CC Minutes - 05/12/03 WS - Laserfiche WebLink

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Ms. Bettman, Mr. Kelly, and Ms. Nathanson noted corrections to the minutes. Ms. Bettman pulled Item 3. Mr. Pap~ pulled Item 4. The Consent Calendar, with the exceptions of items 3 and 4, passed unanimously, 8:0. Regarding Item 3, ratification of the Metropolitan Wastewater Management Commission (MWMC) fiscal year 2004 budget, Ms. Bettman said that the budget indicated that $750,000 was moved from the Operating Reserve to the Capital Reserve. In addition, the MWMC proposed to raise rates by 6.5 percent. Ms. Bettman asked if there were capacity-enhancing projects in the MWMC's capital budget that were not being funded through SDCs. In response to Ms. Bettman's question regarding the use of SDCs, Susie Smith, General Manager of the Metropolitan Wastewater Management Commission (MWMC), responded that the agency had a combined reimbursement/improvement SDC fully allocated by statute to capital improvements. Under the current MWMC's methodology, the agency would not collect enough money from either the reimbursement or improvement SDC to fund the Capital Improvement Program (CIP) in its entirety, including capacity enhancing projects. Ms. Smith anticipated that the MWMC would have to continue to subsidize capital-enhancing projects with user fee revenues. Ms. Bettman suggested that the proposed 6.5 percent increase in fees could be attributed to the fact the citizens were subsidizing the cost of growth. Ms. Smith said that was true, in part. Ms. Bettman referred to the size of the agency's SDC reserves and suggested that if the reserves were used for capital-enhancing projects, the proposed fee increase could be postponed or decreased significantly. In response, Ms. Smith said she could not say that was correct. The MWMC was holding those reserves for a very large project. She said that the SDC funds were allocated annually on the basis of the financial plan for the long-range CIP. The agency could not spend all SDC revenue in one year because there would be no money in the next year. She said the financial plan adopted by the MWMC involved metering that money out to support projects over a five- and ten-year horizon. Those expenditures were largely driven by MWMC's wet weather flow management plan improvements that would cost about $35 million over five years. For that reason, those reserves could not be spent today. Ms. Smith attributed the proposed rate increase to a decrease in user fee revenues since 2000. The need for the rate increase was driven by an extreme drop-off in revenue collection due to the economic downturn, and other factors such as utility rate increases and billing and collection increases. The rate increase was to make up for lost revenues in past years. Ms. Bettman continued to maintain that ratepayers were subsidizing new growth. Mr. Kelly recalled a proposal to raise the regional element of the wastewater SDC. He asked about the status of the increase, and if that increase would help cover the SDC revenue shortfall. Ms. Smith said that the MWMC had adopted and forwarded to the local jurisdictions a change in the SDC methodology that would have allowed it to change the ClP list for which improvements fees could be collected from a five-year to a ten-year basis. In the long-term, that would address, in part, Ms. Bettman's issues. Regarding the status of the fee, Ms. Smith said that the Lane County Homebuilders Association had indicated its intent to take legal action against the City of Springfield if it adopted the methodology change. Springfield had scheduled a public hearing on the item but that was postponed. She said that MWMC felt it had a strong legal position and was working to be prepared for an appeal. MINUTES--Eugene City Council May 12, 2003 Page 10 Work Session