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HomeMy WebLinkAbout02/15/1989 Meeting e e e M I NUT E S Eugene City Council McNutt Room--City Hall February 15, 1989 11:30 a.m. COUNCILORS PRESENT: Ruth Bascom, Roger Rutan, Rob Bennett, Shawn Boles, Debra Ehrman, Bobby Green, Freeman Holmer, Emily Schue. The adjourned meeting of February 13, 1989, of the Eugene City Council was called to order by Mayor Jeff Miller. I. ITEMS FROM THE MAYOR, CITY COUNCIL, AND CITY MANAGER A. Rate Analysis by Metro Wastewater Management Commission Mr. Bennett said the Metro Wastewater Management Commission (MWMC) is beginning a rate analysis. Staff has recommended that the City contract with Lane Council of Governments (L-COG) to conduct the analysis. Mr. Bennett noted that the issue is very sensitive and said it is imperative that the study is perceived as objective by the community. He questioned whether the citizens would perceive L-COG as being independent of the City. Mr. Bennett asked for council feedback on this issue. Mr. Rutan felt the MWMC should not contract with L-COG to conduct the rate analysis. He said L-COG is only partially independent of the City and felt that if the commission is going to the expense and effort of conducting an independent analysis, it should contract with an agency that is completely independent of the City. Ms. Ehrman and Ms. Schue questioned whether L-COG has the technical skills to conduct the rate analysis. Mr. Bennett felt L-COG could meet the technical criteria of the analysis. His main concern was that the product be viewed as impartial and he was not certain L-COG could meet this criteria. Mr. Boles favored contracting with L-COG for the rate analysis if L-COG possesses the technical expertise. He felt the project should be open for bid, however, if contracting with L-COG would have negative political ramifications. B. Field Burning Legislation Mr. Bennett missed the council work session at which field burning legislation was discussed; he said he does not feel the position the council took at that meeting with regard to the legislation was appropriate. Mr. Bennett requested that the council reconsider its position at the Council MINUTES--Eugene City Council February 15, 1989 Page 1 e Goals Session on February 17-18. The council agreed to place this item on its agenda. C. Task Force on Firearms Mr. Boles proposed that the council create a task force to consider the issues associated with assault weapons. He suggested that the task force be composed of a council representative, citizens, and responsible gun owners. Ms. Ehrman suggested that this issue be referred to the Public Safety Advisory Committee (PSAC). Mayor Miller said groups such as the National Rifle Association would want to participate in any discussion of this issue and suggested that they be invited to participate. Mr. Holmer suggested that PSAC be requested to form a task force that would include representation from the National Rifle Association and responsible gun owners. The council agreed to follow Mr. Holmer's suggestion. D. Legislation Regarding Vehicle Registration Ms. Schue said the League of Oregon Cities is proposing legislation that would allow a local-option vehicle registration. The legislation would be initiated at the County level upon voter approval. If Lane County voters passed the legislation, the County could have a local vehicle registration fee with proceeds being used for highways. Ms. Schue said it has been recommended that the proceeds be split, with 60 percent going to counties and 40 percent going to cities. Ms. Schue did not feel such a split would work 4It well in Lane County and asked for council feedback. Mr. Boles said he would support the proposal if the proceeds would be used for transportation in general. He would not favor the proposal if proceeds would be used as another road fund. Mr. Boles felt an emphasis on roads is not wise because it continues to focus on the automobile as the sole source of transportation. He felt this was a Short-sighted strategy. Mr. Holmer asked whether the League of Oregon Cities has considered basing the fee on the value of the vehicle, rather than having a flat fee. Mr. Boles said the fee might also be based on vehicle weight and fuel consumption. Ms. Schue said these options had not been considered. E. Airport Mr. Rutan said no resolution has been reached yet regarding Bill Rogers' allegations that the City misused road funds for the airport project. City Attorney Tim Sercombe said the decision in this case will probably be issued within the next three months. Mr. Rutan noted that staff has contingency plans in case the ruling is unfavorable. Mr. Rutan said money airport facilities. ensure that once the top quality. has been budgeted for staff to begin marketing the Staff will be analyzing routes, fares, and schedules to facility is complete, air service at the airport will be e MINUTES--Eugene City Council February 15, 1989 Page 2 e e e F. Resolution Regarding Downtown Develo'pment District Tax Election Mayor Miller said he and Ms. Bascom favor postponing the election regarding the Downtown Development District ad valorem tax until May. He felt that if the issue were placed on the ballot with the library, the two issues might be confused for some voters. Mayor Miller said the council can choose to put this issue on the ballot in May. Mayor Miller asked whether the council must continue to hold an election with regard to this tax. City Attorney Tim Sercombe said staff recommends that the council continue to vote on this issue. He said it may be possible to hold future votes less frequently than once a year, however. Mr. Bennett felt that, at least at this time, the council should not consider holding the tax vote less frequently than once a year. Mr. Boles