Item B: West Eugene EmX Extension

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Additional Questions and Responses from Eugene City Council February 23 Work Session Councilor Clark What is the State’s financial condition and how might it affect lottery backed mechanisms? Response Councilor Clark made reference to the annual report of the State Debt Policy Advisory Commission and the state treasurer's press release summarizing that report. The commission's report concluded that the state's debt capacity would remain scarce in the 2011-2013 biennium. Councilor Clark asked that we report back on the state's financial health and how that might affect the financing of the West Eugene EmX Extension. As a result of sharp declines in projected general fund revenue at the state level, The State Debt Policy Advisory Commission is recommending that no net increase in general fund backed debt be authorized by the Legislature and governor for the next two years. According to the commission's report, general fund debt capacity is expected to return in the 2013-15 biennium, because state revenues are projected to increase and also because deficit borrowing approved by the 2003 legislature will be repaid in full. The report also notes that, through refinancing of a portion of existing lottery backed bonds, $282 million in lottery backed bond capacity will be available for the 2011-2013 biennium. State Treasurer Ted Wheeler noted in his press release that “We recognize that there are pressing economic development needs today across the state, and I will work with the Legislature and the Governor to make sure that Lottery-backed debt is allocated to those economic development projects that get us the biggest bang for the buck.” The legislature will decide where the EmX request will be placed among its economic development priorities for 2011-2013. As noted in the staff response during the February 23 work session, LTD’s strategy for obtaining $30 million in lottery backed bonds for use as local match has been to spread the request over three biennium's. During the 2009-2011 biennium, LTD received $1.6 million. The requests for the 2011-2013 and 2013-2015 bienniums would be $8.4 million, and $20 million respectively. Particularly given that the estimated opening year for a West Eugene project has moved to 2017, LTD feels that there is flexibility to obtain the needed match within the constraints of the state's debt capacity. February 28, 2011West Eugene EmX Extension 10