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HomeMy WebLinkAbout11/18/1992 Meeting e M I NUT E $ Eugene City Council McNutt Room--City Hall November 18, 1992 11:30 a.m. COUNCILORS PRESENT: Shawn Boles, Bobby Green, Ruth Bascom, Randy MacDonald, Paul Nicholson, Kaye Robinette, Roger Rutan. COUNCILORS ABSENT: Debra Ehrman. The adjourned meeting of November 17, 1992, of the Eugene City Council was called to order by His Honor Mayor Jeff Miller. 1. ITEMS FROM THE MAYOR. CITY COUNCIL. AND CITY MANAGER A. Guest Mayor Mayor Miller announced that Dennis Mikata, as Guest Mayor, would facilitate Item I on the agenda. e B. Homelessness Issue Mr. Green said that the Human Rights Commission, at its November 17 meeting, unanimously voted to ask the City Council to revisit the homelessness issue-- specifically the camping ordinance, in light of the recent Miami Federal Court decision. He said the aD-page decision is being forwarded to the commission. Guest Mayor Mikata asked City Manager Mike Gleason to consult with the City Attorney's Office and make a recommendation. C. LeaQue of OreQon Cities Conference Mr. MacDonald said that the League of Oregon Cities (LOC) has presented the City with an Excellence Award for cities over 25,000 population for its wetlands program in the west Eugene area. The City was also given the Safety Award for its record on work-related injuries. Mr. Rutan arrived at the meeting. Mr. MacDonald said that the LOC is taking a proactive position in engaging the State Legislature and the citizens of Oregon in a dialogue about the state's future. Mr. MacDonald also announced his reelection to the league board. He said that Mike Lindberg, City of Portland, was elected president of the LOC for the next year. e MINUTES--Eugene City Council November 18, 1992 Page 1 11 :30 a.m. e D. Riverfront Research Park Ms. Bascom announced a tour of the Riverfront Research Park this afternoon. E. Wavne Morse Ranch Public Hearing Ms. Bascom said she asked Tim laue, Crest Neighborhood Chair and a member of the Planning Commission, to represent the council at the Wayne Morse Ranch public hearing. F. State of the City Event Ms. Bascom announced the second annual State of the City and new councilor inauguration at noon on January 11, 1993. She said councilors will be asked to submit text for a brief public information piece. Mayor Miller added that retiring councilors will be gathering for a similar event on January 9. G. Individual Conferences Ms. Bascom said she is holding individual conferences with all councilors. H. Low-Income Housing Plan Mr. Nicholson said that according to Richard Guske the City's low-income housing plan is out of compliance with elements of the new Federal Fair Housing Law. Saying that the issue is on the Housing Board's November 19 e agenda, Ms. Bascom agreed to apprise the council of any developments. Mr. MacDonald noted that Mr. Guske also raised the issue of client involvement and he asked that the Housing Board consider that issue as well. I. Interfaith HousinQ Network Mr. Nicholson said that the Interfaith Housing Network is producing an instructional video and has requested $1,000 in matching funds from the City. He asked for a staff recommendation. The council concurred. J. Community Television Mr. Nicholson asked that the topic of community television be placed on the council's agenda for a fuller discussion. The council agreed. K. Kathmandu DeleQation Mr. Boles said he will be showing slides from Eugene's delegation to its sister city Kathmandu at 5 p.m. on December 7, in the McNutt Room. L. Bicvcle Thefts Mr. Nicholson said he assumed that staff was moving forward with analysis of the cost of implementing his proposal for requiring proof of ownership for all e MINUTES--Eugene City Council November 18, 1992 Page 2 11:30 a.m. e bicycles. That was the case. Mayor Miller adjourned the City Council Meeting and convened the meeting of the Urban Renewal Agency. II. WORK SESSION: LORIG 8TH AND WILLAMETTE MEMORANDUM OF UNDERSTANDING Mr. Gleason said there has been some confusion about the proposal for develop- ment of the 8th Avenue and Willamette Street property. He said that the transfer of property is between the City of Eugene Urban Renewal Agency and U.S. Bank--not with Lorig Associates, the developer. He introduced U.S. Bank Vice President Lee Bodenhamer to address the proposal. Mr. Bodenhamer said that the proposal before the council is unchanged from the original concept. He explained that the bank would be the contributors of the land to the joint venture, i.e., the bank would own the property and retain a minority interest in it, with Lorig Associates being the developer. Mr. Bodenhamer said the bank would continue to operate the property as a parking lot until such time as construction on the project is begun. He asked the council to approve the continuing process. Mr. Robinette noted that the sale price was the fair market value of the property. Addressing questions raised by Mr. Nicholson, Mr. Bodenhamer said reconveyance It could occur in three years if the project is not built in that time. And i f the property is reconveyed, the Urban Renewal Agency will come out whole in the transaction through interest and parking payments. Responding to a question posed by Mr. MacDonald, Lew