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retention to the job cap would likely be immaterial for a majority of enterprise zone investments that would most likely meet the $30,000/job cap based solely on job creation. Companies new to the area (no existing jobs retained locally) making large capital investments with limited numbers of new jobs would likely experience the most significant reduction in the tax exemption benefit under this revised cap. Local companies that have large existing employment bases would benefit most from the revised cap. Given the opinion (see issue #4 in Attachment C) that a reduction of the tax exemption benefit by greater than one-third may not be allowed under State rules, it is possible that the proposed $30,000/job cap could only be enforced up to this limitation. The impact of the County's addition of"job retention" in the waiver provisions is not considered to be significant given that the council would be required to approve such a waiver. A summary of issues related to this agenda item is included in Attachment C. RELATED CITY POLICIES The enterprise zone tax exemption addresses the following related City policies: Sustainable Community Development - The council's Sustainable Community Development goal addresses high quality of life and a healthy economy. The availability of quality jobs is a basic quality of life issue. With a local unemployment rate that exceeds the national average, and local income levels below state and national averages, the creation of new production sector jobs is fundamental to the health of the local labor market. The creation of an enterprise zone will also provide an incentive for redevelopment, infill development, and brownfield redevelopment, which are primary sustainability goals. Growth Management - The enterprise zone advances the City's Growth Management goals by encouraging more intensive industrial development in a defined area that has been zoned accordingly, and where existing public infrastructure investments have already occurred. Fair, Stable, and Adequate Financial Resources - The long term property tax revenues that result from new investments that are encouraged by the short-term tax exemption address the council's goal for financial resources adequate to maintain and deliver municipal services. COUNCIL OPTIONS The council has several options: 1. Approve a resolution that is consistent with the July 12, 2005, Lane County Board Order. 2. Approve a resolution which would remove the inclusion of job retention in the calculation of the cap and the cap waiver provisions, and seek the County's reconsideration of its Board Order. 3. Take no action at this time, and continue working with Lane County to resolve differences related to interim criteria. 4. Take no action, and begin working with Lane County towards the establishment of permanent local criteria. 5. Proceed with City Council direction to terminate the West Eugene Enterprise Zone, and rescind direction to work towards a future zone designation. L:\CMO\2005 Council Agendas\M050718\S0507184.doc