Loading...
HomeMy WebLinkAboutCC Minutes - 04/12/06 Work Session M I N U T E S Eugene City Council Work Session McNutt Room—Eugene City Hall April 12, 2006 Noon COUNCILORS PRESENT: Jennifer Solomon, Andrea Ortiz, David Kelly, Betty Taylor, Gary Papé, Bonny Bettman, George Poling, Chris Pryor. Her Honor Mayor Kitty Piercy called the meeting of the Eugene City Council to order. A. WORK SESSION: Renewal of Library Local Option Levy City Manager Taylor reminded the council that it discussed the issue of what measures to place on a future ballot several times in the recent past. Today the council would discuss the possible renewal of the Library Local Option Levy. Library Services Manager Connie Bennett was present for the item. Ms. Bennett said the Library Advisory Board, a department advisory committee that had met for over a year, formulated the recommendations before the council. Several members of the board were present in the audience. Ms. Bennett briefly noted the effect of the proposal, which included a shift of $700,000 to the General Fund, allowing for a reduction in the amount levied. She invited questions. Mayor Piercy solicited council comments. Mr. Kelly thanked staff and members of the board. He regretted the use of a local option levy to fund library operations but believed it was necessary until more comprehensive tax reform occurred. He asked what made the reduction possible and if it was related to the upcoming 2008 budget. City Manager Taylor said the funds that allowed the City to make the annualized commitments at the level proposed were due to the work of the Budget Committee over several years. He also attributed the reduction to the PERS reforms sustained by the courts, as those funds then became predictable, ongoing revenues. Overall, in terms of the budget, property tax payments were strong, and the litigation regarding the Qwest lawsuit had been resolved in the City’s favor, bringing in new revenues. He confirmed, in response to a question from Mr. Kelly, that the $700,000 figure was the result of financial analysis performed by staff, and it could be revised by the committee, depending on what happened with other council priorities and ongoing program costs. Mr. Pryor shared Mr. Kelly’s concerns about the use of the local option levy and said his preference was to include the cost of operating the library in the General Fund. He believed that was the council’s ultimate goal, and the renewal of the levy would likely be the last such measure offered the voters regarding library operations. If the levy was needed as a bridge, he thought it reasonable if the goal was kept in mind. City Manager Taylor said he hoped the City could find the $5.2 million in annualized revenue needed to support the library in the General Fund, but he applauded the community’s wisdom in getting the branches started and building the new library. He noted the high use the service enjoyed. He also hoped the levy was MINUTES—Eugene City Council April 12, 2006 Page 1 Work Session bridge financing but said he was unsure the entire amount could be absorbed into the General Fund unless something was done to change the overall revenue structure. Mr. Papé agreed with the remarks of Mr. Kelly. Responding to a question from Mr. Papé, City Manager Taylor indicated that the upcoming budget would include about $2 million in annualized revenue available for allocation; he would make recommendations on its allocation, but the $700,000 being contemplated would not come from that source. That was an option the council had, but he thought other council priorities might be considered more important while the City still had the opportunity to ask the voters to support the current level of library services. Mr. Papé asked about the potential impact of compression due to other possible levies. Financial Analysis Manager Sue Cutsogeorge said that currently, the City was not in compression and staff did not anticipate the City would be in compression as a result of the library or after-school levy. The parks bond was outside the cap and did not affect compression. She confirmed, in response to a follow-up question from Mr. Papé, that if the Tax Court decision regarding the after-school levy was upheld, the education component of the property tax would be in compression. City Manager Taylor said the superintendents of the school districts indicated that they would live with the decision of the Tax Court while it was under appeal, which meant the school levy within the municipal cap would be included in the districts’ caps. Mr. Papé thought the City was moving in the right direction by shifting costs to the General Fund. Responding to a question from Mr. Papé about the contingency fund identified in the forecast of require- ments, Ms. Cutsogeorge said staff projected the assessed value over the next four years, and if it overesti- mated the target, the contingency fund could offset the inaccuracies, any unexpected expenses, and cover the costs of compression. Responding to a follow-up question from Mr. Papé, Ms. Cutsogeorge said the contingency fund could not be used for General Fund purposes. Ms. Bettman acknowledged the popularity of library programs and emphasized her support for the library. She asked how much of the General Fund cost of library operations was revenue-supported. Ms. Bennett said it was not considered a revenue-supported service; only a small amount came in through fines or fees. Ms. Bettman said because the library was a very popular service, there was a temptation to seek a local option levy for those services as it was more likely to pass. However, she considered the library to be an ongoing General Fund service. She felt any new services to be funded by the money mentioned by City Manager Taylor should be weighed against the fact the library was an ongoing service. She was reluctant to support the staff-proposed motion because it was specific about the amount of the levy and the council had not yet seen the manager’s proposed fiscal year 