Good evening, uh we're still too short, but I understand two short counselors, two counselors short, but I understand they might be here soon.

Um, but we can, I think, get going here.

Uh good even before we begin tonight's work session.

I want to thank everyone for taking the time uh to attend tonight, whether you're here in person or joining us virtually or in the auditorium next door.

Meeting is being broadcast into the auditorium also with overflow seating on TV C T V Channel 30 on Zoom and on the city's YouTube channel.

A recording of the meeting will be available tomorrow morning on YouTube.

We recognize tonight's topic has generated significant interest and we appreciate the large turnout.

I want to take a moment to outline a few expectations so that this meeting can run smoothly for everyone, and we can have plenty of time for discussion among council.

Uh, to assure the attendees both in the room and watching remote, they can clearly uh follow discussion.

We ask that you please refrain from clapping, calling out or making verbal outbursts.

This is a work session.

These disruptions interrupt the flow of the meeting and interfere with the audio for those who are participating virtually.

If you feel you have to publicly express support for a comment or viewpoint, we ask you to use a quiet, non-disruptive method, such as snapping fingers, a thumbs up, or jazz hands.

I've seen it.

Um this is a work session, like I said.

There's no public comment in work sessions.

Uh, the next opportunity for public comment, though, if you'd like to, is during the next regular 7 p.m.

City Council meeting on June 16th.

So show up there at 7 p.m.

You can fill out the yellow card.

You can go in there and you can make your public comment for three minutes.

We know many of you are looking for clarity uh and information related to data centers and the enterprise zone here in Hillsborough.

We hope uh our hope is that tonight's work session will provide a clear understanding of the issues before us, and importantly, we'll provide time for council discuss policy options and provide staff with direction before the end of the night.

I'll turn the time over to the city manager, Robbie Hyman, to begin the work session.

Thank you, uh Councilor Harris.

Uh so uh I know last week we we started this work session.

We got about a about a third of the way through.

So there's uh quite a bit of information still that we wanted to get through tonight.

And really, this presentation is based on a lot of feedback and questions and concerns that the staff has received from both city council and the public over the past several weeks.

So our hope tonight is to be able to share as much information as we can with you all.

Uh council obviously will then await uh any kind of direction on policy that you all want us to undertake uh moving forward.

So uh with that, I think Dan is going to cue this up to the slide where you all left off last week.

Um, we do have four kind of primary um sections.

This first one is kind of the background section.

We're almost done with that section.

There's a couple more slides to go on that.

The second section is on land use, the third is on the enterprise zone, and the fourth is kind of a catch-all.

And that's also where we've tried to kind of group the different proposals that we've received from council in certain categories that are that are similar.

Um, and our goal after each of those sections is to pause to have any kind of questions that the council has, any kind of clarifications or discussion of those points.

Uh so with that, uh I will turn it over to Dan.

I just have a quick question.

Um you receive our materials and answering our questions.

Is that information on our website that's focused on the data centers?

Uh so we have both our website, uh FAQs and website that are is dedicated to data centers.

All of the information as well tonight is included in the packet as well, both online, and I think we've put out a printed copies as well of everything that we have also.

So then I just appointed clarification that uh information that um questions that council have asked, though that information has been answered and is available on the website for data centers or no.

I think the questions the council has asked is what we're trying to address this evening.

I think our FAQs get to a lot of it, but I think most of the questions are going to be addressed in tonight's presentation.

Okay.

And one more thing.

Like, how long do you think this presentation is going to be?

And so that I just want to know because I'd be willing to withhold my questions so that council has more time to answer questions, and we don't run out of time.

Yeah, we have approximately 45 minutes remaining in the presentation.

So I would say 15 minutes or so for each remaining section.

Um that excludes any questions, though.

So we'll that's why we'll try to pause between each section so that the council can have any kind of question discussion on those specific sections.

We didn't want to have you all wait till the end because there's just so much material.

We thought it'd be make more sense to pause in between each section so the council could have any discussion they want at that point.

Thank you.

Okay, thank you, Robbie.

Good evening, Council President Harrison, counselors.

I'll pick up and finish the last couple of slides really to the background section.

In this section, in particulars in response to some of the public comments as well as council questions, really around some of the environmental protections and regulatory layers specifically to waterways and repairing areas and sensitive natural areas.

In Hillsborough, there are a series of layers of regulations and protections that get applied to these different areas.

I'll cover those in maps here in the next couple slides.

But just to summarize what those are, at the city level, there's what's called the significant natural resource overlay.

Often you'll see the acronym SNRO.

And that is applied to natural resource areas throughout the city, and there are different degrees of protection for those sensitive areas.

So we seek first and foremost to always protect those areas.

Occasionally, those areas may be partially impacted, and if somebody does impact one of those areas, then they have to go through an additional land use process with mitigation requirements and an evaluation there as well.

Then at a uh more of a kind of countywide level, partner clean water services has what's referred to as sensitive areas and vegetated corridors.

Those usual follow mainstream corridors or river corridors, and uh clean water services in coordination with city staff will review any impacts of those.

Oftentimes there is a lot of co-location, as you'll see in a minute, between our SNRO and the Clean Water Services Vector corridor areas, but nonetheless seeking to really protect the most sensitive of natural resource areas, especially in those reparian areas.

On top of that, uh occasionally we can have what are called jurisdictional wetlands or jurisdictional waterways.

And so these are wetlands that can be on sites pretty much anywhere where you have flowing water, also then elevates up to a state and a federal government level of regulation and protection.

And so, again, most of the time uh we are working with development applications to seek to avoid those areas.

Uh, occasionally there may still be an impact there, in which case now that requires state and federal permitting above and beyond the local level permitting that I just spoke to.

And then lastly, there's an additional regulatory area really around our floodplain.

So, again, in our waterways, especially that are prone or coverage to flooding, um, we evaluate development to try to keep that out of those floodways, both for that development's impact of potential flooding and not to cause additional flooding perhaps in other parts of our community.

And so uh our planning division is the local uh authority to review um any impacts of the floodplain, but that has to be done in coordination with the Federal Emergency Management Administration, FEMA as well.

So, what does that look like?

Here's an example site.

Um, it's a little faint, but the black box at the bottom is intended to be a development site.

The green uh or the uh the blue area you see on the map would be an example of the FEMA floodplain.

So the the light blue line is really a uh a creek corridor.

Um, this could be a site that's transitioning, say, from agricultural use where farming activities happen pretty close to that corridor and the floodplain uh in a major storm event is that uh kind of the darker blue or the more faint blue you see here.

So if there were to be development in there, that's where that FEMA floodplain alteration or permit would be triggered.

In this case, you can see the building footprint down there staying outside of that.

Then, as we layer in uh this is now showing the Department of State lands, let's say there was wetlands along that there's ponding water or soils that qualifies as wetlands, those are protected, and so we would first seek to keep the development out of that.

If the development's getting into that blue area or the green area, and you can see where some of the starts to overlap now.

That's what would trigger that department of state lands and the federal review as well with the Army Corps of Engineers.

Then on top of that, uh you can start to see then how the Clean Water Services Vegetated Corridor, which is really a buffer of those waterways, would come into play on the site.

That's in the orange.

It overlaps with the green and the blue as well.

And so again, we typically seek to try to encourage development to stay entirely out of act.

Development can propose going into that, of course.

But as I noted earlier, that requires an additional review and evaluation and for uh mitigation if it is to be approved.

And then lastly, uh we'll overlay the Hillsborough significant natural resource overlay, which typically then expands uh a bit beyond the clean water services vegetative corridors as well.

So again, it comes out of our local community development code uh in actual resource protections.

And so, again, in an optimal setting, we would have the building uh in the development project located as such here where it's not encroached on any of those.

Uh but again, if it was proposed to push in some of those, there are local permits to be reviewed, um evaluated to get the criteria, mitigation proposed out of appropriate.

Um, and so again, Rachel will talk a little more about that in a very specific case of the example later, but we really wanted to help flag uh and make sure that there was common awareness of the multiple layer of protection, especially in some of those most sensitive areas.

This is true in our north little industrial area, but also applied to the crop entire city.

So anywhere where we're taking development activity, residential area, commercial areas, these types of regulations would apply depending on the site conditions and both natural report to prevent the barriers did exist.

So now switching to the last two slides of the background portion of the presentation.

These were slides provided to us by Portland General Electric.

So we will do our best to speak to these, but I would like to acknowledge that we are doing our best to speak on behalf of the partner.

If there's more in-depth conversation, especially around the power impacts and planning for data centers, we would really encourage possibly uh inviting those partners to come back and present or provide additional information at a later date.

This slide seeks to show the uh breakout of the different customer classes that Portland General Electric serves.

You can see residential is 34%, commercial users record one percent, uh industrial 35%, and then there's a breakout below that.

Um is our understanding that these are the percentage of total customers making up.

This is not the consumption percentages by each of those customer classes.

So it's a little bit different than what Nikki Iert and our water director shared the last time.

Um the upper right is a map that shows uh the Portland General Electric Service Territory in the green hatching uh across the region, and then in the green box is that Silicon Force, the high-tech sector uh where most of our data centers are concentrated.

Uh, that aligns with some of the maps you may recall that were shown in the last background portion of the last work session.

And then the lower right, uh, I think is a map that they were seeking to highlight and show uh many of the trans-Pacific cables that come in daylight in Pillsboro.

Um, but the main thing from city staff standpoint we wanted to fly on this is we do our best to coordinate with uh our power utility partners, uh, primarily Bondville Power Administration and Portland General Electric when we're doing a lot of our near-term and long-term planning efforts.

Uh we share uh growth aspirations with them around our housing uh and our economic growth uh when we were planning for geographic areas, whether that be for redevelopment uh or into some of our expansion areas, we do our best to coordinate with them on the service needs of those areas and all the gun very specific utility corridor alignments.

Um, they do facilities planning of their own where future substations go, where do emergency response centers go off of all that work.

And so I would like to thank them for that partnership.

Um, but that does, I think, become relevant to some of the power planning questions and concerns that we've definitely heard from the council uh and from our public.

And then the last slide to the background section really uh we wanted to highlight is uh you may have seen in some of the cities frequently asked question responses uh and some of staff's responses to your questions, uh reference to the Oregon Power Act, which was passed as part of House Bill 3546, and that really lays out um how our utility partners are undertaking uh efforts to create a new regulatory framework, uh, especially serving large load customers.

Those customers are using significant amounts of power coming in.

Um, and there's some uh multiple core components that we've been tracking that Portland General Electric has shared uh along those.

Those include a new uh customer classification and schedule.

Um, some of you may have seen the recent news over the last week in terms of some of PGE's rate changes, uh, especially as it relates to data centers and other use classifications.

We believe this is a part of that conversation.

Um, growth-based cost allocation, um, where and how uh some of those growth modifiers and modifications are happening.

Customer protections against stranded assets.

Um, you know, they like us are utility operators for making sure there aren't uh stranded assets that users are paying for.

And then lastly, special contract support clean energy development, as that is both a corporate goal of Portland General Electric and all the one that we have stated as a community in terms of renewable and clean energy uh usage in grid as well.

And so you'll see uh references sometimes to this UM 23 uh 77.

That is really that effort uh really to evaluate some of the changes to their rate model in their turbine delivery model.

I'll stop there on that front just because again, we know enough to be informed, but we're not expert on that.

That really is the better space for Portland General Electric DAP to to share further details that the council has questioned.

So with that, that brings us to the end of the first section, which was really the background.

Um, if there's any questions on the background materials, we'd be happy to answer them now.

If not, we would jump into the land use portion of the presentation.

Go ahead, counselor.

So with uh flooding, the local thorium in FEMA and others, who are the others who would be involved in that?

Are those the logos that are listed on the counselor?

Thank you for the question.

Just to make sure uh we answered it properly.

You're um asking who evaluates the protections of the regulatory floodplain.

Yes, that is done by our local floodplain administrator, who uh is Rachel Marble on our planning staff right now.

We have a different staff that will review that.

That is done in coordination with FEMA.

So the city does that.

Correct.

Correct.

Okay.

Let's see.

So in the core floodplain, FEMA, a permit, it gets triggered.

Department of State Lands.

So if something happens, FEMA gets triggered.

Department of State Lands, you say protected lands with non-development.

Why are first of all why are these lands protected?

And what deems these lands to be, why are they deemed sensitive areas?

I'll do my best to answer that somewhat briefly, but happy to get into more detail now or later if the council would like as well.

So each of those layers, I'll just go back briefly to the map, maybe each of the layers is protecting an important part of the resource, but at times different parts of the resource.

So the blue on the map is the FEMA floodplain.

That is really focused on primarily protecting water flows and flooding impacts.

There are some components in there around habitat, uh, salmonid spawning, many other uh species related pieces, but that purpose is really around flow water flow and flooding.

The other three areas really get into then those the protection of natural resource areas, each agency defines and determines those differently.

So, for example, the city's significant amount of resource overlay is seeking to protect sensitive waterways, like a creek corridor and the example on the map.

It also seeks to protect important stands of trees or habitat in different areas.

Uh, some of you that have sort of previously on planning commission may recall like your repairing upland for it and different categorizations.

But that is really us saying these are different types of natural features in our community and in our urban environment or in our planning areas that have some degree of environmental, social, economic, or energy importance, and there's protections that are put over those ahead of development activity happening.

Hope that answers your question.

Yes, and I would say we do that really at a localized level as well, based on what our geography, what our habitat, what our natural use resources are constraining, and then also what our community is prioritizing in terms of protection.

Okay.

And so, yeah, I saw PGE plans to make people pay their fair share.

So does that supersede what is written to any of the data center agreements?

Thank you for the question.

Um the data center agreements you're referring to are the enterprise zone agreements, just to make sure I respond appropriately.

Wherever data centers live.

So yes, and that's a question perhaps we can come back and answer when we get to the enterprise zone course a little bit more.

But in short, the enterprise zone agreements are not speaking directly to power rates or energy usage.

It is really speaking to the investments of the facilities and the equipment in them and the specifics of that program.

But we can come back maybe answer that a little later in the presentation further.

It might be good for the council to have a tour of all data centers just to get an idea so that we understand differences and location, so we have an idea of what that looks like.

Counselor, we can we can set that up.

I know a few years ago as part of a council retreat, how few of you got to do that.

Um we have partners that we can certainly uh figure out how to do a tour of those data centers.

Thank you.

Next section.

Yeah, of course.

Counselor Sinclair.

Thank you.

Um Director Diaz, uh, I see the PGE service area uh outlined here.

What about Bonneville as a utility partner?

Um Counselor, thank you for the question.

But if the council is requesting a service area for Bonneville, uh, we can provide that.

These are PGE slides, so we want to be mindful of A, we're speaking to them, but we're not also fully familiar with the fact that it's there.

The Bonneville power service area is much larger and encompasses much of the Northwest.

And so if that's a request default, we can see with reasonable effort if we get a map and send it on council after.

That'd be great.

Thank you.

Anything else?

Okay.

Good evening, Council.

My name's Rachel Marble.

I'm the code and policy project manager in community development.

Um, I'm going to talk to you as you need about land use regulations.

Um, just a quick kind of level set on the policy basis.

Um, so our zoning code is the community development code, and those regulations are an implementation of the comprehensive plan.

Um, and the comprehensive plan is an expression of the community's values that's represented as goals and policies.

And that's really an extension of the uh vision that's set by the Hillsborough 2035 community plan.

The development code is also informed for other analyses.

So an overview of the development process.

This is not specific to data centers, but I gave an example of a data center development, and I'll go through that in just a moment.

But just to kind of walk you through the general development process.

So when a use is permitted outright in the zone, it's typically reviewed as a type two administrative decision when it goes through land use.

That includes a public notice for type two decisions that sent out at a 200 foot radius.

It does not include a public hearing, but it does include the public notice, which has a public comment period.

During the land use review, I just also wanted to note too for land use applications that land use applications are vested under the current code when an application is submitted.

So it's at that point that you're vested under the code as it stands when you apply.

You just have to submit an application.

During the land use review, the application is reviewed by city departments, including building transportation systems, fire, the works, water, and parks, as well as external agencies like PGE, Clean Water Services, Washington County, ODOT, and the Department of State Lands.

And conditions of approval are added for any needed public improvements, such as road construction, utility extensions, traffic, safety improvements, and fire access.

Once a land use decision is approved, the applicant moves on to engineering permitting, which includes public infrastructure permitting, private utility permitting, and grading and erosion control permitting.

Those permits are all reviewed and issued through the city, but they're also they also involve review and coordination with external agencies like clean water services and DEQ.

After that, the development then moves on to building permitting, and this is when we're ensuring that it's meeting all the building code requirements, including fire and life safety requirements.

And it's at this time that the applicant, when the building permits are issued, the applicant would pay fees and any required system development charges.

Lastly, once it's under construction, inspections are required to ensure that the code requirements are met, the first shown on the plans, including the building code and utility connections.

Okay, so where in the city are data centers in allowed use.

So data centers are classified in our code as industrial services.

You won't find them as a use category.

They fall under an umbrella use category, which is how our code is categorized.

The list of zones on the right is all of the allowable land use zones in Hillsboro that data centers are permitted as a primary use.

They're allowed in all of our industrial zones.

They're allowed in one commercial zone, commercial general, and two of our urban center zones, which are found in the Amber Glenn area.

I'll note that there's actually two industrial zones that are missing from this list.

My apologies.

One is the Evergreen Special Industrial District, ESID.

That zone is actually not applied to any properties in the city.

So it's a kind of a legacy zone that we don't use anymore.

And then the other one is the SSID Shoot Road Special Industrial District.

That zoning only applies to the Genentech campus.

So they're not allowed in any residential zones, and just for kind of a comparison, we have 37 zones total in Hillsboro.

So these are the ones where it is allowed.

There are additional limitations in the IS industrial sanctuary zone, which is what the map on the left is showing you.

The map on the left is not showing you all of the zones in the city, it's just showing the IS zone.

We have sub-areas in the IS zone, and there are two sub areas with additional limitations.

One is the MEAC sub-area where data centers are not allowed as a primary use at all.

And then the other is the Jackson East sub-area, which is actually split into two further sub areas.

The Jacksony South subarea allows data centers as a primary use, but only up to 62 acres total.

The Jacksony North sub area allows data centers as a primary use, but only 21 acres total.

So in addition to use classifications and standards, the development code also has development and design standards.

We have general standards that apply anywhere in the city.

Those things are include things like setbacks and building height, landscaping, access, street standards, utility standards, design standards for architecture or design of a building.

It also includes overlays, standards for overlays, which are some of the environmental protections that Dan mentioned.

We have our local natural resource overlay, SNRO, and we have the floodplain overlay, which is the city's implementation of the FEMA requirements that we we regulate on their behalf.

During the development process, we also are looking at development centers for outside agencies, including Clean Water Services.

We also have plan districts in the code that have regulations for certain areas of the city.

North Hillsborough is one of those.

We have a North Hillsborough plan district.

The North Hillsborough Plan District has regulations that are in addition to the general development standards.

They include things like enhanced landscaping, buffers at the urban rural edge, which is mapped in the code, enhanced design requirements for buildings, and a special setback along the crescent park greenway along Weibel Creek.

So this is a development example.

This is the QGS site along Northeast Hoffman, and that was given to you kind of in detail with items that were required during the development process.

This was included as part of the packet.

There's also paper copies out front if anyone would like to see that.

And it's also online on the packet.

So this is the QGS site in 2018 prior to urban development.

The land was previously agricultural, as you can see.

I'll also note between Brookwood and Star is not protected by the city's significant natural resource overlay, which that determination is done as a study when well it's density-wide, but it's also done when newland is brought into the urban growth boundary.

There is, however, up there was, however, upland forest on the site.

You can see the L-shaped forest there.

That was protected by the significant natural resource overlay.

It carried a level one protection, which is the lowest level of significance in our overlay.

And that forest you'll see when I move forward was removed and mitigated as a part of the development.

So this is the QGS site in 2025.

You'll see that this has five data center buildings that were constructed in phases.

And the summary of the development has kind of the process and the requirement or the requirements broken down by topic area, areas that have been brought up, like water, stormwater, things like that.

And you can see in there the requirements the applicant had to go through as a part of the development process.

You'll also see it's a little dark in the photo here, but you'll see Wyvill Creek now and north of that.

The mid was the mitigation area for that natural resource removal.

It's over 12 acres of upland habitat that was planted with over 1400 plants during the development.

And you can see it very faintly, but the Crescent Park Greenway is also there that the applicant was required to construct across their property.

And this is a selected amount of the environmental overlays that Dan went over.

I didn't include all of them just because it's a lot of a lot going on.

But I wanted to highlight here this is Weibell Creek highlighted in blue.

The Clean Water Services Shaded Corridors highlighted in red, and only on the QTS site, which ends there, the vegetated corridor continues.

And then the Weible Creek Green Space setback that's required by the code is also highlighted here in yellow.

With the scale, how wide this is, it's a hundred feet setback in total.

Oh, sorry, and I'll also just mention I mentioned that this area of Wywell Creek is not significant on the Significant Natural Resource Overlay.

There are other portions of Wybowell Creek that are protected by the significant natural resource overlay.

Um and again, that evaluation is done, including many things like the condition of it whenever it's studied.

Um the buffer for that for the city's significant natural resource overlay for riparian areas is 75 feet.

So that would go from the edge of the the water or the creek in this case or wetlands if it's wetlands.

And that buffer ranges in size, it's minimum 75 feet per riparian areas in the city, and it does extend all the way up to 120 feet for certain uh uh creek systems.

So um now we'll talk a little bit about the code amendment process and what that looks like as far as our code, what it requires.

Um, if council were to desire to initiate a code amendment, um, which you have the power to do, um the a code amendment can be initiated by council or planning commission.

Um once it's initiated, the um code amendment language and findings would need to be drafted to support the amendment, whatever was being proposed.

Um by statute, we're required to send notice to the Department of Land Conservation and Development and Metro 35 days in advance of our public hearing with the proposed language.

Um that language can change after that notice, but we're required to have a proposal of our code amendment language at that time.

So after that notice is sent, we um our code requires us to hold a public hearing at the planning commission.

The planning commission makes a recommendation to city council on code amendments.

Um public notice is sent to affected properties.

Um in this case, it would be in the zones that have changes that are affected by the amendment, whatever is being proposed.

Um part of that notice could include would likely include what's called a measure 56 notice, which is a requirement that we have to let people know that the permissible uses of their property are changing.

We're also required to let them know that it may affect the value of their property.

We have to do that at least 20 days in advance of the hearing.

After the planning commission hearing and the recommendation, then the code amendment would come to city council and it would come as an ordinance, and um ordinances require two readings at City Council unless they're approved uh in one, which requires a unanimous vote by council.

Um so and then the second reading, if it weren't a unanimous unanimous vote to pass the ordinance.

Ordinances typically have a 30-day delayed effective date, but they can uh be effective immediately upon declaring declaration of an emergency.

So uh all in all to get through all of this, uh, it would be around 80 to 90 days with scheduling of meetings and all of the required notices.

So, council that concludes the land use portion of staff presentation.

We wanted to take this slide to uh recognize that we've sought to take many of the policy ideas and inputs that we've received from council, uh some of the common themes we've seen and some of the public inquiries and testimony and frame them on this slide.

But really, at this point, we're happy to answer any questions you may have or receive any additional policy direction discussion uh deliberations that you'd like to have.

All right, I have a couple of policy or go ahead.

A couple Rachel, what you were just sharing.

