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HomeMy WebLinkAboutCC Minutes - 03/07/05 WS MINUTES Eugene City Council Work Session McNutt Room--City Hall March 7, 2005 5:30 p.m. COUNCILORS PRESENT: George Poling, Jennifer Solomon, Betty Taylor, David Kelly, Gary Papd, Bonny Bettman, Andrea Ortiz, Chris Pryor. Mayor Kitty Piercy called the work session of the Eugene City Council to order. A. ITEMS FROM MAYOR, CITY COUNCIL, AND CITY MANAGER Mayor Piercy reported that the United Front trip to Washington, DC, was productive and there was good reason to believe that there would be funding for the Interstate 5/Beltline, bike path, and Delta Ponds projects. Ms. Bettman wanted to thank Senator Floyd Prozanski for his advocacy on behalf of the City. She commented that Senator Prozanski had been criticized in the press for defending the rights of cities to participate in the selection of freight routes. She said that Senate Bill (SB) 496, the Forest Legacy Program, passed the Senate, and Senator Prozanski gave an excellent floor speech in support of the bill. She announced that Senator Prozanski and Governor Kulongoski, was conducting a public hearing in Cottage Grove on March 10, 2005, on SB 313 and SB 912 related to the methamphetamine epidemic. Ms. Ortiz reported that the Earned Income Tax Credit (EITC) Task Force had been meeting and Lane County Commissioner Bobby Green had made public service announcements encouraging people to apply for the credit. She said the typical benefit to people who qualified was between $1,000 and $4,000 and that money tended to stay in the community. She invited councilors to attend the Bethel Weed and Seed dinner on March 14, 2005. She pointed out an article in The Register-Guard highlighting the accomplishments of Fairfield Elementary School in the Bethel School District. Ms. Taylor congratulated Mayor Piercy on hosting the recent First Friday Art Walk. She announced that she would be in Washington, DC, in mid-March and would attend a meeting of the No Child Left Behind (NCLB) Task Force. She requested an accounting of parks in the southern part of the City that identified acreage and park type. She commented that problems related to panhandling were often caused by drivers who stopped to give money. Mr. Pap6 urged support for the Forest Legacy legislation, SB 496. He expressed appreciation for the City's efforts in the Santa Clara/River Road area and the working group that had been formed. He inquired about the status of resident surveys. City Manager Dennis Taylor said that a survey related to issues associated with a community park was scheduled to be conducted in April 2005 and a more comprehensive survey MINUTES--Eugene City Council March 7, 2005 Page 1 Work Session addressing a broader range of issues would be conducted later in the year. Mr. Papd announced that the Council Committee on Intergovernmental Relations (CCIGR) would meet on March 9, 2005, and there were a number of legislative issues to address. He invited councilors to attend. He said the committee met at 9 a.m. every Thursday with locations to be announced. He thanked Mayor Piercy for her efforts in Washington, DC, and expressed appreciation for all of the partner jurisdictions who participated in the trip. Mr. Kelly remarked that he was impressed with the work of the CCIGR during the current legislative session. He announced that the Human Rights Commission (HRC) was hosting an informal public outreach session on the issue of gender identity protection code revisions on March 14, 2005. City Manager Taylor noted that according to the Supreme Court's website the Public Employee Retirement System (PERS) court case decision was likely to be announced on March 8, 2005, and that decision would have budgetary implications for jurisdictions. B. WORK SESSION: Possible Formation of a Fire District City Manager Taylor stated that in December 2003, the council had asked staff to study the issue of formation of a fire district and report back in a year. He introduced Fire Chief Tom Tallon to provide the report. Chief Tallon highlighted portions of a report presented to the League of Oregon Cities (LOC) that demonstrated the challenges facing cities to provide essential services as a result of tax reform in the 1990s and the proliferation of proposals to break up services into districts. He said the report pointed out that it could create long-term pressure on cities' revenues through property tax compression. He noted information in the agenda packet that indicated the City would lose approximately $80,000 in revenue from local option levies due to tax compression in 2005. Chief Tallon said that the City was guided by the Eugene-Springfield Metropolitan Area General Plan (Metro Plan), which designated that fire and emergency service delivery was logically provided by cities. He said that the Metro Plan would need to be amended, a process typically taking six to twelve months, to allow for a fire district. He reminded the council of a number of independent studies that had been conducted: · Eugene was currently rated as a Class 2 city for purposes of property insurance by the Insurance Service Underwriters. · A performance study funded by Springfield in 2002 recommended against forming a fire district, identified capacity and circumstances that implied a promise of cooperative efficiencies, and deter- mined that the Eugene Fire and Emergency Medical Services Department was a well-mn agency that provided important fire and pre-hospital emergency services to the community. · Standards of Cover identified level of service, deployment of resources, location of