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HomeMy WebLinkAbout11/30/1987 Meeting M I NUT E S - Eugene City Council Dinner/Work Session Jacobs Room--Hult Center for the Performing Arts November 3D, 1987 4 p.m. COUNCILORS PRESENT: Freeman Holmer, Emily Schue, Cynthia Wooten, Ruth Bascom, Roger Rutan (4:40 p.m.-8:25 p.m.), Jeff Miller, Rob Bennett. COUNCILORS ABSENT: Debra Ehrman. BUDGET COMMITTEE: Joan Rich, Katherine Eaton, Don McLoud, R. Kim Short, Arden Munkres, Kay Robinhold, Shawn Boles. His Honor Mayor Brian B. Obie called the work session to order. 1. WORK SESSION GENERAL FUND SERVICE/FINANCIAL PLANNING A. Introduction City Manager Micheal Gleason introduced the discussion. Fi nance Di rector Warren Wong distributed and reviewed a packet titled "General Fund - Service/Financial Planning Work Session." He discussed the process that would be followed during the meeting. He said it will be similar to the process the council fo 11 owed on November 2, 1987. He presented the information the councilors requested on November 2, 1987. He said the Strategic Financial Plan that the council will develop will mitigate deficits projected in the Six-Year General Fund Financial Forecast. Answering questions from Ms. Bascom and Ms. Wooten about items on the list of City services in the packet distributed to the councilors, Mr. Wong said the Park Project Management item ($204,000) is the unit headed by John Etter. It plans City parks. The Cultural Arts and Special Events item ($156,000) includes such things as the Harvest Fair and Imagination Celebration. Ms. Bascom said the Park Project Management unit is essential to the park program. She wondered how it could be eliminated. Replying to questions from several councilors, Mr. Wong said the impact on a $60,000 house would be $36 if the City foregoes the permitted annual six percent tax base increase. He said the City's percentage would be 30 percent of the 2.23 percent decrease in the combined tax rate if the Central Eugene Urban Renewa 1 District is liquidated. The City's tax rate is $10.80 per thousand including debt service, and the combined tax rate is $33.54 per thousand. The estimated revenue from a one-percent restaurant tax does not include administrative costs. Collection costs for the Transient Room tax are ~ MINUTES--Eugene City Council November 30, 1987 Page 1 between two and five percent of receipts and collection costs for a restaurant tax could be similar if there are not many exceptions. There are about 250 "sit-down" restaurants and 40 to 50 hotels and motels in the city. He said e audits would affect the administrative costs of a restaurant tax. Mr. Wong said the Lane County Board of Commissioners is considering a real estate transfer tax and, if the City adopts a similar tax, the County might administer it. Answering questions from Ms. Wooten, Mr. Wong said sufficient information has not been obtained to estimate receipts from a City real estate transfer tax. Lane County officials estimate that a .1 percent real estate transfer tax will generate about $500,000. He emphasized that receipts from a real estate transfer tax depend on the economy. Ms. Schue wondered about the City's share of a .1 percent Lane County real estate transfer tax. Mr. Holmer said some people transfer property several times in a short period. In that case, a real estate transfer tax is not equitable. He said the tax is easy to administer and produces a lot of money. Responding to a request of Mayor Obie, Mr. Wong said the City's FY89 budget is being prepared now. It is possible that some of the council's decisions this evening will be reflected in the FY89 budget. Decisions that eliminate or change services may take longer to implement. If the council decides to eliminate some employee positions, the organization will try to relocate those people and that will take time. e B. Target Ballot--Exercise Mr. Wong said the six-year financial planning targets on which the councilors will vote involve additional revenue, expenditure reduction, and one-time adjustments. He stressed that one-time expenditures can be spent only once. He said actions taken in the first year will carry forward into the next years. For example, if revenues are increased 2 percent in the first year, the increase will continue. Mr. Gleason said the targeting process is for six years but the councilors may repeat the process every six months. Councilors may change their decisions after receiving information about the actual cost of curtailing services. The staff will present data about incremental service reductions later. Answering questions, Mr. Wong said reductions in services probably will be phased and phasing will increase the estimated cost. The data given the councilors assumes the tax base will be increased the allowable six percent each year. Several councilors commented on the target ballots. Ms. Ba scom sa i d the targeting process will provide the councilors with information about consensus. She wondered how increased facilities or expanded services could be reflected on the ballots. Ms. Wooten said she needs more information. She said she would like to create surpluses in the Six-Year Forecast for new e MINUTES--Eugene City Council November 30, 1987 Page 2 projects and growth and there is no provision on the ballots for that. Mr. Rutan said his votes on November 2 reflected general philosophical opinions. e Mr. Bennett sa i d IIfleet replacementll is a capital expense and Mr. Wong responded that the fleet replacement is financed from the General Fund. The councilors completed the