Bowers, Development Division Manager, said that the City will provide parking spaces within its existing system at market rate; and the City has the capacity to do that up to the project's maximum size (100,000 square feet). He noted that the project will have 40-80 spaces on site, and the City would provide the remainder using the Parcade and the Hult Center garage, without making further investment. In response to a question from Mr. Green, Mr. Bodenhamer said U.S. Bank will consolidate its commercial, mortgage, trust, and branch banking operations in 40,000 square feet of the new building. The remaining 40-60,000 square feet will be available to other tenants. This, he said, creates an opportunity for jobs to be located downtown, including on-site property management. Addressing a question from Mr. Robinette, Mr. Bodenhamer said the bank intends to work closely with the City to keep the parking rate structure consistent with the local market. Mr. Boles moved, seconded by Mr. Green, to direct the City Manager to enter into a memorandum of understanding which involves disposition of the site. Ro 11 ca 11 vote. The motion carried, e MINUTES--Eugene City Council November 18, 1992 Page 3 11:30 a.m. e 6:1; Mr. Nicholson opposed. Mr. Nicholson said he opposed the motion because there is not enough detail in the proposal. III. BROADWAY AND LINCOLN PROPERTY PURCHASE REQUEST Mr. Boles moved, seconded by Mr. Green, to direct the City Manager to enter into an agreement to allow for the purchase of the Braodway and Lincoln site. Roll call vote. Mr. Rutan expressed support for this and the previous motion, saying parking lots are not consistent with developing a dense urban core. Mr. MacDonald asked for clarification on the City's obligation for the parking exempt lone. Mr. Gleason explained that the parking exempt zone was a stimulus to development for density. He said the Urban Renewal Agency has to gauge how much it is constraining the development by the pressure on the parking system. Mr. Gleason said this problem has yet to emerge. Addressing a concern raised by Mr. Nicholson, Mr. Gleason said the motion serves the purchaser, who cannot present himself to a lender with a specula- tive land deal. He said if the City's conditions are met, the council is agreeing to transact the land. e The motion carried unanimously, 7:0. Mayor Miller adjourned the meeting of the Urban Renewal Agency and reconvened the meeting of the Eugene City Council. IV. 1993 LEGISLATIVE PRIORITIES Linda Lynch, Intergovernmental Relations Director, said the council is being asked to approve the November 4, 1992, minutes of the Intergovernmental Relations Committee (IGR), which also approves the legislative policy frame- work for the next legislative session. She said that staff considers the document as marching orders for the session, reflecting the core of the issues the City will discuss at the legislature. Ms. Lynch said the thrust is to try to maintain local control and to look for money. She said that staff drops the poliCY if there is no consensus on the council. The specific bill is brought back before the council during the session to see if it is easier to achieve consensus. Ms. Lynch said the document is used for councilors to lobby Eugene-Springfield and Lane County legislators, and for staff to use in sharing with local government committees and other members of the legislature about City issues and City priorities. She noted that the decisions before the council are outlined in the agenda item summary. e MINUTES--Eugene City Council November 18, 1992 Page 4 11:30 a.m. e A. PurchasinQ Preference For Products With Recvcled Materials Mr. MacDonald asked that this issue be flagged for the council's subsequent consideration at an appropriate time in the future. B. System DeveloDment CharQes Mayor Miller said that the two questions on the system development charges (SDCs) for the council to consider are the following: 1) whether to include a statement in the policies document supporting more uses of SDCs, and 2) whether the City should proactively seek a longer list by having a measure introduced. Mr. Boles said that in view of its two-year history, it is increasingly clear that while the rate structure is fair for the systems that the City assesses for, there is little question that there are major portions of the infrastruc- ture that new development has an impact upon which are not being captured by SDCs. Mr. Rutan opposed expanding the use of SDCs, saying it would jeopardize relations with both the City's public and private sector partners. Mr. Robinette felt it was too soon to deal with SDCs on the legislative level. Mr. Boles moved, seconded by Mr. Green, to include a statement in the policies document supporting more uses of SDCs. The motion e failed, 3:4; Ms. Bascom, Mr. Robinette, Mr. Rutan, and Mr. MacDon- ald opposed. C. Dilemma Over State Fees Ms. Lynch explained that the City generally opposes any increase in fees it pays to the State--a position that may be overlooking the possibility that local government may have a legitimate responsibility to share in the costs of certain State programs. Staff's suggestion is that if the council wants to investigate that as a policy option, it authorize more staff time when the Governor's budget is released