Um we have point of order.

So we have please hold on, point of order.

Um so uh the the president's supposed to call on the people based on how when they have uh you know it's a cue.

So yes, I I'm sorry, I was paying attention, but I wasn't sure who cued, and then uh Councillor Sinclair indicated she was ready to talk.

So I apologize for not keeping the queue in order.

Do you uh I don't know.

I just turned it on.

Was everyone paying attendance?

I was not council care.

Go ahead.

We'll just go down the line then.

I just quick um protected areas.

Why do they change?

The city's significant natural resource overlay.

Just part of what you presented.

I should catch in particular, what specific area you were talking about.

My curious, why do protected areas change?

So the city's significant natural resource overlay, which is which is what we regulate locally.

Um it's established when it was it was established citywide in 2003.

We did a citywide study to establish what significant natural resource overlay would cover.

Um and like I said, that that study and that analysis, there's there's parts of that that are required by both uh statewide goal five and then also Metro Title 13.

So that study is done, and then the overlay is established.

It was done citywide in 2003, and then any time we have an early curb and growth boundary expansion, if we do that study for the new areas.

Um, so when property is brought into the urban growth boundary, that's when that study is done.

That's when the significant natural resource overlay is established, and it doesn't change um past then unless an applicant is proposing to um remove the designation, or um if the city were to like restudy an area and and change the designation, it could change the level of significance.

We have three different levels of significance.

Um, like I said, that's that is determined through that analysis that looks at the condition of the resource.

Um it also looks at other factors, other considerations.

Um so it doesn't change once it's established.

Um it's it's set by the overlay.

Okay.

And then my last one, you described the process and it's 80 to 90 days.

Is that an ideal?

Is that an ideal of that process?

Because my question is gonna be did we do that with these new agreements?

I know we didn't because we didn't have public right input on them.

So this is this that um process I'm describing here is the is the code amendment process.

Um the I think the agreements you're talking about, the enterprise zone agreements are not subject to this code amendment process.

So this is just specific to land use development code amendments.

Okay, thank you.

Council Sinclair.

Thank you, President Harris.

Um, Rachel, at the beginning of your presentation, you can be that I'm assuming you're referencing to the enterprise zone.

Once agreements are signed, they are in my correcting understanding the grants corporation of vested legal rights to our land.

So regardless of a site plan being completed.

So my this portion was only on land use.

So um that was not regarding the enterprise zone applications, that was regarding the land use applications.

Okay.

So um can you hold one second, please?

Mr.

Wild, that's the third time you've interrupted us.

Um so we will not tolerate disruptions that preclude the council from being able to reconduct business.

Your actions are causing a disruption, precluding the council from conducting its business.

That is an impact on every person in this room online.

Please refrain from causing any additional disruptions.

If you continue to cause disruptions, I may ask that you leave the meeting before we continue, and if they refuse to do so, I may have to ask them to have a remove.

This is your first warning.

Mr.

Wildfire, your actions continue to cause disruption, preclude the council from conducting its business.

Please refrain from causing any additional disruptions.

This is your second warning.

If you disrupt the meeting one more time, I will ask you to leave the meeting before we continue.

If you refuse to do so, I will have to ask you to be removed.

Let me continue.

Sure.

So uh so the vesting that I was speaking about was for the land use applications.

Um, so that would be like in this case, a development review for a new construction of uh of anything, but in this case a data center.

Um so an example of that would be in the um fall, we changed the development code.

We actually changed one zone, UCMU.

Um we prohibited data centers in that zone, which they were previously allowed.

Um, in the time that it took us to change the development code, we had an application, a land use application for a data center, which vested them under the current code.

So they were able to move forward with the land use application because they're vested under the code as it stands when they apply.

As it stands when you apply.

Okay, thank you.

Just one additional piece if I can echo up that it's been a point of major confusion that land use and development codes and processes apply to an entity or property owner or developer's ability to build or develop or operate something in Hillsborough.

That's what Rachel has sought to cover under this portion of presentation.

There are certain sets of state statutes, local policies and processes that we've responded to.

So apologies again if staff are asking some clarifying questions before we respond.

We just want to make sure we're really hitting at the heart of where council's interest and questions are and doing our best to try to clarify that.

The enterprise zone, which we'll get to in the next phase, is subject to a different set of state laws and standards and processes that can be similar at times to the land use piece, but also very different at times.

And so we'll do our best to respond to those pieces in that last part of the presentation as well.

And my final question pertaining to the timeline.

If there's an emergency amendment brought, can the council brings up front.

Is the 35 days still requirement or does that apply immediately upon approval?

So this slide and that timeline are for a standard development code amendment.

Dan will cover on the next slide, which I think might be what you're kind of getting to, which is a land use moratorium, which would be different from a development code amendment.

That's covered by different set of statute and rules.

So the 35-day notice that's required for DLCD here is for any development code amendment that we want to make.

A land use moratorium, if we were to say use that ORS section to say we're gonna put a temporary halt on data center development.

That's not subject to those rules on the previous slide.

That's subject to a different set of rules.

Um and that requires a 45-day notice to DLCD and also requires a public hearing.

And we'll we'll go over that.

We'll continue to go over that.

Okay.

Thank you.

Thank you for the reminder again between land use and enterprise zone.

One thing that helps me a lot is you know, land use is the rules that you have to like work under to build something on a piece of land depending on the zone.

The enterprise zone program is a taxes in the program.

So that's the very main difference right there.

It helps me figure that out.

And also all this information is actually placed on our webpage, right?

For everybody to access.

So everybody go there if you need to figure out what all those things mean.

Those are really important, especially if you're trying to understand what we're trying to do here.

Uh, I just want to get one point of clarification on something you mentioned, and as my fellow counselors should know by now, I try to move really fast.

So that's where my question has come from.

I understand from the city council perspective, how we move code amendments along, right?

But you mentioned that the planning committee can also bring them forward.

So, how can an individual planning commissioner uh bring something like that forward?

And what is the timeline look like compared to city council and planning commission?

Which one is faster?

Which one is slower?

Which one would be the best for us to go there faster?

Would we want a planning commissioner to kind of lead the way or do we want a city council to lead the way?

Sorry, back really quick.

Um, so our code allows development code and amendments to be initiated by either the planning commission or the city council.

Um, the initiation of the amendment is is um is a consent agenda item essentially, is uh whether it's at council or at planning commission.

Um, so that part doesn't really affect the timeline of it.

Um, it it's whether you whether it's initiated by city council or by planning commission, it's required to have a public hearing at the planning commission.

Um, the code allows for city council to hold its own public hearing if you would like after the planning commission.

You're not required to um the planning commission typically what how we see uh development code happen amendments happen is that there's a public hearing at the planning commission, they make a recommendation, and then that recommendation comes to you all as an ordinance, and you just do a first and second reading of that ordinance.

You don't typically, but you are allowed to require for ask for a public hearing.

That would delay the timeline because we'd have to re-notice uh we'd have to meet our noticing requirements for your public hearing as well as the planning commissions.

Okay, and then as a follow-up, is it just like the council that any commissioner can bring up any sort of issue, or does it have to be like the leader of the planning commission?

So it would be initiated by uh by an order.

Um, so it would need to come before you all as a consent agenda item as an order.

Um, let me clarify the question because uh before you you give me a really long answer, which I appreciate the details.

Um, my specific question is like how does somebody on the planning commission initiate this process?

Counselor, if I can take a stab at that, please thank you for the question.

So, in short, um, we would need consensus by whichever body was initiating it.

Um, that consensus then is the direction to staff to prepare and initiate that order to bring on consent agenda.

It cannot be done on an individualized basis, much like you work on a council.

One last piece, if I may, just flag back to your initial question too, which I think is an important clarification piece, especially as we talk about land use now, enterprise zone later, is those processes around the initiation, the public hearing steps are informed in part by state land use law.

We have to be compliant there.

That is seeking to encourage a degree of public engagement, public participation in the legislative process.

And then another part of that uh land use code amendment piece is in our own codes.

And so those pieces are rules that we would have to follow in our set processes, especially around the spirit of so much of what the council often raises is having that transparency, having that public engagement component and being available there too.

When we get to the enterprise later, we'll talk about their different state laws that we have a similar piece, but I want to apply to again they're different right now.

Thank you.

I have one question.

You said the estimated the quickest we could possibly do this is 80, 90 days, but does that take into account the entire process of agreeing to and drafting the actual code amendment or is it an addition?

First we have that, then once we actually get it finalized, at that point it's 80 and 90 days.

Is that right?

Um yeah, and I mean 80 to 90 days uh when I actually looked out to see like that's like the bare minimum.

Um and that would be like if I were to take if you were to direct me to make a code amendment and I were to take like probably two weeks to draft that, um, it wouldn't it wouldn't be very long.

And that would also include no public engagement um in that process.

The 89 days is like the bare minimum, uh, and not an ideal.

I think someone asked if that was an ideal, that's not an ideal uh code amendment.

So if we have a complicated code amendment, there's a lot of debate or a lot of discussion until we reach agreement.

That that whole process could take many more weeks than two weeks, particularly if you want to do public engagement, and say it's a two or three month process, then would you just add like 75 days onto that?

Is that sort of like once it's finalized?

Is it 18 to 90 days?

Is that what the or the little shorter than that like 70 70 to 80?

Um, I mean, once it's finalized, you could you could count the days from the DLCD notice because at that point we have a we have we have an amendment, we have amendment language.

So we've agreed at that, you know, in theory agreed to be some type of amendment language at that point.

So that's 35 days in advance of the public hearing.

Um, the planning commission public hearing would happen.

And then typically um, depending on how the dates fall with council, it either goes to the very next council meeting or it has to skip one, depending on the you know how those dates line up.

Um so I would say from the DLCD notice, it's gonna be around 70 days.

So 70 days plus the time it takes to agree in draft, more or less approximately.

Okay, thank you.

Any other questions in the section?

Okay.

I have sorry, we do have counselor Andrew.

Thank you.

Um, I have a question about uh about water.

Uh, do you should I wait for the next section?

If it's related to kind of permitting and development evaluation, now would be a good time.

We can probably answer it quite quickly if it's related.

It's about data center water usage.

Yeah, so uh can you can you help with what what are the different kinds of data centers and how they might be using our water?

Sounds good.

Yeah, thank you, count for the question.

I'll try to be briefing this because I think we touched on some of it last session, but we have received some follow-up questions, especially from council around the systems.

And so while we're not expert on all the systems, typically, as you heard uh last meeting as well, we have many data centers uh in Hillsborough that use what's called a closed loop water cooling system.

So it's it's basically like a radiator where water is brought into a cooling system.

We call it a closed loop system because the water often will stay and be recycled within that system, but that's used to cool some of the heat from the server processing in the data center.

Um, when our water director spoke to the lower water usages because of those closed loop systems.

Um, I confirmed since our last uh work session with our plumbing inspectors.

So they're the staff as Rachel was talking about earlier in the inspection phase that go out and look at every one of these buildings as they're being built.

They look at all types of buildings across the city.

But I was asking about specifically data centers, and they're the plumbing and the building inspectors both clarified that since about 2013, every data center that we have on record has included some form of those closed looped uh reuse water systems for for cooling.

Um, there are some, and we're working to compile more finite data on this, that as you also may have heard last week, and I think there may have been some confusion here, that at times we use a hybrid system.

So, in addition to that radiator system, use what's called passive air cooling as well, where they will open up dampers and use a lot of our more mild temperatures here to cool some of the data centers and not have the need to fire up the radiator system quite so much.

I think that's where some of the confusion came in.

Um, other types of systems include like mass um air conditioning type of systems, and there's a lot of nuance there.

Uh, those sometimes we see to be evaporative cooling where there can be a lot more water loss, sometimes back to those pieces.

We don't see those in Hillsborough as we've talked about.

So I'll stop there just for the sake of brevity tonight.

I hope that gets at the heart of your question uh and builds upon some of the information that Nikki did a great job presenting uh last week.

Yeah.

And the and the the water usage numbers are from from the last time are the same or currently.

The water usage numbers have not changed and reflect the answer I just gave you as well because those closed use systems they don't use.

They don't use constantly of flushing new water in.

They stay largely closed and get flushed every very periodically, but spread out.

But thank you.

Thanks.

A day.

Excuse me, that didn't see who said that.

You want to stand up?

You've all been pretty good.

Really good, honestly, about letting us do the work here so we could concentrate on just now of communication.

So I do appreciate that, and I appreciate everyone's uh patience and consideration to this council.

Um one final piece just before we move into the enterprise on section, which will be the final uh section of it of staff background for this evening.

Um I want to commend planning and Rachel, especially for providing this document to you all when we come back around to have any final policy discussions or direction.

Our hope is that this again seeks to summarize a lot of the uh requests and inquiries that you all have provided, um, at least help find some of that.

So please use that as you see appropriate or not.

Um but our hope was theirs just helps us to let you know.

Here's the categories we're hearing and seeing recommendation from you and would welcome any additional policy direction or guidance.

Are you gonna go back to that prior slide there?

Uh would you like to do that?

Now we're moving to the enterprise zone uh session and finish that up.

Well, I don't know.

This so Dan, I thought we were gonna like go through the slide and allow the policy sort of discussion for the land use before we moved on to the enterprise.

I'm happy.

Uh sorry, I must have misunderstood uh move forward to the next section.

I'm so sorry, Director.

I have one final question.

Go ahead.

Um pertaining to the Hillsborough FAQ on the data center water usage.

It says the Hillsborough Water Department and Economic Development Department have a shared responsibility for identifying data center water usage.

So the customer category has not yet been created per data centers specifically yet, correct?

That has not been classified yet.

I'm sorry, council.

Um the the rate piece that we've discussed tonight is oh, sorry, Nikki's actually coming up.

If you want her.

Hi, Nikki.

Can you repeat your question?

Yeah, so my question is is that the um is that the um category there's eight classes, correct?

Currently, that's correct.

And if there's not a class for to identify data centers specifically.

We actually have been doing research on this based on the community concerns that have come up, and we're working on it right now.

Some of the data centers are in the commercial category, right?

And they don't they might have smaller water use, but they also have irrigation associated with that, and our commercial category has a winter and a summer peaking, that way they're paying a higher peak.

And some of the data centers are in the industrial class.

This is something we'll be working on with the utilities commission.

We don't we need to do some research to see because if if we move them into one class, I don't want people getting a deal if they're irrigating, and then we move them in another.

So we need to make sure that we're very careful and deliberate about that, and we're doing more research on what their actual usage is because a lot of the large industrial customers have usually have separate irrigation meters, and so those are in a different customer class.

So that's we're doing that work right now and trying to figure that out and to see if we should create one.

And the utilities commission is asking some questions about that as well.

Okay.

Is that answering your question?

It does.

It's still another, it's a it's a process and it's still being developed.

Um so a question I have is can the council receive um the corresponding addresses and meter reads, uh, data provided for the economic development department that has generated the March 2026 data center water use FAQ.

Um, yes.

Um, so we've received about this last year about four public records requests.

So we've been generating that data pretty frequently um so we can get that.

Are you just are you wanting their usage, their meters, and their addresses?

Yeah, we should be able to get that quickly because we received several quick requests.

Thank you.

Thank you so much.

Okay.

And Nikki, just to clarify that point.

So that was data that was put together by the water department, not economic development department.

Oh, yes, I should have made that um clarification.

That was from the customer accounts.

Okay, yeah.

It will not include the we don't have the data from Swalton Mary Water District.

I believe they have four in their service area that serve the city of Hillsboro.

They serve east of Cornelius Pass.

They have also done public records requests.

So if we're interested in that, I can gather that as well.

In its entirety, that'd be wonderful.

Okay, thank you so much, Nikki.

Um, did you all uh I don't know if we have the customer class in there, but I'll have to take a look.

Okay, okay, thank you.

Yeah, I was gonna say that that would be really helpful information to have on our website for those data centers so people understand what kind they are, what water uh usage they have, um, what the area is around there, and an environmental impact of that area.

Um I in my conversations did talk with people at cooling loop, and there's a lot of um filtration removes suspended solids, sediment and particles before they even get into the cooling loop.

So that's good to know.

My question is what about groundwater?

Because that was the biggest concern of the agencies that I talked to, they didn't have a problem with any other kind of water.

They're concerned about groundwater and how do we know if we don't know usage, how do we know that those areas won't be affected as bad as some people might be thinking.

Yes, I think one of the reasons, you know, we are you supplying potable drink drinking water to these um companies, which means a lot of things are not in the water.

One example is we don't have PFOS in our water at Hillsborough.

So there isn't an evaporative cooling that would concentrate that because it's not in the source water.

Um those closed loop systems from our understanding also go when they're discharged straight into the sanitary sewer.

And what happens when these projects come forward is you have plumbing inspectors that go and confirm all of this.

We also do not allow people if they have like a well, um, they are, I believe, Dan, they are required, they have to go on city water inside the city.

Um, so they would have to cap off those wells or they couldn't use those for that.

We have had some additional discussions on additional protections if if the council is interested, we could put into place.

We also don't allow discharge into groundwater here.

Other places might do that, but ours has to go into the sanitary sewer for our city code.

Does that answer your question?

Yes, and I'll let you know.

I would like additional protections.

Okay, thank you.

Moving on to the developer code concepts and development process changes.

So, council, again, as as it was mentioned, what was put together with this slide was really just a slide to help facilitate your conversation.

So, what staff did here was put together common concepts that they heard from your various proposals or your questions to try to help guide the conversation to the extent that you want that guidance, um, or you can just sort of dictate how you want the conversation to go.

But now's an opportunity for you all to sort of talk about any potential changes that you may want to see to the land use process.

Um, we'll get to the enterprise zone and then a sort of a catch-all at the end for anything that's not land use or enterprise zone related.

And that's sort of following this this outline um that was put together that's sitting by your your seat.

Um, and so now is the opportunity for you all to sort of lead the conversation.

If you have additional questions that we as staff can answer, we're happy to do that.

But otherwise, it's an opportunity for you all to sort of talk to each other about what changes you would like to see, see if we can sort of reach a consensus about what that direction might be, and then give staff some directions so we can go back and look at what you're asking for and bring something back to you in the future.

Um, so with that, I'll turn it over to Council President Harris to run this part of the discussion.

I got two buttons on this one.

Um, so development co-concepts would be just changing the code requirements.

Explain to me what that is so we have an idea of the scope of what we'd be talking about under that particular call.

Yeah, I can give it a shot and then staff certainly jump in or Simone jump in.

Um the idea here is that you have different proposals.

So, for example, counselor Sinclair had a proposal that she brought forward that for some various land use code amendments.

Um, I believe some of your other uh proposals or questions also have land use related things.

Uh Council R Care just mentioned um some additional sort of water restrictions.

So this is an opportunity for you to talk about, and then there may be situations where you're saying we need more information before we can make that decision.

So we'd like some more information on some of these environmental impacts that you'd like staff to try to go gather.

So this is that opportunity for you to say, you know, here's things that we know we want to do, here's places where we want more information from staff, um, or you know, just other ideas that you may have, sort of about how we regulate land use and all those things that Rachel just covered.

So that could be uh uses in various zones, that could be um the sort of design standards that Rachel talked about.

I don't know, Rachel, if you want to sort of you could probably talk about this a lot better than I can about what their options are.

So yeah, um, and so I tried to kind of compile again.

There were different proposals and things that were brought up.

So I kind of tried to just tell that, and again, there's there's three different things on this concept sheet.

The first just being a new use category to define data centers in the code.

Um, some of the proposals kind of mentioned um different types of data centers and potentially scaling some of the requirements.

So right now we don't have that use kind of use specifically.

So that's that's kind of the easier one to um kind of nail down.

Um the second piece of this is the development and design standards.

There were some things mentioned in the proposals.

And some of these standards, I don't have like recommendations per se on what standards we could consider adopting.

But these standards could be could include things like additional landscaping, additional setbacks, additional buffers, screening, um, sustainability or green building requirements.

Um and those would go into like the special use standards of our code section of our code.

Um that would be something that either you you all would want to determine a policy basis for, or again, have um have us bring back additional information based on this the you know local studies and data.

And then the third thing they're out of order up here is the use restrictions.

So every use in the code, there's four options.

It's it's either permitted, limited in some way, it requires a conditional use, or it's not permitted.

So those are the four options we have in the code for every use.

Um on the back of the sheet, I put the purposes of all of the zones that currently allowed data centers, um, with the exception of the ESID.

I left that off because like I said, that's a legacy zone, it's not applied anywhere in the city.

Um so you can see the purpose statements of each of these zones, and um you know, decide um if you want to provide policy direction based on the purposes of these zones.

If you feel like there's additional limitations or prohibitions on data centers that you want uh kind of by zone, um that the table next to it um is looking at a different approach.

This is just um data to show you if you were to go forward with something like we have in Jackson East, where it's limited, um, it's basically limited by acreage in the zone.

This is all of the zones that uh that they're allowed in today, the total acreage of that zone as it stands, the amount of existing data centers we have in those zones.

So as you can see, there's only actually two zones that we have data centers in currently, and then what um kind of some example limitations would look like uh in in acres in those zones.

So I put um there's three boxes you can see highlighted in red text.

Um, those are the IS zone.

Um I highlighted those because we've already exceeded those percentages with the amount of existing data centers.

Um and then uh, and I these the acreages here don't include the meek sub-area and the Jacksonese sub-areas because those already have limitations.

Um so this this data is not necessarily meant to say, like, yes, move forward with this, although you can certainly say that, but to say here's what it would look like if we were to move forward with limiting by acreage or percentage of a zone.

Uh, and then the last piece on this sheet is if we were to move forward with limiting it, um, which uh by the by the whole area of North Hillsboro or by all of the industrial area.

Um I don't have an acreage um calculation for what that looks like, but when you can see the total acreages of the zones, um not all of these zones are in North Hillsboro, so um that's something else to consider, you know.

If you want to move forward with looking at it by zone or by area of the city, um maybe you want to do a combination of all of these things and say we're only going to allow them in North Hillsboro, but we're going to limit the amount in North Hillsboro.

So other zones like the urban center zones, those are not located in North Hillsborough, those are located in the Amberglen area.

Um so you could make a different call on those zones based on the fact that they have very different purposes than some of our industrial zones.

Thank you.

First of all, to get this organized a little bit.

Um I see these three categories.

I really like this the way you've done this.

So we could talk about use categories, establishing some discussion whether it's one different or multiple different types of data center uses, probably even.

Second development design issues, which is like, oh, maybe they have backup diesel they have to use biodiesel or something, or some sort of uh more photo ballistic or something, and then the third one, the use restrictions, which is like what areas do we want these restrictions to apply?

So that's sort of how I see these broken down.

I think there's gonna be a lot of suggestions from everybody as we come along here, but I think they're gonna they're gonna be a lot.

And I I wonder whether or not we want to take these one at a time, like what new use category and talk about that.

And then if people have suggestions, we could say that's a good one.

Let's include that, or to try and build support.

So we're focusing on like the top one or two or three or five, whatever that would be in each category.

Um, and then we could start off just everyone have one suggest or we just could just go.

So my suggestion would be maybe to talk about either one, two, or three.

So we're like we keep on track what we're all talking about, and then let everyone share at that point and see if we can find some some uh some common threads here for you guys to follow up on.

That's my suggestion.

Um that being said, we're all city councillors, we all have the same power to say what we want.

So um I would uh we're gonna start here.

It's gonna be uh counselors, uh Andrew, Sagato, and then Sinclair.

