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HomeMy WebLinkAbout03/06/1989 Meeting e e e M I NUT E S Eugene City Council Dinner/Work Session BJ's Restaurant--44 East 7th Avenue March 6, 1989 5:30 p.m. COUNCILORS PRESENT: Ruth Bascom, Rob Bennett, Shawn Boles, Bobby Green, Freeman Holmer, Emily Schue. COUNCILORS ABSENT: Roger Rutan, Debra Ehrman. The work session of the Eugene City Council was called to order by Mayor Jeff Miller. I. SOUTHERN WILLAMETTE PRIVATE INDUSTRY COUNCIL SEMI-ANNUAL REPORT Laurie Swanson, Director of the Southern Willamette Private Industry Council (SWPIC), explained that Eugene, Springfield, and Lane County used to operate separate job training programs. Then, about four years ago, the three jurisdictions decided to pool the job training resources, and SWPIC was formed. SWPIC's annual budget is about $4 million, 90 percent of which comes from funds that are part of the Federal Job Training Partnership Act; the other ten percent is primarily a mix of State and Federal funds. Stewart Tittle, President of the SWPIC Board of Directors, briefly reviewed the semiannual report. He described some of SWPIC's activities over the past year, as well as some of the programs it expects to operate in the future. He also mentioned that SWPIC is considering its organizational options. Currently, it contracts with Lane County for personnel, fiscal, and risk management services. To keep operating expenses at a minimum and to make the best use of its funds, SWPIC is considering other organizational options, such as contracting for services from another organization (public or private), renegotiating the contract with Lane County, or forming an independent non-profit organization. Mr. Tittle said a decision is expected in May. He said the City Council would be kept abreast of this issue. Ms. Swanson mentioned that changes at the Federal level will result in significant changes to the way services are delivered to welfare recipients in Lane County, beginning in 1990. One change will be to allow for the provision of employment training to welfare recipients; this will allow them to acquire job skills and begin an employment path toward economic self-sufficiency, rather than simply taking the first minimum-wage job that comes their way. In response to a question, Ms. Swanson said there will be additional funds associated with these Federal changes regarding welfare MINUTES--Eugene City Council Work Session March 6, 1989 Page 1 e e e recipients. SWPIC hopes that these funds will compensate for the decline in funding from other sources. Ms. Swanson said the net result for SWPIC probably will be a shift toward delivering more services to welfare recipients. In response to questions, Ms. Swanson said SWPIC networks regularly with other community service providers and makes reports to the school districts and Lane Community College. Mr. Boles said he would have appreciated more detail in the report to provide as much information and bac~ground as possible. Mr. Holmer asked Ms. Swanson to respond to a claim in a recent letter to The Register Guard that the enterprise zone has not created any jobs. Ms. Swanson said the key question in this debate is whether a company (such as Swenson Brothers) would have located in Eugene anyway--that is, even if the enterprise zone did not exist. She said that economic development--the efforts of local communities to attract developments to their area--is a very competitive business. Because of the intense competition, every advantage that a community can offer is important; and it is the complete package of advantages that determine whether a company will locate in a community. She said the enterprise zone, by itself, cannot create jobs; however, it does play an important part in the City's entire effort to attract economic development. Mr. Boles referred to the statement in the semiannual report that SWPIC's adult job training program had an entered-employment rate of 88 percent for the past six months. He said this statistic, while important, needs to be complemented with a statistic regarding how long these people remain employed. Ms. Swanson agreed, saying that SWPIC is trying to collect better information regarding the duration of employment for the people it serves. SWPIC does conduct 90-day follow-up surveys, which have shown a fairly good retention rate: of those who entered employment, about 80 percent are still employed after 90 days. Mr. Boles asked about SWPIC's cost per client. Ms. Swanson estimated that $2,000 to $3,000 is spent, on average, for each person that SWPIC serves; of course, some programs are more expensive per client than others. For adults, SWPIC's entered-employment rate is about 70 or 75 percent; and roughly 80 percent of the youth that are served exit the program in an acceptable manner (that is, by returning to school or obtaining a job, depending on the particular case). Ms. Swanson said that over the long term, SWPIC expects to serve fewer clients, but in a more comprehensive manner. She added that job training programs, though they have short-term costs, have much greater long-term benefits because they help people become economically self-sufficient. Mr. Bennett mentioned the high cost to the community when people are not economically self-sufficient. In response to a question from Mr. Green, Ms. Swanson said the funds for the Summer Youth Employment Program are used to pay a youth's wage at a summer job. This summer work experience is intended to teach basic work skills and MINUTES--Eugene City Council Work Session March 6, 1989 Page 2 e e e habits to the youth. After the summer, they usually return to school and then seek a job outside the program during the next summer. Ms. Swanson said the program is targeted to at-risk youth, those with multiple barriers to becoming economically self-sufficient. She said 70 to 80 percent of the youth who participate in the program show a definite gain in work competency. Ms. Schue asked about an intensive, month-long camp that was held for at-risk youth a few years ago. Ms. Swanson said programs such as this are expensive. She believed that for a community such as Eugene, programs that provide actual experience working within the community probably are more effective than work training camps that are held outside the community. City Manager Mike Gleason praised Ms. Swanson's work for SWPIC. He said the region made an intelligent decision four years ago when it decided to pool job training resources and form SWPIC. He said the organization plays a key role in the City's economic development efforts. II. AGREEMENT TO TRANSFER ELECTRIC SERVICE FROM LEC TO EWEB IN THE WILLOW CREEK AREA Susan Brody, former