Item 2D: Resolution Placing Library Local Option Levy on Ballot

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The current Library Local Option Levy, which expires June 30, 2007, includes a range of services. Under the proposed renewal of the Library Local Option Levy, all of these services would continue and no new services would be added. The Library Advisory Board, a Departmental Advisory Committee, was formed in January 2005 and meets monthly to provide citizen advice to staff. Agendas have included discussion of the levy’s role within the Library’s budget, levy sequencing, whether to recommend continuation of current services or enhancements (such as the addition of one or more branches) as part of the levy renewal, and the effect of Measure 5 compression on the levy. The board has unanimously recommended local option levy renewal at the current level of services. The proposed renewal will be for a four-year, rate-based levy for the years FY08 through FY11. This proposal assumes shifting some levy-funded services from levy funding to the General Fund. Because it will be a rate-based local option tax levy, the amount levied each year will depend on the amount of assessed value in the City. The economy and housing prices are expected to remain healthy over the next few years and renewal of the Library Local Option Levy is not projected to result in any significant Measure 5 compression of property tax revenue. For the vast majority of property in the city, total general government taxes will remain below the $10 per $1000 of real market value tax cap prescribed by Measure 5. However, a 3% contingency has been factored into the levy estimates to accommodate the possibility of loss of levy revenue due to a drop in real market property values or the possibility that projected future assessed value growth is less than expected. On April 12, 2006, the City Council held a work session and directed staff to prepare a four-year local option levy of $0.41 per $1,000 of assessed value to be placed on the November 7, 2006 ballot. This levy size assumes a shift in FY08 of $700,000 in library services from levy funding to the General Fund. The chart below sets out the gross amount levied, the tax rate of $0.41 per $1000 of assessed value, and the estimated cost to the median homeowner for FY07 (the last year of the current levy) and for the proposed levy renewal period. The median Eugene taxpayer is estimated to pay an average of $63 per year over the four-year period of the levy. Existing Proposed Levy Renewal Levy Assuming $700,000 Shifted to General Fund FY07 FY08 FY09 FY10 FY11 Gross Amount Levied $4.9 $4.5 $4.7 $4.9 $5.2 (in millions) Tax Rate per $1000 $0.47 $0.41 $0.41 $0.41 $0.41 Assessed Value Cost to Median Taxpayer $66.50 $60 $62 $64 $66 The effect of shifting $700,000 of levy-funded services to the General Fund is a reduction, from what otherwise will be required in FY08, of about $0.07 per $1000 in the tax rate, and a reduction of about $10.25 for the taxes on a median home Passage of a property tax measure on a general election ballot in an even numbered year requires a simple majority of the votes cast. A double majority is required in any other election. L:\CMO\2006 Council Agendas\M060508\S0605082D.doc