So um just just to be clear.

So um, so uh uh so right now we're gonna uh work on the new use category.

I would suggest that's how we start, but if people want to talk about other things, they can do that.

But I would suggest we start that way.

Before we start the process, can I just add one thing before we go down the line?

Um so one of the things that I really like about you know, obviously things didn't turn out how I wanted in during the the immigration discussion, but one of the things that I really liked about that process is what Raheem did.

So I basically took all of our ideas, took a couple of weeks, put something together, and came back with some options and recommendations.

So I would like to propose that we decide whether we want a new use category, which I think that's where we're all leaning towards, and then have staff do something similar, like Rahim did because I think that we have enough information on paper.

We've shared enough about uh our feedback and what we'd like to see.

There's a lot of research going on right now around data centers, and I really have a lot of faith and trust in our staff to kind of come back with something that's really good.

So that's what I would like to propose because I could really see us going back and forth in an hour over one specific topic, and that's really not something that I would like to do tonight.

Um I would just you know, like something a little bit more concrete.

But I agree.

I think that as people go we round robin this a little bit, we can be concise on the it areas without you could get in the details if you'd like to, obviously.

But eventually it's gonna go back to staff and they're gonna try and draft it.

And you're right, they have more expertise knowledge about certain things than we do.

No, it comes back.

We don't like it, we can always kick it back or we can modify it.

But I I agree at this point we should be not necessarily at 30,000 feet, but not at three feet either on this, right?

Um so with that being said, it would be nice if we had some concise this is what I'm interested in.

Um, and then we did some round robin to see if we can reach some guidance for our stuff.

All right, I'll start.

So by this so new use category comes up.

Yes, that is what I would like to see for development and design standards.

I think a lot you have a lot of um, like I think the council has a lot of similar ideas regarding solar solar panels and um, you know, uh doing a maybe going multi-story things like that.

So uh really uh looking at the environmental impact.

Um and I would also, and I don't know if this is gonna be in this or not, or maybe it's in under the the next section where I I would like to propose that we do uh an environmental study off of our uh what we have um and the impact uh but but for Hillsborough.

Thank you.

Counselor Sogalo.

Yes, we and I I think special use category in the Nile Sub, a clarifying question.

Because see the what the thing that I'm thinking about is we can um uh well, actually, let me go back to my question before I dive into that.

Can we set zones specific for data centers?

Or we say this is the only place that data centers are allowed to go.

Is that exactly what we're discussing here?

Because I noticed that on the zones there's different uses, but then there's a lot of like an industry can go in one zone and then another zone.

Like, can we do specifically strictly data zone data centers only in the zone?

Is that a is that legally allowed?

Counselor's salgado, if I can maybe make sure we're hearing and reframe the question.

So, yes, the we can set geographic limitations to where data centers go.

We can also evaluate the existing zones per the map, Rachel shared earlier, and have a conversation of would you like to change where they can go or how they can go in any of those areas?

So the answer to that is absolutely what I would caution is if we're hearing this is creating a zone that is only for data centers can be quite difficult in terms of the more diverse mix up we have.

That's why I asked.

So here's here's what I'm here's what I'm leaning towards.

Uh so look, we have if we're paying attention to the experts out there, this thing's gonna grow exponentially over the next few years.

Uh experts.

Uh excuse me.

Um, can you please refrain from commenting so we can complete this process?

So people that get paid and dedicate their lives to studying laws, issues, policies.

Um, so that's what I refer to experts, statisticians, mathematicians.

So those people are predicting that uh there's gonna be a growth in data center use and demand, both in AI and data centers.

Um, and so if you want us to find a solution, I would invite you to let us communicate.

I would invite you to let us communicate if you want us to do our job.

Not you.

Not you, Mr.

Walfert.

I'm not pointing at you.

Thank you for letting me continue.

I'm trying to identify the person as being disrupted.

So uh it's okay, we don't have to figure out as long as people let me talk, that's all good.

Um that's what I'm here for.

Uh so we see this growth happening, and so we see all these different types of data centers in our in our community, and I feel like we need to fit we need to know where these things are going once they apply uh for for these applications.

And so, what I would like to see is I would like to see uh different zones depending on type of data center and consider the environmental impacts of the different types of data centers and the proximity to things like wetlands, schools, um critical infrastructure.

I think those are the things that that we should really be looking at and seeing what type of protection our environment needs from the different types of data centers.

And I think we do need to have that sort of approach to it because we can't do wholesale, they're not all the same.

There's some that can fit inside of other buildings that don't create all the environmental impacts that the huge hyperscale ones uh do, right?

So that's what I would like to see.

Um, in in whatever the staff come up with, so just some options and some differentiation and acknowledgement that we do have to treat them differently.

So, nothing specific.

I mean, you can refer to the document that I submitted.

There's a lot of bullet points there.

I think it's a lot of what a lot of people are saying, so nothing too different, just a little bit more details on what we can actually do.

Thank you.

You don't want to stand up if you identify you just want to interrupt us.

There's a room across the way, you can hear everything, and you can pop all you want or from the other room if you'd like, but I think most people really like to listen and seriously think about this and help us make some decisions.

Uh counselor uh case, did you want to make comment or you want to pass?

Sure.

No, I'm happy to go ahead and sorry, sounds that okay.

Um, as with uh things so far we're hearing is that new use category of data set uh data storage thumbs up.

I think that's a great idea.

Um, and as we are talking on the development and design standards, um, you know, as I've been thinking about this and thinking about through the presentation from last week um as well, and how 80% of data centers are supporting local businesses, and so I'm hearing what you're saying, Counselor Salogato, about the data, you know, about having the standalone data center, but maybe also considering some other things.

Um, I absolutely agree with the multiple proposals that talked about uh having an environmental impact study.

Um, what I'd also like to see is an economic development um impact study, and how if we are to you know pause data centers or reduce the amount of them or where they're located, um, what would that economic development impact look like?

Because we are the economic engine of the state of Oregon here in Hillsborough.

Um, and so what we do matters for our you know jobs, our friends and neighbors' livelihoods, as well as our own's.

Um, and so I think uh kind of pieces of what I've been hearing.

I think that might be a helpful thing to do as well is have an economic development impact study on some of these things.

So, as we look at the development and design standards and are looking through this fabulous document from Rachel, um, I think that might be really helpful too.

So that'd be my addition to all of this.

Thank you, Councillor Sinclair.

Thank you, President Harris.

Um I want to say to staff, thank you for the time that you put into this.

Um, but I really want to focus right now on our governing authority as a council body, and I'm would like to focus initially on the teeth of why we're here, which is the Enterprise Zone program.

And I would like to ask a question can this council exercise its authority over the Hillsborough Development Code to amend the zoning within the enterprise zone boundary, immediately striking data storage and compute facilities as a primary allowed use, as we did in 2022 in the Hillsborough City Development Code amendment 001-11.

And this pertains references to the Jackson East Jack Jackson East sub-area where standalone data centers were downgraded from an allowable primary use to a strictly accessory use.

And first, like that question answered, and then I'd like to go on to what I uh submitted as proposed tonight.

So, Council Sinclair, that's exactly what we're asking you all to discuss right now.

So we're talking about land use restrictions and various zoning codes, um, whether that's the number three use restrictions on the back of the sheet um or development of design standards on number two.

There's various aspects of all that that we can impose.

We can't do that immediately, as Rachel was describing.

There is that process under state law that we have to follow.

So, what we're trying to get tonight from you all is a consensus from the council and saying here's restrictions that we would like to impose or design standards that we would like to impose, so then we can begin drafting those sorts of things and bring it back to you to say is this sort of what you had in mind, and then we're gonna go through the process that Rachel described.

Great.

I'm on the same page.

I totally understand that.

I wanted to get my question out.

So to get a straight answer that this is doable if this body chooses to directly do so.

Um I I created two uh proposals that I'd like to uh submit to council tonight, and specifically with the land use uh land use aspect.

I'd like to propose an emergency ordinance admitting the community development code.

This ordinance exercises our sovereign authority over local land use law to protect our unlimited industrial land supply, preserve you uh utility capacity, and mandate high density employment.

One zoning precedent direct staff to replicate the legal blueprint this council established in August 2022 case file member CDCA 001-19, which we strip which excuse me, which restricted data centers in the Jackson East sub-area.

Two permitted use amendment, remove data storage processing and information technology centers as a primary permitted use citywide across all industrial zone districts.

Three reclassification of accessory use restricts data storage facilities strictly to accessory uses directly subordinate to a primary manufacturing or commercial operation on the same parcel.

Four mandatory mandatory employment density standard establishes a land use performance standard requiring any site using an accessory data facility to maintain a verified minimum of 15 permanent full-time equivalent jobs per acre secured via a binding restrictive covenant renting with the land.

Five public safety and transparency regulations requires any accessory facility exceeding a two megawatt threshold to trigger a public resource impact analysis for water or power and a type three land use review with a public hearing and binding capacity sign-offs from our regional utility partners, and last emergency clause includes an emergency declaration enabling the land use changes to take effect immediately upon passage, preventing speculative acreage acquisitions while the policy is finalized.

And that is what I hope for us to talk about.

Thank you.

Uh Council Alcara.

Um, everything that Kipperlin said.

And I agree with looking at um land use defined and having some restrictions.

Um, I want an environmental impact study, but I want that impact study in alignment and with our partners.

All the agencies that I listed in my study have an interest in what's going on.

The only uh one that I did not hear back yet was from the Grand Ron Tribe.

I did hear back from the Columbia River Intertravel Fish Commission and some other agencies that we're already working with.

Um I think within economic development impact, I want to know like how much money is being generated.

I would like to know the energy use, the water use.

Um do these data centers, are they gonna be paying any money to enterprise zone or to HEDC as do they get are they going to be giving revenue to the city upwards of I don't know, a couple million dollars?

And if so, what is that money used for?

And bigger question um is that accounted for in our budget?

Our biannual budget.

All right, thank you.

And I have a few comments as well.

On the use category, yeah, I agree with what's been said.

We should have a new definition of use for data storage, and I think maybe more than one category, possibly, whether that's based on size or energy use or whatever acres, I don't know how they measure it.

Um I know we talked about hyperscale co-location enterprise, and I think there's even like a higher size now.

We don't have we don't have 1500 acres to do those big months, so that's not going to happen.

We're looking at the um they're still big, but they're small.

Uh two development and design centers.

I think most people covered what I have thought as well, which is some environmental issues um related to that.

Uh I think that's the main thing, then use restrictions.

Um, I was looking on the other side of the shark.

Looks like there's only two sites that actually even have standalone data centers right now.

Um, if I'm if I'm reading the chart correctly, it's just the IP and the IS sites zones.

Two zones, yeah.

So well, I'll sort just provide one clarification.

So I did mention the example earlier.

We do have one data center that's not represented here, that's in the UC MU zone where it's not per permitted anymore.

So now we're gonna be non-conformities.

That's not represented here, it's not permitted in that zone.

So I guess I look at the ones that don't even have any right now and ask maybe these are not appropriate for data centers in the first place.

So either putting them under the limited or not permitted, uh, might be an appropriate place to start on those for you guys to look at.

Um, and then uh where they are cited, let's take a closer look at those and see what features um are appropriate or necessary.

This is where they're going.

Let's look at the stream corridors and land use on those particular places and what the manufacturers are on those fights.

So I think where they're can tell us a lot as to where what maybe where we want to limit them or even prevent them from going in.

Um sort of from a third cow, I will talk through, I'll talk 20,000 feet, not 30,000 feet.

And that is that um we we've developed over the past several decades enterprise zone industrial district with a certain architecture that encourages um employment here, and I would like to keep it that way.

And I know that data centers do not employ a lot of people, but sometimes those data centers are necessary to get the high employee jobs.

So you could have thousands of people working on a site and they do use color location facilities, not just the facilities on their site.

I'm not I don't know how to square that circle.

Um, but I'm just pointing that out that I would I would like to have these um industries and manufacturers to come in here and pay really good paying jobs and follow old rules and make sure that they're you know they're environmentally sound and are participating positively in positive ways in our community, are able to continue doing the work in this community, whether that means limiting them or putting a 15% cap on something or whatever it happens to be.

I want to make this a welcome environment for people for job for people who create jobs, industries who create jobs that pay well in this community and get back to the community.

Um, and that's sort of my focus, and that's what I would like to concentrate on and not say, well, we can't move in there because of this or that.

Um so not that we shouldn't do this or that, but I'm just saying that is a fact that we should be looking at as well.

And I don't know where that goes, whether that's in use restrictions or or development design, but that's sort of my overlay of this whole thing.

Councilor Alkart.

So when I signed up and voted for enterprise zone and everything that it would bring jobs, uh then we have to look at housing and um and additional companies, right?

That might be coming together.

I cannot get the thought out of my head of large layoffs and uh room full of people who are trying to get their careers back.

So I um didn't think about the recycling of people in those companies, and I am not okay with that, because we are also wanting to encourage our youth to want to aspire to some of those companies and become engineers.

And I would hate to tell them you have a time limit if you're thinking on certain companies.

So I think I want to have some understanding going forward with those companies and their intention to bring jobs like what does that mean?

And I actually care about to have more than 15 jobs per data center.

And that's okay.

It's not $72 an hour.

I think excuse me.

Excuse me, ma'am, you're not part of this discussion.

But please just read just listen, please.

There's a work session for us to complete this.

So the types of jobs that we say we want to recruit when these companies are coming in, they're livable wage for working families.

And some of these have been union jobs.

I'm a union member, so yes, that matters to me.

And I would like to see if what the investment is with the data centers and their workforce that's in there, what's their long long-term plan?

How disposable are they going to be in the future?

I um what I said about you in that pathway that they're going to go into that kind of um business.

I would rather encourage them to go and get the degree and go work wherever you want and not to belong to a company.

That's not your purview for economic development, but that's what I'm thinking about when you talk about bringing more jobs, getting more people working.

And then because then we start talking about um housing, right?

We talk about all these things that are coming as an increase of these jobs that are promised.

So I think I would like to have a more real picture of what it looks like for workforce because I believe that that has changed.

Um and I you know, I'm just concerned.

I just want to say at a 30,000 foot level, that I have been frustrated for months, and people have been frustrated for months.

It's all over social media, it's in the news, it's everywhere.

So data centers are on people's minds, and it is frustrating for people, and I will just say to have limited input about this.

We're a public city organization managing city dollars, public dollars.

Why has it taken so long to get to this conversation?

And we listen to people in um public comment.

I asked for some of the emails to get printed off of us because I I have not had a chance to keep up with all the emails that people have sent to us about data centers.

So we have to consider that because right here, right here, we were a closed group, and we cannot function like that.

And we need to start inviting public in.

So use all this, they need to be involved in this process.

Thank you.

Sorry, I wasn't triggering who I'm just gonna go down the lines, Councillor Sinclair.

Thank you.

Uh, by the way, we're I would still like to stick to development code concepts like camp.

A lot of other issues we're gonna talk about downstream from here.

Yes, thank you.

Um in talking about the community development code, I think it's really important for our asset body to stay focused on the public being at the forum pride to be a part of that process, so that there's trust that's not broken and that we continue forward with having both council and the public aware every step of the way, and that's why I recommend the community development code change.

And my understanding is our public hearings related to that, so that will be included in the property.

So counselor, so yeah, put the just clarification because I'm trying to follow what the staff have laid out in front of us because I think you know, following the process in order, um, is gonna get us farther.

And so I just don't want to miss an opportunity to share my thoughts on the economics and the workforce piece of it.

Is this something that the like the staff is taking feedback on this right now?

Like, did I miss something?

I'm trying to try to understand what's going on here.

Uh Council Sabata, I thank you for the question.

And what we are seeking to listen for and do is absolutely take all the feedback in, but especially in the land use space here, what I'm will intend to do here in a minute when you're done as a council with this deliberation section.

We will try to just quickly regroup up the common themes we've heard and make sure there's a degree of consensus amongst council.

We'll do that now with the rest of the program tonight, and we can come back at the end of this evening to make sure because that would be the direction we take.

Um, but I am hearing some common themes around policy areas you are seeking for more work.

There might be a couple clarifying points before we wrap up.

But um, on the economics piece, some of that is starting to definitely strive or get in more to the enterprise zones and the incentives in those pieces there.

We'll do our best to respond, but I think much of that is probably best to be held and then discussed after we have a chance to get through the full enterprise zone uh portion of the presentation and have that similar conversation there, I think will be a little bit more relevant.

Okay, then I'm gonna ask the rest of my council if we could just follow the instructions from our staff because I really don't want to miss an opportunity to share my views on the economic and workforce stuff because I'm sitting here focused on land use, and then I'm gonna talk about other stuff.

So if you I just ask you to stay focused on what we're discussing so we can we can all contribute fairly.

Thank you.

Council Remember.

Thank you.

Um so two other things.

Um if you if you could investigate that, um, would be if if maybe we could lease the land instead of Southland.

Um that maybe that may be something because then the land comes back to the city, it's not a for everything.

So that's only and then um yeah, so the the other the other thing is uh uh you know the the data centers are kind of empty outside if if that all that area we could somehow like with use in the sense of maybe pathways or just because they're they're not you know they're not using all the parking, for example.

And so if you could maybe look into that so that people who are living around it, it it's they could benefit um from it uh with uh you know being able to use that um better.

Thanks.

Thank you.

And I have one other comment I noticed if this is listed up on your slide uh on the development process changes.

We didn't talk too much about development process changes by two versus pack three, but I'd like to get some um feedback on that because I think we're gonna have to if you put them in a limited use category, probably.

And the bottom one, the land use moratorium, which is a fetch story thing, um, and it would it would obviously put a halt to uh permitting at the point that obviously takes care of time.

There's a process for that.

I think there's uh I think there's a consensus, perhaps not.

Maybe I can get a thumbs up or thumb down, at least have a staff explore the process or moratorium and take a look at that and see if we can establish the facts on the ground for that.

Sorry, point of clarification.

The review process type two and three, is that the thing that just got changed at the state level?

Uh different uh that I think is getting it into the enterprise later this evening.

Um, I think what this is getting at is in many instances development goes through a type two administrative review against development standards.

There are things tied to what Rachel was sharing earlier that if we make data centers, for example, a conditional use application, it could require a public hearing with the planning and zoning hearings board to evaluate data center development against potential development standards or use considerations and the like.

And so that would be the difference of a public hearing public body decision versus a review against existing standards and type usage.

Okay, so that's sort of what I was getting at as if if a certain use category of data center, seven data center over 20 GPs or something was going to be cited and you made it a uh conditional use in a particular district, they would actually have to go through a public hearing to get approved.

And that's not being done now.

So that would be one thing we could like change the development code in the process to do that.

Okay.

Council president.

Yeah.

So how wrong was I on that?

No, you didn't.

You were you're you're doing great.

Uh I was just gonna try to uh move us to the next step here.

I know um Dan and Simone and I have been taking some notes, and so maybe Dan and Simone and then I can chime in as necessary to sort of provide you um with a response for what we think we heard is a consensus from the council and sort of the direction that you're giving us, and then um assuming that we got that right, or you can correct us if we've got anything wrong, and then we can move on to the next sort of economic development apart and have that discussion, and then at the end we can certainly have a catch-all conversation about everything.

I I would say just kind of move on to the economic development part.

If you did supplement, you forgot to say something, you can always email chat or whoever get that distributed.

Plus, we'll always have another chance to review the first.

It's gonna be just it might be multiple drafts, obviously.

So we'll have a chance to add anything, maybe we have forgotten.

We kind of want to have an opportunity right now to at least tell you what we think we heard in an option if we tell us that we got it wrong.

So we're not quite finished with things, but yeah.

If okay, I'll take them kind of topic by topic and I'll look council presence to you just to facilitate quick as what degree of consensus and apologies because I will summarize a little bit, but it sounded like there's very strong consensus amongst the council in terms of evaluating the use category and coming up perhaps with a new definition or some sub-options we can take that back and look at that.

Is that other thumbs up sideways or counselor sinclair?

We could okay.

Um then with the development standards, we heard yes, explore additional development standards.

It sounds like there was pretty solid consensus around looking at environmental impacts, especially things that can be going to design them for noise sensitivity, sensitive natural areas like we talked about earlier this evening, and possibly energy efficiency.

I wanted to confirm those three is where it's sounded like there was the greatest consensus.

Yes, yes, no, it's okay.

Um, and then environmental impacts.

This one, I think there was we've heard two categories.

One is a district-wide assessment, kind of an aggregated assessment of impact of environmental, and then we also heard maybe site-by-site specific impact.

So I just want to make sure we don't miss something there, but in terms of looking at environmental impacts, can I just get a quick sense of looking district-wide at data centers more broadly, if that's of interest?

Okay, and then at a site by site level, maybe as they're starting to look to come in and potentially be developed in the city.

Is that one that we heard correct, or is there not consensus there?

Okay.

Can you explain what that what that would be look like?

I mean, I'm not sure.

Is it if we made it a conditional use, could it be a top three and then we review the environmental impact?

Or are you actually talking about having some environmental checklists to go off on each individual site?

That's a little bit of what we're I think Zeke understand.

I think there would be the potential if if data center applications are coming in for development, we could try to get an upfront assessment responding to some of what we heard is what is their anticipated power need, what is their anticipated water need, and make sure that when we're doing our reviews against our infrastructure capacities and some of those partners, do we feel like those are serviceable or going to create issues kind of on the front end and fold that into more of our development review process?

So am I seeing consensus on that one?

Yeah.

That'd be at a project by project level.

Yeah, I think also with some of that, like what counselor Andrea was saying earlier about biodiesel.

I think you were saying that, right?

About bioethical and you know, solar panels and some different things like like environmentally responsible options.

I think that'd be a helpful piece of that to get it on board.

And I think that really responds to a lot of the public comment we've heard too, is like can we evaluate some of the site developments in South Hillsborough, for example, some of you may recall we did energy efficient building designs and solar readiness.

We could look at trying to require or apply some of that to future data center development as well.

So yeah, after that.

I think there's a lot of consensus on the design development.

Got as well, environmental design is what we'll great.

Um is okay if we keep going as helpful.

Um did a little split in terms of evaluating economic impacts uh of what that's in.

And while that's it kind of straddles land use, kind of gets in those other areas, just a quick touch base here.

Maybe we come back to this one before the end of the night, but to assess truly the economic impacts between revenues, the city, overall reliance on some of our other local businesses, things like that.

Is that of desire?

But would that really be a development co-concept or is it more yeah, isn't it more at the end?

Um I think that's more of a setting regular game back rather than requiring that as part of a development process or a code standard.

Oh, I see.

I see requiring the upfront economic analysis for each different development application.

Correct.

Versus we heard loud and clear some of those accessory uses or the tie could exist in manufacturers.

That would probably we can address some of that in that use definition uh portion that you all had consensus on at the top of the list.

So we like this look at the economic impact.

So I so if I understand this correctly, yeah.

So we would be giving you direction on whether or not we believe an economic analysis of each development application should be done, or whether or not we should just make all that into our easy ordinance and our inner and tax abatement or whatever.

That's the question to you at our project by project level, or again, do we do that as an aggregate of you know, for example, all data centers across the city?

Oh, sorry.

Uh counselor said, but no, no, no worries to be sorry.

Um does this pertain to jobs breaker.

Um we could try to look at a employment density component of that potentially.

That can be a pretty good theme to check, but if that's the consensus of the council, we can look at that or try to look at that.

Just to clear no counselor case.

Sorry.

