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HomeMy WebLinkAbout07/12/1989 Meeting --- \ e M I NUT E S Eugene City Council McNutt Room--City Hall July 12 t 1989 11:30 a.m. COUNCILORS PRESENT: Ruth Bascomt Rob Bennett (after 11:45)t Shawn Bolest Bobby Greent Freeman Holmert Debra Ehrman (until 1:20)t Roger Rutan. COUNCILORS ABSENT: Emily Schue. The adjourned City Council meeting of July lOt 1989t was called to order by Mayor Jeff Miller. I. REPORT ON THE COMMUNITY RESPONSE TEAM PROGRAM EVALUATION Mr. Boles said he and Mr. Holmer met several times with staff over the past few weeks to develop an evaluation form for the Community Response Team Program. He said the evaluation will aid the City Council this fall when it e has to decide whether to continuet discontinuet or modify the program. Mr. Boles also said the police component of the program is scheduled for termination at the end of Septembert one month before the social service components of the program finish. He said it would be preferable to continue the police component through October so thatt if the council decides to continue the programt it would not have to be stopped and restarted within a month. Extending the police component another month will cost $20tOOO to $25,000. This money could come from reserves in the Community Response Team Program budget or from the General Fund contingency account. II. ANNEXATION AND SEWER ISSUES IN THE RIVER ROAD/SANTA CLARA AREA This item was a continuation of City Council discussions on May 31 and June 21. At those meetings the council discussed options for addressing the sewer and annexation issues in the River Road/Santa Clara area. The discussion focused primarily on Option It a council-initiated annexation and follow-up election for the River Road area, and Option 2t connecting the area to the sewer system without annexation. Staff reviewed information regarding annexation and sewer issues in the River Road/Santa Clara area. Most of the information was contained in a July 12 memo from staff to the Mayor and City Council. - MINUTES--Eugene City Council July 12 t 1989 Page 1 -~ ....~.~. e Deputy Director of Public Works Terry Smith had no news to report from the Environmental Protection Agency (EPA). He mentioned that a technical amendment to the Clean Water Act, which would make collector sewers eligible for State revolving loans, recently passed a significant legislative hurdle. Mr. Smith said the council directed staff to propose a way to deal with the fact that residents in the River Road/Santa Clara do not pay system development charges. He said it would be possible for Lane County to adopt the City's system development charge ordinance and apply to areas outside of the city. The charges would be based on the impact the areas have on the City's road and sewer systems. Mr. Smith also mentioned that Eugene has the lowest system development charges of any major city in the state. As a result of recent State legislation, Eugene will have to change its system development charge practices by January 1, 1991. This probably will result in a doubling or tripling of the City.s system development charges. Mr. Smith briefly reviewed information on sewer hookup costs for an average household, with and without annexation to the city. Mr. Rutan asked what the City Council's main goals are. Ms. Bascom mentioned two: to distribute the cost of urban services fairly throughout the urban area; and to address the groundwater contamination problem being caused by septic tanks in the River Road/Santa Clara area. Mr. Holmer said another goal is to achieve a rational boundary for the city by annexing the River Road area. He said that for the long term, he supports the goal to distribute urban service costs fairly; however, in the short term, this goal e may be at odds with the goal to accomplish annexation. On the basis of these comments, Mr. Rutan said the need to meet sewer hookup deadlines is not necessarily the sole driving force behind the City Counci1.s discussion of annexation and sewer issues for the River Road/Santa Clara area. Other councilors indicated that Mr. Rutan was correct. Mr. Smith briefly reviewed information about the aggregate sewer cost for the River Road area: with annexation, the total assessable cost would be about $30.7 million; without annexation, the cost would be about $35.1 million. Mr. Smith mentioned two of the factors behind the higher cost without annexation. First of all, the City has made infrastructure investments which give it the capacity to serve the River Road area. If sewer services are extended without annexation to the River Road area, the City would need to recover the cost of such investments. Second, if annexation of the area occurs, the City can pledge its full faith and credit behind the bonds to construct the sewers, thus achieving a lower interest rate than would be possible if sewers are constructed outside of the city. Mr. Holmer asked about the possibility of pledging the City's full faith and credit behind bonds to construct sewers without annexation. Mr. Smith said that incurring this amount of debt outside of the city limits would have a negative impact on the City's credit rating. Finance Director Warren Wong estimated that the impact would be from 75 to 100 basis points on any future bonding. - MINUTES--Eugene City Council July 12, 1989 Page 2 - . e Mr. Boles said he would find it difficult to justify the City's pledging its full faith and credit behind debt for an area outside the city limits. Mr. Smith reviewed some information about how Lane County might participate by bearing some of the costs to provide sewer service to the River Road/Santa Clara area. He also provided some financial information about repayment of the $6 million sewer construction grant that the City received from EPA. Mr. Bennett asked about the possibility of renegotiating the sewer connection schedule with EPA, as opposed to simply defaulting and opting to repay the grant. Mr. Smith said the City's chances of receiving an adverse decision from EPA and the Department of Environmental Quality (DEQ) increase if the City is not making reasonable progress to meet the schedule. In response to questions, Mr. Smith and City Manager Micheal Gleason said it is not merely financial matters that are at stake (the cost of constructing sewers in the River Road/Santa Clara area, the cost of repaying the grant, and so forth). The City's credibility is also very much at stake. If the City fails to meet the conditions of the grant, its credibility with DEQ, EPA, and the State Legislature could be impaired. Mr. Smith said that if the council decides to pursue Option 1, it would be very difficult to meet the deadlines for a March 1990 election. The council indicated a preference for the soonest possible election date (May 1990). Tony Mounts, Finance staff, briefly reviewed information on several topics: sewer construction financing options; alternatives to lower costs; financing e options for River Road residents; tax differential options for River Road residents; and the