HomeMy WebLinkAbout04/16/1980 Meeting
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MINUTES
EUGENE CITY COUNCIL
April 16, 1980
Adjourned meeting from April 14, 1980, of the City Council of the City of
Eugene, Oregon, was called to order by His Honor Mayor Gus Keller at April 16,
1980, 11:30 a.m., in the Council Chambers with the following councilors present:
Betty Smith, Scott lieuallen, D. W. Hamel, Jack Delay, Eric Haws, and Gretchen
Miller. Councilor Brian Obie was absent.
I. ITEMS FROM MAYOR AND COUNCIL, APPOINTMENTS, ANNOUNCEMENTS, AGENDA
ADJUSTMENTS
A. Chamber of Commerce Supports Eugene Plan Approach to Budget
Ms. Smith explained she and Councilor Obie had appeared before the
Executive Committee of the Eugene Area Chamber of Commerce to ask
their support for the Eugene Plan. She introduced Mr. Tom Hoyt.
Tom Hoyt, Eugene Area Chamber of Commerce, explained the executive
board had held two meetings in order to review the "Eugene Plan."
The executive board has authorized payment of $2,250 to the Better
Eugene Committee to promote passage of the budget. He presented
the City Council with a check and urged the citizens of Eugene to
support the Eugene Plan.
The Mayor expressed his appreciation for their support.
B. Condominium Conversion Report from the Committee on the Rights of Aging
Mr. Delay asked the councilors to read the report from the Committee
on the Rights of Aging. The committee interviewed residents of lane
Towers and Eugene Manor and compiled their comments on condominium
conversion for the council's consideration since those people could
not be present.
C. letter to Councilors on Industrial Triangle
Mr. Haws asked if the City Manager had received the letter sent to the
councilors on the Industrial Triangle. Manager replied he had not but
expected the Planning Department to make their recommendation to the
council soon. Mr. Haws indicated the County and council philosophies
differed and the letter might call for a response.
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D. Appointment of D. W. (Bill) Hamel to Architectural Committee
The Mayor asked for approval of the appointment of D. W. Hamel to the 4It
Architectural Committee.
Ms. Smith moved, seconded by Mr. Lieuallen, to appoint Mr. Hamel
to the Architectural Committee for selection of architect for
Community Convention Center. Motion carried uanimously.
E. Appointment to the Eugene Renewal Agency of Mr. Delay and Mr. Obie
The Mayor asked for council approval for the appointments of Mr. Delay
and Mr. Obie to the Eugene Renewal Agency.
Ms. Smith moved, seconded by Mr. Lieuallen, to appoint Mr. Delay
and Mr. Obie to the Eugene Renewal Agency. Motion carried unani-
mously.
F. Using Private Residences for Housing during Track and Field Trials
The Mayor referred to a letter sent to the councilors from Barbara
Tooley and Charlotte Page who would like to offer a service of provid-
ing private residences for housing during the Olympic Trials. He asked
for comments after the meeting from councilors if they were uncomfort-
able with the concept.
G. Announcements
1. Budget Committee, Thursday, April 17, 1980, 7:30 p.m., McNutt
Room.
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2. Room Tax Committee, Tuesday, April 22, 1980, 7:30 p.m., McNutt
Room.
H. Meeting of Council Changed to May 27, 1980
Manager explained the fourth Monday council meeting in May is on
Memorial Day. Council members agreed to change the Monday, May 26,
meeting to Tuesday, May 27.
I. Cone/Breeden Update
Manager explained this item was listed later on the agenda but needed
to be addressed now because of a deadline. He introduced Stan Lo~g,
City Attorney.
Mr. Long summarized the memorandum distributed to the councilors from
the attorney's office on the subject of Cone/Breeden dated April 15,
1980. He said this issue started out as a particular case concerning
one piece of property. It has ended up "striking down" one of LCDC's
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own administrative rules. The City has two courses of action. The
City can continue its present position with respect to the individual
rezoning in front of the commission, or the City could appeal the
decision that declares the LCDC rule invalid. Mr. Long said staff
suggests the City not appeal this decision for LCDC. They are suggest-
ing that if LCDC does appeal, the City assist them in that effort.
