CC Minutes - 09/09/02 Work Session

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Ms. Bettman determined from Mr. McVey that the staff recommendation to the RAC had been for a maximum trigger of seven percent. If a proposed index or inflationary adjustment exceeded the trigger, under the recommendation the City would go through the full resolution process. The RAC agreed it preferred a more conservative figure, and recommended five percent. Ms. Bettman asked if the conservative figure would trigger the process less often. Mr. McVey indicated that out of twenty years' experience, there was one year the cost index was greater than five percent. Mr. Pap~ said that while he was in sympathy with Mr. Fart, he was prepared to support the resolution. He said that the community had experienced rising construction costs, which had flattened since 2000. He noted that few CPIs were as high as 3.9 percent. He asked if the 20 cities surveyed for the CCI were in the northwest. Mr. McVey said Seattle was included. Mr. Pap~ observed that Seattle was a big metropolitan area. He asked if other indices had been considered. Mr. McVey said that staff looked at indexes most relevant to the City's infrastructure. He added that there were not a lot of other cost indices related to those costs. Mr. Rayor supported the motion because he found the proposed adjustments to be justified. In response to a question from Ms. Nathanson, Mr. Carlson indicated staff would clarify before the public hearing whether the City subsidized Iow-income housing SDCs using General Fund dollars. Ms. Nathanson determined from Mr. McVey that the CCI was completely separate from the Producers Price Index (PPI), and staff had not traditionally looked at the cost elements in the PPI. Mayor Torrey determined from Mr. McVey that a school district constructing a new grade school on the site of a former school would be credited for any past development on the site. He determined from Mr. Carlson that any City assistance offered a new hospital in Eugene would not be in the form of an SDC exemption or waiver because of legal equity issues. He further determined from Mr. Carlson that a component of the SDC, the reimbursement component, could be used for preservation of existing infrastructure. Mr. Fart said he thought it made no sense to compare Eugene to larger cities such as those in the CCI survey. He said it was an arbitrary application of numbers because things were not the same in Eugene. Mr. Farr expressed concern about the impact of the adjustment on the local economy. Mr. Meisner asked what indices Portland, Salem, and Medford employed. Mr. McVey said that they generally used the ENR CCI for their construction cost index. Those communities' councils had approved the use of the index. Some Northwest cities use the Seattle ENR cost index, which over time was about the same as the 20-city ENR. He said that local indexes were susceptible to local fluctuations and were more sensitive to local conditions than national indexes. Ms. Bettman noted the RAC's failure to recommend a project-based methodology because it lacked the data to support such an approach. She suggested that unless the City wanted to hire more staff and get its own data, the City had no choice but to use such pooled information. The motion passed, 7:1, Mr. Farr voting no. The council took a brief meeting break. MINUTES--Eugene City Council September 9, 2002 Page 12 Work Session