Item 3A: Approval of City Council Minutes

Home Browse Search

Roll call vote; Consent Agenda Item B, the Tentative Working Agenda, passed unani- mously, 8:0. Regarding Item C, Councilor Bettman expressed appreciation for the handout from engineering staff. She called it unfortunate that she only received it before the meeting and did not have a chance to review it. Her main concern with the Metropolitan Wastewater Management Commission (MWMC) budget and capital improvement plan (CIP) was that it appeared to contain $31 million in capacity enhancing projects and another $2 million in systems development charges (SDCs) to pay for them. She averred the City had a policy that dictated that development would “pay its own way” in terms of capacity. She did not believe this was being done and meant that ratepayers would have to absorb the cost. She observed that costs to the ratepayers increased every year. She could not support this. Councilor Kelly asked the MWMC representatives to speak to Councilor Bettman’s concerns. He wondered how the disparity had come to be so great. Susie Smith, General Manager for MWMC and the Environmental Manager for the City of Springfield, stated that she worked with Peter Ruffier of the City’s Wastewater Division to administer the regional wastewater program. She explained that MWMC updated the facilities plan in 2004 and the result had been a much larger CIP than had been contemplated previously. She said leading up to that, the MWMC was on the brink of adopting an updated SDC methodology that would have incorporated ten years of projects as opposed to the five-year list figured in the old SDC methodology. She stated that both the project list and the SDC methodology were updated in 2004 and, in doing so, MWMC made every effort to follow the Oregon Revised Statutes (ORS) to a tee. She related that MWMC was under “a lot of scrutiny” in the process. A committee composed of members of the community worked on the methodology and still the MWMC was in litigation over whether or not the procedures and the ultimate methodology met the statutes. Ms. Smith explained that there was a limitation on how and what could be charged on a “per new user entering the system” basis. She underscored that the SDC improvement fee did have to be based on the new 20-year list. Due to capacity constraints and environmental requirements, the 20-year list was front- loaded in order to avoid overflows of the sewer system. She noted that at present, overflows occurred “in less than a five-year storm event” (which is the State standard for overflow events). She underscored that front-loading the project list related directly to the $51 million CIP for the next year and was why MWMC would be going to the bond market for $50 million in revenue bonds. She said the MWMC budget brought together revenue sources for capital from various places. She affirmed that the cash on hand was based on SDCs and user rate revenues and it was spent in the ways that they were statutorily eligible to be spent. Over the next several years, MWMC would be spending nearly $80 million in debt financing to fund those projects and this would be repaid through user rates, reimbursement SDCs, and improvement SDCs as the funds were available. She underscored that the projects had to be built now and the MWMC had to borrow money to do so, but would be able to pay back some of those bonds with future SDCs that come in. Councilor Kelly asked if the new SDC methodology adopted in 2004 was set up so that, over time, the $31 million in initial projects would be covered by SDCs. Ms. Smith replied that there was no simple answer. She clarified that if a project was perfectly phased, with development coming into the community so the money was raised as the projects were able to be constructed and “everything were in perfect parity,” she could guarantee that the $31 million in projects could be covered by those revenues. She stressed that the MWMC would have to look at what revenues came in and would have to meet its debt service requirements regardless of what the rate of community development was. MINUTES—Eugene City Council May 22, 2006 Page 5 Regular Meeting