Agenda Packet 12-9-19 Meeting - Laserfiche WebLink

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CITY OF EUGENE, OREGON Notes to Basic Financial Statements continued (5) Other Information, continued (H) Outstanding Encumbrances At June 30, 2019, the City has encumbered the following significant commitments: Fund Amount General $2,404,579 Community Development 1,513,278 General Capital Projects 2,837,867 Systems Development Capital 2,364,802 Ambulance Transport 41,532 Municipal Airport 9,914,221 Parking Services 892,948 Stormwater Utility 1,222,026 Wastewater Utility 1,982,773 Internal service funds 3,302,553 Other governmental funds 7,737,706 Total outstanding encumbrances $34,214,285 (I) Tax Abatements The City uses property tax abatements to encourage business and economic development. The City has four tax abatement programs: Low-Income Rental Housing Property Tax Exemption, Multi-Unit Property Tax Exemption, Property Tax Differential, and the West Eugene Enterprise Zone. The City’s tax abatement programs reduce or eliminate the amount of property taxes that a property owner pays. The revenue impact from property tax abatements consists of two components: revenue loss and revenue shift. Most property taxes levied in the City are through fixed tax rates. With these levies if a property is exempt from taxation then the City simply raises less money than if the property was taxable. Some levies, mostly bond levies to repay debt, do not have a fixed tax rate and instead calculate the tax rate each year by dividing the amount of tax revenue needed that year across the value of all taxable properties. In these cases, if a property is exempt from tax the effect is to raise the overall tax rate on the remaining taxable properties. Therefore the final amount of tax raised for the City will remain the same because the tax burden is shifted to the other properties. Low-Income Rental Housing Property Tax Exemption The Low-Income Rental Housing Property Tax Exemption (LIRHPTE) is enabled by Oregon Revised Statute (ORS) 307.515 – 307.535 and City Code 2.910 – 2.922. LIRHPTE is designed to encourage development of properties that are offered for rent or held for the purpose of increasing low-income rental housing. Rental properties constructed after February 12, 1990, or rental properties owned by 501c(3) non-profits that are offered for rent or held for the purpose of developing low-income rental housing are eligible. Property must be rented only to persons with income at or below 60 percent of area median income based on US Department of Housing and Urban Development criteria, and must be rented at rates that reflect the full property tax reduction. The abatement applies to real property taxes, which are reduced through a reduction of the property’s assessed value. Properties that meet the requirements qualify for 100% exemption over a 20 year period. These tax abatement agreements do not include any provisions for recapturing any abated taxes. Multi-Unit Property Tax Exemption The Multi-Unit Property Tax Exemption (MUPTE) is enabled by ORS 307.600 – 307.637 and City Code 2.945 – 2.947. MUPTE programs are designed to be an incentive of redevelopment of residential properties in city centers and along transit corridors. In Eugene, the City Council has authorized the use of MUPTE in the downtown area and west of the University. The program has been discontinued in the West University area and it has been narrowed so that student housing is no longer eligible. 80 December 9, 2019, Meeting - Item 2CCC Agenda - Page 124