ballots. C. Service System Ballots The councilors discussed items on the service system ballots they completed on November 2. Replying to questions from Mayor Obie and Ms. Wooten, Mr. Wong said the expense titled IIBusiness Licensell in the Career Criminal Unit is background checks on people who apply for business licenses. The revenue from business licenses goes to the Permit & Information Center. Mr. Gleason discussed the activities of the Community Affairs Unit and the Crime Prevention Team. Mr. Bennett said the Eugene Sports Program (ESP) gives much leverage. He said it affects 11,000 young people and is extremely important. He emphasized that volunteers rea lly run the program. Ms. Schue said part of the City's contribution to the ESP is for ESP maintenance of City playing fields. Ms. Wooten said many thousands of people participate in City League sports programs. Mr. Miller said it would not be prudent to decrease the services of the Police, Fire and Emergency Services Department. " The councilors decided they did not want to vote again on the service system ballots. They decided to use the results of votes on November 2, 1987. I D. Results of Voting on Financial Targets Mr. Wong distributed the results of the councilors' votes. He sa i d the summary indicates that the councilors want about 26 percent of the projected first year deficit addressed by additional revenues, about 55 percent of the first year deficit addressed by expenditure reductions, and about 24 percent of the first year deficit addressed by one-time adjustments. I Mayor Obi e reviewed the votes of individual councilors. The councilors discussed their votes and concluded that they had included different things in the categories. Mr. Gleason discussed the process and emphasize that the councilors were not cutting items from the budget. He said the councilors were deciding about financial priorities. The Mayor and several councilors discussed their votes. Mr. Bennett said the council should demonstrate that it can decrease expenditures. Then additional revenues can be sought. Mr. Rutan said all the councilors want to decrease expenditures, all councilors want to find some additional revenues, and some one-time adjustments can be made. Ms. Wooten reiterated that she would like to generate resources for capital and operating funds for new projects with e I MINUTES--Eugene City Council November 30, 1987 Page 3 both new revenue and budget cuts. She said she does not support major one- time adjustments. She said phased new revenues and budget cuts could create e money for a new library and other new projects. She said she does not want to reduce expenditures very much. Ms. Bascom said she would like to fund some new projects with new revenue. She is interested in a new library, the Fire and Emergency Services Redeployment Plan, and a police and fire training facility. Ms. Schue said she favors some one-time adjustments the first year and none later. She said she favors additional revenue for existing programs and the current CIP. She cautioned against decreasing programs too much for new capital projects. Mr. Miller said he favors some new revenues but he would like to reduce expenditures to equal revenues. He would 1 i ke a stable revenue stream but one-time adjustments could mitigate some of the expenditure reductions. Mr. Holmer emphasized that the City cannot legally have a deficit but the budget probably wi 11 be imbalanced. He said he does not want to defer maintenance of facilities. Some one-time adjustments can be made and some additional revenues would be appropriate. He said discussions about new projects, programs, and their funding should be separate from budget considerations. Ms. Wooten said the Economic Development Strategic Plan will have to be funded, therefore, she is concerned about new projects and new revenues. Mayor Obie said his votes reflected a belief that new revenues will have to support new projects such as a library. He said the Capital Improvement Program (CIP) should be included in the targets, but new projects should not e be be included in the targets. The councilors voted on the target ballots again. Explaining the voting process, Mr. Wong and Mr. Gleason said the percentages will be carried forward each year. E. Service System Ballots Assistant City Manager Dave Whitlow reviewed the results of voting on the City I S service system on November 2 and said items wi th a score of 16 (beginning with wading pools) are "below the line" and may be eliminated. Mr. Gleason said the staff will provide a report in about three months that will propose several ways to implement the voting. The counci 1 will then make final decisions. The councilors discussed ways of addressing the items "below the line.1I Mr. Bennett said he would like to wait for the staff report. Mr. Miller said he would like to lobby for retention of Police, Fire and Emergency Services. Ms. Schue emphasized the need to discuss minimum levels of service in general. She cautioned against moving items above and below the line. She said it leads to trading. Mr. Rutan said the directions given are general and he would like a staff analysis of each item below the line. e MINUTES--Eugene City Council November 30, 1987 Page 4 Summarizing, Mr. Rutan said the direction given by the voting is that additional revenues will have to be found or some expenditures will have to be e decreased. He said the expenditures libel ow the line" probably will be reduced or eliminated. Summarizing also, Mr. Holmer said the programs "below the line" cannot be funded with