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ATTACHMENT K City Attorney’s Office City of Eugene 777 Pearl Street, Room 105 M Eugene, Oregon 97401-2793 EMORANDUM (541) 682-8447 (541) 682-5414 FAX www.eugene-or.gov Date: January 4, 2010 To: Mayor Piercy and City Council From: Glenn Klein, City Attorney, 541-682-8447 Sue Cutsogeorge, Finance Director, 541-682-5589 Subject: Urban Renewal Questions This memo addresses three questions related to urban renewal. First, what is the status of the downtown urban renewal district? Second, what happens to the district if the Council and Urban Renewal Agency Board (URA) take no action to amend the plan? Third, what changes did the Legislature make in 2009 to the urban renewal statutes that affect the downtown urban renewal plan? The downtown urban renewal plan was amended in 1998 (as part of Measure 50’s implementation). At that time, the Council established a maximum indebtedness (a cumulative spending limit) amount of $33 million for the downtown urban renewal district (primarily to pay much of the cost of the new library). In addition, the Council chose a city-wide special levy, together with the more traditional tax increment financing, as the method for collecting ad valorem property taxes sufficient to pay the debt obligations of the urban renewal agency. As of FY2008/2009, the city-wide special levy was discontinued, leaving only the more traditional tax increment financing. The tax increment funds flowing to the agency in FY10 will be sufficient to provide funds for the last library bond payment, as well as place in the bank sufficient funds to cover the amount of tax increment dollars that the URA is authorized to spend under its existing spending limit. In December of 2009, the final payment for the library bonds was made. After that final payment, the URA is able to spend approximately $500,000 in tax increment funds on projects included with the downtown urban renewal plan, as well as pay for administrative costs of the district through FY2010/2011. The maximum indebtedness figure limits the amount of tax increment dollars that can be spent over the life of the district, but not the amount of other funds – for example, proceeds from the sale of property owned by the URA. The URA also has available to it an additional $1.8 million of non-tax increment funds in the Downtown Revitalization Loan Program. Unless the Council adopts an ordinance amending the urban renewal plan before the end of this fiscal year (June 30, 2010), tax increment financing for the downtown district will cease. The 2009 Legislature passed HB 3056 related to urban renewal. That legislation took effect on January 1, 2010. One of the changes resulting from HB 3056 now requires that an urban renewal ~ 1 ~