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HomeMy WebLinkAbout08/12/1981 Meeting (2) ." 'p. ..- M I NUT E S e Eugene City Council Work Session Valley River Inn August 12, 1981 7:30 a.m. PRESENT: Mayor Gus Keller, Mark Lindberg, Brian Obie, Emily Schue, Betty Smith, Gretchen Miller, D. W. Hamel, Cynthia Wooten, councilors; Micheal Gleason, City Manager; David Whitlow, Assistant City Manager; Pat Lynch, Council Assistant; Jim Farah, Planning Department. 1. PRESENTATION OF EUGENE ECONOMIC DIVERSIFICATION PROGRAM--MR. GLEASON In his opening remarks, Mr. Gleason referred to the Eugene Economic Diversifi- cation Program, a proposal he presented to the Mayor and City Council, dated August 7, 1981. He said he wished to explain how the material was developed, define the problem, and describe the solution. He felt it was important to move ahead with the solutions concurrently. What the staff was proposing was really implementation of the General Plan. Solutions to spurring economic development can also be a way of holding the lid on development. It is impor- tant to remember that the City is just one player. He felt that the proposed e program will not have short-range impacts, but that change could result over a long period of time. A. Definition of the Problem Mr. Gleason reminded the council they had requested an action program from the staff. He had talked to various committees, commissions, and people involved in developing this proposal. He turned to the chart on population growth 1900 to 1980. He pointed out that after the 1940s, the curve was 2.5-percent rate of compounded growth. He observed cycles which resulted in the line being slightly flatter. This trend line matches the assumptions in the General Plan and housing development. He did not anticipate that the City could be respon- sible for full employment, and pointed out that it was the private sector's respons i b il ity. Mr. Gleason explained the results of the David Birch study which showed that in the West, firms with 20 people or less employed 60 percent of the pbpulation. He noted that major employment will come from firms already in the Eugene metro area. Twenty-five percent of the employment could come from industrial siting. It is a "prime on the pump." A firm of 1,000 employees cannot have dramatic impact on long-range employment figures. Graph B of the diversification program "percent of emplO)meht by sector," was called to the attention of the council. Manufacturing, education, and govern- ment were a decreas i ng percent of tot a 1 Lane County ernp 1 Dyment. Wholesaling, e manufacturing, and services have been increasing in the period 1974 to 1978. MINUTES--Eugene City Council August 12, 1981 Page 1 . ;;.." e Mr. Gleason explained that unemployment in the timber products industry in the outlying towns hits Eugene's service product base economy in a ripple effect. Two solutions are possible: 1) to make Eugene a destination point with the Performing Arts Center; and 2) to convince the County to diversify the industry of the outlying cities and get them to grow faster than Eugene in a diversified manner. Mr. Gleason superimposed the United States housing starts on the Lane County unemployment rate. On both graphs, there were down turns with changes in Lane County..ernpl.OYri1etl'tlagging slightly behind changes in US housing starts. He showed the United States unemployment rate, which is not as dependent on the timber industry and is not as volatile as the Lane County unemployment rate. He pointed out the most diversified economy is the United States economy. The most Eugene could hope for would be to follow the trend line of the United States. The City of Portland is very diversified and their trend line looks like the United States trend line. The unemployment rate is the same. There is political volatility in the "boom and bust" cycles. When unemployment is high, citizens want economic activity stopped, citing pollution, noise, etc. When the unemployment cycle is low, people want economic activity. These cycles put the execution of the General Plan in a volatile situation. What staff wants to do is to push the City into a diversified economy but also to have a tool that is useful for matching the capacity of the City to adopt the General Plan so the land is available for industrial expansion in the down cycles and so they can control growth on the up cycles without saying you are IIpro" or lIantill growth. There could be a time that the council will direct staff to pull back on the reins, remembering that the impact is in the long run. Council should not expect major impact in the next two years. e B. What is the Solution? Mr. Gleason explained the pros and cons of two possible extreme staffing solu- tions. One was to form a Mayor's task force, the other was to create a depart- ment of economic development. Mr. Gleason said staff had chosen a solution in between the two extremes called a matrix management. By taking the group of existing people and giving them separate tasks, the existing staff is being used. He recommended development of an executive task force consisting of the departments heads key to the development issue and growth management: Charles Kupper, HCC; Public Works; Richard Reynolds, Performing Arts; CETA programming; Gary Long, Staff Services; John Porter, Planning. Mr. Gleason would chair