projected revenues and costs associated with annexation of the River Road area. Mr. Holmer asked about the possibility of a general sewer assessment deferral program (as opposed to a deferral program just for low-income households). He said such a program would allow residents to defer sewer assessments until the title of their property is transferred. He said the payment at that time could be set so as to cover the City's cost of holding the debt during the interim. Other councilors indicated an interest in having staff provide some information on such an option. Pat Decker, Planning staff, said the City Council, if it wished, could direct staff to begin implementation of Option 1 (annexation and election for the River Road area) and to proceed with the changes needed to use Option 2 (extension of sewer service without annexation) as a fall-back position. Mr. Rutan said there are strong reasons for having the River Road/Santa Clara area in the city of Eugene, and they have nothing to do with a desire to increase the City Council's domain; rather, they have to do with fairness and effiCiency. He said it makes sense to annex the River Road area. The question before the City Council is how to accomplish this in a way that responds adequately to the financial situation of River Road residents. Mr. Rutan said Option 2 is short-sighted. He said he was not interested in considering Option 2 at all. e MINUTES--Eugene City Council July 12, 1989 Page 3 --- . e Mr. Bennett also said he did not support Option 2. Mr. Smith said that in order to keep its options open, the City needs to begin preparatory work for both Options 1 and 2. If the City were to proceed with Option 1 but do no preparatory work for Option 2, and then if the City were to lose the annexation election, it would not be possible to begin pursuing Option 2 at that time and have sewer lines installed during the 1990 construction season. Mr. Smith said the current schedule calls for the connection of 75 percent of the property in the River Road area by 1995. He said that if the City made no progress during the 1990 construction season, its negotiating position with EPA would be more difficult, if not impossible. He said the City, even if it missed the 1990 construction season, could still meet the schedule to connect 75 percent of the properties by 1995. Ms. Ehrman said she did not favor Option 2; however, she said the City should begin the preparatory work for both options, because it might lose the annexation election. She said the City should have its fall-back position ready. Ms. Bascom and Mr. Green made similar comments. Mr. Bennett said Option 2 is unacceptable--except as a last resort after all other alternatives have been pursue~. He did not want the council to agree at this point that it is willing to consider Option 2 as a fall-back position. He said the council should focus on achieving Option 1. It should not position itself to accept defeat. e Mr. Rutan agreed, saying that the proposed strategy (Option 1 with Option 2 as a fall-back position) would put the City on the defensive from the outset. Mr. Boles said that given the history of these issues, there is no way for the City to move off of the defensive. He said the proposed strategy has the advantage of setting the alternatives clearly before the River Road residents: it informs residents that sewers are coming to the area in one way or another. Mayor Miller agreed. Ms. Bascom moved to direct staff to begin the sewer design process for the River Road area. Mr. Holmer seconded and the motion passed 7:0. Ms. Bascom moved to authorize the City to apply to the Boundary Commission for annexation of the River Road area. Mr. Holmer seconded and the motion passed 7:0. Ms. Bascom moved to direct staff to begin preparatory work for Option 2. Mr. Holmer seconded the motion. Mr. Bennett and Mr. Rutan raised questions about the meaning of the motion. Mr. Holmer explained that his intent in seconding the motion was not to commit the City Council in any final way to supporting Option 2; rather, the intent was to direct staff to prepare some of the necessary groundwork so that the City Council will be ready, if it so decides at a later date, to e MINUTES--Eugene City Council July 12, 1989 Page 4 . e pursue Option 2. Ms. Bascom agreed with this explanation of the motion's intent. The motion passed 7:0. Mr. Gleason said staff has assumed, based on council discussion, that the City would not pledge its full faith and credit behind a debt outside the city limits. He asked if the council wished to reexamine this question. It did not. Mr. Boles said the City needs to relieve the burden of annexation for River Road residents as much as possible. He said this is not simply a financial matter. In addition to being concerned about the costs associated with sewer hookup and annexation, River Road residents are concerned about preserving the character of their neighborhoods. He said the City needs to assure River Road residents that annexation will not result in an obliteration of the character of their neighborhoods. Mr. Gleason said staff would prepare some information on the very best financial incentives that can be offered to River Road residents to reduce or defer the costs associated with sewer hookup and annexation. He said staff could present the council with a range of incentive packages to consider. The council supported this suggestion. Ms. Bascom said the City Council should consider what financial incentives can be offered to River Road residents, while still taking into account the e cost of such incentives to current city residents. She said the financial situations of both current and future city residents need to be considered. Other councilors agreed. Mr. Gleason said the current service system of the City is lower than he would like it to be. He said that after annexation of the River Road area, the City's resources would be stretched even tighter than they already are. Mr. Holmer referred to the public information and education program for Option 1. He said the City should give consideration to having some of this work done by a group or agency other than City staff. Mr. Rutan stressed the importance of having an effective, well-planned public information and education program. He said River Road residents need to feel that they have received the information in an impartial manner. Mr. Rutan also said the assistance of Lane County Commissioners and State Legislators from the River Road area would be helpful in the public information and education program. He said these representatives should be approached immediately. Mr. Boles stressed that the public information and education program needs to be just that: information and education, not persuasion or political pressure. e MINUTES--Eugene City Council July 12, 1989 Page 5 < , e Mr. Holmer raised the possibility of a special City Council subcommittee to work on the annexation issue. The meeting adjourned at 1:25 p.m. (Recorded by Monty Hindman) MNCC 071289 e e MINUTES--Eugene City Council July 12, 1989 Page 6