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HomeMy WebLinkAbout10/24/1988 Meeting e M I NUT E S Eugene City Council Dinner/Work Session McNutt Room, City Hall October 24, 1988 5:30 p.m. COUNCILORS PRESENT: Debra Ehrman, Freeman Holmer, Jeff Miller, Roger Rutan, Emily Schue, Cynthia Wooten. COUNCILORS ABSENT: Ruth Bascom, Robert Bennett The adjourned meeting of October 19, 1988, was called to order at 5:45 p.m. by His Honor, Mayor Brian B. Obie. Mayor Obie said the Council Subcommittee on Library Financing would meet November 1 to discuss its recommendation to the council. Councilors dis- cussed whether it was necessary to consider the issue prior to that recommen- dation being made, and agreed to place it on their agenda as soon as possible after the subcommittee's meeting. e Mayor Obie referred to a memorandum relating to a recent arbitration award and asked for a discussion of the matter to be placed on the agenda for the October 26 council meeting. He commented that the arbitration process ap- pears to lack effectiveness. Susan Brody, Planning Director, reviewed the City's annexation program. The council adopted a formal program in April 1986. Since that time, staff has been hired, a brochure has been developed and mailed, letters and information packets have been mailed to over 600 property owners, 750 people have attend- ed 19 meetings, and an early referral process to agencies has been developed. The City has processed 23 annexations in River Road/Santa Clara, 18 of which are effective and involve 225 acres. The City has installed about ten miles of trunk sewer lines in the River Road/Santa Clara area and the Irving Road sewer line is presently under construction. Annexations have received con- sistent approval from the Boundary Commission. In spite of these successes, the program has faced significant political opposition and several legal challenges. Ms. Brody said seven of 17 appealed annexations have been decided by the Court of Appeals in the City's favor. She mentioned a lawsuit filed on behalf of the "Keep Our Ground Waters Clean" organization challenging the City's policy of requiring annexation prior to connection to the sewer sys- tem. Remonstrances on two annexations have resulted in one annexation being e MINUTES--City Council October 24, 1988 Page 1 Work Session e overturned. A remonstrance election is scheduled in March for a River Road commercial area. Ms. Brody said State law does not provide sufficient tools to allow the annexation program to be successful as it is currently operating. The tri- ple-majority annexation process was envisioned to be the primary method that would be used when the annexation program was adopted in 1986; however, this method is no longer available. In its place, the State Legislature approved a double-majority annexation process, but staff has been reluctant to use this because of the lack of clarity provided by the legislature on how the process would operate. Because of this lack of clarity, the City has been using the council-initiated annexation process. Ms. Brody anticipated that a legislative interim committee would be estab- lished to review boundary commission and annexation law in relation to state land use planning. Ms. Brody mentioned several other obstacles faced by the annexation program. State law provisions allow remonstrance by as few as one or two electors. The majority of septic systems in the River Road/Santa Clara area continue to work well even though they are polluting the ground water, which means that individual residents do not have an immediate incentive to support annexation and the provision of sewer service by the City. The cost of sewer service is high. For an average size lot of approximately 9,200 square feet in the River Road/Santa Clara area, the public improvement costs are close to $4,000 which can be paid for through Bancroft payments of $300 twice annually. e Additional private costs are about $1,200, for which no financing is avail- able currently. Ms. Brody said options are being sought that would reduce the financial burden for area residents. Also, anti-city sentiment persists in the area, and there is the perception that urban-level services are not needed in the area or will not be worth the additional tax dollars. Mr. Rutan commented that mistakes have been made in the development of an annexation program that responds to State law, the metropolitan planning process, and the Department of Environmental Quality (DEQ). Though annexa- tion could help achieve a sensible goal of having as little government as possible, Mr. Rutan said the large number of court cases is indicative of the fact that the program is not working. Lane County Commissioner John Ball maintained that while it has not met with universal success, the annexation program has moved towards solving a prob- lem. He complimented staff for representing the council well in an often controversial area. Focusing on the voluntary nature of the program, he agreed with Mr. Rutan that it would be logical to reevaluate the possibili- ties. Mr. Holmer maintained that building on the voluntary system is the key to successful implementation and he considered it the council's obligation to make annexation more feasible and attractive to residents. He considered the issue of whether sewers can be connected prior to annexation the most diffi- - MINUTES--City Council October 24, 1988 Page 2 Work Session e cult question facing the City. Mr. Holmer cautioned against non-voluntary annexation that could create resentment among unwilling citizens. Ms. Brody reported staff is concerned that the program is not working and should be reevaluated. The immediate sewer hook-up schedule and the City's long-term ambition to annex the River Road/Santa Clara area are two separate issues