Item 1: Ordinance on Downtown Urban Renewal Amendment

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would have gone to 4J. The State made up the difference. If the Downtown District had not diverted those funds, the State would have had the additional $550,000 to allocate as it chose. Had the State chosen to keep the money in education, $20,000 would have returned to 4J to be used for educational purposes based on the applicable statewide school funding formula. The rest would have gone to other school districts around the state. 2.Collection Capability of the Local Option Levy = on-going loss of $137,000 if the Downtown District were terminated: The County Assessor analyzed what would happen if the Downtown District stopped collecting property tax revenue. The County Assessor’s estimate is that 4J would lose about $137,000 of local option levy proceeds annually if the Downtown District were to no longer collect tax increment funds. Local option levy proceeds are extra dollars that 4J can put towards educational purposes that are not offset under the state funding formula. The loss occurs because taxes that are currently counted under the “general government” category for Measure 5 tax rate limitations (i.e., the “school property tax dollars” that now go to urban renewal) would move into the “schools” category. When that happens, the schools category of taxes must be reduced for a number of individual properties within the City because schools are already collecting as much as they can under Measure 5 limits for those properties. State law says that local option levy proceeds are the first to be reduced in the event of compression. 3.Availability of One-Time Funds = one-time gain of $30,000: If the Downtown District were to stop collecting tax increment funds, there would also be a return of any excess tax increment funds collected by the Downtown District to the overlapping taxing districts. The estimated gross amount to be returned to 4J would be about $1 million. Staff have confirmed with the State that this would not represent additional money to be spent on education in 4J; rather, it would go through the state school funding formula, and 4J would receive about 3% of the total (or about $30,000) on a one-time basis. The rest would be split among school districts across the state. Amendment Information The Downtown Urban Renewal District was created in July 1968. The plan has been amended four times, most recently in 2004. Two of those amendments extended the life of the district, and two of those amendments made other changes that did not extend the district life. The proposed plan includes a summary of the past amendments. State law requires a “substantial plan amendment” for the council to increase the maximum indebtedness. The substantial amendment process requires a mailed notification to all Eugene property owners; review by the Planning Commission; notification to other impacted taxing districts; and a public hearing. The proposed ordinance containing the 2010 amendments is included as Attachment B. (The proposed plan as amended and the report on the plan are included as Exhibit A to the ordinance.) Public Notice The overlapping taxing districts were notified in writing (March 12, 2010) and have until April 30 to provide comments. The Lane County Board of County Commissioners (BCC) reviewed an urban renewal presentation from the County Assessor on April 7. The BCC indicated that they will provide written comments. Z:\CMO\2010 Council Agendas\M100419\S1004191.doc