Mr. Long said if the City, however, wished to appeal, they should do
it soon. They do not know the course of action of LCDC of this time.
The property owners of Cone/Breeden could also appeal and ask the City
to rezone the property. Mr. Long advocated the City not take the
initiative but wait. It was the advice of the City Attorney and the
Planning Department that no action be taken at this time. Mayor and
councilors agreed to accept the recommendation of the City Attorney.
J.
Re ort on the Com lete Census Committee from Chairman John Wesle
Made later in the meeting.
Mr. Wesley told the councilors they had an 87-percent return from the
mailings in Eugene. This week the workers will go house-to-house.
He gave council samples of the neighborhood newsletters which explained
the census count. In June, there will be a local review of the census
project.
II. ROUTINE ITEMS FOR COUNCIL APPROVAL
A. Approval of Council Minutes of April 2, 1980
Ms. Smith moved, seconded by Mr. Lieuallen, to approve council
4It minutes of April 2, 1980. Motion carried unanimously.
III. PUBLIC HEARINGS
A. Bancroft Policies (Memo distributed)
Manager noted that Bancrofting was discussed briefly at the last
Wednesday meeting. He referred to the memorandum to Mayor and council
from the Manager on the subject IIAssessment (Bancroft) Bonding in the
City of Eugene" as well as the memo to William McGuire, Finance
Director, from the City Attorney on assessment bonding. Manager
summarized the memorandum. Twelve-and-one-half million dollars in
projects are already completed or well under way. Contracts have been
made with contractors. Warrants have been issued by the City. The
City pays off the warrants by issuing bonds. In the past, the bonds
have been sold on the market for less than seven percent. The last
sale of bonds by another agency was in the area of 9.5 percent. If
the City sold bonds at that rate, the City taxpayer would be picking
up the difference between that rate and seven percent. The second
category of projects listed in the memorandums are projects that have
been requested by petition. They have delayed bringing them to the
council for action because of the present bond market situation.
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If the recession deepens, there could be a problem of owners going
bankrupt and a need to foreclose on the property. If developers ~, .
cannot make the payments on the land they have required, the City ..,
would acquire possession because of nonpayment of liens and need to
sell the property to recover costs. This could take three to five
years. There are a sizable number of new subdivisions involved which
is another category. The City is hard put to service the present
developed areas. This would add to the present operating burden
although presumably there would be additional income once the property
is developed. Mr. Henry suggested the City not proceed with these
new projects during this construction season or at least not before
June 10, 1980, when a bond sale is scheduled for current projects.
The City of Eugene contemplates selling approximately a $4-million
bond issue in June and an $8-million issue in the fall of this year.
It would be unwise to proceed with more liabilities and therefore he
is suggesting holding off on further Bancrofting. The Manager recom-
mended no new subdivisions be approved this construction year that
require Bancroft financing. He suggested the City confine its efforts
this year to the improvement of streets, arterials, and projects in
established neighborhoods.
The second issue was to determine when to increase the interest rates
and for which projects. The existing warrant group amounts to $12
million and the Manager suggested applying the ten-percent interest
rate to some of those projects. An increase in the systems develop-
ment tax could make up the deficit. Manager introduced Mr. Long and
asked him to elaborate on the legal aspects of levying increased
interest rates. ~
Mr. Long said he had been asked what the City can charge as an interest
rate to the property owners. He said that the City could raise the
interest rate to ten percent and sell the bond at nine percent. Or
the City can charge seven percent as they were doing and increase the
systems development tax to pay for the difference in interest or levy
it on the tax rolls. The memorandum from the City Attorney divides
the $12.6 million in projects into four categories. With respect to
the first category, the City is legally committed to a seven percent
interest rate. Categories 2, 3, and 4 involve various projects at
different stages of development. In the second category of projects,
those owners have been told that the interest rate would be seven
percent. Legally, it could be increased; however, that could meet
with substantial resistance. In considering the 1980-81 projects,
there is a lot of discretion and many alternatives.
Mr. Haws questioned the reason for stopping subdivision development
in the city if the developer had money to pay for the improvements
himself. He did not want the City to subsidize the projects. Neither
did he want to stop subdivision development.