that are tied together for policy reasons. Ms. Brody said the City was committed to having sewer hook-ups completed for 15 percent of the exist- ing systems by the end of 1988, but only four percent of those connections have occurred. ., Terry Smith, Public Works Department, said he spoke with representatives of the Department of Environmental Quality (DEQ) about the City's inability to meet the sewer hook-up schedule mandated by the grant the City received from the Environmental Protection Agency (EPA). He anticipated that in exchange for granting an extension of the schedule's deadlines, DEQ would issue an order requiring the construction of a sewer system in the River Road/Santa Clara area by a specific date. The City would probably be the jurisdiction mandated to do this. Mr. Rutan said the City has the option to inform the State that an unsuccess- ful attempt had been made to meet the hook-up schedule and the State would have to assume responsibility for a new schedule. Mr. Smith said State law gives cities unique authority regarding sewers, both within and outside city limits. He said the City can extend sewers beyond e its boundaries, assess for them, and form local improvement districts. If Bancroft financing is provided within the city, it must also be made avail- able to residents outside the city. The City lacks authority to require connection to that sewer. As a condition for acquiring an EPA grant, Lane County passed an ordinance authorizing the County to require hook up. Mr. Rutan said the City must determine the extent to which it will be respon- sible for the execution of the program. Mr. Smith explained that if the City renegotiates the schedule but then does not live up to the obligations of the grant, the EPA could ask the City for repayment. The DEQ could intercept State distribution of funds and could exercise court powers for cease and desist. Responding to a question, Mr. Gleason said that while the grant money did not provide infrastructure within the City, its conditions aided the City in gaining approval for its Metropolitan Plan and focused attention on the environmental and health risks resulting from the ground water pollution in the area. Ms. Brody said that if the DEQ follows the anticipated course of action, the City may want to consider two options for meeting the extended connection schedule: 1. Pursue a council-initiated annexation of the River Road area, which would almost certainly be remonstrated and an election would decide e MINUTES--City Council October 24, 1988 Page 3 Work Session e the annexation. Current surveys indicate that such an annexation might be overturned in an election. This option would require a high level of activity over several months on the part of staff and the City Council, as well as a large-scale public information program to ensure that the public is well informed. Economy of scale could be achieved if the sewer system was installed as a whole over a period of four to five years. 2. Change current City policies to allow the construction of a sewer system in the River Road/Santa Clara area prior to annexation. Mr. Holmer asked if the first option could be engineered to allow an incre- mental annexation by quarters, thus allowing a concerted effort to package and sell the program. Ms. Brody said there would be difficulty in selecting and defining the areas, but this was an option that could be considered. Gary Chenkin, Planning Department, pointed out that the option of proceeding with one fourth of the area at a time would probably result in remonstrance elections in each quarter. Responding to Mayor Obie's question, Mr. Smith said the gross cost for sewers for all the River Road area would be approximately $30 million. Additional private costs would average $1,200 per household. Emphasizing that there is a strong public policy purpose behind the present program, Ms. Brody said the second option may not make the most planning sense; it also raises significant inter-jurisdictional issues that would have e to be addressed; however, it may be the only practical solution, given the current political opposition to annexation. Ms. Brody also said the second option would raise significant urbanization issues (e.g., if development were to occur as a result of the increased sewer services). Responding to Mr. Miller's questions, Ms. Brody said the hook-up schedule affects the residential and some of the commercial areas of River Road, but the industrial area along Highway 99 does not move the City towards its hook- up schedule. If the second option were selected, it would carry the recom- mendation that areas that do not help meet the hook-up schedule should not be allowed to take advantage of the sewer installation. Ms. Brody noted that allowing an area to develop before annexation occurs is desirable if revenue is the primary consideration. She said a contract annexation would require property owners to annex in the future, but State law does not allow that guarantee without a legislative solution. Mr. Rutan observed that reviewing the process in its entirety may produce discussion that will lead to a better strategy. He suggested exploring the option of finding a way to transfer responsibility for the existing problem to another jurisdiction. Ms. Wooten disagreed with Mr. Rutan's suggestion and said the City has a responsibility to resolve the situation. She envisioned a solution that would focus on encouraging residents to pay for the services that are neces- sary for urbanization. e MINUTES--City Council October 24, 1988 Page 4 Work Session e Mayor Obie requested exploration of the option to strengthen the role of the Metropolitan Wastewater Commission by creating a new district or enhancing the one that encompasses the River Road/Santa Clara area. Mr. Smith