2008 budget. Responding to a question from Ms. Bettman, City Attorney Glenn Klein indicated that the council would be considering a resolution and it could be amended in May after the council had seen the budget. Today the council was merely giving direction to staff to prepare a resolution. City Manager Taylor said the council had until July 26 to make final decision about what to place on the ballot. Ms. Bennett added that even if the measure was authorized by the council, placed on the ballot, and approved by the voters, the City could under-levy the local option levy if the council chose to fund the service from another source. Ms. Taylor agreed that the library was a basic service and she thought it was ridiculous that the council had not pursued other forms of revenue, which was a long-time council goal. She said Springfield was considering a business tax, and suggested that Eugene could do the same. She determined from City MINUTES—Eugene City Council April 12, 2006 Page 2 Work Session Manager Taylor that the council could decide against the levy and choose to fund the service with another revenue source before the levy expired. Ms. Taylor thought the council should do something along those lines. She asked what would be saved by closure of the branches. Ms. Bennett estimated $1.5 million. Ms. Taylor wanted more branches but thought it was important to have a library with decent hours and good service. Ms. Taylor asked what happened if the voters did not support the levy. Mr. Taylor said the council would have to make some very hard choices across the General Fund. Ms. Taylor suggested that it might be better to start making those hard choices now. Mr. Poling thought the council was considering a fiscally responsible approach that would not cost the tax payers any more than they were paying now; in fact, it would cost less. Mr. Poling thought closing the branch libraries would be a gross injustice to residents of those areas, noting that use of the branches was very heavy and they were valued by residents, particularly seniors. He also thought closing the branches would place additional stress on the downtown library. Mr. Poling appreciated the flexibility the council had in regard to amending the levy in the future or under- levying the local option levy. Ms. Solomon, seconded by Ms. Ortiz, moved to direct the City Manager to prepare a meas- ure for the November 7, 2006, general election ballot to fund library services with a tax rate of $0.41 per $1,000 of assessed value, and bring the proposed ballot measure to the council for consideration on the Consent Calendar for May 8. Responding to a question from Mr. Papé, Ms. Bennett said the revenues from the coffee shop in the library lobby go to the levy element of Library operations and they were being used to repay the levy. She said the library received less than one percent of its revenues from sources other than the levy or General Fund, and those revenues were generally from gifts. Revenue from library cards purchased by nonresidents goes into the General Fund and those sales realize about $60,000 annually. City Manager Taylor said that the City could direct those revenues back to the Library if the council chose to do so. Mr. Papé thought that was a logical approach and encouraged staff to consider it. Ms. Taylor thought branch libraries should be everywhere and that it was an injustice that some areas of town did not have branches. However, she thought reductions at the branches would be preferable to reductions at the main library. She thought it unjust that the bookmobile was discontinued, and that there was no fine forgiveness for poor people who ran up library fines. She would support the motion but wanted to find another way to fund Library operations. Ms. Bettman reiterated her support for library services and her opposition to reducing them. She believed that relying on levy revenues put all those services at risk, and at some point a levy would fail and the council would have to cut library services or services added during “rosy times.” She thought it prudent to put as much of the costs of the Library into the General Fund as possible and indicated her intent to pursue any additional money outside public safety to reduce the cost of the levy and make library services more secure for the General Fund in the future. Responding to a question from Ms. Bettman, Finance Director DeeAnn Hardt recalled that the Budget Committee discussed the City’s pending obligations of other post-employment benefits and staff provided MINUTES—Eugene City Council April 12, 2006 Page 3 Work Session magnitude estimates of those obligations. However, those costs were not built into the budget as an ongoing expense or set-aside. It was flagged as an issue for the committee. Ms. Bettman recalled that Budget Committee member Terry McDonald questioned how many of those costs were already being covered by other employee programs and the discrete liability the City faced. She suggested that if the manager proposed such an expenditure in the upcoming budget, the committee might want to consider redirecting those funds. Mayor Piercy invited members of the public to support the work of the Library Foundation. The motion passed unanimously, 8:0. B. WORK SESSION: Downtown Development Update—ORI (Sears Development Site) City Manager Taylor reminded the council that the Board of Directors of the Oregon Research Institute (ORI) had decided against moving forward with the purchase of the City-owned Sears site for a new downtown headquarters. Denny Braud of Planning and Development joined the council for the item. He emphasized the City’s strong support for ORI’s proposed downtown project. Despite the efforts of all involved, the project was never able to get the financing needed for ORI to go forward. He thought it important for the City to continue to assist ORI in locating downtown and said staff would work toward that goal with ORI. Mr. Braud recommended that the council move forward with another