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HomeMy WebLinkAbout07/13/1981 Meeting - e M I NUT E S Eugene City Council Dinner Meeting Tree House Restaurant July 13, 1981 5 p.m. PRESENT: Mayor Gus Keller, Councilors Gretchen Miller, Emily Schue, Bill Hamel, Mark Lindberg, Cynthia Wooten, Betty Smith, Brian Obie, and Eric Haws (6-7 p.m.); Micheal Gleason, City Manager; Dave Whitlow, Assistant City Manager; Pat Lynch, Council Administrator; Carol Baker, Community Relations Director; Joe Miani, KPNW Radio; Susan Pack and Don Bishoff, Eugene Register-Guard. I. ROOM TAX TASK FORCE REPORT Ms. Smith said the room tax was passed several years ago with 40 percent to provide funding for the Performing Arts Center, 25 percent for the Convention and Tourism Bureau, 25 percent for cultural activities in the community, and 10 percent for facilities. She said in the beginning a Room Tax Committee was responsible for allocating the money for all the cultural and artistic activities e in the community; however, the State contracting laws were changed and the Parks and Recreation Department assumed the responsibility for contracting with organizations in the community. She said in the past two years the Room Tax Committee had funded other events, such as Eugene Summer, because they felt they were important. Ms. Smith said that the committee, when it realized what the operating deficit of the Performing Arts Center would be, was supporting an increase in the amount of money available for the center. She said the executive report on convention and tourism in Eugene indicated the importance of Eugene as a destination point and the need for greater funding of the Convention Bureau. Ms. Smith said that because of these concerns and needs, the Room Tax Committee appointed a task force comprised of three members of the Room Tax Committee, three members from the Performing Arts Commission, and one member from the Eugene Action Forum. She said the task force reviewed the moneys generated by the present room tax rate which currently were around $300,000 annually. She said the Mayor's proposed increase of two percent in the room tax caused a great deal of concern and the task force considered what other options might be available for increased revenues. Ms. Smith said tonight's report was informational only and had not been reviewed by the Room Tax Committee. She said the committee would review the report and submit recommendations to the Budget Committee, which would in turn make final recommendations to the council. - - MINUTES--Eugene City Council July 13, 1981 Page 1 e Ms. Smith said the task force had looked at several sources of additonal revenue, including a gas tax; however, it was felt that gas tax funds should be used directly for improvements of streets and roads. She said the task force also hoped for revenue from the increased cigarette tax. However, the State Legislature had decided that money would go for property tax relief. She said there were also some members of the task force who favored placing a tax on the rooms rented by the University during the summer. Ms. Smith said the University was supportive of contributing to the City's cultural fund, but it might not be supportive of doing so in the form of a room tax. Ms. Smith outlined the alternatives recommended by the task force. The first was a tax on amusement devices, such as pinball machines and video games, because the Federal tax on those devices would end soon. She said the current $250-per-unit tax would therefore not be an increase for the affected companies but merely a revenue transfer from Federal to City government. She said this revenue source would generate over $100,000 annually. She said all the proposals had been reviewed and cleared by the City's finance and legal departments. Ms. Smith said the second alternative was a patron user fee on tickets sold at the Performing Arts Center. She said the proposed fee would be 25 cents per ticket and in this way those using the facility would help pay for its upkeep and maintenance. Mr. Obie asked what the average ticket price would be. Mr. Gleason said that figure was not known, only an estimate of the number of tickets which would be sold, and at 25 cents a ticket the annual revenue generat- ed would be over $100,000. He said ticket prices would vary considerably, depending on the type of event. e Ms. Smith said the third alternative was a gross restaurant revenue tax excluding liquor sales. She said the tax recommended would be one-half of one percent and it was estimated to generate $300,000 annually. Ms. Smith said the total annual revenues from the current room tax and the proposed additional sources would be around $800,000. She said this amount would not completely meet all the needs. She said the Eugene Arts Foundation was in the midst of its campaign and had obligated some of its funds for opera- tion of the Performing Arts Center as well as for subsidizing some programs of local groups at the center. Ms. Smith said there had been some preliminary discussion on assembling a cultural plan for the City. Ms. Wooten said-the proposed cultural plan would coordinate those cultural activities funded by public dollars and establish priorities for funding. She said as a member of the Room Tax Task Force she had several concerns. She said it would be unfortunate to depend too heavily upon the Eugene Arts Foundation for a major share of the funding of local groups. She said revenues from private donors as well as from taxes would fluctuate with the economy. Regarding the proposed restaurant gross revenue tax, Ms. Smith said part of it would