And just clarify because they brought up that uh that um uh yeah, yeah, economic impact.

It um yeah, it was it was kind of a catch-all for all of this, right?

Like we get comments about all the emails and public comments that we've been getting about the environmental stuff, and we've also gotten some economic ones.

And so I think it was kind of a catch-all spot for all the economic development questions, yeah, kind of a holistic study that maybe ends up being piece by piece, but yeah, the jobs creation, that kind of stuff would go in there at you know, like where Alcair was saying about the jobs and recycling of humans, um, like that piece of it too.

So that was yeah.

Counselor Silicau.

Soil and green, is that what you're talking about?

Oh, okay.

Recycling of humans.

Um, I think you know, I think we should keep them separate because one's about the taxing syndrome and the taxes, and the other is about the land use.

So I think it should be tied to it, but I think it should be separate.

So maybe aggregated instead of site by site.

Let's go.

If the coups agrees, let's take that and we'll pause and come back at the after the next section.

I think might help to refine some of that.

I think please.

My view is it should be part of the ordinance and enterprise zone agreements, but they're gonna have some requirements in there as each person does an application, they may have to show how it complies with our ordinances easy uh objectives.

So it's sort of both, you know, um, because you have this this ordinance, and then they're gonna say, I comply with it because of this.

Okay.

So is it comes okay if we kind of pin that one as a somewhat yes, come back and refine, whereas the other ones I think you've really appreciated the clarity you've provided.

Just a couple final ones.

Geographic is in the zone focused.

I think we've heard this phrase by multiple and some gets to the sheet.

Is there a consensus to really look at trying to be geographically mindful of where we might continue to allow them even in a limited fashion and where we preclude them back to the table conversation?

And we'll refine what that looks like and bring it back.

Uh I would just want to clarify, I think um yes, proximity, I think is important, but again, this I go back to the different types of data centers, right?

A co-location facility is gonna have a different environmental impact than a bigger data center.

And so the bigger data centers, I feel like we should look at proximity from water areas, uh schools, other kind of vulnerable uh issues.

So that was a distinction I'm trying to appreciate that.

So consensus there generally for the the location.

Okay, Councillor Sinclair had a question or no, I don't.

I it's just I I do agree the compatibility matters.

Okay, good.

And then the last one is just uh I think the land use moratorium of would you like us to proceed with that path or focus primarily to the code amendment path or some blend?

I have a comment from the last um are we also considering the ex area area that's adjacent to the city of Hillsborough?

Are we considering the unincorporated areas and plains and other areas that because of our data centers?

Are we also considering what impacts those people might also face and those protected areas, those wetlands, etc.?

Rural communities.

Council Alcara, thank you for the question.

To make sure, are you referring to that last piece where I was asking about our valuation coming back with options on geographic zones whether they'd be allowed or not?

Are you talking more to one of the other categorical areas?

What we were just discussing.

So we we can make that a factor of as staff come back with different zoning location options in the city, understanding of what is the proximity to we've heard the schools mentioned or two residential areas or sensitive environmental years, we can definitely include that.

Um could we quickly can we if we did that, like if we're gonna do a site on a piece of property that abutted a neighbor, a neighboring community?

Is there something where we could say we're gonna get go ahead and give notice to people that were not special in regard to giving those two, but outside the city limits, but maybe even go a little further?

So at least our neighbors would have notice of our proposed changes.

That could be something that we talked about a little bit to the geographic consideration and or the process uh piece.

All right, thank you.

And then just the more the left is the moratorium question, whether or not that we're voting for a moratorium.

Well, that would agree with the moratorium, but there's a process to undergo.

We have to make some findings, we have to do some things.

And question is whether or not as people talk about piecing this together.

This could be a piece or a bridge if you choose to, uh, but it's not a requiring us to vote for a moratorium.

I want to make that very clear.

It's just authorizing the staff again to explore.

May I also ask, because I feel like we interrupted you earlier, uh George WhatsApp you were going to say also an amendment to the community development code.

Direction on which is the if there's some evaluative steps that we're getting clarity on that we will need to follow back up and also integrate into our work plan.

We can we'll follow up on that.

But feedback tonight of whether you'd like us to pursue that more in the spirit of a community development code amendment or in the form of a moratorium through the state moratorium process or some lendable would be very helpful so we know where and how to kind of frame up the response to council and spend the energy and time from a process standpoint.

Council Sinclair.

I would absolutely like to recommend an amendment to a community development code.

All right, the the question before us is the thumbs up thumbs down, but it also look at a moratorium.

It's not instead of it, it could be a dish.

Could be instead of could be addition, but it's something like plan A, plan B, plan C.

We like to have a lot of plans going at one time as conditions change.

We may want to pivot or we may want to do both.

So the question is do we want to guide them, authorize them, direct them to take a look at that process?

And just giving it funds.

So yes, pursue the moratorium process.

Yes, okay.

Investigate it, I think is a better way.

And to that we'll put that with initial steps, you know, just to take a look at it.

And investigate an amendment to community development code.

That yes, we've that's mainly what we've been talking about.

I'm making sure because up there there's a type three and then use moratorium.

And it's it's it's an and not an or.

Okay.

Yeah, I just I also just wanted to clarify that if we were pursuing a land use moratorium, the point of that, um, part of the point of that is to buy us more time to be able to do a development code amendment.

Um, and to pause development while we're figuring out what all of these standards um would look like.

So that I mean it's a temp the moratorium is temporary, um, but it could get us time to be able to be thoughtful about the development code that we're making.

Um, so it would be oops.

We wouldn't do a moratorium without also pursuing development code amendment because we are required to show that we're working towards a long-term solution as a part of the moratorium.

Rachel, thank you.

Council President, we have proceed into the rest of the program if you'd like.

Yeah, let's go.

Well, you can do so.

Oops, there we go.

Sorry.

Um, yeah, so I'm thinking we'd maybe take a break to an hour and 45 minutes if we could take a break and come back at 755 or thereabouts.

Thank you.

The next section.

Dan, go ahead.

Thank you, Council Pretz.

I'll turn it over to Balokata, our economic development manager to talk about the enterprise zone portion.

So before I get into the enterprise zone details, um I just have a short summary about economic development and how that relates.

So economic development helps build a strong and resilient community by supporting business growth, attracting investment, and creating opportunities for residents.

These efforts focus on three key outcomes, strengthening the local economy through industry diversification, creating jobs with a range of wages and career pathways, and generating tax revenues that support essential public services, infrastructure, parks, and public safety.

Together, these outcomes contribute to a strong quality of life and a stable future for the community.

The city advances these goals through a variety of policies, partnerships, and incentive programs.

One of the most effective tools is the Enterprise Zone Program, which helps attract new investment, supports existing businesses as they expand and encourages companies to reinvest in facilities and equipment.

This makes it a valuable tool for business recruitment and retention and expansion.

The city supports economic growth across a variety of sectors with a focus on fostering opportunities that create living wage jobs, encourage capital investment, and strengthen the local tax base, which supports community services.

Because Oregon's tax structure can make the state less competitive for certain large-scale investments programs such as the enterprise zone, help companies justify locating and expanding here, enabling the community to capture the economic benefits of those investments.

So to provide a geographic context, this is a map of our enterprise zone.

There's two areas of our zone, North Hillsboro and downtown and South Industrial Areas.

To qualify for the exemption, a business needs to be located within the enterprise zone boundary.

Okay.

So the Enterprise Zone program supports many different types of businesses, not just data centers.

The information listed on this slide is a combination of various industries that were approved for enterprise zone benefits.

The Enterprise Zone Program has been active for 20 years with 100 approved applications representing 60 companies.

An average of seven applications per year were approved over the last 10 years.

As an overview, 50 applications are currently active, meaning some businesses are currently receiving tax exemptions while others have approved projects that have not yet placed property into service and therefore remain eligible to begin their exemption.

This represents more than 11.6 billion dollars in total estimated investment and approximately 3200 jobs with a median compensation of 126,500 per job.

Participating companies are also required to submit annual reports detailing expenditures made within Hillsboro from supplier purchases to retail spending.

In 2025, reported local expenditures totaled approximately 21 million dollars.

So the Enterprise Zone program is a state authorized property tax incentive administered locally.

Eligible investments receive a tax exemption for three to five years.

In 2017, the city authorized the optional two-year exemption, allowing companies to choose a three, four, or five-year exemption period with a maximum benefit of five years.

To be clear, the exemption cannot extend beyond five years in total for each investment.

Per state statute, the exemption applies to new assets only.

For example, it includes new buildings, building expansion, new machinery and equipment, and some personal property.

This requirement is applicable to all standard enterprise zone applications statewide.

If companies have new projects in the future, which includes new assets, as I've just described, they are allowed to submit another application, but must meet the state and local program requirements in place at the time of application.

So the following state requirements applies to all standard enterprise zone applications.

Increase in maintain employment by 10% for existing companies or create one job for new companies to the zone.

No job losses more than 30 miles from the zone, which generally means a company outside 30 miles of Hillsborough cannot close their facility or reduce their employment and move to Hillsboro to receive the enterprise zone exemption.

Exempt assets must be on site until the end of the exemption period.

If not, the asset will be disqualified and exempted taxes must be repaid.

First source hiring agreement is signed between the company and work source Oregon, agreeing to notify work source of any open positions to list in their database throughout the exemption period.

Our city contracts, which is essentially the company agreeing to meet our local program requirements, must be posted for 21 days on the city website per statute.

We will review the local requirements on the next slide.

Also, according to statute, we redact the business name and any proprietary information from the public postings.

The Oregon legislature created the school support fee, allowing school districts to determine their fee, which is a minimum of 15% up to a maximum of 30% of a company's exempt property taxes in years four and five.

Both the Hillsborough and Beaverton school districts have adopted a 15% fee and are responsible for directly assessing participating companies.

A pre-authorization meeting must be held with the company, county assessor, staff, and the city as a local zone sponsor before approval to review project details, annual compliance requirements, and answer questions about the program.

And lastly, each company receiving an enterprise zone exemption in Hillsboro and statewide must submit annual compliance forms to the county assessor's office for verification that the state requirements are met and determination of assets eligible for exemption.

Because we meet the requirements of an urban zone, we are allowed to adopt additional program requirements.

These are the requirements that the council adopted in 2017 when we sought reauthorization from the state for enterprise zone program.

The school support fee was later added to our city contract as required by state legislation.

So the local requirements include minimum investment in North Hillsborough of $1 million and $100,000 in downtown and South Industrial areas.

As I mentioned earlier, an annual procurement, an annual local procurement report is due to the city with a goal of increasing purchases by 10% annually.

Required wages to be paid at 102% of minimum wage in exemption years one, two, and three, and $125% of minimum wage in exemption years four and five.

This allows jobs opportunities at all levels to create a diverse range of positions.

Benefits provided to all employees must meet or exceed the national average for private industry as determined by the Bureau of Labor Statistics for the previous calendar year.

All employees are offered training and advancement opportunities, and the company reports a description of the training program and the number of participants annually.

Companies pay an application fee equal to 0.1% of the total estimated value of investment capped at $50,000, which is equivalent to a $50 million investment.

We are the only enterprise zone that voluntarily shares our application fee with Washington County.

A community service fee is assessed to companies receiving benefits, which supports workforce development and economic development priorities.

The fee is based on an exemption per job formula applied annually to all participants.

As we discussed earlier, in addition to the community service fee, applicants pay a school support fee of 15% of the abated tax in years four and five of the exemption period.

And an annual compliance report is required, confirming that the local requirements were met.

So this timeline highlights major milestones in the history of the Hillsborough Enterprise Zone Program.

So in 2006, the Hillsborough Enterprise Zone was established, including the creation of the community service fee and the appointment of a zone manager.

In 2016, the city council adopted amendments to update the community service fee and application fee.

In 2017, the city applied to the state for reauthorization of the enterprise zone and adopted local policies discussed previously.

In 2024, this the Hillsborough and Beaverton School Districts established a 15% school support fee and adopted resolutions implementing the fee.

That same year, the city council approved an expansion of the enterprise zone boundary.

Good evening, Council Michelle.

So this chart shows the community service fee that we have received and collected since inception fiscal year 1112.

As you valid stated, the program started in 2006, and community service fee is not paid until the investment is abated.

So that's why there's a delay in the community service fee.

The blue color is the community service fee, which I'm going to call CSF, otherwise you'll hear me say community service fee a lot, is paid by non-data center companies, and the orange CSF is paid by data centers.

The CSF is restricted by both state statute and city policies.

Years one through three can only be used for workforce development and years four and five for economic development.

This means that the community service fee cannot and is not used for city operations like police and fire and is not booked in our general fund.

The city has chosen to fund 1.25 FTE with the community service fee funds.

As it is restricted, we are allowed to use that to pay for staff, and that is really a finance-driven that we like city policy to use restricted funds first, and then that way we are not dipping into discretionary funds to pay for work that is specifically tied to the community service fee.

So the FTE includes the one full-time position, which is our workforce development project manager, and then pays 25% of our full-time position who manages the eZone program.

As you can see, the amount of the community service fee collected has increased significantly in the last few years.

Prior to biennium budget 2527, finance was booking the community service fee and tracking it in our economic development fund.

As the revenues began to increase, finance staff determined that we needed to create its own fund for our enterprise zone program and monies needed needed to go there.

So for Biennium 2527, which you all adopted, we created that new fund, and we get all the men that we've been tracking tracking related community service fee and the application fee were moved into this new fund, and then any new revenues and expenses are being tracked in our enterprise zone fund, which is so that budget and that fund can be found in our city's adopted budget, which is online.

To note, the city does not have to charge a community service fee to companies.

It is allowed under state statute as Val said, and prior city councils did approve the implementation of the community service fee.

If we did not impose that community service fee, then the companies would keep those funds.

And the city would have to find other discretionary funding sources for the programs that are currently being supported that Dan and Val will talk talk about briefly in a moment, or we'd have to end those programs.

So the Washington County Assessor recently changed how they calculate the real market value for data centers.

They change their methodology from a cost basis to an income basis.

The county assessor thinks this new methodology provides a better valuation of these types of properties.

And with this methodology change, it increased the valuation of data centers, thereby increasing our community service fee.

Companies in the enterprise zone agreement, like all property owners can appeal their property valuation.

And if the appeal is successful and the valuation amount is decreased, then the city must refund the community.

There have been several pills throughout the time since inception.

And in fiscal year 1617, you can see the blue is actually a negative.

And that was a non-data center company that appealed their valuation, which resulted in them resulted in the city having to refund portions of those community service fees.

So we have to potentially refund money, not just for valuations, but if a property is determined by the county not to meet the programmer criteria and their exemption is not allowed, then we would have to refund the community service fee.

So every year, Val said that property is evaluated, the asset is evaluated to make sure it still meets all the criteria and continue in abatement.

So therefore, we need to retain a balance in this fund for potential refunds.

And if there were no community service fees funds available, if we were to spend them all, and we had to do a refund down the road, then we'd have to use discretionary funds to pay that refund until we had new community service fees collected.

Back to you.

Thank you, Michelle.

So what I'll cover briefly, and I think this actually gets to some of the questions in the last session, too.

So hopefully you see some of the answers here, and we can come back at the end.

But these are some of the public benefits that come from that funding that we are able to aggregate and collect from those community service fees that are paid back by the enterprise zone applicants.

Many of these programs should be familiar with you because it's due in large part to past and present councils direction to support the funding and the evolution of many of these programs that seek to provide not only benefit to Hillsboro residents, Hillsboro Workforce, and Hillsboro small businesses, but in making these investments too, we recognize many of these partners do serve at a countywide or region wide level as well.

So that benefit is going beyond our city limits, even though the primary emphasis of the programs are to really respond to needs and opportunities here in the community.

So this table seeks to provide the funding that has been provided with a correlated year because some of those partnerships and agreements have expanded over time as we have seen the program mature in revenues change.

And so at the top, you see the Portland Community College Quick Start Program that we launched in partnership with some of our local employers and Portland Community College, really focused on getting manufacturing technicians and manufacturing workforce ready for our advanced manufacturing sector, especially semiconductors.

You can see that on the far right column are some key performance indicators that we tried to normalize across the years 2020 to 2024.

But in a couple of these longer standing partnerships, I'll give you aggregate numbers too because they're quite noteworthy.

So in the the quick start, we have supported to date about 390 participants in that program.

Similarly, we launched and want to thank our partners at Centro Cultural with the Central Protestant, something that we have supported since 2016 to the tune of just shy of about 2.8 million dollars.

That effort provides a variety of support throughout our community, both ranging from workforce development and small businesses, and you can see some of those last four or five year indicators on the right-hand side.

So more to come on that.

COCINEMOS, our food entrepreneur partnership program with Adelante Mujeres.

You can see the funding there.

And so you see some of the key performance indicators that we have out of our partnership there, including business coaching hours, new businesses supported at launch, and program graduates really learning financial leadership literacy, how to create business plans, launch their own programs.

And then one of our longest standing partnerships is that of the PCC Future Connect program, which in the last uh 2020 to 2024 window has supported 250 uh first-time college students or low-income college students.

That program dating back to its inception is over 700 students supported as well in the spirit of providing access to community college, providing access into the workforce and helping to support careers and livelihoods.

So moving on, there's some additional pieces that we've been evaluating as we started to see some of that fiscal curve, albeit uncertainties of appeals and appraisal methodologies.

But we have been tracking other elements as well, some of which stem from city council priorities or other community initiatives.

Those include things like customized on-the-job training programs that we have launched with Hillsborough employers, everything from English as second language classes up to specified welding classes for certain types of job skill sets, uh, customized training programs.

We've worked with biotech companies to create biotech career pathways at Hill High, many other types of examples.

Similar to that, we provide a customized incumbent worker training program to many of our local businesses.

The goal here is to try to encourage those uh Hillsboro residents that are employed at Hillsborough employers to be able to get additional training and perhaps grow or stay within those companies during different economic periods and um changes in needs.

We have the workforce development center feasibility analysis.

This is something that has come out of community engagement efforts in the past and has also been a council priority.

So we continue to evaluate what it would look like to establish a more holistic advanced manufacturing and training center.

We've done that uh to a degree in partnership with Portland Community College, other workforce trainers, um, and that is one while we've not taken the next step uh to acquire a site or build a facility, which would be massively capital expensive.

We have been evaluating what the design of that would look like and starting to put some funding away to be able to support a partnership like that if we're able to make it uh realized.

The advanced manufacturing training and education consortium, AMTEC is one that our uh workforce development manager, um previously Christy Wilson, currently Claudia Rizzo Mendoza has helped to facilitate.

This is where we bring our local employers together with local workforce partners, educators, trade uh uh uh uh training programs and the like, uh, and they meet monthly to go over that, and a lot of the programs um that we've created in the past and some new ideas of future opportunities really get established there between uh that set of partnerships.

And so while uh the city organization and and Claudia in particular does a great job convening that and establishing that, uh many of these dollars that uh Michelle was just talking about helped you fund portions of that and the ideas that can come out of that.

Um we talked about Hillsborough School District support.

Uh, we're continuing to explore a couple of opportunities there with them as it relates to some of those college and career pathways and support for that.

And then as Michelle noted, um, we do support and fund a portion of our staff out of those funds as well.

Uh the picture on the lower right here of one of the DCC Future Connect cohorts uh at graduation.

So with that, uh that concludes the first portion of the enterprise zone more macroly.

Uh, we're happy to take some questions here.

Um, and then the next portion would be getting into the specifics of the enterprise zone process.

We've received a lot of questions around how those applications work, what's being reviewed, what's being asked for in contract, but that's the next section up.

Thanks for the info again.

Uh I have a lot of questions.

So first one, am I yelling or is that just my ear messing up right now?

Because my ear is still a little bit.

You're a little close to the mic.

Okay, you're back up.

Yeah, all right.

Uh, for those that don't know, I'm dealing with uh been dealing with an ear issue for the past couple months, and it kind of messes up my hearing uh and my vocals.

Um so on the local requirements, is there like an annual report that companies submit that's part of the enterprise zone program?

Or how do we like how do we confirm that information?

Yeah, so all of the companies are required to submit uh I call a compliance letter.

Uh just basically um providing the information that they have complied with our local requirements specifically.

So the uh state requirements that is uh required to be submitted to the county assessor's office with a cow uh with a copy to us and the county uh verifies state compliance for those requirements.

Next question.

How like what happens if the company doesn't uh you know meet some of these requirements?

What are the consequences?

Are there any consequences or is it just do better next time?

Yes, no, um, the local contract outlines what the uh you know the callbacks are if they don't meet the requirement.

Um, if a company does not, and we recently had this happen.

Uh company did not submit an annual compliance letter, and um we actually took steps to disqualify their uh existing.

Okay, so there's real consequences.

That's really great to know.

Uh okay, next question.

Help me understand.

I think this is what I understood from the presentation.

So I'm just gonna come from right.

So the graph, 25 to 26, we haven't collected those yet.

Those are what we're expecting, or at least we haven't distributed, sorry, we haven't dispersed that one.

That is money we have received in the community service fee from the companies that are part of the program.

That's our money.

That hasn't been dispersed yet.

No, that's the revenue side.

What has been dispersed uh has been from last year, and that's what we're seeing on the table below and the following slides where it talks about the different partnerships.

Is that kind of where all of the money gets spread out?

Because I'm looking at the table and I'm like, that's a little bit under 55 million, and then I look at the graph and it says 15 million.

So I'm just trying to trying to make sense of the numbers that I'm seeing in the graph.

So because of the last couple of years or the balance in this fund, which is why we create a fund specifically for this, currently has about 55 million dollars in it.

Oh, case, that is really helpful information.

That is how that is information that I've been asking for, right?

Like how much money is in it, how much we just how much have we dispersed, what's available, what can we use it for?

Because there is a lot of need out there in the community, right?

And there is a specific use.

So if I just feel like that is really important information.

So thank you for distinguishing that.

And as Dan said, one of when we have we're retaining some effort for appeals and those sort of things.

But one of the big pieces is that workforce development center.

Um, obviously 55 million is quite a bit, but and it's that sort of thing.

Dan you can probably speak to that better than I do.

Yeah, and then one more one more question.

Um, so given you know that there is partnerships with private companies, and part of it is to help their workforce development programs.

What are we doing?

Because I have some insights, for example, I when I worked at Intel, we partnered with PCC for the um quick start program.

So I have some insights about how the program works, right?

And so one of the things that is really important, and what I really value and I like about that program is that they bring people into semiconductor industry that would not traditionally think about semiconductor industry.

So they they look at other industries where people have the same skills, the same kind of daily routine, right?

So one of those is fast food, others is like nursing home.

There's people that are on their feet all their time, they're writing reports, they're checking in.

So they're bringing people in that are not used to that environment, right?

They're just really great program when we talk about equity perfectly designed.

The issue that I saw is people are not set up for success, right?

It's like they go through this program, they get put in a job, they're in a completely new environment, and nobody is there to actually hold their hand and say, actually, you know what, this is completely new for you.

Let me show you the way how you talk to people, how you communicate, because they end up getting set up for failure, right?

So, how do we follow up on that money we're investing, making sure that the investments are actually permanent and not just like a flash in the pan program that we can highlight because that's what I care about that this money is getting invested in some real long-term uh impacts, right?

Not just like a flash in the pan.

This program looks really great, but in practice might not actually work out, and you see that a lot, right?

And I'm not that's not like an indictment on the staff, intel, anything that happens with any program.

You can think of the design any any way you want.

