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HomeMy WebLinkAbout02/10/1986 Meeting (2) e e e M I NUT E S City Council Work Session Wilder Room--Eugene Conference Center February 10, 1986 5:15 p.m. PRESENT: Brian Obie, Mayor; Richard Hansen, chair; Cynthia Wooten, vice-chair; Debra Ehrman, Roger Rutan, Freeman Holmer, Ruth Bascom, Emily Schue, councilors: Mike Gleason, City Manager; Bob Shelby, Bob Coleman, Barb BellamY, Dave Whitlow, Gary Long, Carol Calkins, Bob Kime, Larry Schoe1erman, Warren Wong, John Arnold, staff; Carol Donagon, KMTR, Jim Boyd, Don Bischoff, Henny Willis, Register Guard, John Se1ix, KUGN, Tracy Berry, KEZI, Media. Mayor Obie called the meeting to order at 5:15 p.m. \ I. AIRPORT TERMINAL EXPANSION PROJECT Mayor Obie reviewed the report from the Airport Subcommittee (Richard Hansen, Debra Ehrman, Roger Rutan) which was distributed. The subcommittee presented four questions for comment and review. Mr. Rutan summarized the rationale for the questions presented. He said that these are the major issues identified by the committee which need discussion and input from the staff. He did not believe that it was necessary for the council to reach any decisions tonight. Mr. Obie opened the discussion and asked Mr. Shelby for a financial update. Mr. Shelby said that of the $2.6 million in FAA funds that we can count on, $1.8 million has been offered and accepted as a grant. He is optimistic that the total requested amount of $4.7 million will be a reality because Mahlon- Sweet has been named for priority consideration in the FAA funding portion of the Continuing Resolution signed by President Reagan last month. If this entire amount is not available, then a potential list of changes and deferrals can be implemented. Ongoing discussions and negotiations with the airlines are being held. A financial package is before them and is expected to be decided by mid-April. Mr. Obie commented that the City Council has the authority to set fees at the airport for landing fees, rental, etc., as we are the provider of the services. However, the airlines can refuse to do business with us and go somewhere else, so the negotiations for fees must reflect some measure of comparison with other communities the size of ours. Mr. Hansen asked how long the fee contracts last. Mr. Shelby said that the City has suggested one-year agreements, but he felt that longer lease agreements would be negotiated. He also explained that the landing and rental of space are negotiable items while the surcharge for operation of the airport fire station is not. Mr. Holmer questioned whether a substantial contribution from the City would be necessary in order to complete negotiations with the airlines. Mr. Shelby said that it was very important for the City to commit to a contribution as soon as possible. MINUTES--City Council Work Session February 10, 1986 Page 1 e e e In response to Ms. Wootenls question, Mr. Shelby demonstrated on a chart that according to the best expectations from all of the user fees, $9.4 million of the construction could be supported by those fees. Lottery funding of $.7 million and FAA fundingQf $4.3 million will be applied to the project, leaving a gap of $3.2 million left to fund. He also explained that the EDA grant, if received, would have the effect of reducing the City's share of the project. He noted that $.4 million of the FAA funding would go toward airfield construction items. Mr. Shelby stressed the importance of the Room Tax funding to cement the project together. Mr. Obie continued with his observations, after asking the councilors to share theirs in trying to provide the committee a sense of direction when meeting with the City of Springfield and Lane County. Mr. Obie would prefer that any adjustment of the scope of the project be done after all the financial facts are available and the negotiations with the airlines are completed. Mr. Hansen reviewed the project and suggested that the City Council cannot personally visualize the project from the proposed design; therefore, it is premature to reevaluate the design or make decisions about reductions. The architects have assured them that the design proposed is a middle-of-the-road project, neither a IIwarehousell nor a IITaj Mahal. II Mayor Obie affirmed his support of a two-percent (2%) county-wide room tax, which would stay even with Portland and would make available $400,000 per year from the metropolitan area. He would also be comfortable with a metropolitan- area tax only, not county-wide. Mr. Holmer also commented that the reality would probably include the Eugene/Springfield metropolitan area, rather than the whole county. Mr. Obie favored the room tax because there is a tie to the industry--43% of those who fly into Eugene stay in hotel rooms. It is in the realm of what either the City of Eugene can do or in partnership with Springfield and Lane County if that is possible. He would concur with the committee's decision in regard to the extent of public involvement. Mr. Miller agreed that all the information should be available before reduc- tions or changes in the project are considered. He sees the most important issues as the second-level concourse, a large enough airport to accommodate five airlines and enough loading services to alleviate the present baggage problems. He also is comfortable with the negotiations with Springfield and Lane County. He believes strongly that whatever total figure