the task team and would focus on economic diversification and development. Mr. Obie approved of the suggested modified approach but was concerned with Mr. Gleason's chairing the task team. He felt this project needed the full atten- tion of one person. Mr. Gleason could not give it the attention it needed with his other responsibilities. Mr. Gleason responded that this plan had evolved over a period of about two months. There were several meetings on the subject, six to eight. Consistently the major argument raised at these meetings was that it takes more time than we have to commit to the project. They talked about hiring someone for the posi- tion, such as a deputy city manager. The philosophy developing managerially in e MINUTES--Eugene City Council August 12, 1981 Page 2 " e the City Manager's Office is to reach out in the organization and use the skill of the organization as opposed to creating a circle of commitment around the Manager's Office. The advantage to it is that it emphasizes existing linkages. It commits the department's whole resources, not just one person. It reinforces the objective that you want to accomplish through all the people in the organi- zation, not just the one person. The task team would meet once a week for the first few months. Assignments would be parceled out. They would have a staff person committed to the task team full time (Susan Smernoff). Ms. Wooten agreed with Mr. Obie that having it done internally with Mr. Gleason's busy schedule might possibly produce the same results. Having a consultant working with staff might result in a recognizable impact. Mr. Gleason did not disagree, but pointed out that the City was not rich. The program would be a $50,000 to $100,000 commitment. Mr. Obie did not care if it was a consultant. He thought a staff member could do it if they were free to do only the implementation of the task team. Ms. Wooten said there was not an economic development specialist on the staff. She hoped to see someone who had done the work before. Ms. Smith questioned if they could contract for a short time with someone. Mr. Gleason said that they could not contract for leader- ship, it must come from the institution. It is true the knowledge resides in specialization, but the dynamics comes from the leadership. Leadership cannot be injected. Ms. Smith reiterated Mr. Obie's and Ms. Wooten's concern that Mr. Gleason participate in the task team but that they have an individual to monitor and e direct the program for at least the first six months. I Mr. Lindberg said that if they were hiring an administrator, Mr. Gleason was right. If they wanted staff services, in terms of research and information, then the council members were right. You do not hire an administrator to be the head of Ford Motor Company for six months. The council and Mr. Gleason agreed to flag this as an issue to be resolved. Mr. Gleason suggested they were talking about purchasing the skills and having a full-time staff person that is part of the task team. C. What Will the Task Team Do? Mr. Gleason reviewed the six-point program in the Eugene Economic Diversifica- tion Program: 1) industrial sitings; 2) core area redevelopment; 3) increased destination point activities; 4) small businesses; 5) employment and training programs; and 6) capital improvement programming. Mr. Gleason said the City was undercapitalized. Parks and sewers are needed. The problem will get increas- ingly worse. They will have less and less capacity to get the utilities, sewers, fire sations, etc., in place. They will do less and less maintenance on what they have. It will get worse slowly. Politically it is possible to do it. After being asked about the remedy, Mr. Gleason replied the capital improvement plan is the first step. An execution model will have to be developed. The capital improvement program cannot be accomplished solely through the General Fund. What has been done in some cities with some success is a series of e MINUTES--Eugene City Council August 12, 1981 Page 3 -- - ..---- . ,. e utility taxes earmarked for a separate fund for capital only. The Budget Committee makes recommendations about the moneys in the fund each year and what projects will be under way. It does not go to operations and maintenance. In one city where he worked they had a six-percent tax on all utilities and the fund was substantial (water~ gas~ TV, electric). It is a distributive tax. If one took the City's inventory now and tried to maintain it, the average cost per year would be approximately $20 million~ assuming that it had $20 million behind it for several years. This assumption has not been going on in Eugene. ~ssuming 2.5-percent growth, there is an added $10 to $12 million a year in capital that has to go to the infrastructure. That would be a minimum $20 million to $40 million per year for the next 15 to 20 years. Ms. Wooten suggested that they might consider slowing growth until they could catch up with capital improvements. Mr. Gleason replied that they could not tune the economy that finely. The City Council's choices would have impact 1 ater. They do not control enough of the agenda to do otherwise. He told the council they were on an aircraft carrier making a mid-course direction change and they can only make it so fine a correction. There are too many currents that they simply do not have