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Mr. Long further explained the bond market process by saying that the
projects are lent funds at one interest rate prior to the City bond
sales. There is no assurance that the bonds will be sold at that rate
so it is presently a hazardous situation. He added that even the bond
counsel is unsure of the future rates. He said that the City can
charge ten percent with City Council approval, and perhaps one can
sell them for 9-1/2 percent in June.
Manager said there will be no restrictions for a developer who is able
to raise his own capital for the improvements.
Mr. Haws asked staff to explore all possible alternatives before
saying "no" to developers.
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Mr. Long indicated that in regard to future projects one could estab-
lish a sort of "security system" or could decide to do some projects
and not others. Ms. Smith asked about the impact of this on new sub-
divisions. Mr. Teitzel responded that these include about 25 subdivi-
sions, approximately 400 lots, totaling about $4.8 million. Ms. Smith
added that although the City cannot finance projects above its means,
she was concerned about these new subdivisions. Mr. Lieuallen indi-
cated that we are talking about eliminating a type of financing, not
making a law prohibiting subdivision development. He asked what
deficit would be incurred if funded at 7-percent interest and the bond
was at 10 percent. Manager said the difference is 3 percent each
year, approximately $60,000. In response to Mr. Lieuallen's question,
Manager said that street improvements in some area~ such as Cal Young
and Willagillespie could be continued as they are important arteries
and not subdivision development.
Mr. Lieuallen agreed with Ms. Smith and Mr. Haws that more information
was needed for alternatives, especially with regard to category #4,
1980-81 projects.
Manager noted the first bond sale of $4.4 million would result in a
$60,000 deficit. Mr. Long said the question for council to decide was
whether they wanted to take any steps to eliminate the deficit on the
balance of the $12 million that is to be bonded or if they wanted the
City to pay for the deficit in any other way; lf so, in what way.
The second question is to decide what to do about the 1980-81 projects.
Mr. Lieuallen said more information was needed as to the impact on
developers of eliminating this funding or whether developers could
finance improvements on their own.
Public hearing was opened.
John Bennett, Homebuilders' Association, 3282 Gatewa , reminded council
that of the 60,000 deficit, only a small part would go to finance new
subdivisions. He said most of his comments come from the City of
Springfield's consideration of this same subject. He said the Bancroft
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Act was not meant as a subsidy for builders or as a profit for the
City. It is a valuable tool and should be kept. The Homebuilders'
Association recommended to Springfield that they raise the rate to ten 4It
percent. They recommended a variable rate so if the bonds are sold at
a lower rate the benefit can be passed on, and that there be a .5-percent
adjustment to cover administrative costs. The association will lobby
in the legislature to increase the ceiling. They would rather have a
higher interest rate than lose these projects. Of the projects that
have been filed in 1978, 75 percent of the engineering has been done
by City staff. The builders have committed dollars to these projects.
They have commitments to bankers. The assocjation will help council
in surveys of builders to find out the effects of this contemplated
action.
Public hearing was closed.
Manager explained that staff would come back with an ordinance to
raise the interest rate within a week or two and with alternate
proposals within two to three weeks. They were still concerned about
continuing to incur liabilities prior to the June bond sale. Mr.
Teitzel said all the construction plats have been filed and are ready
to go as Mr. Bennett had indicated.
Manager said he was reminded that although some builders were present,
property owners on the affected properties (Cal Young, Willagillespie)
were not present and those are the people who would be affected by the
ten-percent rate. Staff felt that it would be desirable for the City
to stick with the seven-percent policy for the $12 million (not ~
including 1980-81). He suggested that an eight-percent to ten-percent ..,
adjustment in the systems development tax could make up most of the
deficit as it applies to new subdivisions. They would not be paid
until the permits are requested.
Ms. Schue outlined the two philosophies. One is where property owners
and subdividers pay for their own improvements versus the public's
expectation of a seven-percent interest rate. She said she was in
favor of protecting the City's money but was concerned about the
City's "good faith." She asked for more information on exactly what
people were told about an interest rate of seven percent.
Ms. Miller asked where Willagillespie and Cal Young roads fit into the
categories in the attorney's memorandum. Manager replied they come
under #3 and #4. He added that the category of 1980-81 projects
should be considered #5. She indicated they needed more information.
