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<br />- <br /> <br />e <br /> <br />e <br /> <br />sewer provlslon in that area. A project should be considered too expensive <br />if sewer costs exceed 3 percent of the median annual family income. Using <br />this criterion, staff has determined that at a 3-percent rate, homeowners <br />would be able to meet their financial obligations with either a 10- or <br />IS-year financing program. The River Road Citizens Advisory team (CAT) <br />recommended against 20-year financing because it encourages property owners <br />to enter into long-term debt without substantially impacting monthly sewer <br />costs; CAT did not consider IS-year financing. Mr. Smith said that interest <br />costs increase with IS-year financing, and there is a possible negative <br />impact on the City's bond rating. The choice between 10 and 15 years is up <br />to the council. <br /> <br />Mr. Smith noted that four low-income deferral programs are available to <br />assist residents with sewer costs in the River Road area. In addition, it <br />might be possible for Eugene to receive several million dollars at a <br />3-percent interest rate from the Oregon State Revolving Loan Fund to aid in <br />long-term financing. It might also be possible to seek County assistance by <br />means of the County Road Fund. The road fund could help reduce the average <br />homeowner's cost by approximately 20 percent. <br /> <br />Mr. Smith said that staff is particularly concerned with those <br />moderate-income property owners who do not qualify for low-income deferral <br />programs, but who have large sewer assessment costs. In order to address <br />this concern, staff is considering a delayed-assessment mechanism in which <br />the City would assess only a portion of the area of this lot. The remaining <br />assessment cost would be carried by the City. Mr. Smith noted that the City <br />may not assess vacant properties until they are annexed to the City and can <br />be developed. This carrying cost, to the Sewer Utility Fund, is <br />approximately $1.5 million. The City already has $4 million invested in <br />interceptor sewers which will gradually be recovered as sewer bills are paid. <br /> <br />Responding to a question from Mr. Boles, Mr. Smith clarified that in the case <br />of delayed sewer assessment, the property owner would be required to pay the <br />entire assessment cost at the end of the specified time period. This would <br />allow property owners to decide when to sell and subdivide their property <br />within the assessment period. If a property owner chooses to annex, <br />subdivide the property, and develop, he or she would pay the assessment at <br />that time. <br /> <br />Responding to a question from Mr. Boles, Mr. Smith said that there is no data <br />on the average income of those individuals who own large property lots. <br /> <br />Mr. Miller inquired about the possibility of dividing assessed sewer costs <br />equally among landowners regardless of calculated property area. Mr. Smith <br />responded that this type of common assessment is less equitable than the <br />proposed assessment method; large property owners would receive a <br />substantially greater benefit. <br /> <br />Mr. Boles asked about the equity of proposed cost-cutting programs to those <br />River Road residents who might not want to subdivide their property; i.e., <br />those landowners who desire to maintain the rural character of their land. <br />For these people, the opportunity to develop is not a benefit. He suggested <br />the possibility of establishing a contractual agreement with these owners in <br />which they would demonstrate their intention not to subdivide their property <br /> <br />MINUTES--Eugene City Council <br />Dinner/Work Session <br /> <br />April 9, 1990 <br /> <br />Page 2 <br />