to do a broader analysis of fee impacts to the City. Several councilors expressed opposition to changing council policy in regard to this issue. Citing consensus, Mayor Miller said there is no support for changing the council's policy on this issue. D. Use of PERS Funds by Local Governments Ms. Lynch said that the IGR Committee has suggested that Public Employee Retirement System (PERS) funds be available to local governments for loans and to back up municipal investments. She said this would be of interest to the e MINUTES--Eugene City Council November 18, 1992 Page 5 11:30 a.m. e State Treasurer as no other jurisdiction has discussed this. Ms. Lynch asked if council wanted staff to spend time researching the issue. Mr. Rutan suggested that any effort in this regard be directed at the State Treasurer and to the Oregon Investment Council, not the legislature. He noted that one of the members of the Oregon Investment Council is a resident or Eugene. The council concurred. E. Real Estate Transfer Fee Ms. Lynch explained that the moratorium on local real estate transfer fees expires next year. The IGR Committee recommends allowing the moratorium to expire, making such a fee a local revenue-raising option. Mr. Nicholson expressed his opposition to continuing the support assessment for counties, saying it is a way of avoiding current tax constraints. He also is opposed to the use of the State fee to fund the Housing Trust Fund because the two are not properly connected. Several councilors supported the IGR Committee's recommendation, saying they favored local control. Mr. Robinette, however, felt the County should be reimbursed for the cost it incurs. Responding to a question from Mr. MacDonald, City Attorney Glenn Klein said that a favorable decision in two pending cases will enable the City to structure the fee in such a way that it would not be subject to the current e limits. Mr. Boles moved, seconded by Mr. Green, to take a position that says the council opposes extension of the real estate transfer tax for its current purpose; and further, that the council would like it returned to local control. The motion carried, 5:2; Ms. Bascom and Mr. Nicholson opposed. F. Use of Lottery Funds Ms. Lynch said that IGR is asking whether the council wishes to support other uses of lottery funds besides economic development. Mr. Green said he supports the use of lottery funds for education. Mr. Rutan favored a stricter definition of what economic development is, but will stand on the current definition. Mr. Boles moved, seconded by Mr. MacDonald, not to oppose changes to the definition of economic development in terms of expenditures to the Lottery Fund. The motion failed, 5:2; Mr. Boles and Mr. MacDonald voting in favor. e MINUTES--Eugene City Council November 18, 1992 Page 6 11:30 a.m. - G. Percent For Low-Income Housing Ms. Lynch said that the question is whether the council wants to direct staff and the Housing Policy Board to develop a recommendation for dedicating a percentage of all private development to low- and moderate-income housing. Mr. Boles moved, seconded by Ms. Bascom, to direct staff and the Housing Policy Board to develop a recommendation, including scope and cost, for dedicating a percentage of all private development to low- and moderate-income housing. The motion carried, 6:1; Mr. Rutan opposed. Mr. Boles moved, seconded by Mr. Green, to approve the minutes of the November 4, 1992, meeting of the Council Intergovernmental Relations Committee, as modified by the above activities and motions of the City Council on this date. Roll call vote. The motion carried unanimously. Citing a meeting conflict, Mayor Miller asked Council President Boles to facilitate the rest of the meeting. V. LOW-INCOME HOUSING ISSUES Rich Weinman, Housing and Community Development Section Manager, called attention to meeting packet material and the council's social goal and the e Housing Policy Board's objectives. He reviewed successful low-income housing projects. He said staff has researched different models for determining the best, most cost-effective, replicable way of building affordable housing. Staff is currently involved in researching funding for future projects, specifically bond financing. Responding to a question from Mr. Boles, Mr. Weinman said that there are approximately 3,000 names on the Section 8 waiting list for two- and three- bedroom units. He added that there is an average of 500 people in emergency housing per day. The City has built 197 units since it began its low-income housing program several years ago. Mr. Weinman reviewed the section's $150,000 budget, saying about half to two- thirds is spent on new construction activities. A. Foxwood Project Mr. Weinman described the proposed Foxwood Project as a new model, adminis- tered by a nonprofit organization with an extensive community board chaired by Jean Tate. This is a 60-unit project in South Eugene that will collect slightly higher rents than Richardson Bridge, but will still serve tenants at 50 percent of median income. He said housing financing is difficult so Foxwood has proposed the use of bond financing. e MINUTES--Eugene City Council November 18, 1992 Page 7 11:30 a.m. e Responding to a question from Mr. Boles, Mr. Weinman said the difference in tax credits