for the airport project is agreed upon, it must be held to and that it be enough to include inflation and contingency. He also agreed that the room-tax proposal should not exceed the Portland rate and that he would approve adding airport commission members from Springfield and Lane County. Ms. Bascom sees the council united in their commitment to the airport project, but that they are maneuvering a package with a lot of soft financial figures. She is willing to negotiate with the other governmental bodies in order to MINUTES--City Council Work Session February 10, 1986 Page 2 e e e provide a community contribution to the project. She also agreed that cuts should be struggled with later and approved the concept of additional airport commissioners. Mr. Holmer would like as much negotiating room as possible which can be applied to the design as well. The second-level boarding is essential, and the public needs to be persuaded that the design represents good management. He is willing to share the decision-making with other governmental bodies and to add members to the Airport Commission. Ms. Wooten supports the project as proposed at the $17.1 million level. The revenue projections are problematic, and she suggested that there be second- and third-tier cuts developed and available if those revenues fail to material- ize. The EDA needs to be worked with carefully in order to provide jobs. She supports a county-wide 2% room tax, but wants the municipalities to be in control of the project; she would support representation on the commission from outside the metropolitan area. Although she did not know what form it should take, she agreed that a program for involving public participation should be developed. She also suggested that the council not dismiss general obligation financing, even though she supports the room tax for now. Ms. Schue wants to remain flexible about the scope of the project and agreed that it is not yet time to consider cuts or changes in the project. She also supports a county-wide 2% room tax and the additions to the Airport Commission as long as airport personnel are under the control of City management. She also supported pUblic involvement and education and hoped a general obligation bond could be avoided. Ms. Ehrman would like to go to the joint committee with the project intact and a tiered list of reductions if funding is not available. The room tax is appealing to her because it need not go to the people for a vote. She commen- ted that the financial figures are not very realistic and, therefore, plans for cuts need to be made. She would prefer a county-wide 2% room tax rather than metropolitan and is not sure of the political realities. She has no problem with additional representation on the Airport Commission. Public involvement is problematic because either the subcommittee goes to the other bodies with options and flexibility which is open to suggestion and change, or they go with the project proposal intact. Mr. Rutan sees the project as a difficult challenge. The City of Eugene resources are probably not sufficient and it is appropriate to encourage the input of the other governmental bodies. But the City Council needs to provide leadership to meet the goal of building the airport. They need a logical way of presenting the project in phases, which affirms the design. The public has been involved and need to be educated further. A funding package needs to be put together by the City Council to take to Springfield and Lane County. The operation of the airport should stay with the City of Eugene, but he would support the Airport Commission being expanded. The role of the council is provide leadership, to get county-wide input, take the challenge, and not change the design. MINUTES--City Council Work Session February 10, 1986 Page 3 e e e Mr. Hansen expressed concern about the $9.4 million projected from user fees until the airline negotiations are completed. The lottery money is also a soft figure. He does not think the City can proceed until the funds are secured. He supports the 2% county-wide room tax in order to keep pace with Portland. He also suggested that the council make a commitment of some property-tax dollars in order to make up shortfall and specifically mentioned using Economic Development dollars for the airport if necessary. Ms. Bascom added that there needs to be a community education effort and that a first-, second-, and third-tier reduction plan be developed which could be useful for public awareness that the project is not overpriced. Mr. Obie commented that if the public perceives the project as overpriced, it is necessary to bring the pieces of the project into focus: baggage space, lobby space, the concourse, and accommodations for five airlines. Ms. Wooten agreed that the council should provide leadership and that once a figure is agreed upon ($17.l million), it should not be exceeded. She would not support funding a shortfall with property-tax revenue. Mr. Miller remin- ded the council that, once the project is begun, some areas of the work could be renegotiated, and dollars could be saved. Some questions and discussion were held regarding Mr. Hansen's suggestion to use property tax funds. Mr. Holmer agreed that leadership by the council is essential, that there be a means by which to listen to the public, and that he would not support a property tax funding for shortfall. A series of questions was asked about