stations, train- ing, prevention, and other measures. · An accreditation process currently being undergone by the department was concluding with a site visit in May 2005 to review 240 measurements upon which accreditation was based. MINUTES--Eugene City Council March 7, 2005 Page 2 Work Session Chief Tallon stated that he was unable to put together site visits to other departments for the council but had surveyed the 17 largest fire departments in the state; 11 departments were municipal departments provided out of general fund governments like Eugene and six of the departments were fire districts. He said that typically departments in jurisdictions with populations of 50,000 or more were delivered municipally like the department rural areas with populations of 49,000 or less formed fire districts for better efficiencies and economies. He noted that the exceptions were the Tualatin Valley and Clackamas 10 fire districts, both of which were located in the metropolitan area around Portland. He said that Gresham had disbanded its fire department and was scheduled to vote on annexing into the Clackamas Fire District 10. He concluded with the observation that the City was in a good position to take no action regarding changes to the provision of emergency services. Mayor Piercy noted that there was an effort in the Legislature to eliminate the Lane County Local Government Boundary Commission to ensure that cities could not prevent formation of special districts. Ms. Bettman said that legislation had been drafted but not yet introduced that would eliminate the boundary commission, and another bill was being considered that would only remove the commission's authority with respect to public safety and library districts. She agreed with the staff recommendation regarding the possible formation of a fire district. Financial Analyst Larry Hill, responding to a question from Ms. Bettman, said that compression was computed on a property-by-property basis and industrial property did not increase in value as quickly as other types of property. Much of the compression, where the assessed value approached the real market value, was occurring in industrial properties. He said that for most properties the average relationship between assessed value and real market value was approximately 80 percent. Mr. Hill explained that when taxes were $10 per $1,000 of real market value compression occurred and taxes on that property were reduced until the $10 cap was no longer exceeded. He noted that local option levies were affected first and then permanent levies were reduced. Ms. Bettman asked how a special district that only included the County would differ from the County, which had taxing authority. Principal Planner Kurt Yeiter explained that it was a legal difference that consisted of being able to exempt those costs from the base property tax and charge additional taxes for special district activities. Ms. Bettman expressed the opinion that because it was so much more expensive to provide services in rural areas, urban taxpayers would then be faced with either a diminished level of services or higher taxes. Mr. Kelly said he supported the staff recommendation to take no action. He commented that most people regarded police and fire as basic services provided by local government and there was no compelling evidence that a change in the current structure was desirable. He acknowledged the level of cooperation that existed among local fire departments. He expressed concern that a fire district governed by a five-member board would further confuse the public and increase the disconnection from decision- and policy-makers. He thanked Mr. Hill for his explanation of compression and its impact in the City. He asked if projections of the impact of compression in coming fiscal years were being done. Mr. Hill said that a model to anticipate compression in the future was being developed and he hoped that some results would be available during the council's budget discussions. MINUTES--Eugene City Council March 7, 2005 Page 3 Work Session In response to questions from Mr. Pap~, Chief Tallon said the survey of 17 fire departments addressed the cost and structure of service provision. The City of Gresham, because of the vote on fire district annexa- tion, had published a significant amount of data about the general fund and fire district rates. He added that Springfield was not actively pursuing annexation into the Willakenzie Fire District and instead was looking at points of cooperation and collaboration with the department. Ms. Taylor agreed with the staff recommendation and preferred to retain local control and accountability. Ms. Ortiz said the department did a good job and she would continue to support its efforts. Ms. Bettman agreed that the department was excellent and the issue was not just about money and local control, it was also about training and quality of services. She said at a recent LOC conference, experts had indicated that public safety districts were economical for small jurisdictions but when the population was above 20,000 to 30,000 the economy was lost. Ms. Bettman, seconded by Mr. Kelly, moved to authorize City staff to lobby against any proposed legislation that would weaken or eliminate any of the powers or responsibilities of the Lane County Local Government Boundary Commission. Ms. Bettman said that the council would not meet again until April 2005 and a number of bills were likely to be introduced prior to that time; it would be good to have definitive council direction on those issues that could preempt local control. Mr. Pap~ expressed concern about