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HomeMy WebLinkAbout01/21/1981 Meeting - e - \ M I NUT E S Eugene City Council City Council Chamber January 21, 1981 11:30 a.m. COUNCILORS PRESENT: Gretchen Miller, Betty Smith, Mark Lindberg, D. W. Hamel, Eric Haws, Cynthia Woot~n, and Emily Schue. Councilor Brian Obie was absent. Adjourned meeting of the City Council of the City of Eugene, Oregon, was called to order by His Honor Mayor Gus Keller. I. ITEMS FROM MAYOR & COUNCIL, APPOINTMENTS, ANNOUNCEMENTS, AGENDA ADJUSTMENTS A. Freedom of Hostages From Iran Councilor Wooten noted that she is grateful that the hostages have been freed. The council went on record in support of the hostage release. B. Metropolitan Cable TV/Translator Commission Mr. Hamel stated that the Metropolitan Cable TV/Translator Commission received a rate increase pr.oposal last Friday from Teleprompter. The commission agreed to request permission of each of the participating jurisdictions to retain former commission staff person, Shirley Swenson, to review the rate increase and make recommendations. She had been the staff person behind the Teleprompter contract. The City's share for these services would not exceed $1,100. The revenue from the franchise last year was $86,000. He indicated that he would like to request the council to authorize the staff to expend these funds from the contingency fund. Mr. Hamel moved, seconded by Ms. Smith, to retain Shirley Swenson to review the proposed Teleprompter rate increase and make recom- mendations. Ms. Miller asked if there are problems with the contingency. Keith Martin, City Attorney, responded that this was handled by resolution of the council so that resolution would be presented to them at the next meeting. Mayor Keller asked staff to respond. Ms. Miller stated that she had not been following this item closely, but hopes the commission will look at public access and consider that as well. Mr. Hamel noted that it would either be the whole program or there would be no program. Mr. Lindberg requested a report on public access television. Mr. Gleason indicated that this report would be forthcoming. Mr. Martin stated that the resolution and franchise ordinance were negotiated MINUTES--Eugene City Council January 21, 1981 Page 1 e two years ago and the authority of the council is defined. The commission sets the rates and conditions for the franchise; they are only asking now for the ability to expend the funds. Roll call vote; motion carried unanimously. C. Appointment Mr. Gleason stated that the Budget Committee is recommending the appointment of Michael Hartwick, 2260 Elysium, and Harold Lannom, 310 East 14th, as their representatives to serve on the Room Tax Subcommittee for 1981. Mayor Keller noted approval of these recommendations. Ms. Miller moved, seconded by Ms. Smith, to appoint Michael Hartwick and Harold Lannom to serve on the Room Tax Subcommittee from the Budget Committee for 1981. Roll call vote; motion carried unanimously. D. Announcements e Mr. Gleason announced the following meetings: Animal Control Subcommittee, 10 a.m., January 22, in the Mayor's Office; Eugene Performing Arts Commission, January 21, 7:30 p.m., in the McNutt Room; Room Tax Subcommittee, 7:30 p.m., January 22, in the McNutt Room. The deadline for the ticket sales for the testimonial dinner for Charles T. Henry is tommorrow and those tickets must be purchased in advance. Mayor Keller noted that the public is invited to the dinner to be held January 27 in the Valley River Inn. There will be a no-host social at 6:30 p.m. followed by dinner at 7:30. The Boxing Commission will meet at 4 p.m., Thursday, January 22, in Room 102. Ms. Wooten noted that last year there was an item in the budget that was to be used for proceeds from the percentage of the gate from boxing and wrestling matches and she would like to know if that money can be used for emergency housing, since last year it was allocated to the West Eugene Boxing Club. She would like a report brought back. Keith Martin, City Attorney, stated that six percent of the gate from all boxing and wrestling matches is designated to be used for civic affairs for education, recreation, and charitable purposes. Ms. Wooten stated that she has a concern for emergency shelter and would like to have this idea explored to see if these funds can be used in that manner. Mr. Gleason stated that he would look at the allocations and expenditures and that a report will be brought back. E. Windows In Hilton Hotel Ms. Miller stated that she would like to dispute the decision Hilton Hotel to use single-glazed windows in their facility. staff to research this and bring a report back on the impacts fire safety if this is allowed. allowing the She would like on energy and e MINUTES--Eugene City Council January 21, 1981 Page 2 ~ II. ROUTINE ITEMS FOR COUNCIL APPROVAL A. Segregation of Assessment Located at the Northwest Corner of 11th Avenue and Stewart Road; applicant: M.J.L. Properties by Robert Richmond (SE 80-14) Ms. Miller moved, seconded by