control over. They will have to make more mid- course corrections. Councilor Miller arrived at the meeting. Ms. Wooten suggested with the conditions nationally it might be better to stabilize the Eugene capital improvements before making commitments to diversi- e fication. Mr. Gleason did not think things were as bad as others and pointed out in terms of employment, Eugene was worse in 1976. Mr. Obie interjected that if the City could diversify~ they would not be so dependent upon the interest rates. Mr. Gl eason added it woul d take three years to prepare the Four Corners area before it could be marketed. If they start now it would take ten years to have the sites in West Eugene ready for industry. They are trying to match public and private capital so their development occurs. They can get diversification, but not only through property taxes. Mr. Obie said $20 million a year is $1,000 a year per family, and that is a lot of money every year. Mr. Gleason recognized that he was oversimplifying because there were all kinds of capital schemes in it: Bancrofting, a tax on new development, user fees. The ~irport is a $29-million agenda funded by user fees. They have $2 million to build a building, at which time the City will get the fees to be repaid for the building. The solution to the River Road/Santa Clara problem has to be front-ended. The sewers must be put in before the money comes in. Mr. Gleason told the council that they will not notice that they are under-capitalized except in extreme dramatic cycles. They will con- tinue to under-capitalize if they use the oroperty taxes as the basis of support. Mr. Obie referred to the question of growth. He said they are having a problem with people in Eugene who are having economic difficulties. More and more of e their spendable income goes to the government and there is less for housing and less to live on. They might have super cities to live in, but their living MINUTES--Eugene City Council ~ugust 12, 1981 Page 4 l .'. e st andards are 1/10usyl/ based on the percentage. Mr.~G1eason pointed out that the gasoline tax had not changed for years and said this area was an example of funding of government being stable for a period of time. Ms. Wooten was not sure how much more people could reasonably be taxed. Six percent on top of all the utilities would project an increase in the utility. She mentioned other means of developing revenues besides taxation. She sug- gested they generate income through other enterprises. Mr. Gleason suggested that in building the city hall they lease out space. Ms. Wooten noted that one city had owned a railroad. Both expressed concern with competition in the private sector and with business failures. Mr. Gleason suggested a user's fee on storm sewer. They spend $1.5 million a year sweeping the streets and cleaning the gutters so water pollution in the river is not so bad. It is done out of property taxes. They could create a utility called a storm sewer utility and charge a user's fee. It shifts the resources for other things. It is more responsive to the electorate. Ms. Wooten said that they could not have a user's fee for everything. It is difficult to sell that kind of government. The council took a five-minute break. D. Four Corners Industrial Area Mr. Gleason said the task team's major job would be to develop a working program. They have prepared a skeleton plan. The team would flesh out the skeleton. One of the first task team issues would be the industrial siting. A city this size should have several industrial sites available. The Four Corners e area is a gamble but has the potential for the biggest payoff. It allows the City to use the existing structures, to reuse the sewer system, water, power, etc. A map of the Four Corners area was displayed. Mr. Gleason pointed out that land in this area was underused, and in many cases vacant. He said a lot of the assembly would have to go on and it would take a public structure to do that. Mr. Hamel suggested that they could use the railroad system already there. Mr. Gl eason agreed. About twenty-five percent of the land is vacant. Many build- ings are sited on large lots. The task team would develop, with the Chamber of Commerce, an industrial siting scheme for the Four Corners area. Mr. Gleason suggested taking the like amount of money and setting it aside in a pool and writing a contract with the Chamber of Commerce to create a similar task team that would help develop this area as an industrial site. They would have to do a survey and answer questions: How much land is there? What is the condition of the land? What is the saleability of the land? What is its market value? Who woul d sell it? What would it be used for? The pool of money would be used along with the retail skills of the people in the community. They would create a proposal. Together they would build a blueprint on the Four Corners area. The City could form a district or the Chamber might have a not-for-profit program. It could be paid for by tax incrementing the district. Industrial revenue bonds could also be used. It could be marketed by a joint public- Chamber group. The proposal would affect the entire community. - MINUTES--Euqene City Council August 12, 1981 Page 5 . . . . Mr. Obie asked what expertise the Chamber would supply and whether they would 4It foot the bill. Mr. Gleason said that