the process when the CCIGR existed to address legislative matters. He recommended that the matter be referred to the CCIGR for consideration at its next meeting. He said the committee had already been given policy direction on the subject of preemption of local authority. Mr. Kelly pointed out that the City's Intergovernmental Relations Manager Jason Heuser indicated the motion was a good idea and provide some guidance while the council was on break. He said the issue could be revisited by the council after its break and the CCIGR had a certain level of authority to act when there were time constraints and could even modify the council's recommendations. He said the issue related to the structure of government in the Metro Plan and the general structure had served the City well; he would support the motion to direct lobbying during the break and trust that the CCIGR would address any specific legislation that was introduced. Ms. Solomon stated that she would not support the motion and was not prepared to discuss the matter. Mr. Poling agreed with Ms. Solomon. He preferred to discuss the matter with Mr. Heuser present if the motion was based on his request. City Manager Taylor said that Mr. Heuser would be present at the regular meeting for the agenda item related to the CCIGR. Mayor Piercy suggested that the motion and discussion be deferred to the regular meeting following the work session when Mr. Heuser would be available. MINUTES--Eugene City Council March 7, 2005 Page 4 Work Session Ms. Bettman indicated she was willing to postpone the matter to the regular meeting. C. WORK SESSION: Economic Development Committee Recommendation on an Enterprise Zone City Manager Taylor stated that the issue before the council was whether to submit an application for an enterprise zone before the April 25, 2005, submission deadline and if an application was submitted, what was the direction of the application. He introduced Denny Braud, staff with the Community Development Division. Ms. Taylor declared that based on the City's previous experience with an enterprise zone, it was wrong to act and more time should be allowed for public input as the community became aware of the concept. Ms. Taylor moved to postpone the item and conduct a public hearing. The motion died for lack of a second. Mr. Kelly pointed out that the question before the council was whether an application for an enterprise zone should be made; the State might or might not approve the application. He asked if the enterprise zone would have a ;'claw back" provision to require a business to pay back the tax from which it was exempted if it was out of compliance. Mr. Braud said state statutes include a "claw back" provision that require a business that failed to meet its job creation obligations during the three-year period to repay the taxes from which it was exempted. As an example, he said that HMT Technology Corporation was required to repay a portion of its tax exemption under the City's previous enterprise zone. Mr. Kelly noted that Union Pacific Industrial Development was considering leasing property to tenants for rail-related uses such as a container facility and asked if that use would be eligible for enterprise tax exemption. Mr. Braud replied that it would as the basic test was whether an operation served other businesses and a container facility would meet that test. Mr. Kelly acknowledged Ms. Ortiz's concerns regarding inclusion of the railyard property within the enterprise zone until master planning around the railyard had occurred and noted that enterprise zone boundaries could be expanded at a later date to include that property and related eligible uses like a container facility, once a master plan was completed. Ms. Taylor asked ifHMT had repaid taxes and reimbursed the City for infrastructure and staff time. Mr. Braud said that the statutes only addressed the enterprise zone tax exemption and HMT had repaid approximately $471,000 for the period in which the default occurred. Ms. Bettman asked if the "claw back" provision in State statutes enabled the local jurisdiction to request payback of taxes if the business defaulted. Mr. Braud replied that the provision enabled the tax assessor to collect taxes based on non-performance and payback was automatically required. In response to questions from Ms. Bettman, Mr. Braud said that the City's application would be competing with applications from Madras and Harrisburg. He said that job quality standards should be in place before the enterprise zone was created and if the City's application was successful, that date would be July 1, 2005. MINUTES--Eugene City Council March 7, 2005 Page 5 Work Session Ms. Bettman cited the proposed motion and noted that the Mayor's Committee on Economic Development's recommendation on community standards was very general. She commented that the standards were important and should include a specific index for calculating a self-sufficient wage, benefits, and related items. She asked if the City could use expertise in the community, such as labor organizations and economists, to develop data for the standards. Mr. Braud said the statutes limited the types of conditions that could be attached to the tax exemption, but how the criteria were processed was up to the local jurisdiction. City Manager Taylor noted that the proposed motion would result in an application coming to the council on April 11, 2005, for a resolution but more time would be taken to develop community standards before July 1, 2005. Ms. Solomon asked if removal of the railyard from the enterprise zone boundary would cause problems with