HomeMy WebLinkAbout08/08/1983 Meeting
M I NUT E S
- City Council Work Session
Bloch Room, Hilton Hotel
August 8, 1983
5:00 p.m.
PRESENT: Gus Keller, Mayor; John Ball, Dick Hansen, Freeman Holmer, Mark
Lindberg, Brian Obie, Emily Schue, Betty Smith, Cynthia Wooten, (from
5:45 p.m.), Councilors; Mike Gleason, City Manager; Dave Whitlow,
Assistant City Manager; Barbara Bellamy, Public Information Director;
Pat Lynch, Council Administrator; Dick Reynolds, Executive Director,
Bob Schutz, Business Manager, Hult Center; Warren Wong, Financial
Director; Jean Reeder, Don Vanderzanden, EWEB staff; Fred Webb,
KUGN; Mark Matassa, Fred Crafts, Eugene Register-Guard.
Mayor Keller called the meeting to order.
I. HULT CENTER ECONOMIC IMPACT
Mr. Gleason prefaced the Hult Center presentation by emphasizing the positive
impact of the center in the community as evidenced by a cost-benefit ratio of 10
e to 1 determined in a recent market study. This "information session" would
serve as a prelude to future budget decisions on the Hult Center.
Mr. Reynolds then presented findings from a study recently completed by the
University of Oregon Marketing Department related to economic impact and
audience demographics.
Direct and indirect economic benefits to the community totaled $10,332,700.
Some highlights of the market study were:
l. Direct business receipts totalled $2,577,000. This included hospitality
industry expenditures of $1,391,000; Hult Center services and supplies
of $774,500, and local expenditures made by promotors and performers
of $411,500.
The hospitality industry expenditures were calculated by multiplying
327,000 patrons times $4.25 spent per average visit on food and
lodging. While only 28% of these patrons were from out-of-town, they
accounted for 44%, or $617,000, of the $1.4 million total as they
spent $6.64 or more per visit.
2. Hult Center personnel expenses amounted to $986,000.
3. The total payroll and business receipts (1 and 2 above) amounted
to $3,563,000.
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Using a "rollover" rate of 2.9%, this figure achieves, through a multiplier
e effect, the amount of $10,332,700.
Using information from the Eugene/Springfield Convention and Visitors Bureau,
Mr. Reynolds noted that several conferences booked Eugene solely because of the
combined facilities of the Hult Center, Conference Center and the Hilton. He
continued that for 1982-85, a direct economic impact of $6-1/2 million would be
real i zed. Again, using a 2.9 multiplier, this signified a potential impact of
$18,887,296.
Mr. Reynolds continued with slide projections of the market study patron
demographics. These included age distributions, age and performance relation-
ships, socio-economic factors, income and educational levels, and socio-
economic status and type of events attended. Mr. Reynolds stated that the
findings demonstrate the center's marketing effectiveness in reaching all age
categories with a broad range of events. In most categories, local statistics
were similar to national demographic distributions.
Then Hult Center Business Manager Bob Schutz presented budget projections for
fiscal years 1985-89. With small inflationary increases and a 10% usage factor
increase, a deficit in the range of $350,000 to $370,000 was projected. It was
noted that on the income side, the largest single source of revenue was from the
Eugene Arts Foundation in the amount of $327,185, which represented 39%. Rental s,
room tax, patron user fees and box office commissions each accounted for 10 to
17 percent of the total receipts. While a reduction in marketing staff was
considered to cut expenditures, this move was reconsidered as it was decided
that this reduction would cause losses in income in the various categories.
e Mr. Gleason summarized that while continued deficits were projected, the
center's services should be viewed as a cultural and historical investment
in the community. In comparison to other city investments, programs, and user
fee systems, these potential loss figures are not "out of the ballpark."
Extensive discussion followed the presentation. Mr. Lindberg suggested
reconsideration of a room tax increase and/or a restaurant tax in view of
the benefits accruing to hospitality industries. Mr. Hansen concurred with Mr.
Gleason that the center be included with other departments and viewed as a good
investment. Ms. Schue stressed that property taxes not be used to carry the
burden, but other forms of revenue be considered. Mr. Obie said that funding
options should remain open, and that the overall needs of the community should
be examined at. Mr. Holmer and Ms. Smith agreed with Mr. Obie's concept, and
recommended caution on "selective taxation." Mr. Obie suggested that the
council settle the issue of whether the deficit should be covered by the general
fund or if other tax sources should be considered to enable the budget committee
to move ahead.
Mr. Keller concluded the discussion by stating that the Chair would consider
another council discussion and/or referral to the Financial Planning Commission
prior to the regular council action.
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MINUTES--Eugene City Council August 8, 1983 Page 2
II. EWEB BOND ISSUE
e Mr. Whitlow explained the request from EWEB for City Council approval of
issuance of $30 million of revenue bonds to finance the energy conservation
program in Eugene. EWEB hopes to place the issue on the September 20 ballot
and needs council approval by August 17. He asked councilors to consider
areas to be further researched prior to the August 17 council meeting.
Ms. Wooten noted a contradiction in the Bonneville Power Association's prior-
ities in that they have a legal obligation to pursue conservation measures
as a first priority, whereas they are continuing to finance WPPSS plant #3.
This has necessitated their cutting back on conservation programs with resultant
passing on of weatherization expenses to local ratepayers. Mr. Gleason re-
sponded that legal staff could assess the lawsuit possibilities of this issue
as a separate strategy, but recommended that the weatherization program be
considered because it offers significant advantages to citizens of Eugene in
energy efficiency.
Mr. Lindberg questioned the extent of financial liability to the City of
Eugene through endorsement of EWEB's bond issue in the event of EWEB financial
d iffi cul ty. Mr. Vanderzanden responded that only revenue of the electric
utility system could be looked to for repayment and that there could be no
compensation from city or EWEB property or from city taxing sources.
Ms. Reeder, in response to Mr. Hansen's question, stated that joint customers
of electric and oil heat would benefit by overall cheaper electric rates
even though only electric customers were being subsidized directly. Customers
e with oil and gas heat can get energy audits from the local gas company or State
of Oregon. She also stated that changes in the conservation program involve
buyback payments wi th an 85% II cap II now, and that EWEB' s pil ot program woul d do
likewise. Ms. Reeder stated that the $30 million bond issue would allow 75% of
the residences to be weatherized. Half of the bonds would be issued within the
first three years for $15 million, and if B.P.A. agrees to pay the debt service,
the program could be continued to complete all weatherization. Mr. Vanderzanden
said that if the council approved the ballot measure, EWEB would move ahead in
anticipation of Treasury and B.P.A. approval of the tax exempt status in view of
the benefits to the community.
Several councilors cautioned that all legal issues and B.P.A. and federal trea-
sury issues be cleared before a city commitment is made. Mr. Gleason agreed to
draft a compatible EWEB/City agreement and prepare a joint statement of bond
counsel and attorneys in this matter and review these with the council prior to
the regular meeting.
Mr. Keller concluded the discussion by stating that support was evident from the
council on the proposed weatherization program, and if the loose ends were
taken care of, unanimous support would likely be forthcoming. It was agreed
that no special meeting was necessary to further discuss this.
~~~_d_at):OO p.m.
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