current revenues. However, the 1 i ne is IIfuzzy" and can be adjusted with one-time adjustments, new revenues, or incremental changes "above the line." Mr. Gleason said the staff analyses or report will not be within the budget process. However, the Executive Budget for FY89 probably will reflect some of the direction given tonight. Ms. Wooten was concerned about communicating the council's direction, the staff's response to it, and the budget process to the public. She wondered how the estimates can be increased to account for the central overhead expense of each item and when the council wi 11 consider the capital budget and administrative overhead. Mr. Wong said the impact statements will include overhead expense. Mr. Gleason said the capital budget was included in the targets. He said General Fund overhead is included in the program estimates. The overhead for the other funds probably should be considered by a council subcommittee. F. Discussion Mayor Obie said the councilors would discuss any item if two councilors agreed to do so. After discussion, the item will be moved "above the line" if five e councilors agree to do so. Only Ms. Wooten wanted to discuss Community Schools and the Celebration. The other programs and the councilors who wished to discuss them are: Career Criminal Unit and Community Affairs Team (Mr. Miller and Ms. Wooten), Membership in League of Oregon Cities and National League of Cities (Ms. Schue and Mayor Obie), Park Project Management (Ms. Bascom and Mr. Rutan), Cultural Arts and Special Events Programs (Ms. Wooten and Ms. Bascom), Eugene Sports Program (Mr. Bennett and Ms. Schue). 1. Career Criminal Unit and Community Affairs Team ($339,000) Mr. Miller said the Crime Prevention Task Force was helpful and the community has made some progress in public safety. He said the Community Affairs Team works to prevent burglaries and the Career Criminal Unit works on repetitive problems. He said public safety is more important than some things above the line such as Animal Control. He said it is important for the community to know the council values public safety. Mr. Gleason said a grant funded a portion of the Career Criminal Unit for one year. e MINUTES--Eugene City Council November 30, 1987 Page 5 The vote was 3:4 with Councilors Holmer, Miller, and Schue voting aye and Councilors Bascom, Wooten, Bennett, and Rutan voting nay. The items were not e moved. Mr. Bennett said he would reconsider the programs if the cost is decreased. 2. Membership in the League of Oregon Cities and the National League of Cities ($35,000) Ms. Schue said much of the lobbying for Legislative proposals that increased the gas tax and increased funds for maintenance and reconstruction of highways was done by the League of Oregon Cities. Eugene will receive about $500,000 in additional gas tax revenues because the legislation passed. She said the chances of success will be limited for similar proposals in the future if Eugene is not a part of the sponsoring organization. The vote was 5:2 with Councilors Bennett, Rutan, Schue, Holmer, and Bascom voting aye and Councilors Wooten and Miller voting nay. The item was moved "above the line." 3. Parks Project Management ($204,000) Ms. Bascom said designs for parks projects are necessary. The vote was 2:5 with Councilors Rutan and Bascom voting aye and councilors Schue, Holmer, Miller, Wooten, and Bennett voting nay. The item was not moved. -- 4. Cultural Arts and Special Events Programs Ms. Wooten said several activities that pull people together and give them a sense of identity have been deleted. She said cultural arts and special events are important because they give people in the community a common purpose and civic identity. The vote was 2:5 with Councilors Wooten and Bascom voting aye and Councilors Schue, Holmer, Miller, Bennett, and Rutan voting nay. The item was not moved. 5. Eugene Sports Program Mr. Bennett said the program benefits young children of all groups. It is operated mainly by volunteers. It leverages public funds. It includes a contract with ESP to maintain some of the playing fields. The vote was 4:3 with Councilors Bennett, Rutan, Miller, and Schue voting aye and Councilors Wooten, Bascom, and Holmer voting nay. The program was not moved. Mayor Obie suggested councilors contact the staff about modifying some of the programs. Mr. Gleason responded that he hopes councilors will wait for the impact statements before asking the staff to modify programs. e MINUTES--Eugene City Council November 30, 1987 Page 6 G. Final Ballot Results on Targets e Mr. Wong distributed the results of the second balloting on the financial targets. Mayor Obie said the expenditure reduction on his vote should be reduced from 90 percent to 80 percent from the second year on. Replying to a question from Mayor Obie, Mr. Gleason said the summary of all the council ors' voting i ndi cates that about 23 percent of the projected deficit should be financed by additional revenues, about 58 percent of the projected deficit should be financed by expenditure reductions, and about 19 percent of the projected deficit should be financed by one-time adjustments in the first year. Ms. Wooten wondered if a councilor should contact the staff about incremental decreases in programs and additional revenues before the staff report. She said the average of the councilors' targets does not reflect her opinion. She said she feels strongly about reducing expenditures 58 percent for six years. Ms. Schue said the council should hear from the community before discussing specifically how to