the requirement that the zone be contiguous. Mr. Braud said it was possible to remove the railyard property without compromising the contiguous nature of the zone. Mr. Pap6 remarked that concern over the previous enterprise zone revolved around Hynix Semiconductor's receipt of benefits from the zone, but the fact that more than 80 local businesses benefited was overlooked. He asked what would make the City's application more competitive. Mr. Braud responded that the most compelling argument in favor of the application was the City's history; the previous enterprise zone was one of the most active in terms of the number of businesses that used it and the amount of investment that occurred in the zone. He added that one of the major approval criteria was the potential for new investment and the City would rate high in that respect. Mr. Pap6 asked if the community standards needed to be in place before the application was submitted. Mr. Braud said that the State had no role in approving whatever local criteria the City adopted and standards could be developed and adopted outside of the application process. Mr. Poling commented that an enterprise zone was a tool in the economic development tool box and he wanted to best tool possible. He encouraged the council to move forward with the application process and demonstrate to the State support by a majority of the council for an enterprise zone. He encouraged retention of the greenfields areas in the enterprise zone but was willing to support removal, including the railroad property, if it would result in a majority of the council supporting the application. He agreed that it was important to carefully consider the development of community standards and ensure that they were legally permissible and did not put the City at a disadvantage. He said that enterprise zones worked and cited the 80 business that received tax exemptions for three years but were now paying taxes in one year that made up for that. He said that Hynix tax payments now made up ten percent of the City's budget. Mr. Pryor compared the discussion to the layers of an onion with the first layer being whether to submit an application, the next layer to determine what should be included in the zone, and another layer to determine what the standards should be. He agreed that the dimensions and size of the zone and job standards were important considerations, but the first step was to decide to submit an enterprise zone application. He said that an enterprise zone was a useful economic development tool and one that was considered by businesses considering Eugene as a location. Ms. Ortiz applauded the council's discussion and said she could support an enterprise zone application if the railyard property was removed. MINUTES--Eugene City Council March 7, 2005 Page 6 Work Session Mayor Piercy stated that she could support an enterprise zone as a tool for growing business in the community, but it should be focused and targeted to improve wages and benefits and attract businesses that would be good community partners. Mr. Poling, seconded by Ms. Bettman, moved to direct the City Manager to bring back a recommendation for establishing job quality standards ap- plicable to enterprise zone development projects, and bring back a resolu- tion in support of submitting an application to the State of Oregon for des- ignation of an enterprise zone in 2005, jointly sponsored with and sup- ported by Lane County, with the boundary as proposed in Attachment B, minus the railroad property, of this agenda item. Projects would receive a 75 percent tax exemption by right, and would qualify for 100 percent ex- emption by complying with the job quality standards. Ms. Bettman expressed appreciation for the compromise that would probably result in a majority vote on a useful economic development tool. She said her opinion that enterprise zones were more costly to a community than the benefit received had not changed, but when a zone was targeted to offset economic distortions there was a definite benefit to the community. She said that redevelopment of existing industrial land, infill, and development of brownfields were more expensive than development of greenfields and there was the economic distortion. The City would be providing the incentive in order to intensify the uses in its industrial zone and help the businesses that existed there expand and add more jobs while at the same time maximizing the utilization of existing industrial land. She recognized the merit of Ms. Ortiz's suggestion to remove the railyard property given Mr. Braud's explanation of rail-related uses' eligibility for benefits. She said the motion addressed the wise use of limited resources. Mr. Kelly agreed with Ms. Bettman's remarks. He valued the council's spirit of collaboration and thanked Mr. Poling for identifying avenues for achieving compromise. He expressed frustration with the constraints the State placed on the City's ability to tune the enterprise zone to fit community standards. He thought the proposal being considered would allow the council to focus on its growth management policies and target incentives to redevelopment and infill and job quality standards. He encouraged the involvement of the community in the development of standards and said he would support the motion. Ms. Taylor said the enterprise zone was totally wrong. She asked if environmental standards could be imposed. Mr. Braud said the Mayor's committee looked at a number of options for sustainability measures but the State statutes did not allow standards unrelated to job creation. Ms. Taylor said she preferred