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Local Economy Eugene is the largest city in Lane County and the second largest city in Oregon, representing 45.2% of the county’s and 4% of the state’s population. Eugene’s economy typically follows the trends of the state and national economies. After years of expansion, the pace of local economic growth remains similar to that of the state economy. Annual job growth in the Eugene-Springfield MSA in 2018 was equal to the state’s overall growth rate of 1.9%. Eugene’s 2018 unemployment rate remained steady at 4.5%, slightly higher than the state of Oregon and national unemployment rates. The two pillars that have historically provided relative stability in Eugene’s economy are the large public sector employment base and population in-migration. In-migration has bolstered the area’s population growth over the past decade. The University of Oregon (UO), available health care and abundant outdoor recreation amenities make Eugene a favorable place to live. California has been the largest source of new residents to the area due to Eugene’s proximity, natural and cultural amenities, and relatively lower cost of living. Eugene’s population growth slowed somewhat in the years following the last recession as the local economy contracted and the labor market weakened. However, population growth has rebounded in the last four years, increasing by rates above the ten- year average. Federal, state and county government agencies provide stable employment for the local community, and the health care and social assistance sector comprises the largest employment base in the city. Eugene is home to Lane Community College, Northwest Christian University, and the University of Oregon. UO employs thousands of full- time workers, and brings a large population of students to live, work, and recreate in Eugene. In the fall term of the 2018-19 academic year, 22,760 students were enrolled at UO. In 2020, UO will open the $1.0 billion Phil and Penny Knight Campus for Accelerating Scientific Impact. The Knight Campus is designed to foster collaboration between the next generation of scientists, industry and scientific entrepreneurs to improve the quality of life for Oregonians, the nation and the world. Other planned developments signify continued optimism and growth in Eugene’s economy. Sixteen acres of former industrial space on the Willamette River are currently under development and will include a new park and plaza, as well as housing and mixed-use development, directly connecting our downtown and campus areas to the river. In Downtown, a $60.0 million 5th Street Public Market expansion will expand housing, retail and office space, as well as hospitality. Additionally, the City is leading an inclusive public involvement process to design a new Town Square that includes improvements to the Downtown Park Blocks, infrastructure for an all-season Farmer’s Market, and space for a new Eugene City Hall. Businesses and organizations throughout the community are preparing to host the 2021 World Championships, which will be the world’s largest sporting event that year. The 10-day competition is expected to bring over 2,000 athletes from over 190 countries to Eugene, roughly 3,000 media attendees, and up to six billion media impressions. The University of Oregon is undergoing a donor-funded $200.0 million renovation of its famous Hayward Field facility to more than double the spectator capacity. A preliminary economic report from 2015 estimates approximately 55,000 visitors for the event, with 60.5% of visitors coming from outside of Oregon. The City of Eugene is working with local, national, and international partners to ensure that the community can absorb an event of this magnitude, while being socially and environmentally responsible. Long-term Financial Planning The City of Eugene recognizes the importance of strategic long-term financial planning. Each year, forecasts are prepared to estimate the financial health of significant funds for the next six fiscal years. These forecasts are designed to inform policy makers about the long-term impacts of pending budget decisions and other potential financial dynamics for City operations. The City also adopts a six-year capital planning document the Capital Improvement Program and regularly conducts a Debt Capacity Analysis. Staff also compile the Unfunded Needs Assessment, an inventory of unfunded needs that is presented in the proposed and adopted budget documents. The largest fund is the General Fund, which is the general operating fund for the City. In preparation for the FY20 budget, the General Fund forecast was updated to provide policy makers with the financial outlook for the fund. The forecast indicated that the General Fund remains in a stable position through FY21, with a projected budget gap beginning in FY22 driven by a significant increase in PERS rates assumed that year. However, new legislation passed by the State Legislature in 2019 may limit the extent to which PERS rates increase in FY22. It will take time for PERS to fully analyze and implement the rules of the new legislation; any rate impacts resulting from this bill or City actions will be reflected in future forecasts. 3 December 9, 2019, Meeting - Item 2CCC Agenda - Page 47