Once you actually put it into practice, you start seeing all the things that happen, right?

And so that's one of the things that that happens.

So, what do we do?

Because I feel like we have some responsibility there to make sure that when we do give some of this money back to these companies, because that's what's happening, right?

This money's going back to them to help them.

How do we assure that that money's actually gonna have a long-term impact, and it's not just to repeat the same thing four times now?

A flash in the pan.

Yeah, because that is what I don't like money being used for.

Counselor, thanks for the question.

I'll do my best to respond to it as briefly as I can.

Again, happy to follow up in more depth later if council desires.

So, first of all, that's in part why we created the a portion of that 1.25 FTE in our dedicated workforce project manager, and the role that we have filled to commit to that to try to understand the community's needs, the businesses and employers' needs, the work workers and the workforce need, and to convene those partners can help establish that and operate that program.

The other piece we do is twofold.

One is with the partners and programs like that we captured on this slide.

We have times we'll check back in and revisit and update or change those programs.

And you see this uh oftentimes in those contract renewals when we are updating um uh MOU, a memorandum of understanding, or those contract pieces, usually in a biannual budget type of scenario.

Um, and have the chance to check in on what are we doing well, where are need shifting, where do we maybe miss the mark?

There's digital literacy push for a while, that has shifted.

And so with those more longer standing programs, we're constantly revaluing those, and that's not just from a staff standpoint.

We're doing that with those partners inputs and and other stakeholder inputs.

For programs such as that are on here, where maybe we're reinvesting back into our existing employers.

We will ask them to provide information, and there's caps on the number of dollars per job.

We ask for program curriculum and some of those metrics.

Now that can change based on whatever customized workforce need they're seeking to address, but we do seek to have that within each one of those.

And so I hope that answers your question of how we kind of address it in three distinctly different areas, all related to this work.

Yeah, I mean, because it's a real it's like it's again, it's not because that I want to like hassle on the details, but I pay attention to the impact, right?

These programs are really well designed, but again, you're pulling people out from an environment that they're already comfortable in, right?

If somebody's working fast food hotels, they have their they have their schedules, they have the routines.

We're giving them this huge opportunity, they obviously take up on it.

They go in, sometimes they're not hired for a few months, sometimes they last five or six months, and then what happens to their life, right?

They have to go back and say, Well, what do I do now?

And so that is what I am really concerned about.

Like, what is like how are we actually impacting the lives of people?

Because we have good intentions, but maybe long-term might be a negative impact.

And so that's why I I want to highlight that.

Not that I want to get too dipping the too deep in the details, but those little things matter when you're building a program that you want to have real good outcomes in.

Counselor Amberid and Counselor Elka.

Thank you, Council.

Okay, so the so the CSF formula is uh determined by us.

Okay.

And and we can change it by policy as uh I understand by a policy change.

All right.

And um, but but are there like minimum and maximums regarding that formula?

Uh that uh uh uh that fall under us?

No, no.

Ah, okay, all right.

And so have we ever changed it?

Yes.

Uh-huh.

Okay.

So it was uh initially established in 20 uh 2006.

Yes.

And then we changed it in 2016.

Okay, yes.

Okay, then we have a swing.

No, um, that's when we created a two-tier system.

I see.

So um we wanted to uh make it a little more fair because we started noticing companies were getting larger abatements, yeah, um, and less jobs.

And so we created this two-tier system, which um, you know, if a company uh had an abatement of 20,000 or more per job, they would pay a community service fee of 33% in years one, two, and three, and then 50% in years four and five.

Okay.

We have a lot of the data centers because of their low employment account fall into that um tier.

Yes, which is making our community service fee fund grow.

Yes.

So that's where a lot of the okay money.

So when I look at this graph, I like it.

I really like it.

It's a lot of funds that are being generated.

Um what are the so the restrictions that are put on the usage of these funds?

Are they under ORS or are they us?

We can can we change can we decide how to use them?

Uh counselor, they're both.

So state law has some restrictions, especially in years one through three, and then we at the local level of law also impose restrictions, especially in year four and five.

Okay.

So we can change our local stuff, we can't change the state law requests.

Yes, okay.

And could could you could you tell us what what they are?

Yeah, so in year one through three, um, the money has to go to workforce development pursuant to state law, and then years four and five, it has to go to economic development pursuant to our local code or local policy.

Okay, and workforce development is not equal to schools uh under under that or that law that under ORS.

So we do have some programs where we work with the schools.

Um I'm not maybe I'm not fully understanding your question, I'm sorry.

I mean, so so you know, our schools teach the kids and you mean just giving the money directly to schools for school.

Yeah, is that would that not be would be yeah, it basically has to go towards programs that assist people who live in or near the zones for work opportunities, or work opportunities.

I mean, it has to be like it can be high schoolers or no, I can't, and we do have some programs where we're helping high schoolers, um, and some of the the programs that Dan was talking about does work with high school students.

But for sorry, I'm just trying to understand this.

What like what if what about build what about uh building a science lab in a school?

Is that is that would that not be more enforced development or a computer lab or something like that?

Um, you know, I think we'd have to look at each of those on a case-by-case basis.

I don't want to give you a blanket yes or no answer.

I mean, you know, I'll I'm a lawyer, so I'll tell you what depends.

But um, I you know, I think generally in when these kinds of situations where the state imposes restrictions on what you can spend the money on, um, there's ways to potentially if you could demonstrate that like the computer lab was being used for people to you know learn how to do resumes and something like that, so that you could potentially program yeah, I mean, but we haven't, you know, those are the kinds of issues that I think the program manager works with uh different entities on sort of where you can get the most bang for the buck.

And I think it's important to uh really stress the point that was being made by staff earlier is that historically we haven't had this large influx of money.

Of course.

And so now there's an opportunity for the council to sort of weigh in in the future about how we're gonna spend this money going to Council Sagata's point, like what kind of programs can we sort of have the most impact with?

And then to sort of what you know, Dan and Michelle were talking about sort of a larger sort of workforce development center that you know has been on the city's sort of priority list for a while.

And so there's a lot of there's a lot of decisions that are gonna have to be made with that money, but we're we're not yet making those decisions because we need to hold on to that money, as Michelle was saying, just in case we have to refund some of it.

So we're being conservative with it until that money is basically free and clear to be able to use, and then the council will start to make those decisions.

All right, I have one more.

Um yeah, so could we go back to the graph?

Because I really like it.

Um so um, so you know, I see that we have a very we we have an opportunity.

Uh the enterprise zone was was adopted by the city in 2006.

Um and it was adopted to create jobs, it did create jobs.

That's why the CSF is so low in the beginning, but then the data centers were kind of looped.

There was a loophole, and they came in, but but they they are providing a lot of community service fee.

And so, what I would like the staff to look at is uh maybe changing the formula to get more.

And I mean, get we you know it's it's marketing, you know, marketing mindset.

You you charge as much as the other person can bear, so you know, charge more, uh, and then just investigating how what to do with that, what to do with these funds to so that it they you know, we we get we yeah, so just to do what what to do because I think it's a great opportunity.

Thank you.

Uh counselor Alper and Counselor Finclair and then Counselor Case.

Um, can we go ahead to the slide with all the benefits that CFS is providing?

This one.

This one.

Yeah, so I appreciate all of the things that the city gets to enjoy because of the enterprise zone and the data centers.

I'm questioning the sustainability of that fee and our reliance on it because I think we ought to be looking at other sources as well, and other people have said how do we consider using this funding in a different way.

Um the Coastal Animals program and the Quit Start program, those are like shorter term programs.

The Coasting Animals programs, you can demonstrate how many people participated and how many new businesses were started.

Um, for PCC Future Connect, we can always ask how many students are enrolled who were doing Future Connect, right?

And then for Centro de Cosperidad, they can provide they provide numbers to you for what they do there, but for the quick start program, um, Christian is right because it's a program that introduces people to consider going into those fields.

Not everybody gets hired.

I would like to know how many people get actual jobs who go through that program.

And I can recall um years, maybe a couple of years back, where I believe we were having an enterprise zone conversation and about these funds and how they support people.

Um I think it'd be helpful to see that data.

And work source should be able to provide it.

Our partners should be able to provide that data for us to be able to look at that because I don't think that and I could be wrong, I can't speak for everybody here, but those fees do contribute a lot to the city, and I think that when people look at the enterprise zone and looking at data centers, they're also looking at um tax abatements and energy bills going up.

So I think when you want to explain this, you need to give a little bit more detail to people about what this means.

So we have money that we give the people to get into Future Connect.

I know I have worked with students who have Future Connect, but I think it'd be helpful to have a little bit of qualitative data to go along with this to explain what happens to people as a result of participating in things that we fund.

And yes, we want to get them in the school and community college is uh the easiest access program, but let's also think about colleges four years that are offering free tuition for everybody who qualifies for grants because that exists too.

And I think that that can give you uh maybe a different picture of who some of those future connect students might be and whether or not they're transferring on.

And um, and we're you know, looking at quick start and hopeful that people are gonna get into this the field of technology.

Do we have expectations of these other orgs are gonna do the same thing, or they people have free will, we're not worried about whether or not they want to go into the tech field.

So where we're putting on money towards investing in people in education.

I think we need to look at that a little deeper.

And you know, these programs are really important.

Centro de Prosperidad, there's a lot of people who are low-income people and have an opportunity to do something a lot also with Cosinal.

So we're talking about Central Popular, Central Prosperidad, we're talking about other than that thing will hit us.

Nonprofits participating.

Thanks.

So maybe if I could just summarize what we're already hearing, I think from all three counselors who spoke is that there's a desire to have some more discussion and analysis on how these programs are working and how we can you know fund future programming.

And so that's I think we've already got a consensus on that.

So to the state time, certainly if you want to make more points about that, after leave, but I think we've gotten that message loud and clear.

Yes, yeah, and I'm I'm basically echoing the same thing.

Um I really want to focus on also um how many of these new jobs are already built into the small business that served, are those separate or combined when you look at Central Prosperidad's um itemization, and then in addition to that, when we talk about uh local requirements for local procurement reporting and job quality wages being minimum wage, that's not livable wages, and so um so I'm wondering is so the median wage that was on that slide.

No, no, no.

So the local requirement is 102% of minimum wage.

That doesn't mean that that's what they need to pay or that's what they are paying.

The median compensation that they report to the state and or to the county and to us, should come turned out to be 126,500 per job.

So you're not gonna have companies in North Hillsborough that are paying minimum wage because then we wouldn't be able to get any plate, yeah.

Right, but we wanted to give um companies the the biggest range, um knowing that they're not going to pay minimum wage up there.

I'm so sorry, pal.

I am looking at the page where it says job quality wages, um, and it identifies um Hillsborough Increase overview local requirements, and so I am I meeting that wrong because of the minimum oh it's an they have to they have to pay a minimum.

Okay.

Um that's confusing, at least to me.

Okay.

Um, so my bad.

Um it's just ways to verify what that is.

Um, and then we look at the I the itemization of who the partnerships are um for the workforce development.

My question is I heard counselor uh Alcar mentioned that the city benefits on these fees.

Do we do workforce development within the city and do we bring in any of this community service fees to provide workforce development, create job opportunities here within the city through this funding?

So, counselor, just to make sure we're answering your question appropriately.

Are you referring to job training for city higher positions in the city organization or within the city community?

The city organization through the community services.

So these community service fees are intended to support workforce development programs for the employer across the city from a community standpoint.

None of these dollars are being utilized in a lot of the programs examples we gave for internal workforce training.

That is coming from other revenue sources.

So I can I was just gonna add to that too.

So you're familiar, we have uh a pretty uh robust internship program that we have in the city, for example.

We have some job training um uh apprenticeships, those types of programs, those are not paid by this, those are paid through other funds to the city.

We use these funds externally to put uh out into the community.

Okay.

But counselor Sinclair, I I think if I want to make sure that we're giving you accurate information, I think the question that you're trying to ask is that there is money that the city uses utilizes out of the community service fee, and you're asking what that is used for.

Yes.

As I believe Michelle explained that we have uh 1.25 FTEs that are funded with that money.

And so one of those positions is that position that we've just been talking about that manages all this workforce development program, and that's the one that Dan was talking about that that goes out with the community, works with the community and determines like how they how to utilize this money.

And the point two five is for the zone uh for the for helping to run the actual MPI zone itself.

So that is money that helps um go towards paying for running the program.

And as Michelle was saying, that we take that out of the program proceeds to have help run the program instead of using discretionary funds for that.

So it's being sure that the program is paying for itself.

Thank you.

That's making uh counselor's cage, then I have some questions, and then counselor Suggell.

Sounds good.

I think I'll be pretty quick because I think Council Sinclair answered some of it, or got through some of them for me.

Um so on the on this one, nailed it.

Yeah, the years one to three, 100% of argument minimum wage.

Um, I agree.

I don't love that, but what I wonder is if we can back up, maybe a review of this, our local requirements would be helpful.

Um, and so one thing I'm seeing though is that 102% argument minimum wage and just changing that to years one through three, maintain a median compensation of whatever this the median compensation was, probably like the year prior.

Seems like a starting point not to get to in the weeds, but too late.

Um, and so anyway, I was thinking that would be really helpful.

Um I understand the school support fee in your score and five um is a state requirement, not something that we can do, but that's something that I'll be curious to see the results of the data center um and prosperity council at the state level and see what they recommend.

Um I think that would be something that I would be interested in us as a city um lobbying for a change to start that earlier or from the beginning.

Um and then back to the enterprise zone public benefit slide where it had the four organizations that we've we've talked a lot about, and I think come to consensus, but yeah, I was thinking an audit of that would be super helpful.

Um, I'm also curious if we if there's an opportunity for farmers markets to be considered as part of that job creation.

Um, it's just something I would be interested in.

Like so, because it is you know, job creation and diversify, yeah, it's a different place um for, and so I don't know if they maybe would be adding a training program um for those businesses that you know are really incubating there, right?

They have the day job and they're working at the farmers markets on the weekends.

Uh to just something I have been thinking about for a while, and this seemed to be the place to bring it up because we're talking about it.

So I think that's it for my questions at the moment.

Okay, thanks.

I have a couple.

So I understand that the enterprise zones is 125%.

That's the starting or minimum wage.

Do we have a medium wage requirement?

Secondly, the um the 126,000, it looks to me from that slide like that's a compilation of every single organization that gets tax abatements.

So that could be the manufacturers as well as the data centers.

So if we're creating a different use for data center, I would like to see the wages for data centers because the at least the information I have is they're lower wage jobs.

So when you say it's 126,000 found it, great, but is that data centers or not?

Is that a combination about everyone who is in the program, but the data centers median compensation is 136,570 for data centers?

Yeah, so is that the median?

Yes.

Okay, I think it would be helpful to have that again.

Okay, I got that.

136,570.

See, because that's higher than the overall blended amount of the data centers and non-dasset and tax abatements, but yet I've been told by a lot of people that all this does is produce minimum wage jobs, and that is clearly contrary to what people believe the common wisdom is.

So a median for is not an average, that means half the people are making more than that, and half the people are making below that.

So if you have 30 people working at data center, half the people at a data center are making over 136,000 versus half below.

Um that's better than people think.

Counselor, we're happy to receive any data based on those courses you're looking at just to inform staff, but that data is coming out of the direct reporting as we talk about too.

So just for clarification purposes.

I'm not telling you, I'm not saying I have source information, it's it's what I hear in the ether in the atmosphere, right?

Okay.

Oh, uh, a couple of other questions.

On the on the refunds clause or paybacks or whatever you want to call them, if someone were to um appeal their tax assessment, how long of a period of time do they have to do that?

Isn't it six months or a year?

I believe they have to file their appeal before the end of the calendar year.

Okay, so if they get the notice in November, that means that it would have I mean, it could take a year, sure, maybe longer for the appeal to go through tax courting itself.

Right, and they're not gonna win a hundred percent, right?

It's not all or nothing.

It's negotiated.

Sure, sure.

And then also how long is it between the time when we know they they have fallen out of the system compliance-wise, and then they are we are ordered to refund uh their community service fee.

Um I I don't have a set timeline, but we ever have to do it.

I mean, I try and do it as soon as possible because you know, once it's been uh official, the county assessor provides me with the new value, and then I can recalculate their community service fee.

Um, usually they the company companies shortly thereafter start emailing and calling, asking about their refunds.

Sure.

My point is that we probably calculate how much of this money went hard pretty quickly.

It's not like hey, we have to hold on to it for three years.

It's not like we have to hold on 100% of it for three years.

We could say, well, we're gonna we're gonna escrow, you know, 10% of this for pay maps, right?

So so I think that's probably relatively easy to compute uh an estimate on that.

Uh and so I'm just saying as we calculate going forward what to do with this $55 million and the years outgoing, we shouldn't think that all of this is at risk when we make our plans.

And I'm looking forward to working with staff, so council and council decides what to do with that $55 million or how to spend it, because I think it's going to be a robust and interesting conversation, and we're gonna give you a lot of options probably about we're gonna choose to spend that money.

Vacation.

I would personally pick a mantra if I had a choice, just because I don't think I'm ever gonna get the chance uh tone one.

Uh so we have a if we look around the state of Oregon, um we we have a really unique opportunity here uh to do something really good for our community, and I see this as a test for all of us.

Uh, what we decide to do with this influx of money, um, it's gonna matter for for decades to come.

And so the decisions we make right now are gonna be judged 10, 20 years down the line.

I just want you all to keep that in mind.

Um, one of the things that I have learned through the Hillsborough Leadership Program is that our Hillsborough School District has a really awesome CT program.

And one of the biggest challenges they have is resources, right?

Um people line up for that program and there's waiting lists, there's not enough teachers, there's not enough space, but it's a program that produces really good results, and it's not just about funneling students in the higher ed, which I'm a big believer in because that's that's how I got here, but they also allow them to train uh in trades uh and different things that are not requiring them to go to school.

So can we look at funding something like that in partnership with our Hillsborough School District?

Because I think it benefits the whole community if we look at the long-term impact of these 55 million dollars.

What's gonna happen 10, 15 million dollars line?

That's the kind of impact we can have with this type of money.

We shouldn't be focusing on what good we can get or what good story we can get for the next one or two years.

We should really look at and see what can we actually change with 55 million.

We can change the trajectory of the city with 55 million dollars and CTE programming, HSD partnership.

We should think about the future, we should think about our youth.

Really, that's really where I would like to see the money go, or at least the majority of it goes.

So I would love to see some sort of report on what that could look like.

Uh what the impacts any do your magic, whatever all the numbers that you need to get to us.

I just want to really see what that looks like because I feel like that is the right move to make because it's about the long-term impact, not about what's going to happen in the next year or two.

Counselor, if I if I could, Counselor Harris, uh thank you for saying that.

Uh we we work um directly with Hillsborough School District um very regularly trying to identify that.

This now is an opportunity to try to figure that out.

I will say one of the complications we have the school district is not Hillsborough, it's just the state funding formula, and that and there are ways where we are actually not allowed to just provide money straight to the school district.

That's the complication is the way the state calculates it.

Now, this is going to be a new situation.

So this that's absolutely some analysis that we want to do because if there's a ways that we can figure out new ways to help HSD, it would be amazing.

We would love to do that, and that'll be part of this analysis that we come to.

Yeah, I mean, the reason that what sparked that idea is uh, you know, counselor I asked, could we potentially find a science lab in the school?

Well, if we can find a fine science lab in the school, we can fund from my perspective, right?

So let's do our, I mean, we we figure out ways to uh find uh find easier ways for other people to do things.

Let's find an easier way to fund future investments in our children.

Thank you.

Uh Counselor Ambry, then counselor um LCAR.

Can we do a time shock?

How many slides do we have to go?

Well, we have one more section.

Um there's about 10 slides left.

Um, and what I would propose is when we get into that section, there is two sets of council questions and policy discussions.

Perhaps we can skip the middle one.

This is under section four on the schedule HBL before you uh skipping this the first green question mark middle there and just work through that whole section and wrap up with whatever policy conversation or questions council has at that point.

Okay, a great uh councillor Zenberg and Counselor Elker.

Um thank you.

Um so are we gonna uh are you going to go over the summary of what you thought we were saying?

Yes, we've taken some notes on this section.

If it's okay, what I'd like to do is try to get through the full enterprise zone section, including things like school funding formulas and some of the other financial tax questions we've had, and at the end, there's a couple of other policy areas we would love to discuss on, and then we can summarize all of the enterprise zone policy discussions before the night's over.

Okay.

Yes, yeah, that's fine.

So you mean the next section also and then summarize?

Yeah, okay, that's fine.

So I have a couple things.

Um, we're talking about job training, can we be creative and maybe fun working hands farm?

Another programs like that, not necessarily connected to tech.

Um, I have said that it's nice to have the silicon for us.

One of the things that I think that schools could benefit from are having field trips and having actual front-facing um opportunities to see companies and to talk to people who are actually working in there that could inspire them to go to school.

And I think that um it would be great if the silicon forest pays for the school buses.

Um, regarding data center job requirements.

You're talking about two different pay, right?

Structure.

What are people um what are the education levels that people need to have?

What's the expertise?

Is there any union?

What are the job requirements?

And how long are people expected to be in those jobs?

Like what is the plan for somebody to be in a job like that?

As far as a company can forecast.

Counselor Elkare, if I could, um, we'll take those questions down as well.

One of the um kind of unique things about data centers when we try to answer that is there's really kind of two types of jobs.

They have the jobs that are there permanently in inside the data centers, and then they also have a whole bunch of, for example, electricians.

And so there's an electrician union, for example, and I forget that.

I'm sorry that I don't remember the name of it.

Thank you.

Yeah.

Um, no, so they're actually so they actually come back routinely once the data centers constructed.

They're the ones a lot of times they're doing a lot of the work in the data centers, but they're not often counted as a data center employee.

So that's um, it's a it's a great thing.

We'll try to figure out how to include that in the analysis as well.

Thanks.

Okay.

So we will progress into um if you're looking at your sheet, we are moving into the section four.

And kick it back over to Belle.

Okay.

Uh Enterprise Zone application process.

So for context, the enterprise zone application and authorization forms are developed and provided by the Oregon Department of Revenue.

These standardized forms and requirements are used statewide for all standard enterprise zones.

It's also important to know that the anticipated project timeline and estimated investments submitted with an application are non-binding as stated on the application itself.

Once a company receives authorization, state statute allows project to begin earlier than originally anticipated.

So this slide provides a general overview of the administrative process required to review and approve an enterprise zone application.

Under state law, applications submitted by eligible businesses for qualifying projects must be accepted, reviewed, and processed.

The city coordinates closely with Washington County assessor staff throughout the process, typically beginning as soon as the application is received.

Once the city's review and approval steps are complete, the authorization form is signed and forwarded along with the application materials to the county assessor's office for review and approval.

After the county assessor signs the authorization form copies of the authorization and application documents are distributed to the company, Washington County, Business Oregon, and the Oregon Department of Revenue.

So this slide illustrates the typical enterprise zone project timeline from the initial company application through the return of exempt assets to the tax call.

The process begins when a company submits an enterprise zone application to the city.

Oftentimes pursuing uh the necessary permits and approvals at the same time.

Construction and installation of equipment typically occur over the next two years.

So that's the section in light blue.

The tax exemption does not begin until the eligible assets are placed in service.

In the following year, the company must submit the required exemption claim forms to the county assessor with a copy provided to the city.

At the conclusion of the exemption period, which could be three to five years, the state law requires the formerly exempt assets be added to the tax role and assessed for property tax purposes.