Ms. Smith, to approve the segre- gation of assessment as noted. Roll call vote; motion carried unanimously. B. Check Authorization (resolution distributed) Res. No. 3460--A resolution designating those authorized to sign checks on behalf of the City of Eugene for checking accounts in the Citizens Bank of Oregon, First National Bank of Oreon, and United States National Bank of Oregon; desig- nating those authorized to sign grant applications, bonds, etc., on behalf of the City; and repealing Resolution No. 3298. e Ms. Miller moved, seconded by Ms. Smith, to adopt the resolution. Roll call vote; motion carried unanimously. C. Authorizing Safe Deposit Box Rental Agreement (resolution distributed) Res. No. 3461--A resolution authorizing safe deposit box rental agreement and repealing Resolution No. 3316. Ms. Miller moved, seconded by Ms. Smith, to adopt the resolution. Roll call vote; motion carried unanimously. III. ANNUAL FINANCIAL REPORT FOR FISCAL YEAR ENDED JUNE 30, 1980 (memo, resolution, and entire report distributed) Mr. Gleason stated that David Dietzler is present to represent Peat, Marwick Mitchell & Co. and to answer questions regarding the financial report. Ms. Wooten asked Mr. Dietzler how he would work with staff to correct the current situation. Mr. Dietzler stated that the resolution will answer that question. Ms. Wooten asked for clarification. Mr. Dietzler said this is to make information available so that staff will know if they are still within their budget. This is part of an ongoing process for improvement. Ms. Wooten noted that Bill McGuire, Management Services, had done an orientation for Councilor Lindberg and her. She asked if this would be an appropriate time to review the work plan. Mr. McGuire stated that he had met with Mr. Gleason yesterday to discuss and develop plans to accelerate the work plan to ensure that errors occur less frequently. Ms. Wooten noted that the work plan would have date entries and staff could see within ten days what the budget status is. e MINUTES--Eugene City Council January 21, 1981 Page 3 e ~ e e Mr. Gleason stated that they will have to develop a program for a chart of accounts which will be about a six- to eight-month task, so that balances can be compared each month. This will not be available for about another six months. They will have to change the resource allocation to accelerate the plan. It can be done in approximately one year. It is high priority but is a very involved process. Ms. Wooten noted that she is glad to see it moving ahead. She asked what assurances there are that over-expenditures will not occur until this program is on-line. Mr. Gleason responded that this can be kept under control. The concern really is on the revenue side since they will be aware of expenditures now in the budget. He is very aware that this is a potential problem and he is comfortable that this will be weighed carefully. Mr. Lindberg noted that a year from now the City might have a few more bud- getary problems, but two years from now he assumes this program will be on-line. Mr. Gleason stated that by January 1982, enough management finan- cial data should be available so this does not occur again. In the mean- time, staff will take care of this by doing extra work to make sure it will not happen again. Mayor Keller asked in page 2 of the introductory section, regarding tax cO,l- lections, if the current tax collection rate of 85.3 percent is showing a trend and if that will cause problems for the City. Mr. Dietzler asked if that was the letter from the Finance Director. Mayor Keller responded that it was. Mr. Dietzler stated that this was not a letter from him but rather one from Bill McGuire. Mayor Keller asked him for his reaction to that letter and asked if that perspective is a good one to have. Mr. Dietzler responded that it is and that it is why this project being discussed is so very important. There is a great need to have good financial information on a timely basis. When information is not reported on a timely basis, the risk of getting into trouble is much higher. His recommendation would be to work hard on this project. Mr. Gleason asked how this year's revenues are perceived. Mr. McGuire stated that property tax collections will be greatly improved over last year. He noted that several people came up against the three-year limit last year and this year they will have to start making payments. Ms. Wooten asked why staff feels the tax collection rate will be better this year. Mr. Gleason stated that there are allowances as to when taxes can be paid with eight percent interest. After three years, the process of foreclosure starts and people start making their payments. The payment schedule should improve. This will not be within two percent, but within five percent. Mr. Dietzler interjected that the last tax payments are due in May this year rather than August. Mayor Keller asked Mr. McGuire if on page 3 of his letter the mention of col- lecting nothing is from a serial levy from a bond. Mr. McGuire responded that it