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reviews and implement appropriate changes; push "Arts and Outdoors" as a theme for Eugene; re-staff Fire Station #9; develop a City Council position on racial issues; and develop a strategy to help the homeless in Eugene. We are making, great progress on these priorities on a very ambitious timeline, with each department Executive Director taking the lead on one of the issues. Cross-department teams are preparing draft action plans for City Council consideration and action. This has been a very important and formative process for our City Council and their professional staff because it established major common goals for both the council and the City organization. The fact that the City Council reached unanimous agreement on a spectrum of issues as priorities for the organization is powerful. Last year there was only one goal. This effort provides an opportunity to focus and align our work around these City Council priorities and provides us with a clear sense of direction and purpose for the next two years. When we set priorities, we get things done. When we set priorities and keep them over time, the right things get done. For example, downtown development is moving forward in a very positive manner. The redevelopment occurring and proposed for our city center is consistent with the Downtown Vision and the adopted Downtown Plan. Proposed projects are consistent with City Council actions and priorities for downtown, Actions taken by the City Council regarding the Downtown Plan, the two (downtown and river front) urban renewal plans and the creation of tools such as tax increment financing, multiple-unit property tax exemption (MUPTE), vertical housing development zone, and revolving fund loans have all set a positive context for significant downtown revitalization in the next several years. A recovering economy and rising interest rates also provide a catalyst for action. We look back with pride on the Library, the new Federal Courthouse construction, a restored Eugene Depot, the Aurora Building and the reopening of Broadway. ! am excited about the prospects for downtown. The housing project approved on 8th Avenue, the Oregon Research Institute building planned for construction across the street from the Library on the old Sears site, the Tate condominiums now under construction and the new Fire Station # 1 on 13th and Willamette each reflect the policy direction of the City Council coordinated by staff and our development partners. While we remain committed to finding a sustainable, locally controlled source of new revenue to help with pavement preservation to wipe out our growing backlog, we are grateful that we have made substantial progress towards the City Council's goal in this area and the Budget Committee's recommendations with the adoption of a five-cent gas tax over the last year. While I remain disappointed that more did not come from our work to redistribute County road funds, we acknowledge that we have made some significant progress on the pavement preservation front during this last year. Actions such as passing a three-cent local motor vehicle fuel tax in FY 04 and approving another two-cent increase in FY 05 will greatly contribute to the $4.5 million we have identified for pavement preservation projects in FY 06. I also acknowledge Lane County for continuing to allocate a portion of the OTA III funds to assist us in preserving our roads next year. A variety of street projects are completed and many are underway that improve access and preserve the community's investment in transportation infrastructure, such as repaving of Cal Young Road, Gilham Road and portions of Bertelsen Road and Willamette Street. In September,