So there's been uh quite a few questions from any friends around how phase projects would work with the enterprise zone.

And as Val stated earlier in the presentation, no one investment package can uh exceed a property tax abatement for more than five years.

However, on a specific site, you can have multiple phases that have phased in five-year investments that are subject to this, which can extend uh timelines for the overall site, whereas each investment.

So let's say that this is a site that we're working with, pretty generic site, and we have five phases as shown here phases one and two across the top, phases three, four, five, and six across the bottom.

Next to them are parentheses of when the anticipated construction uh completion and that placed and service date that Val noted, which is really when the abatement starts is happening.

This is very common in data, especially the medium to larger size data center projects, and also we see phase projects in some of our advanced manufacturing sectors as well.

So that's what the physical layout and kind of construction phasing would potentially look like.

And this is how the example with the enterprise application process would look like.

So this color-coded graph follows those steps that Val just mentioned previously.

The dark blue uh slide or the section you see with the one for application one and then year three for application two is when we would be processing the potential enterprise zone application in a normal phased format.

Light blue, as Val mentioned is usually that construction and process that can range depending on the complexity of the building.

Are they building a new building?

Are they going into an existing building, etc.?

That's variable.

And then this assumes five-year enterprise zone request for all of them.

If it was a three-year, you would see the dark green shrunk down to three years.

And then the light green is where each of those investment phases would come back onto the tax rolls and abatement would go away.

So in this case, phase one would come in.

I'm just gonna jump back for a quick minute, and would be placed in service, say in 2036.

That 2036 would really be starting in with year four, right here.

And so five years, we would see property tax abatements on that investment.

And then in year six, um, basically in 2042, it would come back onto the tax rolls and support local property taxes, general fund.

Michelle talk more about that in a minute.

Similarly, phase two would be staggered from that, and I won't run through every single phase, but this just helps to lay out how each of those are.

So each phase is getting the five-year tax abatement, but you can look from year one for application one to the last year of application five, for example, just to the fifth phase, you can look at a span of potentially 17 years in total.

So we wanted to clarify that point because that seems to have been a point of a lot of questions and interest, um, both by the council and in a lot of public uh inquiries that we've sought to respond to.

So, with that being said, there's one additional nuance that I'll rely on Val's expertise on, but is within each one of those application phases, there can be consecutive investments tied to that.

I'll let her run through that as well in a similar fashion.

So each approved application covers up to three three consecutive years of investment.

So you can have one application that is approved, but the company is also approved to uh to invest three consecutive times and receive the abatement that they had originally requested.

So you're gonna have overlapping uh exemptions under one application if they chose to submit the three investments.

So if a company uh wanted a five-year, then their investment one, two, and three would get a five-year exemption.

So let me see if I can handle that a little bit.

So say you got a building, and maybe that's your investment one on the this owner of this building, and in year two, the owner then says, I'm gonna spend 20 million on computer equipment, servers, et cetera, in year two.

So that's that's investment two of application A.

And third year says, I couldn't afford them all, or we didn't have enough customers, so year three, I'm gonna buy the other 20 million of servers, and that's investment three on a single application.

But each piece of property only gets one tax abasement, you're basically just saying they phased in the development of that particular structure.

Is that versus the other one, which is like six different buildings?

Is that the difference between these two examples, sort of more or less?

And each investment would get you know five years, right?

So the total length is actually seven, right?

If you have three consecutive investments, but it's really five years for each investment, even though the total because the investments were over three years.

Okay, I think I got that.

Yeah, so said another way the taxing jurisdictions that are giving the abatement will forego or delay the revenue collection on any investment for no more than five years, even though across an entire site or project with multiple applications or these investments, it can trickle back in or iteratively come back on depending on where the five-year windows start and stop.

So you nailed it, counselor.

So with that, um, what we would have another question on that.

Oh, sorry.

Um, so was that the original, like when the easy program was created, was this phased approach part of the original design, or is this something that got amended later on?

Because it seems having a phased uh program kind of seems counterintuitive to the whole purpose of the easy program.

So I'm just trying to understand when this was this originally part of the whole plan, or is it something that I don't know?

This is one of those components as we spoke about earlier.

There's parts of the enterprise zone that are authorized and really governed or set up in state law, and then there's other parts of local law.

This comes the phased ability comes from state law, and part of that is to allow a phase project investment come in.

Another part where we see it to be beneficial is occasionally we'll have existing businesses coming in and consider expansions.

Expansions maybe here compared to somebody else.

This allows them to come back in and do an expansion or a reinvestment in Hillsborough rather than perhaps I understand that.

So for me, there's a difference between expansion and attracting, right?

So the original intention of the easy program was to attract uh capital intensive business into an area investment into an area that needed uh lightning of economic activity, right?

But when you start talking about um upgrading, adding that's a little that's way different than injecting that investment, right?

Because you're already in there, you're already established, you're already using the resources, you're already producing revenue.

Like I it just I'm trying to conceptualize what the whole point of that is because you're already established, right?

Like you're already in the market, you're competing.

Why are we continuing to like what just the design behind it, right?

Of on electricity, water, that gets really complicated.

And I really just want to understand like is this something that can be changed?

And and if it can, does it have to be at the state level?

Because it just seems like it could get into a place with this phased approach where we get into situations where it's hard to kind of track, right?

And you're you're you're doing so many different phases of different benefits and incentives that you kind of lose track of what the actual purpose of it is.

And so it's not anything criticism specific to you or what the staff's doing.

It's just generally understanding the program, right?

Like counselor, I appreciate that.

I mean, staff are here to try to provide objective information on this understood.

Um, so I to that end, I think at the heart of one of the questions is if the phased allowance of investments was to be changed, that would likely need to be done at the state statutory level that governs the overall program.

That is not something we can do at the local level.

We can bring back more information specifically on that if that's the desire of the council.

Um with that, I'll just say that.

There is the conversation about you're exactly right, recruitment is different than retention and expansion.

Both are arguably important.

This program in Hillsborough has been used uh for both of those, um, and that could be subject to another economic development conversation at a later point in time if the council would like to have that.

So I got to say Councilor Sinclair in Greek and I'll care to the best of my ability to remember who was first.

Council Freddy, could I just add one thing really quick uh on Councillor Salgado's question?

Um, I think one thing to remember too is we have some companies in Hillsborough, because this goes back to your expansion question.

Some companies in Hillsborough also have sites all around the country or all around the world.

And so when sometimes they're deciding do we want to expand our jobs in Hillsboro or in Arizona or New York or something like that?

So that's where it does become competitive.

So that's why expansion is also, I think, included in the state level program.

Um we are competing, even though it's one company, they could expand anywhere, and we want them to expand in Hillsborough because that brings more jobs to Hillsborough.

So that's just an example of why expansion, I think is also important as well.

I mean, I completely understand all of that.

I'm just talking specifically from the perspective of like what is the role of government, what is the role of business?

What is the business responsible for once they're already established in the community, right?

You're already established, you got your incentive, you're competing in the market.

Your choice to expand is based on the revenue that you're making, the assets that you have.

So why are we phasing more incentives if a company's deciding to expand because of the capital they're making and the revenues that they're making and the investments that they're distributing to their shareholders?

Why are we at the state of Oregon get because it doesn't someone's not gonna pick up their whole business and take it to another state if they're already established, right?

So again, it's high-level criticism, it's nothing specific to the city of Hillsborough and what we're doing.

It's just something that I'm noticing that's kind of like, well, this seems way off, and it's really complicated.

Maybe that's why it seems way off because I don't understand it.

But just looking at it very high level, it seems like we're kind of just as a program is not functioning, I think, to the best of its ability.

Councilor Sinclair.

Thank you, President.

Um Harris.

Um what year do we start implementing the phase the phase project example?

And how many agreements have been uh implemented with this?

Val correct me.

I believe that the phased ability of projects has been in from the program's inception from a state law standpoint, but you're so we can confirm that, but that is our understanding.

And so it's not like Councilor Salgato was saying it's not necessarily expansion.

Um does this apply to equipment?

Can one entity and one lot contain uh stack their equipment as well down the road?

Yes, it is right.

So replacement new investments, each investment is hold on a second, please.

Um there in the front row on the right side.

Um you were interrupting again with some comments that second time you did it.

The first time I didn't say you give you a warning that I will not tolerate disruptions that preclude this council from being able to cut conduct this business, your actions are causing a disruption and precluding the council from conducting this business.

That is an impact on every person in this room is on mine, please reframe from causing any additional disruptions that continue to cause disruption.

So I may have to ask that you leave the meeting before we can refuse to do so.

I may have to ask for you to be removed.

This is your first warning.

Go ahead.

So, in short, council, yes, any qualifying investment, whether it's the replacement of equipment or tools, whether it's the addition of new tools, um, are largely eligible for the program.

If they're eligible for the program and they submit an application, then that is where they're considered an approved.

Even if it doesn't create additional jobs, which is the intent of the program.

There is a requirement to increase, especially for existing companies, as Val noted earlier in the slide, to increase the employment headcount at that location by 10% or more.

Okay.

Hold on, hold on.

I have to do this again, unfortunately.

I think it's the person in the black coat in the hoodie in the right in the third aisle on the right side.

This is about the fifth time you've interrupted.

So I am going to give you a warning.

This is your first warning.

We'll not tolerate any further disruptions that we include the council for even able to conduct its business, your actions are causing a disruption and precluding the council from conducting this business.

This has an impact on every person in this room and online key refrain from causing any additional disruptions.

If you continue to cause disruptions, I may have to ask you to leave the meeting before we continue.

And if we refuse to do so, I may have to ask for you to be removed.

This is your first warning.

Thank you.

Um so oh, could we go back to the phased slide, please?

Thank you.

Yes, thank you.

So the the way that I understand this is that a company could do this or apply five times.

Because if it's not like the abatement starts if they if it's been approved, the abatement will only happen when they actually physically build something and put it there, right?

So they could then so this so yes, that they are approved, but nothing is happening until they're physically build something and put something there, correct?

The abatement does not start until as Val noted, the investment is placed in terms of that investment.

And yes, that same investment cannot be applied for again for a future five year.

That would have to be a new investment coming in that is eligible and qualifies under one of those same things.

Thank you.

And I think there has been a lot of confusion.

Uh uh, but yeah, this is just like you could have five different applications or just do it in one go.

It doesn't apply.

The city doesn't start to give the abatement until there is actual physical uh investment in place.

So that's one thing.

Um I think the the the next slide is the same way, right?

So there's like three of them, so sure, but if but if they don't actually have something built, it doesn't okay.

All right, thank you.

So I think there was this a lot of confusion there.

Um okay.

The other thing is uh just one thing to note is that for um for data uh centers or any other many well, there's a manufacturer, but you know, a tech tech things, tech uh companies, uh servers live for maybe three years, four years.

That's it.

That's their life, right?

So they do need to be upgraded.

And so if they are upgraded, then I'm assuming that that that's what that's what you meant that if they're changing the the server racks, which are millions and millions and millions of dollars, then they can apply and get the abatement again.

They will not get it for the building, but they will just get it for equipment being invested would be potentially eligible if the program is still in fact.

So, but one piece of equipment only gets it once.

That's it.

Okay, I think that's important to just say that.

Okay, but um, my question was the uh coming back to the CSF formula, because I like that also.

Can we have um is it possible to have two different formulas?

Like ones if we have um uh the data centers uh classified as you know something else, and I may be using the wrong words.

Could could we have a different CSF associated with them?

So that that's just one question.

I mean, you don't have to answer, but just if that could be uh if we could look into that, um that would be that would be great.

That was it.

Thank you.

Uh counselors at help here, then clerk and then so um why do we do renewable exemptions?

Why do we do that?

These companies have already invested, so why do we continue to give them exemptions?

Let's say phase one gets rid of all stuff by year six.

Are they considered a brand new company and they can get more tax exemption or ongoing?

I'm trying to understand what the why we've given them the incentive once.

They're gonna be generating money in business.

Why do we have to continue to give them tax exemptions throughout the lifetime that they're gonna be in our enterprise zone?

Counselor, thank you for the question.

I'll do my best to give a quick answer.

I may look to chat from one part of the legal component.

So there's I'd say two to three parts of that question.

One is first and foremost, state law makes them eligible for it.

And we have an active program that is in alignment with state law.

And so if an eligible entity submits and meets the criteria, we'll get to this in the final part of the presentation.

We have an obligation to process and approve that.

We can apply our local policies, we can update and in the future apply different local policies, but there is a legal component of if they're eligible, compliant with both the state law program and our local program, we approve it.

So that's one that's more of a procedural legal answer.

We don't have a choice unless we decide we want to make it.

Depending on how a program and even that, as we can talk about later, we're able to make local policies, as we've already done multiple times and spoken to, but there is still an alignment piece back up to the state law enabling piece of that too that we have to be in compliance with.

The second piece of that is we would potentially do it because it does also ensure that investment is coming here along the lines of what Robbie was speaking to earlier and would allow us to ensure that 10% job growth uh is occurring here as that company continues to expand, doing that expansion here rather than potentially somewhere else.

Um I'll stop there, but those are the two primary reasons where there's other programmatic reasons in there too.

So I hope that answers the heart of your question.

Yes, but now I wanna say, but what about large layoffs?

What do we say to that?

What do we say to those companies that cannot and do not retain large numbers in their workforce?

Why are they eligible?

So if a company has an active enterprise zone application, they have to maintain the employment we've talked about.

If they don't maintain the employment we've talked about in an EPOS threshold, as Don noted earlier, we take the step to disqualify them, which then requires uh some degree of penalization up to and including exclusion from the program and back pay.

Um so that's during that period of abatement.

Beyond that, it can become increasingly difficult to require and ensure businesses of any size to maintain certain employment based on business factors and keeping them financially viable and the like.

That's probably as far as deep on that answer as I'll go right now unless there's further questions.

So this may not be a good example, but if Intel decides it's gonna lay off 20,000 people, what what number should we be concerned about in their layoffs?

What's the benchmark?

We ought to be thinking like, oh my God.

I want to just make sure to note clarify that first of all, Intel is not subject to any enterprise zone application, so that's a bit removed from what we're talking about this evening.

Um, that would be a separate conversation, probably to a separate incentive program that we can definitely do, and unless the council would like to use our remaining time on that, I might encourage you to follow up later on that one just so we can get through the remainder of the course this evening.

Uh counselor Sinclair then uh Savato.

Thank you.

Uh Director Diaz, for the phased um applications, what happens if the council as a body chooses to amend the community development code?

Are those agreements already vested and they are grandfathered in to the time they signed the agreement?

Counselor, thank you for the question.

I'll do my best to respond to it just to clarify because we're we're kind of taking the two topics again and intertwining them, they're not always that linked.

Are you referring to committing aspect?

So their permits being invested, not the enterprise zone application and process, I'm sorry.

What if zoning changes after agreements are already signed?

What happens to those agreements down the road if the council body chooses to omit our community development code?

Dan, do you want me to try to take this?

Sure.

So I I think um there's a couple aspects here.

First is that when a uh entity is already existing and we change the development code on them, they get to continue to use that existing use, um, even though the zones changed.

So new ones can't come in, but existing entities, we can't change the zone on them and basically kick them out.

They basically get it, like you said, they're grandfathered in.

And so for those entities that are already there, they can continue to invest into their property and take advantage of this program if they are a part of that program.

For new entities, someone who hasn't gone through the land use process yet, right?

use that existing use um even though the zones changed so new ones can't come in but existing entities we can't change the zone on them and basically kick them out they basically get it they like you said they're grandfathered in and so for those entities that are already there they can continue to invest into their property and take advantage of this program if they are a part of that program for new entities someone who hasn't gone through the land use process yet right and so they just have a uh empty piece of land and they've just been at their enterprise zone application and they want to then invest you know 10 years down the road and we've they don't have an application in so they're not grandfathered in and they um you know the zone changes so they can't build that that building and they can't build the data center in this case for example then they would never um get the exemption because they would never be able to put that property they invest in that property to get the exemption because remember the exemptions only apply to those specific properties that are invested in so it's buildings it's um machinery it's personal property right but we can also stack that basically right but to the extent that the um they're precluded from building that type of facility within that zone then they will never invest in that property so they'll never receive the exemption and and counselor if I may just to add on to Chad's response the final we've got six slides left in this last section there is a map in there that I think actually might help give a visual a little bit to the two parts of what you're asking one is the enterprise zone eligibility and application the other is the land use code and their ability to develop and build what Chad's saying and both of those are needed in order for the enterprise zone benefit to actually be effectuated or recur and so there might be a visual that helps link some that too in two two slides or so.

Okay.

Counselor Sargala just wanna say thank you for seeing Salgado right appreciate that it's been going it's been going above my head and I just noticed that you're actually trying to pronounce it so my parents would be proud.

Uh I don't mean to get in the weeds but I'm gonna get in the weeds because counselor Andrew asked about servers.

So when we talk about equipment um and abating taxes when um when that equipment gets do you know when that equipment gets depreciated uh do they essentially double do they get double benefit for that or does that not calculate into this this program?

So would you like me to illustrate what I'm saying?

So a company comes in and says I'm gonna bring in a two million dollar machine right that gets tax abated because it's two million dollars a lot of money um and so as the years go on that value gets depreciated and they can write it off on their taxes while they're getting their taxes abated right so they're getting local taxes abated 100% and then when they're writing their taxes they're they're counting in depreciation like do you know those details if that's if that's allowed under IRS rules or if that's something that we need to fix.

That just that's just a question that came up with with her explanation as a server.

So the county assessor's office really handles all of that.

So I do not get into that level of detail okay but you understand why that's an important question.

Right.

And maybe at a federal level you know so I the assessor's office provides the uh assess value to us as well as the exempt yeah and the reason before we get too far down the path sorry and I don't I don't mean to be rude I just I don't I don't want you to go five minutes into giving me an explanation that it's not really going to be helpful and I'm not trying to be rude.

I just I'm trying to understand the reason why I'm asking this is you know it it is knowing that information can inform how we update the enterprise zone because if we're doing a hundred percent tax abatement and then they're depreciating their equipment then that gives us room to say well if you're depreciating already why are we allowing 100% for five years why don't we as they're depreciating why don't we reduce the tax abatement because why why would you know and again it's not again our jurisdiction is the city but again we also can update the enterprise zone yeah subsidies Council Sargado in this in the spirit of trying to bring information out tonight to help navigate next steps in direction on some of this I will just try to clarify one quick point is there's two types of taxing I think that you're referring to so I just want to make sure acknowledge that to make sure we're tracking you one is the property tax depreciation and abatement type of the enterprise zone and I believe the other one is more of a federal tax write off tied to depreciation.

So I just want to kind of note that as I think is what you're flagging I do and we can check in with the county assessor's office to provide greater detail if the council desires it but as that equipment is depreciating over let's say the five years of the enterprise zone the assessor is accounting for that depreciation.

So the amount that is being abated they're just not paying the property tax on it is decreasing that should be corresponding with the the depreciation schedule well yeah because that would be 100% of their I mean if if the value if a two million dollar it's 100% of the value if a two million dollar tool if a two million dollar equipment depreciates 5000 dollars after after the first year and it's worth one and a half million dollars yes 100% of the one and a half million dollars is going to get abated yeah that's correct.

And the same could be true if the building value, for example, is appreciating, that would be reset.

So I wanted to answer.

But under the but under the tax abatement rules, it's 100%, regardless if it increases or goes down.

Correct.

My question is we're giving them this benefit, right?

And we need to coordinate with our federal partners uh because we're giving tax incentives, right?

And so there's a there's a this this is a series that's just sticking out to me, like you they're depreciating on one end, getting a benefit, and then we're giving them another benefit.

Like just seems like it's too many benefits uh for one organization.

So again, it's not a jurisdiction, but I think it informs how we update the enterprise.

So President Harris, maybe if we could move on to the next slides to get through those.

But um, you know, I just want to sort of summarize.

I think a lot of what we've been discussing is sort of the state program and the state requirements and what the state imposes.

And so one of the things I think to sort of summarize what you all are saying is that there may be aspects of the state program that we want to look at and maybe have Ariel or our lobbying team maybe talk to the state about that and see if there's changes that we can make to make the program fit more of what we envision as a as a good program.

And so I do think that this was very valuable feedback.

But it's okay, you all I think we've got that message loud and clear, and it'd be great to move on to the next slides because I know that I was getting late, and there's some really important information.

I think you all want to see in the next slides as well.

Let's do it.

Sounds good.

So six slides left, uh, and then we'll have a similar type of final policy conversation as we did uh and as promised to Councilor Ann Bury earlier.

Okay, so this slide summarizes recent legislative changes affecting enterprise zone eligibility for data center projects and the resulting local impacts.

So legislation adopted in 2025, established a moratorium and new enterprise zone authorizations for data center projects after June 6th, while leaving all existing program requirements in place until that date.

In response to the impending change, the city experienced a significant increase in application activity, receiving 17 applications between March and May of 2026.

Two additional perspective of applicants inquired about submitting applications, but were informed that the city could not complete the required review and approval process before the deadline.

So the stars on this map identify the locations of data center sites that submitted enterprise zone applications for specific projects.

The sites are color-coded by development status.

Green indicates an operational facility, yellow represents projects that are under construction or currently in the permitting process.

And blue identifies currently vacant uh sites.

It's important to note that this map represents a snapshot in time, while the map itself is static, the data center industry is highly dynamic with projects frequently advancing through development stages.

We make every effort to keep this information current based on our ongoing engagement with project representatives and the best information available at the time.

Well, before we move off to this one, I just wanted to loop back to Councillor Sinclair's question.

This is the map that we're talking about, whereas the stars are the enterprise zone that were submitted, the sites are development, but back to in order for the investment to be placed in service, they would need both the approved enterprise zone application and the appropriate land use and or other permits to be able to build, construct, install, and make that investment and place it in service.

And then that's what is what would effectuate the realized benefit of the enterprise.

So I hope that's in that graphic here too.

The the color coding is that step in the processing potentially, the development process to the land use side, the stars are the enterprise zone side.

Thank you.

So of the 17 applications that were taken in a process, and I we hope this gets to also some of the revenue or return on investment questions earlier.

Um, this slide seeks to show of those applications the total investment from a real market value on the left-hand side.

Uh, apologies for some of the acronyms, PP is personal property, ME is machinery and equipment, and building is the structural components, all those things we've talked about in terms of eligibility for the enterprise zone.

RMV is real market value.

So that's the full value of what we believe the monetary investment will take.

Uh in 2025-2026 CPR, uh, not life support uh resuscitation, that is a change property ratio that's used in the determining of the property tax amount that gets charged that comes out of the assessor's office.

And so that's that percentage kind of ratio.

Uh then in the next column is that estimated AV, which is the assessed value.

So that's how much of that value is assessed that would either pay taxes or potentially be eligible for the abatement per the enterprise zone.

You can see that's at about 6.9 billion dollars.

And then the code area 7.45 tax rate, that is the tax rate per thousand dollars.

So that's what's charged per thousand dollars of assessed value.

And then the estimated imposed taxes countywide.

So that would be all taxing uh local tax and jurisdictions, the amount of taxes that would be applied across those 17 applications, and based on that 6.7 billion dollars of investment, you can see that that's 113 million dollars.

So if taxes were assessed and paid, that's what uh what it would be is about 113 million dollars.

We'll talk a little bit more about how that would get broken out.

I do want to note that these numbers account for all of those enterprise zone applications kind of coming online right away.