has to do with the allocation from the State. The amount will be less than that received by the Richardson Bridge project. Warren Wong, Administrative Services Director, said that traditionally the City issues G.O. or revenue bonds. He explained that G.O. bonds are full faith in credit and are paid for with property taxes, while revenue bonds are assessment bonds which are paid for by the users. He noted that the City had about $35 million in outstanding bonds. The key issue is the bond rating, an index accepted by bond buyers and financial institutions as to the degree of risk of the bonding venture. The rate has much to do with the interest rate issued on the bond, and takes the following factors into consideration: community's economy, organization's financial position, the debt position, and management. Currently, more emphasis is placed on management with respect to addressing future issues. The problem is a constitutional allocation which says that no governmental entity can lend its credit to a private entity. Mr. Wong said that what is being proposed is conduit financing where the City of Eugene's name is on the bond but the repayment is from the entity that is operating the specific project. Under conduit financing, the City is not technically liable if there is default on the issue. However, there may be a moral obligation to pay and the City's reputation may be tarnished. Mr. Wong said that the City's adopted Financial Management Policies address conduit financing, asking that it not affect the City's credit worthiness or rating-- which indicates an investment-grade bond. He said that apparently no city has ever issued a conduit bond. e Mr. Wong said that experts have strongly recommended investment-grade bonds. Investment-grade bonds involve securing a guarantee on the issue from Housing and Urban Development (HUD), Farmers Home Association (FHA), or a bank. If the bonds are not investment-grade, staff is willing to have the council consider private placement of those bonds, i.e., placement with a sophisticat- ed investor as defined by SCC and the Municipal Securities Rule-making Board (MSRB). Mr. Wong said that the other option is G.O. bonds which put the City in the position of being the guaranteeing agent. He said the developer has examined the various enhancement options and none have been ruled out. Mr. Wong said the council's choice narrows to two options--consistent with adopted financial policies go for an investment-grade instrument which would require credit enhancement, or waiver that and go with a private placement with a sophisti- cated buyer barring resale. The other option is to waiver the council's policy completely and just try to sell it. Staff does not recommend the latter. Addressing a question from Mr. Rutan, Mr. Wong said other options include some kind of guarantee that the City can step in on the debt service if there is default, which would require research by the City Attorney's Office and a bonding attorney. e MINUTES--Eugene City Council November 18, 1992 Page 8 11:30 a.m. e Mr. Boles moved, seconded by Mr. Green, to instruct the City Manager to continue the feasibility analysis of a housing revenue bond (conduit financing) that is either investment-grade or sold by private placement to a sophisticated investor, subject to $15,000 in costs to be obtained from General Fund Contingency. Roll call vote. The motion carried unanimously, 7:0. Mr. Rutan asked that the feasibility analysis include other options. Mr. Boles moved, seconded by Mr. Green, to approve the use of contingency funds to cover development fees for Foxwood ($40,000) and Willakenzie ($25,000) (Orchards). Roll call vote. The motion carried, 6:1; Mr. Boles opposed. Mr. Boles moved, seconded by Mr. Green, to approve the allocation of $18,082.36 from contingency to cover the costs of development charges for the Relief Nursery. Roll call vote. The motion carried, 6:1; Mr. Boles opposed. Several councilors expressed concern with the process by which these actions have been taken. Mr. Boles urged the Housing Policy Board to develop a policy for the development of affordable housing with relation to development fees. Mr. Boles moved, seconded by Mr. Green, to approve a proposed policy for covering development charges associated with low-income housing. Roll call vote. e Several councilors felt the issue should be dealt with in a broader context. Mr. Boles was opposed to including this policy item with other very specific issues. The motion failed, 0:7; the entire council opposed. Mr. Boles moved, seconded by Mr. Nicholson, to allow systems development charges (SDCs) on the Foxwood project to be deferred for two or three years, with the interest rate set at the internal cost of the fund. Mr. Boles wondered what the implication was for the policy already in place which states that SDC fees will be paid at the time of development. Mr. Robinette said that the implication is that staff will propose a policy that will answer the question. The motion carried, 6:1; Mr. Boles opposed. The meeting adjourned at 2:05 p.m. e MINUTES--Eugene City Council November 18, 1992 Page 9 11:30 a.m. - Re7~ ~k Micheal Gleason City Manager (Recorded by Yolanda Paule) cc113018.112 e ~ MINUTES--Eugene City Council November 18, 1992 Page 10 11:30 a.m.