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HomeMy WebLinkAbout04/09/1990 Meeting e M I NUT E S Eugene City Council Souza Room, Community Conference Center April 9, 1990 5:30 p.m. COUNCILORS PRESENT: Mayor Jeff Miller, Emily Schue, Rob Bennett, Shawn Boles, Freeman Holmer, Roger Rutan. COUNCILORS ABSENT: Ruth Bascom, Debra Ehrman, Bobby Green. The regular meeting of April 9, 1990, of the Eugene City Council was called to order by His Honor Mayor Jeff Miller. I. RIVER ROAD SEWER PROJECT e Terry Smith, Public Works Department, provided the council with an update on the status of the River Road sewer project. Because this is expected to be a highly controversial issue, staff recommends that the Hearings Official process be skipped and that the contract come directly before the council at a May 29 public hearing. Contract bids are expected to be opened the first of May and following this process would allow contractors an additional 7-10 days to prepare bids which would likely be reflected in bid estimates. The contract should be signed by the City Manager by June 15; construction should begin in late June. Mr. Smith advised the council that staff is aware of some actions within the community to stop this project. It is possible for citizens to submit a Remonstrance Petition to the council at its public hearing stating that 50 percent of the property owners in this area object to this project. This petition could be overridden by a two-thirds vote of the council. Another legal challenge which is being investigated involves concerns of constitutional equal protection. Mr. Smith reviewed the method being used by the City to assess sewer costs in this area. The City plans to assess sewer costs proportional to the area of the lot. This calculation method is used most commonly for sewer assessment in Oregon and is the best reflection of the benefit provided to a property by a sewer improvement. e Mr. Smith indicated that concerns surrounding the groundwater problem in River Road has been a source of tension within our community. Since 1971, numerous tests of groundwater conditions have been conducted and have proven conclusively that River Road septic tanks have contributed to a significant bacterial contamination problem. Mr. Smith said that sewer affordability has been one heavily debated issue against this project; the City has conducted an affordability analysis of MINUTES--Eugene City Council Dinner/Work Session April 9, 1990 Page 1 - e e sewer provlslon in that area. A project should be considered too expensive if sewer costs exceed 3 percent of the median annual family income. Using this criterion, staff has determined that at a 3-percent rate, homeowners would be able to meet their financial obligations with either a 10- or IS-year financing program. The River Road Citizens Advisory team (CAT) recommended against 20-year financing because it encourages property owners to enter into long-term debt without substantially impacting monthly sewer costs; CAT did not consider IS-year financing. Mr. Smith said that interest costs increase with IS-year financing, and there is a possible negative impact on the City's bond rating. The choice between 10 and 15 years is up to the council. Mr. Smith noted that four low-income deferral programs are available to assist residents with sewer costs in the River Road area. In addition, it might be possible for Eugene to receive several million dollars at a 3-percent interest rate from the Oregon State Revolving Loan Fund to aid in long-term financing. It might also be possible to seek County assistance by means of the County Road Fund. The road fund could help reduce the average homeowner's cost by approximately 20 percent. Mr. Smith said that staff is particularly concerned with those moderate-income property owners who do not qualify for low-income deferral programs, but who have large sewer assessment costs. In order to address this concern, staff is considering a delayed-assessment mechanism in which the City would assess only a portion of the area of this lot. The remaining assessment cost would be carried by the City. Mr. Smith noted that the City may not assess vacant properties until they are annexed to the City and can be developed. This carrying cost, to the Sewer Utility Fund, is approximately $1.5 million. The City already has $4 million invested in interceptor sewers which will gradually be recovered as sewer bills are paid. Responding to a question from Mr. Boles, Mr. Smith clarified that in the case of delayed sewer assessment, the property owner would be required to pay the entire assessment cost at the end of the specified time period. This would allow property owners to decide when to sell and subdivide their property within the assessment period. If a property owner chooses to annex, subdivide the property, and develop, he or she would pay the assessment at that time. Responding to a question from Mr. Boles, Mr. Smith said that there is no data on the average income of those individuals who own large property lots. Mr. Miller inquired about the possibility of dividing assessed sewer costs equally among landowners regardless of calculated property area. Mr. Smith responded that this type of common assessment is less equitable than the proposed assessment method; large property owners would receive a substantially greater benefit. Mr. Boles asked about the equity of proposed cost-cutting programs to those River Road residents who might not want to subdivide their property; i.e., those landowners who desire to maintain the rural character of their land. For these people, the opportunity to develop is not a benefit. He suggested the possibility of establishing a contractual agreement with these owners in which they would demonstrate their intention not to subdivide their property MINUTES--Eugene City Council Dinner/Work Session April 9, 1990 Page 2 - e e and would be penalized if the covenant is violated. Mr. Smith said that this type of agreement has not been considered. Mr. Holmer added that in the interest of compact urban growth, the City would not want to encourage this. Mr. Rutan commended City staff for its excellent work on this project. Pat Decker, Planning and Development Department, summarized information regarding the joint hearing between the Lane County Commissioners, the Springfield City Council, and the Eugene City Council on the Metro Plan amendment. This hearing will provide the council with an opportunity to hear from River Road property owners on separating the issues of annexation and property development. Ms. Decker said that staff is uncertain about what type of testimony to expect. Mr. Boles emphasized the importance in the community of hearing the County present testimony in favor of this project. Mr. Gleason indicated that the County is currently divided on this issue and, thus, would be difficult for the County to present a single, unified position. The meeting adjourned at 6:35 p.m. Respectfully submitted, ~~~ Mi lhea 1 G~a~on City Manager (Recorded by Traci Northman) mncc 040990-530 MINUTES--Eugene City Council Dinner/Work Session April 9, 1990 Page 3