It doesn't account for phasing, it doesn't account for appreciation or depreciation, but these are valid numbers in terms of the overall appraisal approach, and then the estimated COH, which is City of Hillsborough portion uh per our permanent rate of 3.6665 plus LOL, which is the local option levy rate of 1.72, uh shows what the Hillsboro share of those property taxes would be uh annually, and that's about 30 a little over 37 million dollars.

And as Val noted earlier, so that's just from a what is being abated in the first few years of those, what also is roughly coming back online to the tax rolls in terms of revenue uh when they would not be in the enterprise zone program.

Uh the text at the bottom, that application fee of $850,000, as Val noted earlier, there's a maximum fee of $50,000 per application.

We split that 55th with the county.

So the city would receive about 425,000 of that, the county would receive 425,000.

That goes in part also to pay for staff and the processing uh administration of the program.

Yeah, and just to clarify, does this chart assume there's no tax abatements?

Is this the full tax load?

It is the full tax load, and so that's not that would be abated when the enterprise was in effect.

It also is roughly what would come back online and be assessed and collected taxes when the abatement were to go away.

This is under the current rules, they didn't file any applications, they made these investments.

This is what would come on the tax rolls.

Right.

Yeah.

So if all that investment was active and billed incoming on the tax rolls for 25, 26, this is what they would have been imposed on taxes.

So, but none of this is built, none of this exists.

So it was just an estimate as if it happened today.

Um so we're just trying to show that the impact of this investment of down the road, how much we would the taxing jurisdictions would receive in the city would receive from this investment once it's out of abatement, first filled, then out of abatement.

So this almost seven million dollars in investment on the assessed value will bring an additional 37 million to the city once it's out of abatement, once after it's built, if it even exists.

Does that make sense?

Yeah, but that's assuming that the assessed value is gonna be the same as the original value, which is probably not correct, because there's going to be some depreciations.

There's going to be a resessment, I'm assuming.

Right.

And also that assumes everything's online at once, which it won't be.

And that that's what it's really going to cost them.

They obviously have submitted what they believe the investment will be, but some of those investments could be five years from now.

And we all know that cost of construction increase.

So this is strictly an estimate, an analysis of everything in today's dollars, and if it was all built today, but you could probably be significantly more down the road.

Um taxing code amounts can change.

Um there could be additional local option levies, different things.

So it's just truly just an analysis and estimate of what could be as of today.

Uh can I just thank you?

Um, sorry, what was PV?

Personal property, which is the what could you give me an example?

You want to that would be like servers, racks.

Oh, and but the the land's not here.

Land is always taxed.

Land is never exempt.

Yes, agreed.

Yes, agree.

And so that, yeah.

I was just gonna say, so land is not here because it's always gonna be taxed.

And if this wasn't built, it would just be the land that was getting taxed.

Okay, so all right, thank you.

Oh, no, no, one more question.

Um where do we where do we get the permanent rate?

Why do we have that rate?

So that is because of measure 47 and measure 50.

So back in 1997, the state had well, people put on the um measure, a tax whole change entirely property tax system for the state of Oregon.

Yeah, and at that time, um, prior to that, we were on a tax base tax based system, and so the new law that was voted on by the Oregon voters, um, change it to a permanent rate.

And so it's very complicated.

I'll try to give you a very quick thing.

Okay, I know it is that we every taxing jurisdiction was assigned a permanent rate.

It was not our decision, it was assigned based on the math that came out of measure 50.

Yes, and and just this our schools started to go down right after um all kinds of bad things happened, but I'll just stop right.

But yeah.

Actually, was with measure five back in 1998 when the schools started really having issues.

Okay.

So this is me.

Um, staff was asked to provide a case study on a data center site and the amount of property taxes generated, and I picked um QTS, just like counselor Saltada did.

Um, so what I'm showing here is a portion of the property tax bills for the site from for fiscal year 1819 and for fiscal year 2526.

And on the left hand side is the property tax bill, and the property tax bills are generated by Washington County Assessment Taxation and sent out by them.

We do not do them.

Um, so the bill on the right on the left is the first bill after QTS purchased the property.

So prior to the purchase, the property was actually in what's called farm deferral.

And farm deferral is a state program known as a special assessment for farm use, which significantly reduces annual property taxes.

And for those of you that are looking really close, you'll notice that the acreage on 1819 is 41.65, but the acreage on 2526 is just over 90.

And that's because um QTS not only purchases parcel, but they purchased two other parcels.

And so down um you will see in the green box, I have the total net real market value, net assessed value, and taxes imposed for those three parcels combined, so we can compare it to the 2526.

So in 1718, a total of 14,633 was imposed on those three parcels due to their um the wild farm deferral status.

When the part the properties came out of farm deferral and was in the first year of ownership by QTS, um, the total amount of property taxes imposed for all taxing jurisdictions was 326,522.

Um, as you can see, um, is mostly the land that is being assessed for those properties.

So now over here on the right hand side is the property tax bill for 2526, and this property tax bill is just for the building and structures owned by QTS.

It does not include any personal property for QTS or its tenants.

Um, and I have highlighted in green the real market value for land as well as the assessed value, which basically the property taxes were calculated on.

So again, as we said, property taxes are always paid on land because it already existed.

Um as I mentioned earlier, um, companies in tax abatement have to pay property taxes on land and any structures equipment that already existed.

So the property taxes paid and the amount of 599,841 is basically for the land.

Um property taxes are not calculated on real market value.

Cannot stress that enough.

Not calculated on real market value, is um calculated on assessed value.

Um, and as Dan talked about, there's a change property ratio.

So the county assessor does not determine the assessed value until the property comes out of abatement.

When it does come out of abatement, the county assessor takes the exempted real market value and multiplies it by the change property ratio, as Dan showed to get to the assessed value.

And the change property ratio for 2526 is 0.617.

So if I use this ratio, the estimated assessed value for 2526 on that um exempted real market value of 2.4 billion would be about 1.5 billion, and the 1.5 billion is what the property taxes would be calculated on if they were not in abatement right now.

Since um this property tax bill was generated since this property tax bill was generated, it is our understanding that QTS appealed its valuation and the county reviewed and reduced the value, and the new exempted real market value is estimated to be 1 billion 934,716,515.

So the revised estimated assessed value would be just under 1.2 billion.

So in addition to the land, QTS and its tenants have property.

Oops, stay there, Dan's not done talking about my numbers.

You know, I love my numbers.

Um, so they have property taxes imposed on 1.34 billion in personal property assessed value.

So there's 1.34 billion in investment, not an enterprise zone, not abated, being taxed.

And so some people have asked, where are those bills?

Well, per department of revenue, personal property information is considered confidential.

So property tax bills and individual taxpayer information is not available.

So we finance staff had to go to the county assessor to ask what how much, and they gave us the number, the 1.34 billion of what's being taxed on personal property.

And so unlike land and structure, the property change ratio for personal property is one, so real market value equals assessed value for personal property.

There is currently 150,810 in exempted real market value related personal property that is being dated right now.

So between the 559,84941 plus the 21,989,664 dollars imposed for personal property on the 1.34 billion, total impact taxes imposed for 2526 on this parcel and its tenants and everyone was 22.5 million million.

So that is the tax bill that was received.

And I say imposed because, like all property tax owners, so there's a 3% that they can take advantage of, and we don't know that because again, the money goes to the county, not to us.

So as I said earlier, the estimated assessed value for the revised exempted real market value is $1.2 billion.

So if that amount was not in tax abatement and was on the tax rules right now, it would have generated an additional 19.6 million in property taxes.

So that's the total would have been paid is 42.78 million.

So next slide, please.

Thank you.

So what this is showing is the property taxes broken down by jurisdiction at a summary level.

So the Hillsborough School District, they have their permanent rate, they have a bond rate, we've combined it all together.

And so you can see in 1718 when it was in farm deferral, a total of 14,000 was assessed to all for all those property jurisdictions, and in 2526, a total of 22 point almost six million was assessed, and that's where it all goes for those taxing jurisdictions.

Next slide.

So now I'm gonna talk about the school support fee and school funding and might be able to go back to you, Councilor Salgado.

So each year the state calculates how much will be distributed through the school funding equalization formula, which is calculated based on a bunch of metrics received from all school districts, plus estimated property tax revenues, other local revenues anticipated from each school district, as well as the amount that's available in the state school fund.

Together, then all that information, it's very complicated.

I am not an expert, please don't ask me more than what I'm telling you, um, comes together.

The state determines what each school district is going to receive.

This is their bucket of money, these are their revenues for their operations.

The amount is a combination of state school fund and estimated local revenues, which local revenues includes property taxes from their permanent rate, common school fund, certain grants, the enterprise zones school support fee is considered local revenue, and there's other revenues.

So if the amount received in local revenues is more that's is more than what was estimated, then the school district gets less than state funds.

If the local revenues are less than estimated, they receive more in state funds, but the total amount they are receiving does not change.

So as I mentioned at our budget committee meeting a couple weeks ago, Hillsville Hillsborough School District's assessed value increased 28, 28 and a half percent from fiscal year 2425 to 2526.

And that was mainly due to the Intel SAP coming out of abatement and beginning of revenue sharing for our North Hillsborough Urban Mineral District.

The 28 and a half percent increase equates to 30 million dollars more in property tax revenues imposed.

So even though even though HSE is getting 30 million more in property taxes, that does not improve or change their budget, it doesn't change anything.

All it does is change the funding sources.

So for 2526, 50% of their funding is coming from local revenues, and 50% of their funding is coming from the state school fund.

In 2425, the split was 40% of local revenues and 60% from the state school fund.

So as you can see, the increase in property taxes changed the split and not the local amount received.

And as I say previously, a school support fee, which schools are allowed to collect from companies in the enterprise zone tax that they in for years form five are included as local revenues, the equalization formula.

So once again, this is not directly benefit them, or do they control those funds?

It just means the state funding would be reduced.

And I don't know, that's what the state legislature was meant to do when they added the school support fee.

That's how the program works.

And so I think the state legislation, if that's something we want to look at, we could do that.

And so both, as we mentioned earlier, both Hillsboro School District and Beaverton School District established a 15% school support fee for the enterprise program in 2024.

And the school districts are responsible for building the enterprise zone companies under abatement and collecting the school support fee directly.

We do not be involved in that other than Val as the enterprise zone manager is required to provide the necessary information for them to build those companies and receive those funds.

And it is our understanding.

I did meet why all this information is myself and my staff met with the Hillsburg School District finance people to get this information.

So last we spoke with them, we have not yet built any of the companies because I don't think any of them are currently in years four and five yet.

So council, thank you for the patience and the time to get to the final session.

We have set up a similar slide to what we did with land use, but before we maybe get to this, were there any questions on those final few slides that you wanted us to cover before we get into your conversation on policy topics?

Just sorry.

Cool.

I was going to agree to call me.

Yes, I just want to come from so it doesn't matter if we do put money from the CSF into the schools.

The state's just gonna take away whatever they invest because we're making a most likely we need to check with them.

So it's been as you all aware, the gain share program we've been sharing with the school district, $500,000 a year, which is entirely for program.

We've able to keep that out of the local revenue portion because of how we've been giving them the money.

So we are using that money towards what they're doing at block 55 and six or 50.

That's 56 and gate that we're going.

So it's possible.

I don't know enough about it, but it's most likely going to be considered a local revenue.

So we would have to work with Chad and the school district to see how we could find a way to help support them without it just needing less money from the state.

Okay, so it sounds like there could be a Pablo, but most likely there has to be some sort of state action on it.

Cool.

Thanks.

Councillor Andrick.

Um just wanted to thank you.

The examples, the examples are great.

So thank you.

And yes, I don't know why people wanted to move away from the wonderful slides.

But thank you for putting this together.

I had a question on the QGS example showing how much they were paying in the taxes.

What's the community service fee calculated on that example?

Do we know?

Because that would be an addition to the taxes that are being paid.

Sure.

Is that correct?

Yes.

It would be the percentages of all noted based on what the assessed value of the abatement is.

We can try to let out.

Do you have those topics?

I think I have a spreadsheet.

Let me look for that and I'll get back to you.

Okay, because I guess the point is if they normally pay 43 million, they paid 22.6 all together, but if they also pay the community service fee, the delta is a lot as days people may think, right?

Because they're getting two different things, which may become maybe the 75% of the taxes they would normally pay.

So I think that'd be an interesting piece of a fresh.

No more questions.

I guess we're on the question.

QA slide, oh, so running through the policy areas to consider.

Um, do you want to leave the scene or chat?

Or what do you want to inmate counselor?

Well, I want to go back to the last set of discussion in the enterprise zone space.

We're having to capture what we've captured out of that, and then we can definitely go into new areas or refiners if that's okay.

Just a second to jump back a couple pages of notes, most of the ink.

So I think the two big areas of interest and consensus in.

I'm sorry.

Okay, can you hear me okay?

Okay.

Um the two major areas of what's kind of like general consensus was one come back with a conversation, a policy conversation on the community service fee, both how it's being calculated and also um what other requirements are in there.

The specifics I think were a bit variable, but that's when we can definitely try to frame up some of things and come back.

We can do fundamental now or not, but that's just what we heard.

The other one, it sounded like was a funding in the programming discussion, really what to do with those current and potentially predicted community service fees, perhaps some more information on that, and what other options do we have?

Um that's a general topic area that I think we heard pretty solid consensus.

Um that I'll turn it back to you, Council President Council.

If there's other areas you'd like to discuss, we're happy to take notes and listen and happy to summarize at the end.

But I think there was also the discussion about potentially looking at the state program and having a discussion about what changes that the council may want to applicate for at the state level.

Thank you.

I didn't have to appreciate it.

Sorry, go ahead, counselor.

And I'm I'm so sorry.

Um you were referring to the previous list we had, or the current one you've ever now for what we just currently went over.

This was the discussion had after we did the first second of the enterprise zone, but there were some extended conversation policy conversation inputs trying to capture those kind of those counselor.

I think I would add to that, or maybe in addition to that is you know, we have the data data center advisory council coming out, and that's been pretty heavily staffed, and they've been doing they've got a lot of big brain people on that apparently, and they've got resources behind it.

And I was just looking even at the uh the charge that they've given.

It's pretty comprehensive and addressed a lot of the issues we talked about, encourage citing decisions to support responsible economic development, create jobs, increased long-term revenue, that will strengthen our communities, understand how data centers are affecting help work and meet clean energy, climate, natural resource management quality.

It goes on and on.

Um, and from a short brief discussion I had with you, uh, Mr.

DS earlier was we expect that report to come out in October, I believe, preliminary findings at least and final findings soon after that.

What they're doing is a lot of the heavy work that we've been talking about doing here, and staff is doing here.

I know at the end we're gonna be talking about all these ideas, don't just don't just appear from uh a Google search or something, or me writing it down.

They take tons of staff work, and there's gonna be a lot of tasks here.

And some of the stuff we just talked about occurred to me really do necessary changes to the state statute, and they may be making them.

Um, and involving our uh capable GR staff in this might be a way to address some of those things, uh, and for us to make sure we load stuff, maybe focusing on the issues that we do control within this jurisdiction.

Um, meanwhile, letting uh Ms.

Delson, our other GR people, Mr.

Smith work on work on the state side, like looking at the school funding and looking at the percentages and whether you could have uh subsequent application on the same property and things like that.

Um, and that's my include when we look at changing this is figuring out how we can coordinate or piggyback on the work the state is doing.

Council President Harris may just add one additional piece that's come in real time that might be a benefit for awareness for the council if you think about these moving pieces, especially at the state level.

Uh, and Balkan speaking where this is she starts our data point of contact.

But with the House Bill 4084 changes the enterprise zone in mass, including the data centers, but especially some of those other areas.

That rule making uh is also underway, but we've been pulling that'll take about six months too.

So I just wanted to find that too.

Is there is some of that back to the point about lobbying at the state?

Some of that rulemaking will continue to track, but it's not like that'll take a few months too before we see final rule on the enterprise one coming back out of the state.

But we're happy to keep council appried to that too.

Council Speaker.

Um, I have for my initial proposal.

I still would like us to propose the resolution, restoring council oversight to enterprise zone program.

And uh this resolution uses our explicit state law authority as the zone sponsor to reclaim public oversight and eliminate administrative sign-offs on massive corporate tax exemptions.

One statutory mechanisms direct staff to invoke OAR 123-668-100 section five, which limits the local zone manager to administrative functions except as explicitly prescribed by the zone sponsor.

Two, administrative shift, explicit explicitly restricts the automatic administrative signature authority currently held by staff for long-term tax abatements.

Three, public process mandates a routing process where any future enterprise zone application must come before the city council for advanced public notice, a public hearing, and a recorded majority vote.

And finally, legal safeguards ensures the language clarifies that this alters internal procedural routing, not state eligibility criteria.

This protects the city from vested rights challenges by pending applicants.

Thank you.

Thank you.

That's something that's you said that before, but it's relatively what fits into this thing, and so before staff works on that.

And so before staff works on that, I think we need to get a consensus to move that forward or not.

Um so maybe it would be fine to just deal with it now, so they're calling more people and interfering with other issues because it's pretty distinct area.

You're basically asking the authority to execute enterprise zone applications come to council rather than having it delegated to staff or city manager.

Is that basically the essence of what you're asking?

I'm not looking to take away uh I'm I want it to be public.

I don't want to interfere with state criteria, but I want the process to be public.

That's why we're where we're at right now and having this very meeting.

Okay, it's good.

Yeah, if it is it on this subject, yes, yes.

Yes.

So uh council, are you saying the are you uh saying that the permitting should come to council, or are you saying that the um the land use portion of it should come to council because those are two enterprise zone tax agreements should come before council?

Right.

So so but when they start to build it, does not staff's job, but the approval process comes before us.

Okay, for for just for data centers or for everything for all of the tax abatement uh enterprise zone program.

Okay, all right.

So I I I don't I would not agree with that because there are a lot of um uh applications, and and if we can start to make them all conditional and have public hearing for all of the businesses that are applying to be in our enterprise zones that will take a lot of uh council time, a lot of public time.

I think that it would be better for us to make uh rules and policies where we could make some sort of them conditional, but but make these rules so that we we uh empower the staff to do what they do, but if because if we start to look at every single application that comes, that will not be viable.

So that's my um feedback.

Thank you.

Counselor Sagella, you have something on this or something.

Okay, not on council.

This specifically, and I want to make sure people have an opportunity to address this because we're gonna vote on this.

We're gonna give a thumbs up or sideways or down.

Oh, we'll have to vote.

Okay.

Um, my response is similar to counselor and very's.

I feel like if it's mainly ministerial, and this is just does it check the boxes on the statute, which we've been told that's what it is.

I think coming to council doesn't really serve a point because we don't have any subjective way to reject it.

So basically we're gonna say, hey, check the boxes, and they're gonna say, Yeah.

And I don't know that I want that authority, I'd rather have it delegated to someone who actually is an expert and has the time to go through that.

I would support maintaining that authority in the city manager rather than delegate further staff, and this is why this council has the city manager is the only person that reports directly to city council, right?

And so to that extent, there's a closer nexus between the decision making and this council than there is a delegated staff.

So that sort of wasn't working there at all.

Um, and so I would support that, but I wouldn't support this council taking on because I don't know.

And by the way, when those are signs, they get posted.

Obviously, no one knows about that until now, obviously.

Um, but now we do.

Now we know about it.

And if you see it, and maybe we need to be notified when they go on, we should be notified when they get signed, so there's direct notification to us, so we can ask questions at that point, but I I would not support um changing the authority directly to city council.

And is the if before we go down rabbit hole, uh specifically if it's only data centers because it's the data center aspect without having the local jobs created with it being considered data centers, is that something the council would consider?

I can't speak for everyone else.

I don't think I would because you run into the same issues, maybe it's a more heightened sense of concern.

I get that.

Maybe maybe what the question I'm asking then is this wasn't in my opinion, there's been trust lost with what where we're at today with the 17 uh agreements.

And so how is this, or maybe it goes to maybe it goes to um to our uh budget committee or finance committee um because they have oversight.

The point is, so we're just gonna watch if we don't do this and it goes before the public.

Um what does that look like?

Because where we're at is a weird thing between land use and the enterprise zone.

And so the point is kind of when it comes to the data centers.

I believe that should go before council and the public, so that there is public notice and a recorded vote because our community has the right to understand because it's universal, our entire community is impacted by data centers, and we do not know long-term uh consequences, and so currently with the enterprise zone of program agreements where there was a landfall of 17 agreements, that's the part where there's distrust where our community wants to see that go before a public hearing.

I don't know how to remedy that, which besides doing two a resolution, what I'm suggesting now, and also a land use aspect of amending our community uh development code.

I appreciate that.

Um I think we need to change what we're doing, and I think because it's data centers and because we are in the mess that we're in right now and lost the trust of the community, have had a lot of speculation from across the region about this.

I would support this.

What Kimberly is suggesting right now, and to take action on the way that this all went down.

I think that would demonstrate some transparency.

We could possibly some more public trust, and it can be a lesson on okay.

So if this isn't gonna be a long-term thing, how do we go forward and having public trust and transparency about what we're doing?

We didn't do that with this.

We did this with enterprise zone, we did not do that with data centers.

We don't know the environmental impacts, we don't know the health impacts.

I have been looking at those.

Except for here.

If we can uh monitor, regulate, watch what's happening, and be ensure there isn't any health impacts or environmental impacts, but without that, what are we doing this for?

We're just making money, we're generating money, and we're sacrificing people's well-being.

Somebody said earlier, maybe we can get land back.

Well, the land's been ruined, the land cannot be used for something else.

We've heard testimony, people are here, it's late.

There, I've heard nothing of human impact of how people are gonna be dealing with this long before we're all gone from council.

That's what we're doing.

That's the legacy that we're setting forth.

What is wrong with finding out and doing this?

And I would say temporarily, so we can make sure and get back on track with what this is for.

We're not doing this.

This goes against what the enterprise zone was created for.

We know that we're doing this because ComTech told us we had to.

Now that moratorium date is gone.

All we can do now is make sure that from here on we're gonna make sure we're not gonna have any more impacts, we're not gonna have any more loss.

It's not just about making money, and I think that's why people are so angry about this.

We're not even talking about that.

They're here, acknowledge why they're angry.

Thank you, Councillor Case.

Um I am not interested in micromanaging staff, and I feel like this leads in that direction.

Um, I think kind of what council what Councilor Harris said, uh, the recommendations you made and having the city manager continue to sign off on things and and then maybe bring us more of a report, I think could be helpful.

I think there is some accountability coming to data centers from the you know the state level reports that we're asking that are coming from the state, um, that you know the data center advisory committee and the prosperity council um and then our requests are for the the environmental impact study uh and the economic development impact study, and I think um that can help with reestablishing trust that people feel has been lost.

So that would be my thoughts on that.

Counselor Savella.

Yeah, now that I understand, I think you know, I would be against it just because it would fundamentally change what our rule is uh by the charter.

So I think I just don't think that's something that actually we can do from what I understand, but I also you know want to think about the way that we kind of understand items differently on uh on the agenda, and when we're talking about something as complicated as easy program, we're all gonna be looking at the same information, but we're gonna it's gonna look a lot different.

None of us are the experts logistically, so that just sounds like a nightmare.

So I'd rather have somebody who actually is has invested their time and learning about the program and how it works to actually be the one that that dictates that, and us as city councillors, I think we really need to understand that our role is to set up parameters for the people that are doing this rule, and so that's where we should be focusing our time on.

