Loading...
HomeMy WebLinkAbout10/21/1987 Meeting (2) M I NUT E S e Eugene City Council Lunch/Work Session McNutt Room--City Hall October 21, 1987 11:30 a.m. COUNCILORS PRESENT: President Debra Ehrman, Freeman Holmer, Jeff Miller, Emily Schue, Ruth Bascom, Cynthia Wooten, Roger Rutan, Robert Bennett. I. EXTENSION OF AND REVISION TO THE TAX DIFFERENTIAL PLANS IN THE RIVER ROAD, SANTA CLARA, AND HIGHWAY 99 AREAS Ci ty Council President Debra Ehrman opened the work sessi on. Planning Director Susan Brody presented the staff report. She said that when the City Council had adopted an annexation program in April 1986, it also had approved a tax differential schedule that could be applied to properties in the River Road/Santa Clara area. Ms. Brody said the schedule would phase-in taxes for all residential, commercial, and industrial properties in the River Road area over a five-year period and for those in the Santa Clara area over a six-year period. She added that the reason for the difference in phasing was that Santa Clara residents currently paid less taxes than River Road residents did. Ms. Brody said the current tax differential plan was scheduled to expire in e March 1988, and staff recommended extending the plan for an additional year. She said the annexation program had been underway for one year now, positive results were being noticed, and the tax differential plan was a useful tool that should be continued. Ms. Brody said staff also suggested considering the possibility of using a ten-year tax differential approach for industrial properties in the Highway 99 area. She pointed out the locations of those industrial properties on a map. Ms. Brody said State 1 aw a 11 owed 1 oca 1 government tax differentials for periods of up to ten years. She said the longer phase-in had been suggested by several industrial property owners in the area, and staff then had investigated the idea and had contacted property owners for responses. She said 13 responses had been received and were described in staff notes. She said several property owners had indicated that the ten-year plan would make them more receptive to annexation. Ms. Brody said staff felt that a ten-year schedule for industrial properties was justifiable because the cost of providing services to them was lower than for residential properties and could be phased-in over a longer period of time. Industrial properties also added substantially to the tax base, she said. e MINUTES--Eugene City Council Lunch/Work Session October 21, 1987 Page 1 Ms. Brody said the Finance Division had analyzed and was comfortable with the ten-year schedule for industrial annexations. e Responding to Ms. Ehrman's question, Ms. Brody said a longer tax differential for residential properties was not recommended because of the higher level of services they demanded, which Finance staff felt could present problems for the City. Mr. Holmer asked about the significance of the survey of 106 property owners with 12 replies and with only two responses indicating that annexation support was dependent on the longer tax differential. Ms. Brody sa i d she had not meant to imply that the survey alone provided sufficient evidence, but many individual contacts during the annexation process also had indicated that the longer tax differential would make a difference in the support for annexation. Ms. Wooten asked for an example of the average difference to a property owner from the tax differential. Ms. Brody said those calculations co u 1 d be provided later in the meeting. Ms. Wooten said she agreed with Mr. Bennett's suggestion to suspend the tax differential at the point when industrial property was developed or when value was added. She asked whether that possibility had been considered. Ms. Brody said she thought such a suspension seemed problematic because part of the reason for the phase-in of taxes and for annexation was to allow development during the ten-year period. She a 1 so said recision of the di fferent i a 1 probably would be administratively complex. Mr. Holmer said he did not understand the reason for moving from a five-year e plan in River Road to a ten-year plan, which was less attractive to the City. He asked whether the differential would send a message that the City wanted industrial properties more than it wanted private citizens. Ms. Brody said the ten-year approach provided a tool that was attractive to property owners but that was not costly to the City. Mr. Gleason said industrial properties had less to gain from annexation than did residential properties, and the plan was a way to encourage annexation with costs that were mutual and that were less expensive than dealing with services to businesses outside the city. Ms. Brody added that residential properties required greater services and still would receive the differential, although it would occur over a shorter period. Mr. Rutan requested a summary of the general annexation posture for the subject properties. Ms. Brody said City staff had received inquiries from property owners who were interested in annexation and then had broadened contacts to a larger area and attempted to develop annexation proposals, using primarily a voluntary approach to annexation. She added that some of the annexation packages being developed would involve some nonconsenting owners, but the majority of property owners were expected to consent. Mr. Rutan asked whether a certain level of development required that a property be annexed. Ms. Brody said no requirements existed, but significant expansion of an existing use or new construction currently could be blocked until a consent- to-annex agreement had been signed. She agreed with Mr. Rutan's observation that it was in the City's interest to annex industrial properties in an orderly, contiguous fashion whenever possible. e MINUTES--Eugene City Council Lunch/Work Session October 21, 1987 Page 2 Ms. Bascom asked whether 1 egi slat i ve changes to annexation process would affect the tax differential proposal. Ms. Brody said the proposal was not ~ affected. Alan Lowe of the Planning Department provided examples of how the tax differential would affect two properties. He said a property valued at $774,000 (in last year's figures) would pay $230,000 over a ten-year period under the six-year plan; that property would pay $221,000 under the ten-year plan, for a savings of $9,000 over ten years. Mr. Lowe said a property valued at $8 million would pay $2,370,000 over ten years under the six-year schedule; that property would pay $2,271,000 under the ten-year schedule, for a ten-year savings of about $100,000. Ms. Wooten commented that she did not think those savings provided a great deal of incentive. Ms. Brody said the tax differential would provide added incentive along with other elements. Ms. Ehrman adjourned the work session at 11:58, and councilors moved to the Council Chamber for a regular meeting. .Re~;.~;~f~~ ,; ,.,/..d' ._~~ ..... of' '" """,::~,.r/, Mi~eal Gleason, City Manager (Recorded by Leslie Scales) mnccoc21 e 4It MINUTES--Eugene City Council Lunch/Work Session October 21, 1987 Page 3