CC Minutes - 05/22/06 Work Session

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preferred Option 3 but acknowledged the challenges to implementation. He said he would support Option 1 and encouraged staff and councilors to consider whether a further-focused Option 3 could complement Option 1. He could accept a 20 to 25 percent tax rate to establish a reasonable fund to pay claims since the tax was only on the increase in value due to rezoning. He asked if urban growth boundary (UGB) expansions would always be covered by Option 1 or only in certain situations. Mr. Klein replied that a UGB expansion initiated by the property owner would be quasi-judicial and covered by Option 1. He said that an expansion initiated by the government was a legislative process and could be included in Option 1 if the council wished to capture those. Mr. Klein noted there was far more increase in value associated with bringing land into the UGB than with most rezonings. Mr. Kelly asked staff to explore the impact of including government-initiated UGB expansions under Option 1. Ms. Bettman commented that the City only had two current Measure 37 claims, but one of those already used considerable legal resources. She viewed the fund as a way to possibly offset those expenses as well as to pay claims. She appreciated the recommendation of Option 1 and said when the motion to direct staff was being considered she would propose an amendment to not limit it to citizen-initiated rezoning or changes in designation. She felt that was fair because people with large projects could have leverage to get the jurisdiction to initiate a zone change or UGB expansion that was not available to everyone. She cited several recent examples. She said because the jurisdiction was increasing the value of a property through legislative or quasi-judicial action, it was asking for a refund of a small portion of that benefit to come back to the City and offset and balance Measure 37 claims. She suggested it should be called a “givings recovery fee” or “benefit refund” instead of “givings tax.” Mr. Papé said that the recommendation of Option 1 seemed a reasonable approach to Measure 37 but was very concerned about burdening someone with a tax when the change that resulted in an increase in value was initiated by the jurisdiction. Mr. Pryor concurred with Mr. Papé’s concern and would support Option 1 in its current form where it applied to citizen-initiated changes only. He said that Measure 37 was a voluntarily initiated process and the givings tax mechanism should also be. Ms. Bettman appreciated concerns about zone changes initiated by the City and those would be covered under the legislative provisions of Option 3; however, in a situation where the City brought property into the UGB, the fee could be recovered either when the property was sold for a higher value or the land owner made an application to change the use, such as from farm land to residential. She thought those situations could be accommodated under Option 1 and would offer an amendment to delete references to citizen- initiated and include alternate language. She suggested 25 percent as the tax rate and expressed interest in an exemption for very small rezonings with an increase in value of less than $1,000. Mr. Poling was not certain he could support Option 1 unless it applied only to citizen-initiated rezonings. He asked if the percentage rate could remain unspecified until after the public hearings. Mr. Klein replied that it would be better to include a percentage to which people could react; the rate could always be changed later based on public input. Mr. Poling said he could support the option only if it applied to citizen-initiated changes and had a tax rate no higher than 25 percent. He said that no matter what it was called, it was still a tax and would be perceived as one by the public. MINUTES—Eugene City Council May 22, 2006 Page 4 Work Session