did not feel the voters would be confused by placing this issue on the ballot with the library, although he was willing to postpone the election in accordance with council sentiment. The council agreed to postpone the resolution calling for an election on the Downtown Development District tax. II. WORK SESSION: URBAN RENEWAL PLAN UPDATE--DISTRICT EXPANSION Bob Hibschman, Development staff, said the Downtown and Planning commissions originally recommended to the City Council that the Downtown Urban Renewal District be expanded toward the northeast. After the council reviewed this, it decided that development would be more likely to occur to the northwest of the current district. Since then, discussion of the possible expansion of the district has focused on the northwest area. Mr. Hibschman reminded councilors of the three general options: 1) do not expand the district; 2) expand the district (the expansion area can be no larger than 20 percent of the original district); or 3) create a new urban renewal district. Mr. Hibschman gave an overview of urban renewal generally and of the history of the Downtown Urban Renewal District, which was formed in 1968. Urban renewal is a tool designed to stimulate private investment and economic development. State law requires that it be used to correct deficiencies in an area--in other words, to eliminate blight. Urban renewal districts can leverage development in several ways: by making public improvements and constructing or upgrading the infrastructure; by assembling land and then selling it (perhaps at below-market rates) to developers; by making loans for private sector businesses to make improvements; and by constructing parking facilities necessary to support intense urban development. When a district is formed, the property tax base of the area is frozen, and tax revenue from this base continues to go to the General Fund; however, the tax revenue from any increases in the property value of the area goes to the district (this is the tax increment revenue). Eugene's Downtown Urban Renewal District showed significant increases in incremental value during the early 1970s and almost MINUTES--Eugene City Council February 15, 1989 Page 3 . e e reached $70 million in the early 1980s (the frozen base is $34 million). In recent years, the evaluation of the district has declined somewhat. Currently, the district has an incremental value of $59 million, which generates $1.9 million in gross tax increment revenue. This money can be used to fund projects that specifically benefit the district. The money is used primarily for loans and capital projects rather than for operational expenses, because urban renewal districts are designed to end at some point (it would not be prudent to depend on a temporary district to pay for ongoing operational expenses). Mr. Hibschman said the most significant remaining objective for the Downtown Urban Renewal District is to develop the agency-owned sites. In response to a question, Mr. Hibschman said that no more than 15 percent of a community's assessed value, and no more than 15 percent of its land area, may be in urban renewal districts. Eugene's two districts (downtown and riverfront) amount to only about three percent of the assessed value and two percent of the land area of the community. The council asked staff to provide similar information for other cities, such as Portland and Salem. Mr. Farkas mentioned that Portland has many urban renewal districts, which generate a total of over $40 million ;n tax increment revenue. He said that relative to Portland and Salem, Eugene has taken a rather conservative approach to using the benefits of urban renewal districts. Mr. Rutan said the council has discussed whether downtown should have an urban renewal district at all. He wondered whether consensus had been reached yet on this issue. Mr. Boles a~ked whether urban renewal law allows district resources to be used to stimulate housing development. Staff indicated that this is permissible. Mr. Bennett did not think that one of the district's major investments, the pedestrian mall, has stimulated economic development. Mr. Hibschman said the intent of the mall certainly was to encourage development. He said it has not succeeded in leveraging intense development. Mr. Farkas added that the mall might have encouraged some businesses to remain downtown. He stressed that a lot of private investment has occurred as a result of the Urban Renewal District, although not necessarily on the mall. Ms. Schue asked how the increase in the property value of the district since 1968 compares to the increase in the value of the entire city. Staff indicated that the increase for the city as a whole has not been as dramatic. Mr. Holmer said that since 1974, the assessed value of the district did not increase as rapidly as the value of the rest of the city. In response to a question, Mr. Hibschman said that if the district were eliminated, the property tax rate would be lowered by about 62 cents per $1,000 of assessed value (tax revenues for the City, the school district, and so forth, would not increase). Mr. Rutan asked if it is fair to say that the district costs the average taxpayer 62 cents per $1,000 of assessed value. Mr. Farkas said that this 62 cents is not simply a cost; it is used to MINUTES--Eugene City Council February 15, 1989 Page 4 e provide facilities and services. To speak of the district's cost, one must consider the expense of providing these facilities through other means (for example, General Obligation bonds). The cost of providing these facilities and services through other means probably would be about five cents per $1,000 of assessed value less than the cost of providing them through the Downtown Urban Renewal District. Ms. Bascom said this was a