Item A: Sequencing of Financial Measures to be Presented to Voters

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measure was a stop-gap until a state-wide solution was found for school funding issues. In addition to the school-based services provided in the local option levy, the City provides youth services from the proceeds of the levy, such as the Summer Fun for All program. If the council decides not to renew the levy for school-based services, a second decision will be how to handle those City youth services. Parks, Recreation and Open Space Funding: Since 2002, the City has been working with the community to develop the Parks, Recreation and Open Space Comprehensive Plan. The Comprehensive Plan provides a specific, community-supported strategic plan for the future of parks, community facilities, and programs in Eugene. The Comprehensive Plan is scheduled for City Council approval in December, with consideration of a project and priority plan in January. Once the plan is complete, the community must begin to develop strategies for funding the projects included in the plan. A significant portion of the almost $200 million of additional land acquisition and development of parks and recreation facilities included in the plan is assumed to be funded from General Obligation bonds. In addition to the capital costs, a local option levy would need to be designed to pay for the increased operations and maintenance (O&M) costs from these new parks and recreation projects. Without a local option levy for O&M costs, the City would have to decrease the maintenance efforts at existing parks and recreation facilities in order to accommodate the added facilities paid for with the General Obligation bond proceeds. Staff is assuming that the G. O. bond measure and associated local option levy for O&M would occur in 2008, after the PROS plan process is complete and funding strategies have been finalized. Measure 5 Compression: The City is beginning to experience tax revenue compression as a result of the Measure 5 tax rate limitation of $10 of general government taxes per $1,000 of assessed value (as described more fully in a memo to the council included in this week's packet explaining the property tax bills). As a result of compression, each of the proposed local option levies will have an impact on the amount of property taxes collected for these local option levy purposes. Therefore, staff has deemed it important to coordinate efforts for the local option levy proposals in order to better ensure that the net amount of property taxes received for each purpose will be what's expected. Debt Policies: Anticipated measures in future election cycles could result in a significant increase in the City's debt load. As the council proposes to fund new projects with G.O. bonds or other types of debt, careful consideration must be given to the affordability of that new debt. The City's current policy limit on net direct debt is 1 % of real market value. As reported in the updated Debt Capacity Analysis in February 2005, the City was at about 0.4% of real market value as of June 2004, and was projected to reach a peak of 0.9% in FY09, assuming issuance of$30 million in G.O. bonds for parks, recreation and open space projects and $70 million of G. O. bonds for renovation or replacement of City Hall. Double-Majority Requirements: As a result of Measure 50, which was passed by voters in 1997, opportunities to propose new facilities or services to be funded by local option levies or G.O. bonds have become more complex and less frequent. Any property tax measure requires a double majority, which means that the measure must be passed by a majority of voters in an election where at least 50% of registered voters have cast a vote. There is an exception to the double majority requirement for elections in November of even-numbered years. LICMOl200S Council AgendaslMOSll16lS0S1116A.doc