Item 3A: Approval of City Council Minutes

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Councilor Kelly surmised that if community development was slower, the revenues would lag behind the need. Ms. Smith affirmed this. She reiterated that she was unable to say with 100 percent certainty that the result would be complete parity with 100 percent recapture of the $31 million because of the factors in play. Councilor Kelly indicated he would support the motion. He opined that there was “clearly a problem behind the idea of SDCs” and wondered if a State-level fix was needed. Councilor Papé asked what would happen if development did not occur as predicted and the bond had to be paid. Ms. Smith replied that the difference would have to be paid by ratepayers. She said this was conceivable, but MWMC used a very conservative growth projection with regard to SDCs in order to avoid potential volatility in the market and a reduction in revenues. In response to a follow-up question from Councilor Papé, Ms. Smith said the SDC formulas were the same for both Springfield and Eugene. Councilor Papé asked how much of the $145 million, 20-year CIP had been undertaken. Ms. Smith responded that construction bids were in and a contract had been signed for the clarifier improvements, a $17 million project, and construction was set to begin in early June. The engineering/design phase for the aeration basins and for the digester/mixing project was nearly complete and would soon go out for construction bids. While she was uncertain exactly how much these three projects would cost, the construction portion was planned as part of the $51 million component. Councilor Bettman declared the budget to be inconsistent with Eugene policy and with MWMC policy. She asked if the same conservative growth projections had been used for the project list as had been used for the SDC revenue. Ms. Smith responded that the conservative growth projections were a mechanism to help ensure no revenue shortfalls and the CIP was based on Lane Council of Governments (LCOG) growth analyses. Councilor Bettman asked if the project list could be postponed until the SDC revenue “caught up.” Ms. Smith replied that some aspects of the performance of MWMC regional wastewater facilities were not in current compliance under certain conditions with the existing permit. She explained that the clarifier project work being done to expand the wet weather flow capacity was needed now because of compliance issues, even though SDC revenue was not yet available to pay for it. She underscored that the objective of the plan was to remain compliant with the National Pollutant Discharge Elimination System (NPDES) permit and that long-term community growth was not the driver for the budget. Additionally, it was impossible to know what types of development would arrive over the next few years and how much in SDCs they would be charged. Councilor Bettman said she understood some of the complexities but asserted that it was “also very simple.” She reiterated her concern that ratepayers would have to “foot the bill” for growth accommodat- ing capacity enhancements. She understood the written material as having said even though some of the bond proceeds could be paid off by SDCs, there would still be a gap between the revenue and the need. She wondered if there was a plan to increase SDCs so that “they would pay” for the increased capacity of the system. Ms. Smith replied that at this time the methodology for SDC calculation had been prepared following the letter of the ORS statute. She said it had also been developed with the oversight of a citizen advisory committee and adopted by the jurisdictions. She explained that further review of the SDC MINUTES—Eugene City Council May 22, 2006 Page 6 Regular Meeting