Agenda Packet 12-9-19 Meeting - Laserfiche WebLink

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To account for these and other uncertainties, the FY20 Budget includes $1.5 million of financial stability strategies to mitigate uncertainty in the outyears of the General Fund forecast. By implementing these budgetary actions in FY20, the budget gap that begins in FY22 is mitigated and revenues are greater than expenditures by the end of the forecast, providing more resiliency to the General Fund and positioning the organization to be responsive as we look to the future. In March 2019, the City Council approved the FY20-25 Capital Improvement Program (CIP). The CIP forecasts the City’s capital needs over a six-year period based on various long-range plans, goals, and policies. The underlying strategy of the CIP is to plan for land acquisition, construction, and major maintenance of public facilities necessary for the safe and efficient management of City assets. A critical element of a balanced CIP is the provision of funds to preserve or enhance existing facilities and provide new assets which will help the City respond to changing service needs and community growth. The City also recognizes the need to be thoughtful and deliberate in planning future debt levels. As a result, the City has developed a Debt Capacity Analysis. This study looks at not just the legally allowable level of debt, but the level of debt that the community would consider affordable, given the community’s ability and willingness to pay for that debt. The Budget Committee adopted a debt policy limit of net direct debt of no more than 1% of real market value of property. The Debt Capacity Analysis measures future debt plans against this debt policy limit to determine whether those plans are considered affordable. The City’s net direct debt to real market value was 0.05% at the end of FY18. The City issued an additional $28.6 million in bonds in February 2019 as part of the Parks and Recreation Bond approved by voters in the May 2018 election. Major New Initiatives The City strives to make progress on all of the City Council goals, as circumstances and funding allow. A number of the major new initiatives reflect these efforts. Community Safety System System Stabilization Strategies As part of the FY19 Supplemental Budget, the City Council approved an 18-month bridge funding strategy totaling $8.6 million that is designed to address critical Community Safety System needs from January 2019 through June 2020. The goal is to stabilize services for prevention, homelessness, public safety and emergency response. After approving the 18-month bridge funding, the City Council also gave direction to immediately begin work on long‐ term funding strategies to address critical community safety needs. A Community Safety Revenue Team was formed to develop a recommendation for the City Manager. The team began meeting in November 2018 and developed a strategy to fund $23.6 million of Community Safety System strategies on an ongoing basis. Funding Strategy - Payroll Tax The Community Safety Revenue Team’s recommendation to the City Manager was to implement a payroll tax to provide ongoing funding support for the $23.6 million in community safety services on an annual basis, with an option to be phased in over six years. Following an extensive public information and community engagement process, Eugene City Council held a public hearing on the proposed community safety payroll tax on May 28, 2019. Following the public hearing, the Eugene City Council passed the community safety payroll tax ordinance on June 10, 2019, in order to provide ongoing, sustainable funding for these city-wide public safety efforts. This ordinance went into effect on July 11, 2019. The Council made adjustments to the ordinance to take into account public and business community feedback, including an exemption for minimum wage earners, a reduced rate for those making $12.01-$15.00 per hour, and reducing the rate for small businesses with two or fewer employees. Several ordinance revisions were made to ensure that funds are used for community safety services, will have an analysis of economic impacts, and that the outcomes will be measured and reported. The City Council must refer the payroll tax to the voters by 2028 in order for the tax to continue; if not referred by the Council or approved by the voters, the community safety payroll tax will sunset. 4 December 9, 2019, Meeting - Item 2CCC Agenda - Page 48