She would presently advocate raising the Bancroft rate on #3, #4, and
#5 to ten percent with provision that if they could be sold for less,
there would be a reduction in the rate. She said they cannot do
anything with category 1 and category 2 is a sticky issue. She would
need more information. She felt the City could not subsidize projects
on residential streets. Arterials might be different. She thought
they might have to freeze Bancroft bonding until measures are worked
out.
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Mr. Lieuallen felt the present rate of seven percent should apply to
categories 1 and 2. It was a relatively small amount. He suggested
the City go to the legal limit of ten percent for categories 3 and 4.
He would need more information before deciding on 1980-81 projects.
Mr. Long explained the City has sent letters to property owners such
as notice of call for bids, and assessment to property owners in the
group of projects under category 2. This happens before council
awards a contract for a project. Statements in these notices include
"Bancroft bonding requires semi-annual payments of the assessment plus
interest of seven percent per year." Mr. Long said that is not
binding at this time for the City but it has been stated to the
public. He indicated that is why one alternative is to pick up the
deficit on the full $12.5 million.
Mr. Delay felt the City should not be creating a subsidy. The project
should be paid by the owners. There is a need to limit the City's
liability. They should behave like bankers. The City did not precipi-
tate the problem and they are subject to increases as anyone else. He
would advocate an ordinance to include a variable rate. He would like
to see alternatives for the builders.
Mr. Haws agreed but asked if they would say to the property owners,
"You can pay cash or ten percent."
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Mr. Long said a letter could be sent to the property owners indicating
that the rate will be increased to ten percent or the owner can pay
it off prior to the increase.
Mayor felt that there was no other alternative at this time. He would
add one-half percent for the City's administrative costs. The League
of Oregon Cities will lobby for an increase in the interest rate
ceiling. He would rather deal with the situation through an interest-
rate increase than an increase in the systems development tax. He
would advocate categories 2 through 4 go to ten percent.
Ms. Miller said this was an opportune time to look at the basic
development standards. She questioned whether the City's requirements
for streets, sidewalks, and sewers are too high for what the City can
afford, thereby creating a need to finance the projects. She asked
council to look at the basic regulations.
Mr. Lieuallen agreed that council should look at this question.
In response to the Mayor's question, Manager indicated that on a
statewide basis they are conferring with bond counselors and the
League of Oregon Cities.
Mr. Teitzel added that if a decision is not reached until June,
EWEB and other utilities would be unable to complete all projects at
that time.
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In response to Mr. Lieuallen's question. Manager indicated that if
the bonds cannot be sold for ten percent in June. they will not be ~
sold at all. .,
Mayor moved public hearing on item C to the April 30th meeting.
Item V was rescheduled for the April 23 meeting.
B. Condominium Conversion Regulation--Recommendation of Task Force (Memo
distributed. additional information distributed)
Manager referred to the memorandum which presented the three areas
council was to consider: financial moving assistance: life tenancy:
and taxation on conversion) how much for what purpose. Manager
introduced Mr. Croteau.
Mr. Croteau referred to the staff memorandum. the letter from Lane
County Legal Aid Service. and Ruth Shepard and Norville Shannon
regarding life tenancy. Mr. Croteau outlined the points in the
memorandum dated April 4. 1980. He pointed out the shift in philo-
sophy in the assignment of rights between the tenant and the landlord
involved in life tenancy. He said staff felt life tenancy was out of
context with the legitimate rights of the owner. The City Attorney's
office has concerns for the legality of including life tenancy.
Mr. Long said the creation of life tenancy is within the right of the
City. However. it is a fundamental change and litigation should be
expected. Legislature would have power to overturn the City's position
in this area.
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Ms. Smith asked whether this would be another case of the chipping
away of home rule. Mr. Long agreed the State seemed to be restricting
the authority of municipalities. He did not want it to influence
their decision on the rightness or the wrongness of the issue; however,
he wished to inform them of the possible legal ramifications.
Public hearing was opened.
Ms. Ruth She ard. 1765 East 26th Avenue. (full written testimony
istributed was concerned for two groups of elderly and handicapped.