Request for Proposals (RFP) for the Sears site. He believed there would be considerable interest in the site given other pending development proposals in the downtown. Staff would return to the council with the responses to the RFP. Mayor Piercy called for council comments and questions. Ms. Taylor did not believe there was sufficient effort on the part of staff to follow the council’s direction to do whatever was necessary to help ORI locate downtown. She thought the City should spend any excess money it had to support ORI. If there was any possibility that could still occur, she wanted to follow up on it. Mr. Kelly said it was his understanding from council discussions and discussion with ORI representatives that staff worked hard to assist ORI. He believed the City needed to do more than merely place a “for sale” sign in front of the site, and thought the staff recommendation missed a step. He recalled that the Planning Commission developed criteria for the previous property sale, but that happened in 1999 and it was likely the criteria needed to be reviewed. While he did not think that commission review was necessarily required, he wanted staff to draft a new RFP for council review. City Manager Taylor cautioned that would add time to the process at a time when construction costs were rising, but he had no objection to such a course of action. Mr. Kelly believed that the fact the site was a key site justified the additional time the process would take. Mr. Papé agreed that the criteria should be revisited. He supported a review by the Planning Commission. Mr. Papé expressed disagreement with the remarks of Ms. Taylor, saying that staff put considerable effort into the ORI proposal over the last three years. MINUTES—Eugene City Council April 12, 2006 Page 4 Work Session Mr. Papé requested clarification about the investment the City had made in the Sears site. Mr. Braud noted the original cost of the site, which was one-third of a larger parcel that cost $900,000. The City spent approximately $200,000 to demolish the building. The most recent appraisal valued the land at approxi- mately $30 per square foot. Mr. Papé hoped the City was able to recover its costs and the value of money over time to reach the appraised price. Ms. Bettman agreed the property in question was a key piece of property in downtown and she hoped the City would meet multiple objectives through the development that occurred on the site. Ms. Bettman called for a professional appraisal of the site and said in the meantime staff could work on criteria. She agreed a Planning Commission review of the criteria was a good idea. Ms. Bettman asked how another site could work for ORI downtown if the site in question did not work. Mr. Braud said the cost of the proposed building was the major issue facing ORI. City Manager Taylor pointed out that ORI could be among those parties responding to the new RFP. He reminded the council that the City worked a long time with ORI and granted four extensions to the purchase agreement while ORI sought financing. Because of the limited time frame for financing and the nature of the building contemplated, ORI decided against proceeding with the project at this time. Mr. Braud confirmed that ORI had not indicated it was ready to proceed. Ms. Bettman said there was no emergency or need to move forward with haste. She thought the City should position itself to get the maximum number of options given the magnitude of the development that was expected to occur. She thought that taking more time would result in a better process. Ms. Ortiz asked what happened to the earnest money provided by ORI. City Manager Taylor indicated it would go to the Urban Renewal Agency (URA). Ms. Ortiz pointed out that ORI was a nonprofit agency and given the expected purchase price, she thought the City should refund the money if possible. Mr. Klein said that under the legal agreement between ORI and the City, that was not possible. The council would have to articulate a public purpose for returning the money, such as ORI locating in a downtown location. Mr. Poling asked if the City had plans to deal with the water that accumulated on the Sears site. Mr. Braud indicated it was in the process of being drained. Mr. Poling asked if the earnest money could offset those costs. Mr. Klein said the money was going to the URA as revenue and thus could be considered a source of funding for that activitiy. Mr. Papé agreed with the need for a professional appraiser. Mr. Papé pointed out to those who wanted to see ORI on the site that ORI could respond to a new RFP, and the City could continue to work with it as it would work with other parties who wanted to locate in downtown. Mr. Papé respectfully disagreed with Ms. Ortiz about refunding the earnest money to ORI, pointing out that PeaceHealth was a nonprofit as well, but the council would be unlikely to grant it such a refund. Mr. Papé asked if the City could recover the cost of assisting ORI over the past three years by tapping some of the earnest money. Mr. Klein indicated he would need to do further research and would provide a memorandum to the council. Mr. Papé thought it worthwhile to attempt to recover those costs MINUTES—Eugene City Council April 12, 2006 Page 5 Work Session Ms. Solomon, seconded by Ms. Ortiz, moved to direct the City Manager to develop an RFP for the Sears site and bring it back to the council for review after first seeking comments from the Planning Commission, to secure an updated appraisal of the site, and to direct the City Manager to continue to work with ORI to site its new facility downtown. Ms. Bettman indicated support for the motion with the common understanding that the council was seeking updates on the criteria, and the RFP the council would review would be a draft RFP. The motion passed unanimously, 8:0. The meeting adjourned at 12:58 p.m. Respectfully submitted, Dennis M. Taylor City Manager (Recorded by Kimberly Young) MINUTES—Eugene City Council April 12, 2006 Page 6 Work Session