CC Minutes - 05/27/03 WS - Laserfiche WebLink

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Mr. Carlson noted that Sue Cutsogeorge of the Central Services Department was present to answer any questions about the packet materials. Mr. Carlson noted that the formation of special districts would require amendments to the Eugene- Springfield Metropolitan Area General Plan. It would require action by the Lane County Local Government Boundary Commission and potentially legislative changes to the boundary commission's statutory charge. He said that such districts had the potential to offload some General Fund burden and free up resources in the existing General Fund that could be applied to other council priorities, but such districts did not solve the structural imbalances created by increases in the cost of Public Employees Retirement System, health care, and overall inflation, which continued to exceed the growth in revenues from the property tax. Mr. Carlson suggested that such districts could merely be a way of forestalling such problems. Regarding the issue of compression, Mr. Carlson reported that there was still some room under the $10 property tax cap for general government. He noted the differences in that cap created by the passage of Ballot Measure 50, which limited, capped, and cut assessed values so that there became a gap between assessed and market value. The $10 cap imposed on general government by Measure 5 applied to real market value rather than assessed value. While the City's tax rate for fiscal year 2003 was about $9.12, the $10 expressed in assessed value was about $12, leaving room for growth. With the decline in real market value and changes in the local option levy, the City had about $20 million under the cap. Mr. Carlson cautioned the council that when properties were revalued, their real market value may equal their assessed value, particularly in the case of commercial properties. Where the stated property tax rate was over $10, a property with a real market value equal to its assessed value would be in compression, so the City would not receive all the revenue that would otherwise be available for that property. He anticipated that in FY04 the City's stated tax rate would be over $10, and the City would be in compression on some properties. He noted that local option levies were affected first by the cap. A special district, if formed with a permanent tax rate, would be a peer to the City in terms of its tax rate, and so local option levies would be affected by compression before the regular tax rate was. Mr. Carlson suggested that the library was the best candidate for consideration as a special district because of the existing local option levy, which funded about one-half of the library's operating costs and must be renewed every four years; the library was a popular service with voters; there was a community push to provide library services on a countywide basis; and the library was not an instigator of urban growth in the same way infrastructure such as streets and sewers was. Mr. Carlson indicated a vote on a special library district could be held in May 2006. Mr. Pap~ solicited council questions and comments. Mr. Meisner said the creation of special districts would not be easy. Such districts would not reduce property taxes but in the case of a library district would merely free up money from the General Fund now dedicated to the library for other services. Eugene taxpayers would pay a district tax in addition to their City taxes. Mr. Meisner noted his continued opposition to paying for permanent services with temporary taxes. MINUTES--Eugene City Council May 27, 2003 Page 6 Work Session