Our explanation is like how do we shape what their job is going to look like because that's our role, and that's actually has a lot more influence than us sitting there and deciding whether yes or no we should approve an application.

So that's that's the reason why I wouldn't support it.

Counselor Henry.

Thank you.

Um Councillor K we we are we have asked the staff to do the environmental study and the economic um impact study.

So we that and that is because we're hearing what people are saying.

So that is a direction we have given them, and we're looking for it.

And then the uh the other thing is um regarding um uh regarding the governor's moratorium, uh, there are going to be no more data center applications coming in for a year, right?

So just Councilor St.

Terrace, but there are gonna be none because there's a more there's a statewide moratorium.

So so and that applies to us, right?

And so so just just wanted to mention that.

And then the last thing, and I and I just it just kind of pains me regarding the trust being lost.

Um it that this council gave the authority to um the staff to do what they're doing, right?

And so they have been doing that.

This council gave that authority in 2006, 16, 17, 24, 24, and 24.

So we should not say that you know the trust that it could have been lost for us.

We we were not involved in this, we should have been looking at this, we did not look at this.

And now when we are now looking at it, we are making big changes.

We have we're asking for um uh changes in their um uh you know, in the in the easy in the in the zone itself, in the permitting process, in the building process.

We are doing all of that.

And so I would just reiterate that it pains me when when when our community says that the staff is doing something, the staff is doing exactly what the council told them to do.

And so it should be on the council.

They're not doing what the council just let her finish, so then you'll have an opportunity.

So, yes, the the 17 applications came.

Yes, they did.

I would do the same because they always go to going and it was gonna finish.

I would go and buy a lot, but buy a lot of stuff.

So, yes, they came and they they uh they did they process those applications and they put them on the website, which is why everybody got to know per what this council had told them to do.

And so I just I just wanted to say that because uh yes, this council should have been a little bit more proactive regarding the data centers for sure, but it is the council and not the staff, because the staff was doing what they've been told since 2006.

So that's it.

Thank you.

Um I'm not sure which you two is first.

Um counselor Sinclair the Alcara.

Thank you.

Um Councilor Ambry.

I I value diversity on this council and having different perspectives.

Um what happened here this was a factor from 2017, not this council.

We did not create that policy, and so from I can only speak for myself.

I know staff work so hard, but when we continuously ask questions, and we'll get answers at a later time.

I understand we can only do so much at once, but this with council not having that awareness and the public not having that awareness, that definitely breaks trust, and I don't know what universe we're sitting here looking at where that doesn't.

So our community, as us as elects, there's six people here that represent the public, and they expect action from us.

Those are taxpayer dollars, they expect action from us as their representatives.

That's where we come here, and this is going on what seven weeks now.

Um, and they want accountability, they want oversight.

That is our fault as council.

That is our fault now.

Um was council made aware of this because I think there were conversations, but not with all of council about this, and so how I found about it was a newspaper article pointing this out.

So there was a uh definite change in the way that we were inviting businesses to come in, and there was a definite difference and ignoring of how data centers were coming in.

Yes, we'll have environmental impacts, yes, we'll look at impact on human health.

Why is that so hard to ask for?

I asked for it over and over.

I people have asked for that over and over.

I am not sitting here representing my own interests.

You have heard it from public, they have given it to you in public testimony, they have challenged you, they have asked you, they're pleading with you, they're angry, yes, and they're frustrated and they're cussing and they're swearing because they're frustrated, they are afraid of what decisions we're making.

We are letting them down.

I am not saying to permanently for council to be in charge of this, and I can't imagine it that's so many that we just can't do it.

I don't believe that.

We have a responsibility to do that.

So I you know, the way I'm seeing it, you don't want to do it, then everybody can know where people on this council stand when it comes to the data centers.

That's important.

That is important.

I never took corporate money, I don't work for a tech company, I don't have interests up there.

I am concerned that the people in my ward, predominantly low income, are gonna have to face this, and you're gonna sit there and just be okay because you want staff to do their job.

Sometimes we have to intervene, ask questions of staff, and sometimes we have to make a change.

I have never been around people so unwilling to do that, and it's your role to do that, but you go ahead because now I think we gotta fight now for environmental impacts, and we need to know that.

We're gonna need to know what's going on with our water because of the way that we're doing it, we are not establishing trust with the community.

We're not.

You can act like we are, we are not.

Um I know you feel strongly about that.

I got a question though for counselor sinclair.

What specific actions do you think the council should be reviewing and either approving or not approving under what criteria would we deny them?

I don't think the tech, I don't think the data states should be in the enterprise zone uh program here.

I asked you what applications, what actions specifically the staff is now doing, and you think we should come to council.

What actions specifically?

And specifically, I think where there's confusion, I it's not that I have more anyone here has more knowledge of staff because we do not.

The point is I want it to be made public to council.

I want it to be known to council and to the public.

To me, that's through a land uh use process, but then I'm told that doesn't apply to the enterprise zone as a different process.

How well two things happened here?

We were informed, and then real agreements went through.

I I'm not I don't have to go if I'm not trying to take anything away from Robbie.

I that's not my goal.

My goal is to have it go before the public and council, and so if that's not an appropriate process for for um authority on the sponsor, the zone sponsor, then how do we get that to the public?

And so if that's not the appropriate process for for um authority on the sponsor, the zone sponsor, then how do we get that to the public?

Again, what specific action are you saying?

Is it the applications that were recently approved?

Because they're not going to come in as Counselor Ambury pointed out.

There's no more for a year.

We could do it, but there's not going to be any more for a year.

It doesn't matter.

Those are gone.

And that's another thing we have not gone over with the public.

Where are we at with those 17 agreements?

Again, getting back to your request.

I am.

If specific actions that the count that the that are now delegated to staff, do you want to come before council?

What actions do I want?

Yes.

So that's what you're asking.

Yes, right.

The actions that I want is if to for it to come before council and to the public.

What actions are you talking about?

Okay.

Well, you mean the ones that have already been signed off?

Any even in the future, even though if we can't, those are done, we I want us to, as a body, to take action because it's the right thing to do.

Even if there's nothing that comes in for the next year, I want our public to know.

I don't understand you guys need a conversation on yourself because you're welcome to speak.

No, he he indicated he was ready to speak, and I indicated, I think I'm gonna ask Dan a follow-up question to follow up on this question to you.

But I just want to be seen because it's you've been on the mic like 10 minutes.

So I just want to make sure that you see me.

Okay.

I understand that.

And you I've given you more than enough time when we talked about things or I'm just explaining why it's okay.

That's the only thing I'm doing.

I mean, Dan, I got a question for you.

Um, if that let's say a data center, so we'll just narrow it down, right?

So a data center has applied, they we did the application recently, a month or two months ago.

What would be the next step in the process that would be delegated to economic development to approve the next process?

Counselor, thanks for the question.

Sorry to do this too throughout the course of the evening.

Can you please clarify?

Are you referring to the enterprise zone application process or the land use development process?

Are we accurately apparently either one?

I'm not sure, but either one apparently.

So if a new enterprise zone application were to be submitted on behalf of an enterprise zone associated project, it would be not processed because the state's moratorium is now in effect as of June 6th.

Okay, start round any for at least how about on the land use side?

If someone said they did a development application or whatever the process would be again, the land use is completely separate and independent of the enterprise zone.

And so if somebody came in with a land use application or development application for data center, not rehack all of Rachel's portion of the presentation, but it would be reviewed against is it allowed in the zoning?

Are the limitations applied?

Does it meet the development standards that are on the books today that are in effect as of the time that's submittal?

And we would seek to process and review that if it was approvable or could be conditioned to the point of being approvable, that decision be issued.

If it could not be approvable, then we would encourage them not to apply.

And if they still applied, we would deny that.

And would there be public hearings on that application likely?

It would depend on the type of application.

Uh many of them possibly not, um, but again, depending on as we've seen, some of them could, that's very nuanced land use question.

That's right.

So if they complied with all the written codes, there wouldn't necessarily be a hearing, but if they're talking, if there's a type one or a type two or type, we want to go to a floodplain or whatever that goes to a public hearing.

Correct.

All right.

And all right.

I hope that answers the question.

I'm sorry for the clarifications.

We just really want to make sure we're layer focused on responding to thank you.

Christian was sorry.

Uh, question for Ted.

Um, so under the charter rules, if a city counselor asks for information or data from a staff person, it's my understanding that they have to share that data.

Um, if I'm understanding your question correctly, the answer is yeah.

So my question, sorry, sorry to interrupt.

So any city councilor here can request a look at those 17 applications right now.

Yeah, so the city council is a part of the city, and so even to the extent that there's confidential information that we can't show with the public, it doesn't mean that city councilors would not have access to it.

So we have access to it right now.

Correct.

Thank you.

That's all I want to know.

Councillor Dembury.

Thank you.

I just I just wanted to be very clear about something.

So the so there are no, they're not they are going to be no more applications for the enterprise zone because there's the moratorium, and at the same time, we have just given staff direction on changing the land use.

And so we could they could we could have some to be conditional, and they would then be coming.

And that direction has already been given.

So I I'm not sure why we are talking about it.

And this direction to change the land use has already been given.

And the environmental study and the economic study have all been given to staff, those directions, correct?

That's understanding.

And I think the hope for this evening, I'll look over to City Manager's table is to try to summarize those because we will have to sequence that work in, do the work and come back.

The one piece I would just flag again so that way we don't run the risk of damaging any further trust, and in the spirit of being truly transparent.

If somebody comes in tomorrow after watching tonight's conversation and direction provided to staff and submits an application, a land use or a development-related application for a data center, we will process those based on the rules in effect as of tomorrow.

Yes.

Just to be perfectly clear.

And so people may do that to try to get under the rules here, much like we've seen with the enterprise zone rush.

I just want that clear.

So when those come in, our staff are going to go through the appropriate processes as are required in alignment with the procedures laid out in state law and our local codes to process those, upholding the rules that we put on the books to conduct the appropriate outlined public engagement and notices and to render those defensible decisions.

That 75, 90 day timeline, anyway.

That is correct.

Okay, thank you.

All right.

So City Manager Hammond wants to make a comment, then I'm going to give it back to Councillor Sinclair to address the objections, and then we're going to take a poll.

Okay.

I just I thought I'd just um I wanted to make sure I shared with Councillor Sinclair and I'll care.

I absolutely understand uh I think the intent, and I think there's ways we can do this.

Maybe it's not exactly how we just talked about this evening.

I think everybody's in agreement.

There's ways we could have been better.

I absolutely agree with that.

And I think there's ways to do this.

And so if you if it's okay, um, we'll go back and figure out what some of those ways are.

Maybe it's not exactly how you'd propose it, uh, Councilor Sinclair, but there's ways we can be more transparent with the public.

If there's a new data center application that comes in, there's ways I can make sure you all know much quicker.

So uh we can do that.

I can do that, and I'll figure out how to do that.

And and uh I don't know exactly what that'll look like right now.

I just want to make sure you know that there's ways we can accomplish that, and I'll make sure we do that.

Robbie, I very much appreciate the input you just shared with us.

Um this has not been easy.

I do not enjoy pushing the way I have, and I want to make it very clear.

This was difficult for council.

Um there was no communication for us whatsoever.

And I we're here now in Councilor Every, I want to be clear also that we're here because people like me pushed to have meetings consistently and to push this being brought forth to where we have an open conversation.

Um I diligently pushed on that, and so things have evolved from the time we heard this information to now.

We did not have all this information when this happened, and now we do because of it.

Um I don't want conflict with all of us.

It just that was unprecedented, at least in my experience, and it didn't feel good, and I can't imagine how our public felt.

And so, Robbie, I appreciate it.

I'm not gonna keep going backwards.

I appreciate what you said, and I appreciate that we've had this time to talk this far out, and that is what's caused a lot of conflict.

Thank you.

And I acknowledge the work you guys did in pushing this forward, honestly, and um getting uh a lot of information out there.

Um it was definitely helpful, that probably necessary.

I do appreciate that, but I do think we're in a pretty good space or dealing with everything everyone's talked about, maybe not as fast as people would like to, but we're usually going by the law of the statutory requirements.

Um, and so I appreciate that.

With that, um, I will get a census on moving forward with uh counselor sinclair's proposal or not.

So if you want to move forward, thumbs up if you're not sure sideways if you don't want to move forward with it, go ahead and thumbs down.

I see four to two.

That gives you your direction.

Let's see.

Council President, would you like to try to summarize a couple of other talking points just to facilitate the the policy direction?

Well, Council President, I don't mean to interrupt.

I believe Council Sargava had a topic that you want to talk about that was different from this, but you moved on, that's great.

No, I do.

I was just waiting for the vote.

So if we can bring on new stuff, yes, we know we still have some stuff up here.

So yeah.

Yeah, no, I just wanted to share uh one last thing before uh we head out.

And I I would like to uh get the support from the council to explore a data center, community benefit and utility utility.

I had to practice utility because it wasn't coming out right, affordability fund.

And so essentially what I want the staff to do is to see what kind of legal authority we have to create this sort of community benefit, and um what this fund would do is it would provide a direct utility bill credit for income qualified households in Hillsborough, both electricity and water, and here's why.

So earlier I talked about the growth and the demand and the speed of all these things that are growing, right?

And one of the things that has been kind of out there, but I haven't really been too focused on it was the impact of this industry on electricity demand and how that uh cost is kind of spread out over residential customers.

I think it's really important for us to understand the finance model that companies like PGE use.

Um to understand why if something like this is possible, right?

In order, I don't want to speak to their business, but it they have to finance the growth.

And so, you know, that's that's one way that they finance that is they they calculate how much of a captured market they have.

It's like we have this many customers, so you know, we're gonna be able to leverage that.

And so understanding that that's what they have to do to go get financing to build out infrastructure can help you understand that something like this is possible.

Like PGE already does this with certain communities, they already do this with certain state programs where if somebody's income qualified, and I actually worked with this program at PGE.

Um, it's one of the groups that I was working with, is establishing an income qualified rate.

So we work closely with the OPC to come up with an 18% number, and that's a number that I that I worked on with my data uh project within PGE and actually helped inform that work.

So I know that it's possible.

I know that PGE is open to it.

Um, and so what you see here is this growth, you know, it it does get spread out to the to the residents, and there's a lot of data to support that, right?

Uh depending on how you look at it.

And so the way that I that I see that is the cost has to get put onto the residential customers because of the finance model.

And so that's why I see that opportunity here to create this credit where you know we create this new fee that the uh you know easy program uh beneficiaries uh jump into, and that money goes directly to you know a PGE and our CWS or our water department to give a credit to households that are 110% of the median income and why 110% and why the median income.

Well, a lot of the statistics out there show that between 50 and 65% of the population is living paycheck to paycheck.

So, you know, uh median income uh in Hillsborough is 112,000.

So that's 50% of the population is making uh less than that, right?

And so that's 50% of the people if we look at the lower end that I live in paycheck to paycheck.

So a program like this that could give somebody a hundred and fifty dollar credit, two hundred dollar credit on their electricity bill, 50 credit on their water bill, it's very minimal, but it's high impact because people are actually making these decisions every month, right?

Am I gonna delay my electricity bill?

Am I gonna delay my water bill so that I can go to my doctor appointment so that I can buy my medicine so that I can pay my car bill so that I can go get my tires fixed so I can go drive an Uber around, right?

It's very little uh investment that's gonna have a huge impact on our residents, and I really hope that you all can support that and see the future that's in front of us.

Uh, because again, we have to design these programs with the future in mind, right?

If we do want to mitigate some of these concerns we have about AI taking over workforce, etc.

etc.

We have to figure out a way that our community is gonna benefit because the new economy is showing that these companies have huge margins, right?

They're untouched, unregulated, they're out in the wild.

We have time, we have space, we have the capacity, we have the authority to do it.

So please explore that.

And I really hope that you all can support that.

Any feedback for counselor Sogada will know.

I have some, yeah.

If we had then there was fairness in the way people were gonna be able to pay electric bills compared to data centers, I think that plan would have worked.

But why should we have to give people credits?

Why can't we just uh make sure that they're being charged in an equitable manner and that they're not the ones who I don't want to sustain data centers.

I don't know public who wants to sustain data centers.

So, you know, let's talk about what that fee is for people and how that felt when they heard that uh data center corporate, it's an eight billion dollar industry, wouldn't have to pay the same, right?

In energy bills.

So why are we doing that?

It seemed it would feel like it might be a nice thing to do, but it feels like it's taking a step back and giving uh something that was taken away from people and saying, here, you know, we're gonna give you this break.

I don't think so.

I I think like we've had a lot of emails come in about this.

I don't know how many of you have read them about data centers and ideas that people have.

I don't know if staff had looked at all of those.

But um, we're not talking about a fair and equitable process here.

All we're doing right now is gonna catch up where we are with these agreements that we have, and now we have to go through it.

So I don't know what sort of incentive there is in that.

Can I answer that?

It's a question quickly, yeah, because we have other commenters, but it's I mean, I think you know, I invite you all to like remove the politics out of this.

This is a math problem, right?

That's all it is.

It's a math problem, it's a math formula we have to figure out.

And I'm sorry that you can't see the benefit how somebody living paycheck to paycheck, getting a hundred dollars reduced from their electricity bill and another hundred dollars reduced from their water bill benefits.

And I'm sorry that you cannot see that, but that is exactly what the benefit is gonna be.

Counselor Case.

Um, as a board member community action where we have services uh where they help facilitate services like these, I think this is something interesting.

Um, I think we're talking about a lot of ways to make data centers pay their fair share for lack of a better word.

So I think um, as we're as we're considering all the options, um, I think this is this is something worth adding to that list of things to look at of what might this look like.

Um, I think there's there it will take some time because I think we need to look at you know, kind of I think what we want to wait for is that data center task force, the state, whatever it's advisory council and the prosperity council um to come back with their recommendations as well.

But uh I think this is I think it's interesting.

Yep, Counselor St.

Clair.

Yeah, um, Council Selgado, I this sounds very familiar to aspects of what uh President Martin in previous council had suggested.

And in theory, I love the concept of creating solutions, but it kind of feels like we're um not getting to the root of the actual problem.

And my only concern with the suggestion is we've seen time and time again entities be at uh community-based organizations being at capacity, and then there's a lack of communication, and then it leaves our residents feeling frustrated, who need help and who are at the brink of having shutoff.

Um, they're doing all the work instead of us finding the solution to where they're not forced to do the work.

That's the only thing I'm concerned about.

So, what the way that we designed it at PGE is actually no touch from the customer.

It's the PGE collects the information.

Hey, how much do you make?

Prove it to us.

Once that's in the system, it automatically applies to their bill.

So it's actually very well thought out equity-wise.

I was part of the team.

I hope that by now you understand how I think about programs and know that I had a lot to do with that.

And so if they do design a program like this, that's what it's gonna look like.

It's gonna be very low barrier.

They're not gonna have to call in every week and say, can you please give me money?

It's gonna be an automatic credit because their income is gonna be in there.

And I believe every year they have to like re-qualify, so they have to like resubmit their their income information.

So it's it's a it's a very well-run program at PG, I will say that.

I'd like to learn more then.

Council Dr.

Yeah, I think I've used that energy program with PGE sometimes when I couldn't pay all my bill at the same time, right?

So, two things like um people have to qualify, they have to be eligible to meet requirements to get that assistance.

And the other thing, I know this with community action, they run out of money, they run out of support for energy, and so it's not like somebody can just call up and go, oh my god, look at my bill.

I'm gonna call community action.

They run out of funds.

What happens when they run out of funds?

We're responsible for that.

We're we're setting up the kickback with the data centers.

Why does somebody have to call community action and find out that they're not gonna get help because there just isn't any, and maybe they could try again in a future month.

So it's like, should we just give that money directly to community action?

Can we?

I think there's a lot of people though that are going to struggle with their PGE bills who don't qualify for community action.

Because it's it's an income.

It's a household that makes too much to qualify for community action programs, but they're still going to be struggling with the bills that we are imposing because we're allowing this to happen.

Can I can I respond to that?

So one of the things, one of the reasons why PGE started this program is exactly that reason.

Community action was managing the program, and we got to a point right before COVID and during COVID where there was an influx of people that needed that money, and community action had to go home.

And this is where digital literacy becomes important in digital access, right?

People didn't have that.

So we created this huge problem that we had to fix at PGE.

And what did we do?

We decided, hey, you know what?

Why don't we just create the program within PGE so that people don't have to go every month to community action?

Because that's one thing I saw at community action every month, same people.

Like it's just it's they have to lose a day of work, they have to go sit in line, they have to get in the queue, they have to get an appointment.

I mean, they go three or four days, they lose four days of work sometimes just to get help from community action.

And so that's why we designed it to come out of PGE so that wouldn't be a burden on the people that are delivering directly the service.

So again, really well-designed program, really well thought out.

Not talking highly of myself, but I was involved in that program.

And that's why I know so much about it, and that's why I know it works, right?

And it has the support of the community-based organization.

I think that's the most important part, right?

There's a lot of partners that are involved that support it.

Thank you, Councillor.

I appreciate the discussion, certainly the thoughtfulness about our community and affordability and the capacity issues regarding our community-based organizations.

I think when you started the conversation about having this fee, it very much uh aligns with the community services fee and the discussion about the enterprise agreements and what what'll be included in the local policy.

So if you're okay, we can just wrap that into kind of what we're analyzing in terms of programmatic and fee structures.

So I guess that wraps it up.

It's not gonna be a special program, but it can be one of these things that we're talking about, the easy program, which would be the first column there of proposals there.

We will add that one in there.

That's a housekeeping matter.

Did we go through each of these one, two, three, perhaps seven proposals and have a okay?

That's pushing their own lift.

Um President Harris, I just want to be clear that this was just meant to help facilitate the conversation.

It wasn't meant that you needed to go through every single one of these.

This was just to help you all sort of structure what you wanted to talk about.

Um, so it's not that staff is saying that you need to talk about each of these.

This was really just an opportunity to sort of look through what you all had proposed previously and say, hey, this is something just to help you structure the conversation.

So it's really up to you if you want to talk about these things.

We can certainly do that.

If you're done for the night, that's fine as well.

We're not done.

Um, but I would like to call a question on uh Counselor Sagalo's proposal with Ms.

Brooks information that it's something we could look at as far as when we amended the easy program to include this sort of a fee.

With that, was that the proposal or that the potential recommendation?

If there's consensus from council that you'd like to look at that.

All right.

So would we like to include that proposal in as an option in this uh if we amend the ESO?

Thumbs up or thumbs down or thumbs sideways, sideways down or up.

It'll be included in our options at least.

Um, so looking at the items up there that this the staff had listed because they saw some threads of continuity between the different ideas that have come through here.

Uh, does anyone want to make a pitch for any of them or have your own uh wild card pitch today?

I don't have a bitch for what it would look like, but the changes to public notice requirements seems like it would be really helpful based on feedback we would receive from the community over the last few months, and so I think that aligns with council sinclair's proposal that we didn't adopt, but it aligns with the city managers Hammond's proposal also about delegation notice and all that stuff.

So I think that entire column really actually aligns with at least a lot of the feelings that we have to have a little more uh public facing process going forward.

Okay, thank you.

Council Sinclair, President Harris, easy process down the road, yeah.

Yeah.

Everything.

Maybe get a consensus on the three items to take a look at and evaluate or the e-zone process going forward, thumbs up or down or sideways.

Which one?

Sorry.

All three in the middle.

The second call.