CC Minutes - 01/25/06 Work Session

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Ms. Taylor thought the exercise pointed to the need for more revenue, tax reform, and new sources of revenue. She said the only option she could support was the first one, which would tax increases in property value brought about by changes in zoning or designation of a property. She felt a property owner would only request such a change if he or she was seeking to improve the value of the property. Ms. Taylor asked Mr. Klein to provide an example of a legislative change that would increase value, as addressed in the third option. Mr. Klein explained that if the code currently restricted height in a commer- cial zone to 20 feet and the height limitation was increased to 100 feet, some properties could increase in value because a person could build a much larger structure on a particular land parcel. Ms. Taylor remarked that it seemed that this option could tax people who were not benefiting from a legislative change. Mr. Kelly agreed that the materials before the council were very thorough and informative. He reiterated that the City could face “millions of dollars in potential liability” in Ballot Measure 37 claims. He averred that the City had to find a way to pay for those claims. He thought the alternative would be that the City would have to eliminate much of its land use management. He also supported the first option and opposed the second and fourth options. He thought the third option bore further examination. He likened it to a capital gains tax which was only exacted when a sale of stocks or other large properties were realized. He recognized that dealing with approximately 50,000 properties added a level of complexity to the third option, but pointed out that the property tax system dealt with a large number of properties every year. He thought the City could potentially utilize the property tax assessor’s office as a resource should the third option be chosen. Mr. Pryor asked how many Measure 37 claims the City currently faced. Mr. Klein replied that two claims had been filed, but one was not going forward because the property owner agreed to place it on hold pending the Supreme Court decision and the other would likely go away administratively. Mr. Pryor asked if it was known how soon the decision from the Supreme Court would be rendered. Mr. Klein guessed that it would be known in the summer, though it could be anywhere from two weeks to two years. Mr. Pryor did not sense an enormous amount of Measure 37 activity going on at the moment. He did not think it prudent to create a system that could potentially assess people for increases in property values in advance of the decision. He appreciated the arguments against the second and fourth options and agreed with them. He shared some councilors’ hesitance to support the third option because of the number of properties involved and the cost to the City. He felt that what the City could gain in money might not even compensate for what it would pay out in fees and assessments. He predicted it would be expensive. He also was not enamored with the first option. He said it would charge property owners twice. He pointed out that when property values increased, property taxes were the mechanism to receive compensation for such an increase. He thought charging again for property value increases could be perceived as “double-dipping.” He preferred to table all of the options at present. He underscored that if a Measure 37 issue arose that was significant, real, and of concern to the City the council could always bring the conversation back. At present, however, he did not see the need. Ms. Solomon concurred with Mr. Pryor. She agreed that the discussion was premature and there was no need to waste resources on it at this time. Mayor Piercy indicated her agreement with Mr. Pryor as well. MINUTES—Eugene City Council January 25, 2006 Page 2 Work Session