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HomeMy WebLinkAbout04/22/1985 Meeting - e -~~ MfROYED BY CITY COUNCIl ON c M I NUT E S CCITY MGR'S OFFICE) Eugene City Council Dinner/Work Session Jo Federigo's Restaurant Apri 1 22, 1985 5 p.m. COUNCILORS PRESENT: Cynthia Wooten, Richard Hansen, Emily Schue, Freeman Holmer, Debra Ehrman, Ruth Bascom, Roger Rutan. COUNCILORS ABSENT: Jeff Miller. Mayor Brian Obie called the work session to order. I. RIVER ROAD PARK AND RECREATION DISTRICT (Informational Item) City Manager Micheal Gleason said City representatives will meet with repre- sentatives of the River Road Park and Recreation District this week to effect a memorandum of understanding concerning the assimilation of the district if the area is annexed. He will forward a memorandum to councilors. II. EUGENE AGENDA/CAPITAL IMPROVEMENTS PROGRAM City Manager Micheal Gleason introduced the item. Using flip charts, Finance Director Warren Wong discussed the financing gap the City faces. He estimated the total cost, identified available funding, and indicated how much funding will be needed for each of the five Eugene Agenda items (Airport, Riverfront Science Park, Revitalization of the Downtown, Transportation Systems, and Entrance Beautification.) He said a tax increment district is being planned to finance the Riverfront Science Park; however, $1 million to $1.5 million will be needed before tax increment financing can be generated. $10 million to $16 million dollars will be needed before tax increment financing can be generated in the Downtown Revitalization Project. Tax increment financing will eventually repay the initial investments. Answering questions from councilors, Mr. Wong said the Downtown Revitalization Project includes only the retail development and parking. Mr. Whitlow added that all the capital improvements in the Downtown Plan were included in the estimate. Probably 1,000 parking spaces will be needed for the retail deve- lopment and they will cost $10 million to $15 million dollars. Most of the improvements in the Downtown Plan are funded by tax allocation funds. The total estimate for the airport expansion includes a two-story boarding con- course and a loading ramp. The identified funding does not include lottery funds. MINUTES--Eugene City Council Work Session April 22, 1985 Page 1 e . - Replying to other questions, Mr. Wong said a State sales tax will reduce the tax increment funds for the Downtown Project by $15 million to $20 million over 20 years. The burden on the General Fund for operating and maintaining the projects when they are completed has not been calculated. The Entrance Beautification Project involves the planting of trees at many entrances and the reconstruction of the edge of Highway 99 North. The Oregon Highway Department maintains the entrances on State highways. Mr. Obie noted that private funds will be invested in the Riverfront Science Park and the Downtown Projects. Mr. Holmer noted the Ferry Street Bridge is not included in the Transportation Systems Project. Mr. Wong summarized by saying that $24.1 million to $30.1 million is needed to fund the Eugene Agenda. In addition, the City will lose about $2.7 million in Federal Revenue Sharing funds and $2.8 million to $4.8 million is needed for the unfunded part of the Capital Improvement Program. Consequently, new income of $8.3 million to $11 million will be needed. Answering a question from Mr. Rutan, Mr. Wong said capital improvement funds are needed for street overlays and maintenance, sidewalk repair, and the replacement of major facilities. Mayor Obie wondered if the councilors wanted to seek new income for just the Eugene Agenda or if they wanted to address one package that would include the Federal Revenue Sharing funds, the unfunded part of the Capital Improvement Program, and the Eugene Agenda. Ms. Wooten said the council had indicated it wished to seek funding for the library and also a swimming pool. Ms. Ehrman said the loss of Federal Revenue Sharing funds and the Capital Improvement Program should be included in deliberations about financing the Eugene Agenda. Responding to a question from Ms. Wooten, Mr. Gleason said the City will need an additional $2.8 million to $4.8 million for capital improvement each year indefinitely. The City has $1 billion in assets which need to be maintained. An income stream that is committed to capital improvement is needed. Deci- sions about how the stream is used can be made each year. He noted the Eugene Agenda will add capital projects to the City's inventory and those facilities will have to be maintained. Federal Revenue Sharing funds were used to main- tain the City's assets, but they will be lost soon. Answering a question from Mr. Hansen, Mr. Wong said $3.5 million would be needed each year to service a $30 million 20-year bond. The total cost of borrowing $30 million for 20 years would be $70 million. Mr. Holmer said it is very important to maintain the capital assets of the City. If funds cannot be found to maintain all the assets, then the council should decide to abandon some of the new projects and maintain the ones that are kept. MINUTES--Eugene City Council Work Session April 22, 1985 Page 2 - e - Mayor Obie discussed the possibility of using a gas tax or a utility tax to raise $5.7 million. If the council approved a gas tax, Mr. Obie suggested asking the Springfield City Council and the Lane County Board of Commissioners to approve the same tax. If the council approved a utility tax, Mayor Obie suggested the voters be asked to approve an additional three-percent in-lieu- of tax. In that case, EWEB users inside and outside the city would pay it. The $5.7 million would provide the "up-front" money needed for the Riverfront Science Park and the Downtown Revitalization. Tax increment funds would then pay it back and resources could be shifted. Mr. Wong discussed major alternative revenue sources and estimated how much they would yield. Answering questions, he said a tax base would have to be approved to levy a property tax if the State sales tax is approved. The City will be able to levy a specific service tax, such as a restaurant tax, even though a sales tax is approved. An income tax would generate more income than a payroll tax because it would also tax unearned income. Self-employed people were not included in the estimated income from a payroll tax. Commenting on the alternative revenue sources, Mr. Hansen and Ms. Ehrman said they would prefer a payroll tax on employees rather than on employers. Mr. Hansen said an employee would pay less than one percent if a one-percent payroll tax was approved because State and Federal taxes would be deducted. Ms. Ehrman and Ms. Schue said funds are needed for more than just the Eugene Agenda. Ms. Schue noted that the airport, the library, and a swimming pool are things the public likes. Mr. Rutan said perhaps everything cannot be funded at once. Mr. Rutan asked the staff to provide, at another time, a comparison of what a Eugenean pays in taxes to what residents of other cities pay in taxes. Mr. Gleason said the taxes levied by the City are comparatively low. One reason is that salaries in California and Washington are 15- to 25-percent hi gher. Mayor Obie suggested the voters be given an opportunity to fund the Eugene Agenda, revenue sharing, and part of the Capital Improvement Program. In that case, tax increment funds will permit additional funding of the Capital Improvement Program in later years. Responding to a question from Ms. Wooten, Mr. Gleason said a new library or an addition to the existing one will cost about $10 million. Mr. Hansen pointed out that the cost of many of the projects was only an estimate and might vary a great deal. However, the $17.1 million estimate for the airport expansion is quite definite. Responding to Mr. Hansen, Ms. Wooten said the Riverfront Science Park will cost $5.7 million to $11 million and $2 mill i on wi 11 be needed "up front. II She recommended the fi gures be fi ne- tuned and a package including the Eugene Agenda, library improvements, and an inner-city swimming pool be referred to the voters for a general obligation bond. Mr. Holmer was not sure the community was ready to support the kind of package Ms. Wooten suggested and he did not think the library and a swimming pool have as much support as some of the items in the Eugene Agenda. MINUTES--Eugene City Council Work Session April 22, 1985 Page 3 e Ms. Schue emphasized that surveys have indicated that citizens have a great deal of interest in the library. Ms. Wooten proposed that the council approve a public education campaign about the Eugene Agenda, decide how much should be provided for each of the pro- jects, and then decide how the program should be presented to the voters. Ms. Ehrman suggested councilors hold "town hall" meetings to discuss the projects, their cost, and ways to finance them with the public. Mr. Rutan 1 iked that idea. e Responding to a question from Mayor Obie, several councilors said they did not favor a property tax, but Mr. Hansen said it should remain an option. Ms. Wooten supported an income tax and an employee payroll tax. She and Ms. Ehrman opposed a utility tax. Answering another question from Mayor Obie, Ms. Wooten, Ms. Ehrman, Mr. Holmer, Mr. Rutan, and Ms. Bascom indicated some support for an income tax or an employee payroll tax. Ms. Bascom said they are easy taxes to collect. Ms. Ehrman and Ms. Schue supported raising as much money as possible with one tax. Ms. Schue was comfortable with the income tax, but had some reservations about the employee payroll tax because