meet the targets because the community should decide about expenditure reductions and additional revenues. She said the council's first task is to convince the community of the financial problem. Then the council should present a plan and options and ask for comment on them. Mayor Obie said citizens may have to experience expenditure reductions before they fully realize the City's financial problems. Ms. Schue agreed with him. Ms. Bascom said the targets indicate that the City will seek about $500,000 in - additional revenue and decrease expenditures about $1.3 million the first year. Mr. Holmer said the targets direct the staff to present proposals which the councilors will discuss. He said individual councilors should not try to persuade the staff to deviate from the collective direction. Ms. Wooten said the councilors seemed to be indicating that individual councilors can di scuss incremental program reductions with the staff but individual councilors should not discuss new revenue sources with the staff. Ms. Bascom said the council agreed that new revenues must be obtained for new programs. Mayor Obie said some programs that will be eliminated from the City budget may be funded by the private sector and councilors may not approve the expenditure reductions presented by the staff. Mr. Holmer said he may not vote for the additional revenues proposed although he will want to balance the budget. e MINUTES--Eugene City Council November 30, 1987 Page 7 H. Additional Revenues e Mayor Obie asked the councilors to discuss their opinions about additional revenues. Ms. Bascom said she would like to consider a five percent restaurant tax which will be used for the projected deficit and new projects. She sa i d she is interested in a real estate transfer tax because the Lane County Commissioners are considering one. Ms. Schue said she is interested in a restaurant tax of more than .5 percent. She is somewhat interested in a real estate transfer tax. She said substantial funds will be needed for the library. She said a local gas tax would be difficult to get approved. Mr. Miller said the problems are difficult to solve. He said the community must support the council and, if the community supports it, a restaurant tax could fund the Hult Center and cultural and leisure programs. He said he favors appropriately dedicated revenue sources. He said he would consider new revenues coordinated with Lane County. He said some citizens want services retained and taxes to be cut and that is not possible. Mr. Holmer said taxes should be equitable and citizens' ability to pay should be considered. He said dedi cated new revenues are easier to IIsellll but sometimes problems result because the amounts created do not match the needs. He said the cost of administering new revenues should be considered. A restaurant tax could be difficult to administer. He said he favors increased user fees. He said he would like to consider utility taxes. e Mr. Bennett said he woul d 1 i ke to consider a ut il i ty tax. He favors dedicating new revenues. He said expenditures should be reduced before new revenues are sought. He said he might support a gas tax, a rea 1 estate transfer tax, and a restaurant tax of less than five percent. Mr. Rutan said his constituents want the council to make expenditure reductions first. He said he would like a list of all possible revenue sources and the amounts they would generate so the council can consider all the opportunities. He said he favors lIuser-orientedll new revenues and the council should consider carefully who will pay new taxes because many of them will be passed on. Ms. Wooten said she agrees the council should consider who will pay taxes. She is apprehensive about utility taxes. She said new revenues probably will have to be pursued and she favors a phased restaurant tax. She suggested the staff analyze a five-percent restaurant tax and a commensurate offset against the shortfall within the six-percent tax base increase. For example, if a restaurant tax would produce $5 mi 11 ion and the shortfa 11 will be $2.5 million, property taxes could be reduced $2.5 million. She said changes could be made each year. On a scale of one to ten for meeting the City's current needs, Mayor Obie said revenues and expenditures are a 9 and the capital program is a 5. He said he e MINUTES--Eugene City Council November 30, 1987 Page 8 supports additional revenues and additional user fees to meet current needs. He favors implementing expenditure reductions before approving ignificant e new taxes. He would support a new tax if it would decrease property taxes or reduce the City's reliance on property taxes in the future and if the new tax is dedicated to capital projects. He said capital projects could be a library or things in the Economic Development Strategic Plan. I. Comments From Lay Budget Committee Members Ms. Eaton sa i d the 1 ay members of the Budget Commi ttee appreci ated the opportunity to observe the council's discussion. She said the lay members want to discuss their observations, so they will meet on December 10. She invited the councilors to observe that meeting. Mr. McLoud suggested the lay members of the Budget Committee undertake the process just completed by the council. He suggested council meetings be televised and said the public could learn much from televised meetings. He said it seemed all projects lIabove the linell will be funded and $50,000 for Laurelwood Golf Course is lIabove the line.1I He said he supports user fees. He noted that many of the programs "below the linell are operated