Item 4 - Ordinance on Downtown Urban Renewal Plan Amendments

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As a result of the Committee and Agency’s work, actual spending by category may differ from that presented in Table 5. It should also be noted that decisions on spending priorities for project activities will be made by the URA Board in its annual budget process and regular Agency meetings, all of which are open to the public. As is customary, the Eugene Redevelopment Advisory Committee will advise development staff on budget and project priorities for the district, in meetings open to the public. As mentioned above, the West Broadway Advisory Committee will provide input on the mix of uses, design elements, public open space, parking options, and transition plan for existing business for a West Broadway redevelopment effort. Maximum Indebtedness Oregon Statutes require each urban renewal district that receives property taxes include a “maxi- mum indebtedness” limit in their urban renewal plan. The URA amended the plan for the Down- town District in 1998 to include a maximum indebtedness limit of $33 million. “Maximum indebtedness” is a required spending cap for all property tax expenditures beginning in 1998. “Maximum indebtedness” is not a legal debt limit. It is more like a spending limit. Certain expenditures of the district are included in the “maximum indebtedness” calculation and certain expenditures are excluded.For instance, interest on debt is excluded from the calcula- tion, but cash payments for projects and administrative expenses are included in the calculation. The current “maximum indebtedness” of $33 million has nearly been fully spent, with the bulk having been spent on the library. About $4.6 million is left under the $33 million limit in the Downtown District. It is currently projected that the district will have collected sufficient tax revenues to meet the $33 million limit in FY09. Adopting a “maximum indebtedness” figure does not authorize or obligate the district to spend money or enter into debt. It allows future Agency Boards to have the ability to fund projects over time, either with cash or by issuing debt. If the Downtown District Plan is amended, it would be possible for the district to enter into obligations of greater than the $4.6 million allowed under the current limit. The determination of a maximum indebtedness amount is based on a combination of the projected tax increment reve- nues in the district and a policy decision about the appropriate level of spending to allow within the district by future Agency Boards. The proposed plan amendment increases the maximum indebtedness by $40 million. This amount was developed using a conservative assumption about existing tax increment revenues through the year 2030. Future major projects within the Downtown District would require another maximum indebtedness increase. The $40 million increase allows for flexibility to respond to project uncertainties, including uncertainties about the method of payment for the property acquisition. The new limit is also designed to cover district administration costs through 2030 with no change in staff levels. Some questions have been raised about the relationship between the maximum indebtedness figure and a budget for a particular project, such as the West Broadway redevelopment concept currently being discussed. The table below sets out the comparison between the maximum