Lane Transit District levies a payroll tax. Mr. Holmer preferred a personal income tax because it would be paid on total income by everyone who lives in the city. Mr. Hansen proposed a package which would be composed of an employee payroll tax, an income tax, and a property tax. Each tax would provide one third of the needed income. He favored broadening the tax base and noted the employee payroll tax would affect people who work in the city and live outside it. Responding to a question from Ms. Wooten, Mr. Wong said he had not discussed a Lane County one-percent income tax with Lane County representatives. Ms. Wooten suggested Springfield, Eugene, and Lane County might each levy an income tax. Mayor Obie suggested a $30 million general obligation bond which would provide $6 million annually. Each year $3.5 million could be taken out and the rest used for improvements. Mr. Hansen emphasized that the cost of the projects should be clarified before anything is presented to the voters. Summarizing, Mayor Obie said there was some consensus that an employee payroll tax and/or income tax should be used to fund the annual $8.3 million to $11 million revenue needs. He asked each councilor to indicate what should be funded. Ms. Wooten would like to fund all of the Eugene Agenda, the library and a swimming pool, a reasonable replacement of Federal Revenue Sharing funds, and a part of the Capital Improvement Program. She suggested $4 million be alloted for the replacement of Federal Revenue sharing funds and the Capital Improvement Program. ~ MINUTES--Eugene City Council Work Session April 22, 1985 Page 4 . Ms. Bascom would like to make the package presented to the voters broad enough to pass. The addition of the library to the Eugene Agenda would help pass the package, she said. Mr. Rutan favored including the Eugene Agenda, Federal Revenue Sharing, and a portion of the Capital Improvement Program in the package. He said the library and swimming pool would help "sell" the package. Mr. Holmer said the $2.8 million for the Capital Improvement Program is the most important item, the replacement of the Federal revenue sharing funds is the next-most important item, and the Eugene Agenda is the third-most impor- tant item. He would fund the library and a swimming pool with property tax funds and submit the issue to the voters separately. He emphasized that the City is not maintaining its existing infrastructure. He felt the voters would reject the package if everything was submitted at once. Mr. Hansen agreed with Mr. Holmer. He said the Federal Revenue Sharing funds must be replaced and capital investments must be maintained. He will abstain from voting on the revitalization of the downtown. He thought the library and the swimming pool shou1 d "stand on their own feet. II Ms. Ehrman agreed with Mr. Holmer. She said Federal Revenue Sharing funds must be replaced and the Capital Improvement Program must be funded. She favored presenting the projects in the Eugene Agenda, the library expansion, and a swimming pool to the voters and letting them choose which projects will be funded. e Ms. Schue would like to fund the library and the swimming pool with a separate bond issue, and fund the Eugene Agenda conservatively, replace the Federal Revenue Sharing funds, and maintain the Capital Improvement Program. She would negotiate about the income tax. She said it is difficult to make a decision about funding Eugene projects before the result of the State sales tax referendum is known because the sales tax matters very much to the average voter. Mr. Hansen voiced frustration at the inability of the City to levy a sales tax. Mr. Gleason emphasized the importance of timing in the creation of a new income stream. He suggested the staff prepare a recommendation for the coun- cil about timeframes for the presentation of the swimming pool, the library, and projects in the Eugene Agenda to the voters. The councilors briefly dis- cussed when a vote on a new income stream could be put on the ballot. Councilors agreed to meet on May 20, 1985, to discuss the staff proposal for timeframes, a definite amount for a new income stream, and what income/payroll tax would be needed. Ms. Ehrman reiterated that she would like only one tax. Mr. Hansen would like to know who would be affected by an income tax and who would be affected by an employee payroll tax. e MINUTES--Eugene City Council Work Session April 22, 1985 Page 5 e . e Ms. Schue would like to know how an employee payroll tax would "fit into" the L TO payro 11 . Answering a question from Mr. Wong, councilors said they would like to con- sider both a personal and a corporate income tax. The work session was adjourned at 7:07 p.m. (Recorded by Betty Lou Rarick) BLR:vr/1728C MINUTES--Eugene City Council Work Session April 22, 1985 Page 6