go for increased funding and an accelerated program for the Convention Bureau which would directly benefit restaurants. Ms. Wooten said the motel/hotel e MINUTES--Eugene City Council July 13, 1981 Page 2 . e owners were objecting strenuously to an increase in the room tax. However, she could find no evidence that a six or seven percent rate would turn away business. She said she would not be opposed to an increase of one percent in the room tax. Ms. Smith said the council would have that prerogative. She said the task force and Room Tax Committee were trying to present to the City Council a report that reflected strong concensus in support of the proposals. Ms. Smith said part of the concern regarding an increase in the room tax was because of the County also considering a room tax increase. She said the full committee report would probably come before the council in six to eight weeks. She said no tax would be popular; however, the council has long recognized the importance of funding cultural activities. Mr. Gleason said there was no way to avoid controversy when discussing new or increased taxes. He said the council was involved in a major economic diversi- fication activity regarding the Performing Arts Center and the figures presented in Ms. Smith's memorandum were only the best estimates. He said there was no way to know the exact costs but he was confident it would payoff in terms of the whole economy. He said the council would have to consider all the recommen- dations, determine what revenues were needed, and come to some consensus on how the revenues would be raised. He said a decision was needed by September or October. He said there was no way the general fund could support the Performing Arts Center without a major overhaul. Ms. Smith said her vision of Eugene Summer in the future was for a coordinated e promotional program working with the Convention Bureau to put together a strong package to attract people to Eugene. She said an increase of $100,000 in the Convention Bureau's budget would do a great deal in terms of additional staff and additional promotion. She said compared to other major cities in the Northwest, Eugene's Convention Bureau was seriously underfunded. Mr. Obie said the proposals would affect a specific segment of the economy and he would not be opposed to that as long as that segment was receiving value in return. He said cultural activities were part of economic diversification and he would like the council to consider them in those terms. He said if the council did that he felt the proposals would seem more reasonable to those affected. He said the council would need to be very sensitive to the feelings of those who were paying or collecting the taxes so that they would feel they were receiving value in return. Mr. Obie said he would like the council to consider a sliding scale on the patron user fee on tickets. He said he would also favor applying the fee to all theaters in town, including movie theaters. He said a room tax increase and a half-percent restaurant tax could be accepted by those affected if they felt it was reasonable. He said the council had also discussed a business license tax. Ms. Smith said it was her understanding from discussions with the Finance Division that businesses were already licensed. Mr. Obie said the only licenses were for taverns and sign companies. Ms. Smith said the idea could be pursued further with the Finance Division. She said the task force had discussed patron e MINUTES--Eugene City Council July 13, 1981 Page 3 .. . e fees for movie theaters and it was felt that would be very unpopular. Ms. Wooten said she was concerned about adding fees to ticket prices for use of the small hall in the Performing Arts Center by local groups. She said she had also proposed to the task force that a ticket user fee be placed on all events in the city with attendances of over 2,000, including events at the University. She said she agreed the Eugene/Springfield Convention Bureau needed additional funding; however, she was concerned whether the funding would support conferences in the City Center or if it would also involve those at the Convention Center at the Fairgrounds. Ms. Smith said support for the City's Conference Center would be a separate proposal, and that the room tax money from the Hilton Hotel would be designated specifically for the City's Conference Center. Mr. Obie said the goal was not to build a conference center but to provide jobs and funding for local cultural activities. Ms. Wooten agreed but poi nted out the projected operating deficit of the Conference Center and said the more that deficit could be reduced, the more funds would be available for other cultural activities. Mr. Gleason said further discussions with Lane County regarding alternatives for support of both conference centers would be appropriate. Ms. Schue asked if there were any current admission taxes at the State or Federal level. She felt the task force should explore the possibility of such a tax for the City. Mayor Keller asked if Portland had an amusement tax. Ms. Smith said Portland charged a patron fee for their performing arts center but she didn't know if it applied to any other facility. Ms. Miller said she felt all the proposals were feasible and it was important to e keep the focus on economic diversification. She said for the most part she did not favor earmarked taxes and believed they had disadvantages as a system of taxation; however, this may be what is needed to support these activities. She suggested the task force consider some form of sliding scale on the restaurant tax for smaller