11/19/1990 Meeting - Laserfiche WebLink

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e Mr. Wong reviewed an overhead outlining the fiscal effects of Ballot Measure 5 on FY92. He estimated a loss of revenue of $1.8 million in FY92 and anticipated that the loss would escalate in future years. Mr. Wong clarified that the loss was dependent upon the assessed valuation and the tax levies of the jurisdictions competing for the $10 per $1,000 rate. In the metropolitan area, the City and County compete for the $10. Mr. Nicholson asked how the partition was determined. Mr. Wong said that, given a $10 cap, Eugene levied $9 and Lane County levied $2. Any amount over the $10 was pro-rated on a 2/11, 9/11 proportion. Responding to a question from Mr. Nicholson, Mr. Wong said that in many jurisdictions the assessed valuation is not equal to real market values, which is what the constitutional amendment calls for. In theory, if the real assessed valuation were moved closer to real market, the impact on property taxes might be mitigated. Mr. Boles asked if staff had any idea of the difference to be realized if the City used real market value as the basis of the tax. Mr. Wong said he would attend a meeting with the County Assessor the following week to discuss the issue. Responding to a further question from Mr. Nicholson, Mr. Wong confirmed that if the assessed valuation increased, the rate would move down under the cap. Mr. Wong said staff had included State shared revenues on the list as a potential loss due to the mandate given the State by the measure to make up the shortfall for schools. He anticipated the State would look to these revenues, realized by taxes on alcohol and cigarettes, to make up the e shortfall. Regarding the impact of the measure on the downtown Urban Renewal District, Mr. Wong said that the City can continue most activities and pay for debt service and certificates of participation on the Conference Center but will not be able to do many projects in the district, given the increment flow anticipated by staff. Mr. Wong said the impact of the measure on the user fees and charges, agreements with Lane County, and State grants and agreements were unknown. He said that the City could lose $1 million to $1.5 million if the Urban Transition Agreement is adversely affected. Mr. Boles asked if the airport debt service and subvention moneys would be eliminated. Mr. Wong said yes. He added that if the City loses State shared revenues, it would need to determine how to pay the general obligation bonds on the airport. Responding to a question from Ms. Ehrman, Mr. Wong anticipated considerable legal research into the issue of tax-increment financing. B. Recommended Actions for FY91-FY92 Mr. Wong said that prior to the passage of Ballot Measure 5, staff had projected an FY92 General Fund operating deficit of $297,000. Assuming the Capital Improvement Program (CIP) was funded at the proposed $2.5 million level, the projected total deficit for FY92 would be $2.75 million. Mr. Wong e MINUTES--Eugene City Council November 19, 1990 Page 4