small amount to pay in order to use the tool of urban renewal to increase economic development in the downtown area. Mr. Bennett said one also must consider the negative economic and social effects that would result if the facilities and services were not provided through urban renewal. He said it is very hard to argue that the public is paying a net cost for having the Downtown Urban Renewal District. Mr. Rutan said he would not necessarily argue with Mr. Bennett's point. He said everyone would like downtown to develop just as the rest of the community develops; however, in most cities this does not happen naturally. He said that in order to have a dense, vital urban area, a city has to provide a certain amount of assistance to its downtown. Mr. Boles said urban renewal is an important tool in realizing the City's commitment to compact urban growth. e Mr. Holmer wondered whether it would be advantageous to dissolve the current district and form a new one, thus avoiding the 20-percent expansion limitation. Mr. Hibschman said this would result in a loss of the current district's incremental value; the new district would begin with no increment. Mr. Boles raised the possibility of reducing the current district (e.g., removing all public, non-taxable land), thus increasing the amount of land that could be added during the district expansion. Mr. Farkas said this is not permissible under State law: for example, removing a block from the original district does not allow a city to expand the district by 20 percent plus a block; the total amount added to the district can be no larger than 20 percent of the original size of the district. Staff referred the council to maps of two possible expansion options. Mr. Rutan recommended that staff combine these options by including all of the properties within the options that are most likely to develop with the assistance of urban renewal, and then--in order to remain within the 20-percent limit--deleting those properties that are less likely to develop or are less likely to contribute significantly to the district. He said the entire northwest area around 6th Avenue is an economic unit that needs to be improved. He said the expansion of the district should be packaged in a way that will do the most to stimulate development of the area. The council directed staff to develop an expansion option that included all of the area shown in both options but that can be shaped to be within the 20-percent limit. e MINUTES--Eugene City Council February 15, 1989 Page 5 e e e Mr. Holmer referred to three County properties within the expansion options and asked how amenable these properties would be to urban renewal. Mr. Hibschman said the County is interested in selling the three parcels. Ms. Schue said the property owners in the expansion options should be contacted before decisions are made. She said the council should hear their views before it makes a final decision. Mr. Hibschman raised the possibility of using the Downtown Commission as the forum for processing this issue among the property owners. Ms. Ehrman and Mr. Rutan did not support this idea. They said the council has spent a lot of time on the expansion issue and is nearing a decision; therefore, there is no need to refer it back to the Downtown Commission. Mr. Boles said the council also should consider the possibility of creating another Downtown Urban Renewal District. Mr. Bennett said this might not be a wise course to follow. He was concerned that forming a new district might result in less focus on the original district. Mr. Hibschman said the current district is almost in the same financial situation as a newly formed district, because all of its resources are committed: the tax increment flow is committed to debt payments, and the district's cash reserves have been committed to the proposed new library. He said this makes the creation of a new district a more viable option--that is, more viable than it was thought to be when the expansion of the district was first considered (which was before the proposal to build a library with tax increment funds had been made). He said the creation of a new district might be easier than trying to include all of the key parcels of the entire northwest area through the "swiss cheese" expansion approach suggested by Mr. Rutan. Referring to the proposed development of the 8th and Willamette lot, Mr. Boles said the council needs to consider the impact of the loss of this important public space (e.g., during the Eugene Celebration). He said the downtown needs a place to have significant public gatherings. Mr. Boles also said the council should give some consideration to more creative ways of using urban renewal resources to address long-term transportation issues--that is, more creative than simply constructing more parking garages and thus increasing traffic congestion. Mr. Bennett said that while long-run transportation planning is important, the City also needs to recognize the immediate fact that development requires adequate parking in order to succeed in the current economy. Ms. Schue asked if the intent behind expansion is to use the current area's resources to support improvements in the expansion area. She said she had thought that improvements in the expansion area would not occur until this area began to generate increment of its own. She said this question needs to be considered more thoroughly by the council. MINUTES--Eugene City Council February 15, 1989 Page 6 - e e Mr. Bennett added that the council needs to think more about how the expansion area would connect (for example, in terms of management issues) to the current district. The meeting adjourned at 1:35 p.m. (Recorded by Tanya Northman and Monty Hindman) MNCC 021589 MINUTES--Eugene City Council February 15, 1989 Page 7