is. Mayor Keller asked if Mr. McGuire is comfortable with the outstanding percentage of bonded indebtedness. Mr. McGuire responded that he is. The City is a long way from being near any problems with indebtedness because the MINUTES--Eugene City Council January 21, 1981 Page 4 e e e asset values are much greater than the indebtedness. Mr. Gleason asked what the ratio of debt to assessed valuations would be. Mr. McGuire stated that three percent is the legal limitation. Mayor Keller expressed some concern about the bond interest money being used for the Performing Arts Center. Mr. McGuire stated that interest on these bonds is being used, but in all funds with idle cash interest, income was very strong and continues to be so. Res. No. 3462--A resolution setting forth measures to correct defi- ciencies disclosed in the 1980 audit report and stating the period of time estimated for completion thereof. Ms. Miller moved, seconded by Ms. Smith, to adopt the resolu- tion. Roll call vote; motion carried unanimously. IV. FINANCING PLAN FOR THE COMMUNITY CONFERENCE CENTER (memo distributed) Mr. Gleason introduced Jeff Tashman, HCC, to provide information. Mr. Tashman stated that the Eugene Renewal Agency is committed to developing the Eugene Community Conference Center. The agency explored three options for financing--tax allocation bonds, general obligation bonds, and certificates of participation--and they have evaluated these in terms of low interest rates and timeliness. The conference center will cost approximately $4.5 million and in addition to the proposed plan, ERA is seeking funds from the United States Economic Development Administration. They have submitted a grant application for $1.5 million. Although this plans calls for the City to pledge its general -fund, it is anticipated that debt service would be met by the Renewal Agency using tax allocation funds. This agreement would be formally stated in an intergovernmental agreement; the City would not be liable for debt service except in a shortfall of tax allocation funds. Staff believes that only a severe property tax limitation measure would cause such a shortfall. ERA will convey the building site and all future improvements--the Conference Center--to a trustee, in this case a bank; the trustee then causes the center to be built by designating ERA to construct the building and by raising funds for construc- tion by selling certificates of participation to an underwriter. These allow the purchaser to earn a portion of the revenues received by the trustee from the City/ERA. The trustee leases the site of the Conference Center back to the City and the rent paid by the City/ERA provides the debt service on the certificates. The lease agreement includes an agreement that the City will purchase the site and the center for a nominal fee at the expiration of the lease term, probably 20 years. The Renewal Agency agrees to annually reimburse the City for rent it pays and ERA would commit all tax allocation revenues which remain after the agency has met its existing outstanding debt service obligations to meet maturing lease rentals to the City. The certificates of participation would provide for lower interest rates as well as being more feasible. The City Attorney's Office and the Finance Department have conceptually approved this proposal and they are asking the council for a similar approval. Later in the spring, staff will bring back for approval the documents to execute the legal instruments for implementation of the financing. MINUTES--Eugene City Council January 21, 1981 Page 5 e e e He introduced Howard Rankin of the Renewal Agency's Bond Counsel to provide additional information. Mr. Rankin stated this is not a new, nor unusual, financing method in Oregon. Multnomah County School District #1 used this in 1977 and it has also been used to finance a hospital in eastern Oregon. The plan would require ERA to convey the legal title to the bank trustee who would then proceed to approve and designate ERA to construct the building as Mr. Tashman had outlined. The described agreement is necessary to carry out this plan. The primary risk for the City would be within its annual local budget. The chief advantage of the plan is its lower interest cost. The owners of such certificates of participa- tion would look to the stability of the City as rationale for purchase of the certificates. The trustee will hold legal title and ERA must reimburse the City for the rent. Mr. Haws arrived at the meeting. Mr. Tashman introduced Jim Gibbs, from the San Francisco office of E. F. Hutton, financial consultants, to provide additional information. Mr. Gibbs stated that the total amount of money to be spent over 20 years would be equal to or less than general obligation financing, which, in turn, is less expensive than tax allocation financing. They are estimating at this time that they can sell the certificates at 9-1/4 percent, and currently tax allocation bonds are being sold at 10 percent. The procedure in marketing is reasonably fast and