Item 1: Local Option Levy for City Services

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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 was 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. On January 14, the City Manager presented a plan for a City Service Fee. The fee would generate approximately $3 million to pay for: fire and ambulance services, • human services, • economic development and • library services. • It would be capped at $10 per month and include accountability and transparency measures, including restrictions on the use of the funds, an oversight committee and a review by the council after five years. The council directed the City Manager (6-2) to bring that fee proposal to a public hearing on February 4. On January 22, the council held a public hearing on the proposed amendments to the stormwater fee ordinance to amend that fee to be a stormwater and parks services fee. After hearing testimony from 22 citizens, council expressed concerns in several areas about the overall Plan of Action and its components. The council concerns were: Total cost to households is too high. • The City Service Fee mechanism is regressive. • Collecting the City Service Fee would be complicated and the City doesn’t yet have an • agreement with the Eugene Water & Electric Board (EWEB) around billing and collecting. The monthly City Service Fee would not be deductible on people’s income taxes. • As a result of these concerns expressed by the council, the City Manager presented a revised recommendation at the council work session on January 28. The revised recommendation, as amended and approved by the council (6-2), is as follows: Changed the stormwater and parks services fee so that: • Only the council, rather than the City Manager, may set the fee for FY14. ‒ The council will determine the amount of fee, if any, for FY14 as part of the council's ‒ FY14 budget approval process. The council be limited to setting a fee that includes a progressive tiered rate ‒ structure with the following elements to the extent feasible: a low income program social equity component, a rate for residential and small commercial customers not to exceed $5 per month, and a rate for large commercial and industrial customers not to exceed $25 per month. Replaced the public hearing on February 4 with a public hearing on a local option levy to • fund the same services that would have been included in the City Service Fee proposal. S:\CMO\2013 Council Agendas\M130204\S1302041.doc