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. . . to issue bonds is implicit in the City's Home Rule Charter and that the existing State statute does not limit bonding authority to the State Department of e Economic Development or cities with a population greater than 300,000. Ms. Wooten stated that she would support the recommendation to seek a declaratory judgment, but would like guidelines for use of the program discussed first. Mayor Keller asked if this would be part of the process. Ms. Smernoff responded that it would. Mr. Lindberg noted that industrial revenue bonds have been approved for other areas. He asked if there are ways in which we can take advantage of these bonds. He requested a staff report. Mr. Obie moved, seconded by Ms. Smith, to request the City Attorney's Office to begin preparations for seeking a declara- tory judgment on the City's authority to issue industrial rev- enue bonds based on the City's Home Rule Charter. Mr. Haws stated he feels there has been enough evidence presented--both pros and cons. Ms. Wooten stated that the EEDC is not looking at this program as the only financing mechanism. Bonding programs have been abused in areas in the East and she would like more information about who the program would serve. Over-bonding is also becoming a problem in some areas. Mr. Gleason stated that 48 states currently have industrial revenue bonding programs. By not doing it, the State is penalized. Oregon's program makes it difficult for some Eugene firms to take advantage of the Federal tax code. A bonding program would be an extension of the Federal tax code rather than an extension of the City's amount of credit. The National League of Cities has taken an opposing view- point to this program because in some cases it has been used as a grant rather than as an incentive. e Mr. Haws asked for clarification and Mr. Gleason responded that this is a legal question. The City is saying we can issue bonds under the Home Rule Charter. It would be less expensive to seek a declaratory judgment rather than going through private enterprise and losing investments because of court cases. If the declaratory judgment is favorable then the council can decide if they wish to have an industrial revenue bond program. Mr. Haws asked for clarifi- cation of the process. Mayor Keller stated that the Economic Development Committee favors looking into a bonding program for the City. Staff feels it would be beneficial to the City. The committee hoped the State program would be changed through the Legislature, but that has not happened. The declaratory judgment will give a valid determination on the authority of the City to estab- lish its own program. Mr. Lindberg stated that he feels that each jurisdiction could use this as a tool for achieving the public good; it would be a good idea. Some areas have used it for supporting private enterprise rather than the public good. If the council can be assured that the City's authority is legal and criteria can be developed to achieve economic development goals, this would be a good idea. He feels staff should proceed at least to the point of getting a declara- tory judgment issued. Ms. Wooten stated that staff needs to see if this can be done and then council can decide if they want to or not. e MINUTES--Eugene City Council July 8, 1981 Page 12