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CITY OF EUGENE, OREGON <br /> <br />Notes to Basic Financial Statements <br /> <br />continued <br />(5) Other Information, continued <br /> <br />(H) Outstanding Encumbrances <br /> <br /> At June 30, 2018, the City has encumbered the following significant commitments: <br /> <br />Fund Amount <br />General $3,130,352 <br />Community Development 975,769 <br />General Capital Projects 1,629,678 <br />Systems Development Capital 1,286,967 <br />Ambulance Transport 51,428 <br />Municipal Airport 1,466,560 <br />Parking Services 271,089 <br />Stormwater Utility 1,281,804 <br />Wastewater Utility 987,248 <br />Internal service funds 3,600,535 <br />Other governmental funds 9,618,712 <br />Total outstanding encumbrances $24,300,142 <br />(I) Tax Abatements <br /> <br />The City uses property tax abatements to encourage business and economic development. The City has four tax <br />abatement programs: Low-Income Rental Housing Property Tax Exemption, Multi-Unit Property Tax Exemption, <br />Property Tax Differential, and the West Eugene Enterprise Zone. <br /> <br />The City’s tax abatement programs reduce or eliminate the amount of property taxes that a property owner pays. The <br />revenue impact from property tax abatements consists of two components: revenue loss and revenue shift. Most <br />property taxes levied in the City are through fixed tax rates. With these levies if a property is exempt from taxation <br />then the City simply raises less money than if the property was taxable. <br /> <br />Some levies, mostly bond levies to repay debt, do not have a fixed tax rate and instead calculate the tax rate each <br />year by dividing the amount of tax revenue needed that year across the value of all taxable properties. In these <br />cases, if a property is exempt from tax the effect is to raise the overall tax rate on the remaining taxable properties. <br />Therefore the final amount of tax raised for the City will remain the same because the tax burden is shifted to the <br />other properties. <br /> <br />Low-Income Rental Housing Property Tax Exemption <br /> <br />The Low-Income Rental Housing Property Tax Exemption (LIRHPTE) is enabled by Oregon Revised Statute (ORS) <br />307.515 – 307.535 and City Code 2.910 – 2.922. LIRHPTE is designed to encourage development of properties that <br />are offered for rent or held for the purpose of increasing low-income rental housing. <br /> <br />Rental properties constructed after February 12, 1990, or rental properties owned by 501c(3) non-profits that are <br />offered for rent or held for the purpose of developing low-income rental housing are eligible. Property must be rented <br />only to persons with income at or below 60 percent of area median income based on US Department of Housing and <br />Urban Development criteria, and must be rented at rates that reflect the full property tax reduction. <br /> <br />The abatement applies to real property taxes, which are reduced through a reduction of the property’s assessed <br />value. Properties that meet the requirements qualify for 100% exemption over a 20 year period. These tax <br />abatement agreements do not include any provisions for recapturing any abated taxes. <br /> <br />Multi-Unit Property Tax Exemption <br /> <br />The Multi-Unit Property Tax Exemption (MUPTE) is enabled by ORS 307.600 – 307.637 and City Code 2.945 – <br />2.947. MUPTE programs are designed to be an incentive of redevelopment of residential properties in city centers <br />and along transit corridors. In Eugene, the City Council has authorized the use of MUPTE in the downtown area and <br />west of the University. The program has been discontinued in the West University area and it has been narrowed so <br />that student housing is no longer eligible. <br /> <br />84 <br />December 10, 2018, Meeting - Item 2D