One. those who moved into a rental after the sale of their family
home with an idea that the rental would be permanent; and two. low-
income elderly/handicapped who did not own a home. Security in old
age is the key consideration. She advocated a modified plan that
would ensure permanency for the two groups by life tenancy. She would
protect persons over 70 or over 75 with life tenancy. She would
protect those people who raised their families and innocently settled
into rentals thinking they would be permanent before condominium
conversion was a pOSSibility.
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Wickes Bea1, 712 East 16th Avenue, Commission on the Rights of Aging,
(full written testimony distributed) presented comments from the
residents of the Eugene Manor and Lane Towers (52 messages presented
to council to read). The Commission on the Rights of Aging supports
the work of the task force. They would like life tenancy for allover
65, noting that it is the law in New York State and other localities.
They would like a tight definition of "equiva1ent housing" to include
location and the special needs of the handicapped and frail tenants.
Recognizing that life tenancy might not be politically possible, they
would support proposals to protect persons in case of hardship and
with special housing needs in a scarce rental market.
Frank Nearin , 1900 East 25th Avenue, Chairman of the Commission on
the Rights of Aging, full written testimony distributed commended
the task force. He suggested they add to the definition of "equiva1ent
housing" these characteristics: "Housing that is decent, safe, and
sanitary which is equivalent in terms of size and the number of rooms
which is located in the same area of the City; which has equivalent
common facilities including but not limited to elevators, security,
and limited rooms; which has equivalent access to employment, community,
commercial faci1ites, schools, medical services, and transportation;
which is equivalent in special features for the handicapped and
elderly, and which is immediately available for rent at a rental price
not more than $50 per month, greater than the total converted rental
unit." The Commission on the Rights of Aging asks for clarity as to
eviction other than just the statement "eviction for cause." Mr.
Nearing asked for controls of ongoing rent increases. He felt any
increases in rent should not go above the price reflected in the
consumer price index.
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26th Avenue, Commission on the Rights of
testimony distributed suggested the notice
to vacate be 12 months. During the notice time, eviction could only
be for cause or rental increase could not exceed the percentage
increase of the Portland Consumer Price Index. The notice to vacate
should not be applicable unless comparable housing is available.
In the case of moving trauma, the above notice to evict would not be
applicable for any tenant as long as the tenant's doctor certifies
that the anticipated move would be traumatic for the tenant. The
stipulations on eviction and rental increase would still apply.
William A. Babcock, 3580 Bardell, Chairman, Citizens Advisory Committee
on Aging to Lane Council of Governments, said they support a policy
that would give six months notice and would require that assistance be
rendered to find comparable housing and the developer would pay for
the majority of the moving expenses to those who are displaced. If
life tenancy was not possible, they would urge measures to protect
seniors from having to move from place to place.
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Steve Ski ton, 1185 McLean, Lane Count Le al Aid, (proposals distri-
buted advocated a provision that would protect low-income, elderly,
and handicapped renters by making a precondition to displacement that
two comparable rentals are offered to them. He advocated protection
against displacement for the three subgroups with life tenancy. He
pointed out that Oakland and Sacramento have such a provision. Those
cities, he said, felt it was necessary to protect their citizens.
Mark Lindberg, 1750 Olive, complimented the work of the task force.
He was concerned for the seniors who sold their homes a few years ago
for $30,000 and could not buy their apartment. These people should
be protected. They deserved life tenancy. Seniors still in homes
can form judgments on better information, but those people in this
situation have to be protected. He suggested they establish a IIgrand-
father clausell in the ordinance for those residents of apartments who
have been there for two and one-half years or more. Otherwise, he
felt lives would be jeopardized by the trauma of moving.
Councilor Smith filled in for the Mayor who had to leave.
Public hearing was closed.
Mr. Croteau added that the moratorium will be over June 2 and the attorneys have
been holding off drafting the ordinance until they receive clarification from
the council.
Council members agreed to hold over condominium conversion discussion
until next Wednesday, April 23, 1980, and start that meeting at
11 :30 a.m.
Meeting adjourned until April 23, 1980.
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Charles T. Henry ~--
City Manager
(Beth Conant, minutes recorder)
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