they could get a schedule for funding with this proposal. Mr. Lindberg stated there are certain assumptions to be made--this is a good market to sell the certificates and City reserve funds would generate revenue to cover expenses. Mr. Gibbs stated that statements he had made were based on current rates. With the new administration, perhaps things will settle down. This is an excellent form of security for financing this project and they are confident they can market it. Ms. Wooten asked how, if ERA takes on the responsibility for this project, it will be included with the long-term project planned for revitalization. Mr. Tashman responded that this has been planned since 1968 and it has been in their plans since that time. Ms. Wooten asked if this would undercut down- town housing. Mr. Tashman stated that it would not. Ms. Wooten asked for clarification of the City's responsibility and if this project would appear in this year's budget. Mr. Gleason stated that it will not show in income, but would show as a capital improvement project, but that he would not antici- pate that the City would have any problems because the tax-increment fund projections are conservative. If tax allocation funds fall short, they would have to transfer Tier 1 moneys to pay for the project. Ms. Wooten asked if the City's ability to service debt through the general fund would be the basis for sales of the certificates. Mr. Gleason responded that the City is in the chain of security and if for some reason the debt would not be paid, the City MINUTES--Eugene City Council January 21, 1981 Page 6 - e e would do so. Mr. Rankin stated that this type of financing requires a reserve fund to serve for one fiscal year. This would help for one year to meet the obligation. Ms. Wooten asked if the sale of the certificates would be charged against the City's overall bonding capacity. Mr. Rankin responded that in their opinion it would not be charged against the general obligation limitation because no ad valorem taxes would be levied to meet the debt service. Mr. Gleason stated that the obligation is against the general fund, not against'the assessed taxes. Mr. Lindberg noted that even if this were charged against the bonding capacity, that would not limit other projects. Mr. Rankin stated the City can deduct issued utility and water bonds and bancrofting and then have the three-percent limitation begin after that. Mr. Lindberg stated that the City now has just-over one percent and asked how this would affect that. Mr. Gleason stated that it would be insignificant and less than two percent total. Mr. Lindberg asked if there is a possibility that this could go to the ballot as part of the Tier 2 portion of the budget. Mr. Gleason stated that the City is obligated only if the tax allocation financing does not cover the debt service on the bond. In the fall, they will be obligated to place the dollars into that revenue account for 12 months. They would have to decide then what to do about Tier 2. The tax allocation would probably never go to zero, and these are very conservative figures. Mr. Lindberg stated that he feels this is a very appropriate way of doing this financing. The issue is the extent to which the council wants ERA to continue along this kind of work and whether the council has confidence in them to continue. If the City does not enter into this agreement, it will strap their situation while they are being charged to accomplish a lot without many resources. Ms. Smith asked if adopting this proposal would have an effect on the general fund this year. Mr. Gleason stated that the contract will not affect the resource allocation within the budget process. Ms. Smith asked what relationship there will be with ERA if the council approves this proposal. Mr. Tashman stated that the agency would structure specific financing plans this spring, by which time they would know what the costs will be and they will come back later for final approval from the council. Ms. Smith encouraged staff to keep the council as involved as possible along the way. Mr. Gleason responded that this would occur. There will be two more opportunities to make decisions after today. Ms. Schue complimented ERA and HCC staff for bringing this proposal to the council. The proposal has financing advantages. She is comfortable with it and with pledging the security of the general fund since it seems to be a good way to do this project, particularly with the safeguards that are written into the proposal. Ms. Wooten stated that she is in favor of the concept, but she has many ques- tions and would like to have them answered. Under the trusteeship arrange- ment, she wondered who would be responsible for construction oversight and MINUTES--Eugene City Council January 21, 1981 Page 7 e e e who will manage the facility. Mr. Tashman responded that ERA has an agree- ment with Ed Smith to oversee the construction. They will have a final con- struction bid before going into construction and this will not be a phased contract. The center will be operated