he would expect them to foot part of the bill. He noted John Olm is a seller of industrial land. He knows the land. The City would pay him, possibly at a discounted rate, for his services. Ms. Smith noted the Chamber would be subcontracting with private industry to accom- plish what needs to be accomplished. Mr. Gleason agreed. Mr. Gleason said that he would talk with the Chamber Executive Board and get a possible response. Mr. Gleason summarized the six-point program in his conclusion. E. Discussion of Boards and Commissions Mr. Keller asked where they were in analyzing the boards and commissions. Mr. Gleason replied work on that item had not started. There is a problem in the inability to coordinate goals and objectives. The agendas are not clear. The City Council will have to elicit what boards and commissions think is their agenda and formalize communication. It is the council's assignment; staff cannot do it. The council discussed the lack of coordination in the boards and commissions, especially the ones concerned with renewal/downtown area. Ms. Miller asked what members would work on restructuring of the boards and commissions. Mr. Obie suggested that the council is pressed for time, that they ask the boards and commissions to bring a solution to them. The council should say, "This is the problem. What is the solution?" Ms. Miller said she would like to see a ~ written statement of the problem and the people who need to be considered. If ~ stalemate occurred, it could lead to an answer. People could come up with suggestions. Council could then reach a solution. Mr. Gleason added that they needed a statement of the problem and purpose with the groups involved. They could then take it to the boards and commissions. They would receive sugges- tions on ways to solve the problem. The council could consider multiple solu- tions. The boards and commissions are frustrated and would favor a solution. Mayor Keller agreed. The staff's initial focus will be to gather information for the council roles of boards and commissions related to the downtown including central area neighborhood groups. Mr. Keller asked for comment on the Economic Diversification plan. All council- ors gave very laudatory comments. Mr. Gleason estimated that the proposed program would cost between $50,000 and $75,000. Questions would need to be answered about the consultant and the relationship to the Mayor's committee on economic development. He did not recommend that the City develop a dry port. The City has a general plan. The County should be encouraged to take on diversifiction efforts in smaller communities. Ms. Miller said that the Chamber is not everyone in town and they are not representative of everyone. Mr. Gleason answered that he felt that they had expertise. He suggested L-COG would be a good umbrella agency also. Ms. Smith suggested the Mayor's committee, but Mr. Obie had trouble with that suggestion - MINUTES--Eugene City Council August 12, 1981 Page 6 . " - ."e . . since it is such a diverse committee. Mayor Keller suggested possibly dis- e solving the Mayor's committee. Ms. Smith asked if there was that potential. Mr. Keller suggested they ask the committee and see if they could. Mr. Obie noted the committee had served its purpose of defining the problem. The matter is now an action item. Mr. Gleason suggested that if the council wanted action, the staff should go directly to the City Council. If they go to the Mayor's task force, it will hone off the rough edges. Consensus will be gained. By going directly to the City Council, vigor is achieved. Mayor Keller said to go to the City Council and bypass everyone. In order to get consensus, Mr. Gleason would spend too much time. They must streamline the process. Ms. Wooten was comfortable with the City Manager reporting directly to the City Counc i 1 . She wanted to be informed about who the task team is listening to. Ms. Miller noted that the Economic Development Committee has done a lot of work. They have looked at difficult questions. This has resulted in more community consensus. Mr. Keller added that the six points of the current program are the result of their work. It is a group document. Mr. Gleason said that if he reported directly to the City Council, they would have to link the boards and commissions. He added they would form the task team tomorrow. Ms. Wooten said that they wanted to be informed as he went along. Mr. Gleason answered that he would communicate and be sensitive. It is the implementation model of the General Plan and staff will help with policy. They will assign a person to the task team. e Mr. Keller noted this will be on the council agenda the first week in September. The funding, reporting to the City Council, and a report on the boards and commissions will be presented. He said by doing this they will quash the idea that Eugene is anti-growth. The image of the City is not good and this will help. It shows that we care. It is important. It could attract outside investment. That is what he liked about the six points. He did not think they had overlooked anything. If the councilors had, they should contact the City .- Man ager . He thanked Mr. Gleason. Meeting was adjourned. Respectfully submitted, ~~ Micheal Gleason City Man aqer (Recorded by Beth Conant) MG:BC:db/CM7b16 e MINUTES--Eugene City Council August 12, 1981 Page 7