Item B: FY14 Plan on Action - City Service Fee Proposal

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ECC UGENE ITY OUNCIL AIS GENDA TEM UMMARY Work Session: FY14 Plan of Action – City Service Fee Proposal Meeting Date: January 14, 2013 Agenda Item Number: B Department: Central Services Staff Contact: Sue Cutsogeorge www.eugene-or.gov Contact Telephone Number: 541-682-5589 ISSUE STATEMENT This work session is an opportunity for the council to provide input on a new City Service Fee designed to maintain the current level of services to the community and prevent further cutbacks in previously reduced service areas. The new fee is one piece of the four-part FY14 Plan of Action to address a $6 million deficit. BACKGROUND At the November 14 council work session, the City Manager presented information as background for the start of a financial strategy discussion, including discussion of a potential new revenue source. He described the City’s efforts over the past several years to close a persistent structural gap in the budget. Despite several years of hard work and decisions to live within our means, the lingering impacts of the recession have widened the gap between revenues and expenses. At the November 26 council work session, the council received an updated General Fund Six-Year Financial Forecast that showed a projected budget gap of $6 million. The main reason for the increased gap was the significantly lower property tax revenue to be received this fiscal year and each year into the future, due to the depressed economy. At the December 10 work session, the City Manager presented a four-part FY14 Plan of Action to address the budget gap. The plan is included as Attachment A. The four parts of the plan are: 1.Economic Prosperity – Grow the Property Tax Base 2.Cost Control – Lower Costs and Find Efficiencies with Minimal Service Impacts 3.Transition Funding for Parks Costs to Stormwater Fee 4.New City Service Fee The council voted 6-1 to move forward on the path identified by the City Manager for the financial strategy. The modest City Service Fee is proposed by the City Manager as a part of the Plan of Action in order to maintain services and avoid further cutbacks in quality of life for the community. Over the past several years, there have been discussions and examinations of possible mechanisms to S:\CMO\2013 Council Agendas\M130114\S130114B.doc