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Council briefed on ODOT objection to recent rezoning; staff recommends repealing and replacing ordinance to omit high‑trip parcels
Summary
City staff told the Molalla City Council that ODOT challenged the City’s finding of no significant impact under the transportation planning rule and advised that DLCD review could remand Ordinance 2025‑05. Staff proposed repealing and replacing the ordinance to remove parcels of concern, add trip‑generation analysis, and refile with DLCD while keeping residential and central commercial rezonings and the ADU process change.
City staff briefed council members on May 14 about a state‑agency comment from the Oregon Department of Transportation (ODOT) that objects to the City’s finding of no significant transportation impact for portions of Ordinance 2025‑05, the rezoning measure the council adopted on March 26.
Senior planner Dan Zinder said staff received ODOT comments that certain rezonings — notably changes from industrial to commercial in specific subareas — could increase trip generation at state‑controlled intersections, including the new roundabout, and that without additional analysis ODOT could not support those rezonings. Zinder said the City concluded a finding of no significant impact when it adopted the ordinance but that ODOT’s submission during the DLCD review period triggered concern.
Staff reported they consulted DLCD and were advised an ODOT objection would likely lead to remand of the ordinance during the state review period. To avoid a likely remand and delay, staff proposed a repeal‑and‑replace approach: adopt a new ordinance that omits the parcels ODOT identified as high trip‑generation risk and include the trip‑generation numbers and mitigation analysis generated in consultation with ODOT. Staff said that approach would reduce legal and financial risk while preserving rezonings ODOT did not object to (residential and central commercial) and the ADU procedural change from a Type‑2 to Type‑1 review.
Councilors asked about appeal paths and the potential for going to LUBA if DLCD remands the ordinance; staff said LUBA would be the next step and that the City did not view a LUBA win as likely. Staff also said the City will apply for Transportation & Growth Management (TGM) grants (ODOT) in 2025 and 2026 to fund a fuller transportation systems plan (TSP) update and the required analyses.
One councilor framed ODOT’s objection as an attempt by another agency to override locally elected zoning decisions. Staff and other councilors described a nuanced situation: the City’s TSP was written for full build‑out of the existing UGB and did not anticipate additional UGB expansion, and ODOT builds and operates state facilities using the data available at the time. Staff emphasized they had conducted iterations with ODOT to produce worst‑case trip estimates but could not reach agreement on the industrial‑to‑commercial conversions without additional study.
Staff asked for council direction to proceed with the repeal‑and‑replace course to avoid DLCD remand and to seek grant funding for the TSP update; councilors generally indicated support for the staff approach.
Outcome: staff intends to notify DLCD and affected property owners of intent to adopt a new ordinance that excludes the high‑trip parcels, supplement the record with ODOT‑agreed trip generation analysis, and pursue TGM grants to fund a comprehensive TSP update.