responded that the existing County service district is governed by the County Commissioners as mandated by State law. As a standard service district, it could be expanded to include River Road/Santa Clara and could be made responsible for providing sewer service in that area. Ms. Schue commented that while the Wastewater Management Commission is the operating agency, the funding agency is the County service district. Mr. Holmer asked what would happen if the second option did not meet the hook-up schedule? To answer, Mr. Smith referred to a situation in Multnomah County in which Portland is installing sewers and assessing property owners for them, then allowing connection to occur at the property owner1s leisure. The City's current connection schedule is dictated by an ordinance requiring connection within 18 months following the provision of sewers. Mr. Smith indicated it might be possible to negotiate a change in that requirement. Mayor Obie suggested seeking input from representatives of other cities at the League of Oregon Cities meeting. Answering Ms. Wooten's question, Mr. Smith said other methods of financing hook-ups without burdening residents with the addition of City taxes include e extending deferrals of assessment to low-income property owners, extending Bancroft repayment to 20 years instead of ten, and attempting to acquire State revolving loan funds. Another approach might move away from the Bancrofting method and eliminate the cost of debt financing by implementing a user fee. Mr. Smith reported considerable interest in this method and he suggested forming a Citizens Advisory Group to consider financing options before the council makes its decision. At a monthly rate of approximately $30, he projected that the user fee would produce sufficient revenue over ten years to build all the needed sewers in the River Road area. If a renegoti- ated schedule required completion in five years, revenue bonds, the State revolving loan fund, or a State pollution control bond would be possible sources of the needed additional financing. Mr. Smith observed that the different financing packages would be too costly without the participation of the entire area. Mr. Miller noted that the user fee would require assessing a fee on every user regardless of whether service was being received. Mr. Miller continued by asking for comment on providing sewer connection with an agreement to subsequent annexation. Ms. Brody repeated that no mechanism to mandate that annexation exists. Mr. Smith described the second option as an attempt to separate the costs of annexation from those of sewers, but he said the two issues are closely e MINUTES--City Council October 24, 1988 Page 5 Work Session e connected. He recommended proceeding with the installation of sewers which he considered inevitable. Once this is accomplished, he said the discussion of annexation would be significantly changed. Mr. Holmer said his initial preference was for option 2, but he now recog- nized the need to jointly address the related problems of sewers costs, annexation, and taxes. He supported the formation of a citizen committee with representation from the River Road area and the City to devise an offer that would be attractive to River Road residents. Tax deferrals and a mora- torium on taxes during the Bancrofting period could be elements of that offer. Ms. Wooten concurred with Mr. Freeman's proposal, but she stressed the impor- tance of the City's pursuit of both annexation and sewer connection. She recommended negotiating with the DEQ to obtain a hook-up schedule that will allow time for a committee to develop a financing recommendation. Ms. Schue suggested scheduling an election for the River Road area after making an effort to present the advantages of annexation. Ms. Brody pointed out that because the area is outside the city limits, initiating the annexa- tion would be the only way the City could bring the matter to an election. However, the County could seek an advisory vote on the question for that area. Because Eugene's water utility is the provider of service for the River Road water district, Mayor Obie suggested exploring the ability of EWEB to partic- e ipate. Mr. Ball commented that while policy reasons support the linking of sewer installation and annexation in "ordinary" circumstances, specific questions related to existing levels of development in the area and the significant ground water problem allow for consideration of a departure from accepted public policy. For this reason, he encouraged careful review of the second option. Mr. Ball said the annexation issue eventually must be addressed in terms of a whole range of urban services. He said the full potential of the metropoli- tan area cannot be achieved until that issue is resolved and he cautioned against allowing the adopted Metropolitan Plan to create problems instead of solving them. Mr. Ball observed that focusing on sewer installation would not accomplish the integration of the River Road/Santa Clara area into the community. He advised delaying action to allow a process to be developed that will invite the continuing participation of the River Road/Santa Clara residents in addressing all the issues of urbanization. Ms. Brody distributed a letter she had received from the Industrial Corridor Community Organization expressing a desire to separate the issues of annexa- tion and sewers and to work with the City to resolve the problem. e MINUTES--City Council October 24, 1988 Page 6 Work Session e The work session adjourned to the council's regular meeting at 7:20 p.m. Respectfully submitted) ..... ~4 .r' ??>.:~?~.~. ,<-~':-' / .' -/ ~-~ --- Mi ~ea f'Grea'son;/ Ci y Manager / (recorded by Mary Feldman) mncc 102488-530 e ~. e MINUTES--City Council October 24, 1988 Page 7 Work Session