by volunteers and said many programs above the line do not impact as many people as some programs below the line. Ms. Rich said she would like to consider specific terms for dedicated revenues after which they would go into the General Fund. She said it is esier to get the pub 1 i c to approve tax increases if the revenues are dedicated. She wondered why decreases in the central overhead costs were not discssed by the council. '_ Mr. Short said the process the council used is good. He said expenditure reduction is the first priority, in his opinion. He said he doesnot support one-time adjustments or reductions in the working capital that might affect other funds or the City's bond rating. He said councilors have shown wisdom during this process. Ms. Robinhold and Ms. Eaton said they agree with Mr. Short. Ms. Eaon said she would like more information about a restaurant tax and the costs of its administration. Responding to a question from Mayor Obi e, Mr. Gleason said the central overhead does not relate specifically to the General Fund of $60 million and the other funds totaling $60 million and some of the central overhad is fixed regardless of expenditure reductions. The staff had tried to include the overhead for specific programs in the cost estimates presented to the council. He said the expenditure reductions discussed by the council would have very little affect, perhaps two percent, on the central overhead cost. Mayor Obie said the council was considering a four-percent decrease in the General Fund and a two-percent overall decrease, which could result in some central overhead decrease. e MINUTES--Eugene City Council November 30, 1987 Page 9 I I J. Public Information Process e The councilors referred to the page titled "Public Information/Input Process" in their packet. Mr. Holmer said a public opinion survey and newspaper advertisements may not be necessary if the City produces a Voter Information Pamphlet in May. He said the City.s problems are complex and difficult to explain in a survey. Mayor Obie agreed with Mr. Holmer. Mayor Obie said it is difficult to ask the right questions to obtain the needed data in a public opinion survey. Ms. Bascom noted that Mr. Boles, who is knowledgeable about public opinion surveys, had left the meeting. Ms. Wooten suggested the council get information about public opinion surveys before it makes a decision. She wondered if a survey about finances could be combined with another one discussed at the council's goals-setting session. Mr. Miller agreed with Ms. Wooten. He said some surveys concern very complex subj ects. Mayor Obie said the council will receive input on the City's finances at a public hearing. Ms. Wooten wondered if the Budget Committee will also hold a public hearing on finances. She suggested the Citizen Involvement Committee be asked about the proposed process. Ms. Bascom said she would like to know more about a public opinion survey. '_ Mr. Holmer said the proposed public information process provides for many meetings at which councilors can receive public comments. II. Nuclear Free Zone Ordinance During a respite in the financial planning discussion, Mr. Bennett initiated a discussion of two versions of the Nuclear Free Zone Ordinance. He said he was a member of the Nuclear Free Zone Task Force. He said the council will soon consider two versions of the Nuclear Free Zone Ordinance. One version is called the Minimally Revised Version and the other version is the one he asked the City Attorney to draft. He said The Register-Guard received an article about the Minimally Revised Version. The editor of The Register-Guard asked him to write an article about the version he requested. He asked the other councilors for their opinions about his writing the article. Ms. Bascom said it would be better if another task force member wrote the article. Mr. Holmer said Mr. Bennett is the logical person to describe the version he requested. Mr. Holmer said Mr. Bennett should identify himself carefully in the article. Ms. Schue said Mr. Bennett could write the article but it is very important that he indicate the opinions are his and not the council.s. The other councilors agreed with Ms. Schue. e MINUTES--Eugene City Council November 30, 1987 Page 10 Ms. Wooten was also a member of the task force. She said the task force did not consider the version Mr. Bennett requested in detail. She said Mr. ~ Bennett could write an article as an individual but the City staff should not ~ draft the article. Ms. Wooten suggested the two versions be referred to the voters after the council has considered them. She said councilors could take positions as individuals on the versions. Replying to a question from Ms. Bascom, Ms. Wooten said task force members were close to agreement at one time. She said Mr. Bennett's version is very different from the version on which there was almost agreement. Mayor Obie said he wants to consider both versions. Mr. Bennett said he will support the version he considers best for the community when the council considers the two versions. He said he would like the council to support one version. He said he will need staff assistance in understanding the record and legal matters only. He will write the article himself. Mayor Obie adjourned the meeting at 8:25 p.m. to December 7, 1987. .~~,~~.e,C~.~~;~.~~2=~..:!i~~ ~:~. ~.:,. r J' .... '" '. ..1'..... '{,,...f ,:,. ... tI'" ",,~ '....'..7'.'.. /~ f' .,....'" ,- Mi c(ea 1 'Gl easo City Manager ;tIt (Recorded by Betty Lou Rarick) mncc1130 ~ MINUTES--Eugene City Council November 30, 1987 Page 11