restaurants or an exemption for those which do not sell liquor. Mr. Gleason commented that one-half of one percent on a $30 meal was only 15 cents, so the impact on smaller restaurants may not be great. Mr. Lindberg was concerned about accounting costs for the smaller restaurants. Ms. Smith said information provided indicated this would not be an unmanagable task. She said for purposes of simplicity, a one percent tax might be better. Mr. Hamel asked about the legal ramifications of earmarking the room tax from the Hilton Hotel for the Conference Center. Ms. Smith said the City's portion of the room tax was already so designated as part of the contract agreement. Mayor Keller said an increase in the room tax was a viable alternative; however, the hotels and motels were tired of being singled out for support of these activities. He agreed it was time to make a decision on the alternatives. He asked about discussions with the Convention Bureau. Ms. Smith said the Convention Bureau wished the cities of Eugene and Springfield to establish tourism as a high priority in an economic development program. Mayor Ke 11 er also asked about discussions with Lane County. Ms. Smith said the task force had not met with the County although Dick Reynolds had met with George Morgan, Lane County General Administrator. Mr. Gleason said Mr. Reynolds had been working with the Convention Bureau, the Fair Board, the County Commissioners, -- and hotel-motel owners in promoting Eugene as a destination point. MINUTES--Eugene City Council July 13, 1981 Page 4 . , c e Ms. Smith said the Convention Bureau needed an annual budget allocation that it could rely upon and one which did not depend upon passage of Eugene and Springfield budgets. She said all the comments at this meeting would be brought to the task force for its review. II. REPORTS FROM BOARDS AND COMMISSIONS Mr. Lindberg reported that the Renewal Plan Advisory Committee decided at its last meeting to recommend no expansion of the current downtown renewal project. He said the committee was considering creation of one or more additional renewal districts and the two areas under consideration were the 5th Street Special District and the renewal agency property on Broadway between Lincoln and Charnelton. Mr. Obie commented that the Eugene Renewal Agency would be having a retreat soon and the City Council would be invited to lunch so comments on the direction of the renewal agency could be shared. Ms. Smith reported on the Metropolitan Wastewater Management Commission. She said the possibility of any Federal funding was unknown and the commission was pursuing every possible option for funding. She said an additional $50 million was needed to complete the plant. Ms. Wooten commented that any help at the Federal level would come from Senate action because the House had no funds in its budget recommendations for wastewater treatment plants. Ms. Smith said even if $2.4 billion were allocated at the Federal level, the portion for Oregon would never meet the needs. Mr. e Gleason said if the allocation were earmarked just for plants in progress, it would be an 8-year program. He said the Federal administration clearly wants out of this sort of business. Ms. Smith said the commission was not sitting around waiting to see what would happen but was working hard to generate funds from other sources. Mr. Lindberg said perhaps the entire project would have to be scaled down if no funding can be found. Ms. Smith agreed the commission had to come to grips with that possibility. Mr. Obie asked if the City had any possibility for suing to recover money promised by previous administrations and congresses. Ms. Smith said the costs involved in any kind of court action were prohibitive. Mr. Gleason said that furthermore the Federal government on a civil issue of this nature would have to agree to allow the City to file suit, and it certainly would not do that in this case. He said, in addition, there was no entitlement to past appropriations, so there is essentially nothing to sue about. He said Congress appropriates funds from time to time, and that a present congress was not bound by the appropriation decisions of previous congresses. He said there was much uncertainty as to what congress is going to do this year, and that without this information it was difficult for the commission to decide whether to consider a scaled-down project or not. e MINUTES--Eugene City Council July 13, 1981 Page 5 - .. " i Ms. Wooten reported that the Economic Development Committee was beginning to examine the possible use of revenue bonds and was discussing assistance to small e businesses. She said the committee recommended to the council that it encourage the development of an economic development coordinating body through L-COG. She said the purpose of this body would be principally for dissemination of information on the activities of the various economic development committees in the area. Mr. Gleason said the council had proposed to hold a one-day meeting on economic development and the date for that meeting needed to be set. He said a staff report on coordination could be presented and thoroughly discussed at that session. After considerable discussion, it was decided to schedule the meeting for August 12, beginning at 7:30 a.m. Regarding a meeting to interview applicants and make appointments to City boards and commissions, the council decided to schedule that meeting on July 22, at 7 : 30 a . m . There being no further business, the meeting was adjourned. (Joyce Edwards, Minutes Recorder) JE:cl/CM8a3 ~~ e -- MINUTES--Eugene City Council July 13, 1981 Page 6