CC Minutes - 06/10/02 Meeting - Laserfiche WebLink

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Councilor Kelly pointed out that the last paragraph on page 7 of the May 13 regular meeting minutes incorrectly referred to former City Manager Jim Johnson rather than City Manager pro tem Jim Carlson. Mayor Torrey determined there was no objection to the corrections offered by Councilor Kelly. Roll call vote; the motion to approve the Consent Calender, with the exception of Item D, carried unanimously, 8:0. The council considered Item D. Councilor Bettman expressed an interest in seeing the allocations being underwritten by systems development charges called out separately in the future. She could not determine the SDC-eligible projects from looking at the list of projects. She wanted a justification for why the reserves funds were accumulating when the Metropolitan Wastewater Management Commission (MWMC) was proposing a rate increase. The reimbursement SDCs show a beginning balance of nearly $5 million. It was her understanding that those revenues were more flexible than improvement fees, and she wanted to know if all SDC-eligible expenditures were being paid for by SDC revenues. She asked about the impact on rates if the nearly $4 million in reimbursement reserves were directed toward scheduled capital improvements being paid for by ratepayers. Susie Smith, General Manager of the MWMC, clarified that there was no rate increase proposed this year. There had been six years with no rate increases until the five-percent increase in 2001. She did not know what would occur in 2003, saying it depended on the economy. Regarding the MWMC's Capital Improvement Program (CIP), Ms. Smith said that the MWMC determined what percentage of the costs of every capital project could be attributed to a capacity increase. She agreed that the reimbursement element of the SDC was more flexible in terms of how the revenues could be spent. Ms. Smith said that the reimbursement portion of the SDC was allocated to the Reimbursement SDC Fund according to capacity. Then, because the MWMC did not receive sufficient revenue in the long-term from SDCs, it had to supplement, through user rates, a contribution to the Capital Reserve Fund. She said that the large fund balances at this time represented a peak in the continuing "ups and downs" of the CIP implementation. The size of projects created peaks and valleys in the expenditures. Ms. Smith said the SDC funds being collected now were "smoothed over" on a five-year basis, and every year the five years "rolls." The approach being used helped MWMC avoid rate spikes. She said that she could provide a table that showed the project-by-project breakdown between funding sources. Councilor Rayor said the commission had agreed to look at rate smoothing of the SDC because there were no large projects in the five-year horizon but there were large projects in the ten-year horizon. In the absence of the ten-year methodology, SDC rates would swing wildly. Responding to a question from Councilor Rayor, Ms. Smith said that the staff was recommending a change in the SDC methodology to take in a ten-year time frame because of the rate spike issue. MINUTES--Eugene City Council June 10, 2002 Page 4 Regular Meeting