process, including the joint Chamber of Commerce report, the public hearing process, and how a county-wide room tax would be levied. A joint pUblic hearing was suggested. It was generally agreed that the council would make no decisions on the scope of the project or the financial package until the joint meeting with Springfield and Lane County is held. A meeting will be set up after Councilor Rutan, Mr. Whitlow, and Mr. Shelby meet with the Springfield City Council tonight. Mr. Obie called on Mr. Gleason, who said that in order to complete the project, the City Council will need to accept the ambiguity of working with a fixed amount of money and a fixed project. If the council insists on conceptually nailing down everything before proceeding, the project will probably not be done. If the project concept is well thought out and includes some flexibil- ity, then decisions can be made along the way. The council needs to think of revenue in terms of cash flow. There is enough revenue secured to provide an anchor package to begin, and continue to seek revenue producers. The council may want to phase components of the project. The variables are many and cannot all be nailed down at once. The project is feasible. Mr. Hansen questioned Mr. Gleason's scenario and asked whether he would begin building a house without a loan secured. Mr. Gleason replied that each piece would have to be nailed down, one at a time and that if he were building a house, it might be necessary to delay construction of the garage if the money were not secured in time. There may be parts of the airport project which may have to be delayed while we secure revenue. Mr. Hansen commented that conversations are not enough, that there needs to be commitment. MINUTES--City Council Work Session February 10, 1986 Page 4 e e e Ms. Ehrman asked how firm the figures are and what kind of timeline is projec- ted. Mr. Shelby responded that the lottery funding will be announced Friday, February 14th; and that a firm answer from the FAA will be in place by June, or earlier if the lObbying firm is successful in their efforts to move that decision closer. He expects that a go-ahead decision can be made by June, which would be necessary in order to stay within the inflation factor of the proposal. The airline negotiations can also be completed by June 1. Ms. Ehrman questioned whether the County would say yes to the room tax pro- posal and suggested that other options be considered. Ms. Wooten believed that the financial case is good enough to present convincingly. Mr. Gleason pointed out that Ms. Wooten's scenario is only one option and that there are others. The question is not whether the project can be done, but how long it will take and how it will be packaged. Negotiations should remain open in order to change phasing and financing. It is not necessary to commit to only one kind of revenue source. Mr. Holmer asked about general obligation bonds and Mr. Wong provided interest rate figures. Mr. Rutan supported giving local contractors and suppliers every opportunity to be involved in the project, and that bid packages be designed to make this possible. Ms. Schue encouraged the council to go to the City of Springfield and Lane County with gestures of good will backed with positive action. If they say no, then the council can regroup. She did not think it wise to do a "what if" in approaching the other bodies. Mayor Obie reviewed the timeline for the committee, that a gO-day time frame for discussion of the 2% room tax with the City of Springfield and Lane County was agreed upon. Mr. Hansen questioned the wisdom of going to the joint com- mittee with the project intact, leaving little room for flexibility or input. Mr. Obie asked that the committee come back to the council if the suggestions drastically change the funding sources or the project scope. One of the advantages of the plan already in place is that it can be done. The council needs an opportunity to evaluate the possibility of success of another plan. Mr. Holmer suggested that the committee discuss with the other bodies the Passenger Facilities Charge as an ultimate source of revenue. Mr. Obie supported the cooperation with other governmental bodies because it starts a gradual move towards a regional concept of the airport facility and services both for planning and funding. Ms. Wooten summarized the discussion by listing the issues generally consented to by the council members: 1. That a 2% county-wide room tax be pursued; 2. That the airport expansion project be funded as designed with the possibility of cuts if revenue sources donlt materialize; 3. That the Airport Commission be expanded with representation outside the City of Eugene MINUTES--City Council Work Session February 10, 1986 Page 5 e e e 4. That a community education program be encouraged which has as its focal point the City Council IS position on the airport project 5. That a high priority be placed on pUblic information and input, but that the issues be ranked according to whether they are negotiable or flexible. 6. That the City Council avoid rigidity in approaching other bodies and the pub 1 i c. Mayor Obie reviewed the goals for the discussion and commented that he believed those goals were reached. The meeting was adjourned at 7 p.m. Respectfully submitted, /~- Micheal D. Gleason City Manager (Recorded by Judy Jernberg) JJ:pm/ST869 MINUTES--City Council Work Session February 10, 1986 Page 6