by Dick Reynolds in conjunction with the Performing Arts Center. Mr. Gleason noticed that fast-track construc- tion is very different from phased project bids. They do not know what the bids will be yet, but the bid document will determine the cost of the project. Mayor Keller noted that he agrees with the method of financing and appreciates the contribution that has been made. Ms. Miller moved, seconded by Ms. Smith, to approve in concept the community conference center financing plan as outlined in staff memo dated January 15, 1981, and to direct the Eugene Renewal Agency to arrange for the implementation of the plan. Roll call vote; motion carried unanimously. v. REQUEST FOR COUNTY CONSIDERATION OF TREE-CUTTING REGULATIONS COMPATIBLE WITH THE CITY OF EUGENE (memo distributed) Mr. Gleason introduced Jim Croteau, Planning. Mr. Croteau stated that late last year, the Planning Commission and the council considered an annexation to the City in the South Hills area. During the annexation process, when this land was still under control of the County, a number of property owners logged their land in a manner which could not happen after annexation. With the adoption of the South Hills Study and the Metropoli- tan Plan, there is increased recognition of the South Hills beauty, and recog- nition of the potential for residential development occurred. Rather than this area now being a portion of rural Lane County, it is going to be used for urban purposes. He read the applicable excerpts from the Metropolitan Plan regarding recognition of natural resources. The Planning Commission has requested that ,the council request that Lane County Commissioners consider enacting a tree- cutting ordinance similar to the City's for that area in the South Hills that will ultimately become part of the City. This would be from the city limits to the urban growth boundary as defined in the Metropolitan Area General Plan. There is interest on the part of some of the board of commissioners to move ahead with this action. This problem came up in one annexation, but it is better to act now rather than to wait and to react after the trees are logged. Ms. Smith asked if much property would be affected. Mr. Croteau responded that a considerable wooded area would be affected. Some of this is property the City has purchased for park land. Ms. Smith noted that she would like to support this suggestion and expressed hope that the commissioners would share the City's concern and support it also. Mr. Gleason stated that staff feels this would have a minimal impact on merchandisable timber. They are not talking about large stands of trees. Mr. Croteau affirmed that remark. MINUTES--Eugene City Council January 21, 1981 Page 8 e, Ms. Schue stated that she supports staff efforts. The Owl Road situation is an area where there are not large amounts of timber. She would urge that the council act on this diplomatically. Ms. Miller stated that this question was discussed during the Metropolitan Plan Update and those who participated in that update process from the County were aware of the City's concerns. This is not a new issue. This could be presented in a positive way and it is not a crisis situation. The language used in the Metropolitan Plan could be used to help ,maintain the land quality. Mr. Lindberg noted that he agrees with the concept and asked if that is how it would be approved. Mayor Keller noted that the motion is to draft a letter. Mr. Lindberg stated that he agrees with the previous comments regarding the positive thrust. He is concerned about the wording in the memo where it mentions the area in the South Hills that would ultimately become part of the City. Mr. Gleason assured him that they would approach this issue care- fully and make it an affirmative proposal. That is why they are sending a letter to the board of commissioners rather than a document with which they wish to have the County agree. Mayor Keller noted that Roy Johnson wished to address the council. Council consensus was to allow him to speak. e Roy O. Johnson, Ph 0, stated that he is President of the Southeast Firs Neigh- borhood Organization and this land is in an area which would become part of that neighborhood association after annexation. Their neighborhood organiza- tion is in favor of this recommendation for conservation of the watershed area, as well as to preserve the beauty. Ms. Miller moved, seconded by Ms. Smith, to direct staff to draft a letter requesting that the Lane County Board of Com- missioners consider adopting a tree-cutting ordinance similar to Eugene's in the area between the existing city limits and the adopted Urban Growth Boundary in the South Hills area. Roll call vote; motion carried unanimously. Mr. Haws indicated that he would be out of town next Wednesday. The meeting was adjourned to January 26, 1981. e ~:4,~lY- SU~bm.~!.!eda... '\..... .......~.'~, /" "...,. .~ ('~~6~7 . , ~ Micheal D. Gleason City Manager (Recorded by Lynda Nelson) MDG:LN:sba/CM7b9 MINUTES--Eugene City Council January 21, 1981 Page 9