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way of generating internal resources, and would allow staff to get a better sense of the actual <br />operating costs for City services. <br /> <br />Ms. Cutsogeorge called attention to the agenda item summary, which described the fiscal <br />implications of implementing the proposal. <br /> <br />Mr. Carlson said the concept of charging services a capital component for the use of City facilities <br />was similar to what the City did when it rented space from the private sector. The proposal was an <br />attempt to equalize the cost of service component between divisions that operated out of City- <br />owned space and divisions that operated out of leased space. By doing so, the City would <br />generate funding that could be placed in a reserve and used to buy down the future capital costs of <br />the organization. He characterized the proposal as saving money for a future capital investment. <br /> <br />Mr. Svendsen noted a correction to page 8 of the agenda packet, which indicated the total <br />estimated amount of funding generated over time was $22.3 million; he said that should actually be <br />$33.5 million. Of that amount, $4.8 million was one-time funding, and $28.7 million was General <br />Fund-backed bonds that would be paid for from the reserves. <br /> <br />Mayor Torrey called for council questions. <br /> <br />Mr. Meisner determined from Mr. Svendsen that the City had not taken this approach before. Mr. <br />Carlson added that the plan for library financing assumed that type of funding for the Information <br />Service Division and Finance Division, which would be located on the library's fourth floor. <br /> <br />Mr. Rayor said it seemed that the City was proposing to build buildings that were what he termed <br />"Class A minus," but the proposed rate was based on "Class B" office space; he asked why. <br />Regarding the extension of the concept to other services outside the downtown, he suggested that <br />would depend on future budgets. He did not perceive that new funds were involved in the <br />proposal, and in fact saw the proposal as a type of service reduction. He asked for confirmation of <br />the statement that if departments paid more for overhead, they would have less for service <br />provision. Mr. Carlson said that in the short term, there would be no decrease in services because <br />the needed resources were already available and were already dedicated to the Facility Reserve, <br />which was the money from the fiscal year (FY) 2000 marginal exception value. The proposal in <br />question would take that funding stream and translate it into rent for facilities that operate out of <br />downtown. It would potentially increase contributions from Non-General Fund services in fiscal <br />year 2003, but Mr. Carlson believed it would have a fairly small impact to those dedicated funds. <br />Over time, the council would have to make budget choices, especially as new buildings were <br />constructed, regarding the amount of funding attributable to the capital component of the rent <br />payment. Mr. Carlson suggested there was a relationship between those choices and the financing <br />mechanism ultimately selected to construct a building. <br /> <br />Mr. Kelly determined from Mr. Svendsen that staff did not anticipate an increase in the revenues <br />going to the Facilities Reserve until new General Fund-related space was constructed. Mr. <br /> <br /> MINUTES--Eugene City Council November 26, 2001 Page 4 <br /> Work Session <br /> <br /> <br />