to wait for legislation that would allow a zone that was not geographical but rather provide incentives to local businesses other than manufacturing and that did not recruit large business that created a fiscal drain on the City. She said the need for more police and schools was based on the growth in population and preferred to see the City focus on expansion, retention, relocation, and helping local businesses with those issues. She was not able to support the motion as stated. She said an enterprise zone was not fair to businesses in other parts of the community or that were not manufacturers. Mr. Poling said that passing the motion would send a clear statement to the State about the council's commitment to the enterprise zone. If the application was not successful in this round, he said, it would make the next application process far easier. He noted that without the development in the enterprise zone MINUTES--Eugene City Council March 7, 2005 Page 7 Work Session the City would not have the additional tax base and while he would prefer to see greenfields included in the boundary he would support the motion. Ms. Solomon said she would support the motion but asked for clarification on the issue of the railyard property. She said the enterprise zone could be a potential incentive to redevelop the railyard and asked if the boundary could be expanded to include railroad property if it was initially excluded. Mr. Braud said the boundary could be changed by council resolution and approved by the State. In response to a question from Mr. Pap6, City Manager Taylor said that job standards would be developed after the resolution to approve an application submission before the April 25, 2005, deadline and before July 1, 2005, when the enterprise zone went into effect. Mr. Papd, seconded by Ms. Solomon, moved to amend the motion by substituting Attachment A for Attachment B, minus the railroad yards. Mr. Papd said redevelopment of brownfields was a worthy goal but he was concerned about the message sent by limiting the enterprise zone to brownfields. He said that the cost to redevelop brownfields was much higher than to develop greenfields and the zone boundary in Attachment A had been vetted by people involved in economic issues in the community. Speaking to the amendment Mr. Kelly said there was no message that development was only wanted in brownfields; the message was that extra incentives would be provided for brownfields development. He argued that the large greenfields sites were the most desirable sites available because of the limited supply of buildable land and least in need of incentives. He said the incentives would help offset the greater expenses of developing brownfields. Ms. Bettman concurred with Mr. Kelly's remarks and intended to vote against the amendment for those reasons and if the amendment passed would vote against the main motion to create an enterprise zone if it included greenfields. She did not think it was strategic to provide tax breaks for development of premium sites. Mr. Poling asked if Attachment B, minus the railroad properties, included any greenfields. Mr. Braud said that there was some vacant ground with services and infrastructure, such as the Greenhill Technology Park, but those were infill opportunities not greenfields. Mr. Pryor affirmed his desire to make the zone as effective a tool as it could be, but if obtaining the support of a majority of the council meant compromising on the boundary issue he was willing to support the original motion. Mr. Pap~ said he wanted to see greenfields included in the enterprise zone but realized that the boundary could be expanded at a later date. He asked if there were any limitations on the size of the zone. Mr. Braud replied that the statute placed limitation on the size but the City's proposed boundary was well below the size limits and afforded sufficient opportunity for future expansion as discussed. He said a boundary amendment would require resolutions from the City and the County and approval by the State; the process was relatively quick. MINUTES--Eugene City Council March 7, 2005 Page 8 Work Session Mr. Pap~ asked what percentage of actual land available was represented by the land removed from the zone boundary under the main motion. Mr. Braud said that the greenfields represented 786 acres of the 5,946 acres in the proposed boundary; the restricted boundary would include 5,160 acres. He referred to material in the agenda packet that provided specifics about which property was ~development ready" and which was ~development constrained." Mr. Pap~ asked what percentage the 786 acres represented to the total available for development in Attachment B. Mr. Braud said that would depend on the definition of ~available for development" and whether that included greenfields, property for sale or unoccupied, or other characteristics. He noted that an industrial lands study would be conducted that would collect that type of information. Ms. Ortiz stated that she would support the main motion. She emphasized the need for better paying jobs that helped people achieve economic self-sufficiency by providing a viable alternative to public assistance. She hoped that those job standards would be addressed in the discussion of community standards. The motion to amend the main motion failed, 6:2; Mr. Pap~ and Ms. Solomon voting in favor. The main motion passed, 7:1; Ms. Taylor voting in opposition. Mayor Piercy adjourned the meeting at 7:05 p.m. Respectfully submitted, Dennis M. Taylor City Manager (Recorded by Lynn Taylor) MINUTES--Eugene City Council March 7, 2005 Page 9 Work Session