City Planning Director, said she has been under contract with the City to participate in the negotiations between the City, the Eugene Water and Electric Board (EWES), and the Lane Electric Cooperative (LEC) regarding the transfer of electric service provision for the Willow Creek basin from LEC to EWES. She said the City has identified this area as one of its key light-industrial sites and has been concerned that LEC's higher electric rates would be a disincentive to the economic development of the area. Because of this concern, the City Council passed an ordinance in August 1988 authorizing the acquisition by condemnation of LEC's facilities in the Willow Creek area. In addition to passing this condemnation ordinance, the council adopted a motion encouraging EWES and LEC to negotiate a settlement, if at all possible, so that court action could be avoided. Negotiations began in September. Under the agreement that has been developed, the transfer of service would occur in October 1989. LEC would be reimbursed for the value of its existing facilities in the area, as well as for other facility costs to LEC resulting from the transfer. Also, for the next 20 years, LEC will receive a payment of eight percent of the electric revenues received from customers in the Willow Creek area. This annual payment will have three components: three of the eight percent will come from a surcharge on the customers in the area; two percent will come from EWEB's revenue from those customers; and three percent will result from a reduction in the surplus earnings payments that EWEB makes to the City (normally, the payment is six percent of electric revenues; for the Willow Creek area, this will be reduced to three percent and EWES will pay the other three percent to LEe). Finally, under the agreement that has been developed, the City and EWES would agree to make no service boundary changes affecting LEC for the next 25 years without the mutual consent of LEe. Ms. Brody said the City Council would be holding a public hearing on this agreement tonight, and would be asked to consider a motion directing the City MINUTES--Eugene City Council Work Session March 6, 1989 Page 3 e Manager to enter into the agreement that has been developed. She added that a few minor changes may be made to the draft agreement; if any of these turn out to be significant, the issue will be brought before the City Council again. In response to a question, City Attorney Tim Sercombe said a dispute between EWEB and LEC still remains regarding paragraph eight of the agreement. LEC wants the agreement to state explicitly that EWEB will be committed to pay eight percent, regardless of any changes that are made to the surplus earnings agreement between the City and EWEB. EWEB's position is that this commitment is already implicit in the agreement. Mr. Sercombe did not think that any wording changes resulting from the resolution of this dispute would affect the City's interests in the agreement. Mr. Boles said that if the agreement is made, EWEB customers in the Willow Creek area will pay a higher rate than other EWEB customers. City Manager Mike Gleason said this was true; however, Willow Creek customers will pay less to EWEB than they would have paid if LEC were to remain the service provider. He said a crucial part of the whole agreement was the fact that all of the parties--the City, EWEB, LEC, and the Willow Creek customers-- sacrificed something. Mr. Bennett said the payment of eight percent of future electric revenues is not meant to compensate for current assets in the Willow Creek area; rather, it is meant, in some sense, to compensate LEC for a lost opportunity (that is, the lost opportunity of serving the Willow Creek area in the future). Ms. Brody said this was correct. e Mr. Bennett said the eight percent payment seemed rather high, and the duration of the payments (20 years) seemed rather long. He asked about the average rate of return on utilities. Mr. Gleason said rates of return could range from 4 to 20 percent, but the industry standard is probably about 10 to 12 percent. Mr. Bennett said this seemed to be a case of two public entities acting as if they were parochial, private suppliers. He also asked if the City made a prudent exchange--that is, avoiding the costs of taking this issue to court by foregoing half of the in-lieu-of-tax payments that it would receive from the Willow Creek area over the next 20 years. Mr. Gleason said staff believes the eight percent payment is probably at the outer limit of what would be a prudent exchange for the City; but the outer limit is probably the place at which most tough deals are made, each party sacrificing something in order to make a deal work. Mr. Gleason said he believes that the deal ;s fair; however, he could not recommend that the City should have sacrificed any more ;n order to avoid taking the issue to court. In response to a question, Ms. Brody said eight percent of electric revenues for the next 20 years from the Willow Creek area is projected to be from $4.7 million to $7.4 million, depending on how much economic development occurs. - MINUTES--Eugene City Council Work Session March 6, 1989 Page 4 e e - Mr. Holmer asked if the City Council would be risking political embarrassment by supporting the agreement before the EWEB Board has done so. Mr. Boles expressed a similar concern: Given that EWEB, in some sense, is a part of the City, would an improper precedent be set if the City Council were to take action on this agreement before the EWEB Board? Would it be more appropriate for the EWEB Soard to make a recommendation to the City Council? Mr. Sercombe said there are some parts of the relationship between the City and EWES that are definitely hierarchical; the City, for example, has a superior position relative to EWEB regarding general policies affecting the citizens of Eugene. On the other hand, EWEB is a co-equal of the City, or is even in a superior position relative to the City, in some areas (for example, utility administrative matters). Mr. Sercombe said the proposed agreement involves both general policy issues and utility administrative matters. He did not believe, therefore, that any improper precedent would be established if the City Council were to act before the EWEB Soard. Mr. Holmer said he would be satisfied if the council's motion were worded in a way to direct the City Manager to enter the City into the proposed agreement, provided that the agreement is approved by EWES. Staff indicated that a motion like this would be fine. The council recessed to its regular meeting at 7:15 p.m. (Recorded by Monty Hindman) MNCC 030689-530 MINUTES--Eugene City Council Work Session March 6, 1989 Page 5