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HomeMy WebLinkAboutCC Minutes - 01/29/03 WS MINUTES Eugene City Council Work Session McNutt Room-Eugene City Ha11-777 Pearl Street January 29, 2003 Noon COUNCILORS PRESENT: Betty Taylor, David Kelly, Nancy Nathanson, Scott Meisner, Gary Pap~, Bonny Bettman, George Poling, dennifer Solomon. CITY COUNCIL WORK SESSION Mayor James D. Torrey called the work session of the City Council to order. A.WORK SESSION: Downtown Vision Implementation Tools Mr. Carlson introduced the item, saying that Richie Weinman of the Planning and Development Department and consultant Charles Kupper would make the presentation and answer questions. Mr. Weinman provided a staff presentation on the implementation of the Downtown Vision. He reminded the council that it approved the Vision for Greater Downtown in November 2000. The vision included a variety of implementation steps. He said that the implementation effort complemented the Downtown Plan update currently underway by the Planning Commission Plus Three City Councilors. He said that following a Request for Proposals process, the City hired Charles Kupper of Spencer & Kupper Associates as a consultant. Mr. Kupper helped the City review various tools used by different cities in Oregon and the Northwest to improve their communities and their downtowns. Mr. Weinman referred the council to a listing of the different tools examined by staff, mounted on the meeting room wall. Mr. Weinman summarized the staff recommendation, which was to extend the life of the River'front Urban Renewal District, to create a new renewal district ringing the downtown, to expand the area to which the Multi-Unit Property Tax Exemption (MUPTE) applied, to consider a vertical housing development zone to encourage mixed-use residential and commercial projects, and to consider policies that relate to fees in the downtown area. Mr. Kupper provided the council with a PowerPoint presentation regarding tools to assist downtown. Mr. Kelly requested copies of the presentation. Mr. Kupper invited questions. Ms. Taylor asked what happened when the value of an urban renewal district went down rather than increased. Mr. Kupper responded that the renewal agency would receive no revenue. It was MINUTES--Eugene City Council January 29, 2003 Page 1 Work Session not uncommon for revenues to go up and down during the life of a plan. He said, in response to a follow-up question, that the district could not "get negative revenue." Ms. Taylor wanted to know why, if property was not being used, it was so valuable. Mr. Kupper said that to the current owner, it might have little value, but when assembled with other property for a different use, it could have considerable value to the City and renewal agency. Mr. Kelly thanked Mr. Kupper for the presentation. He felt a solid, well-built downtown was critical to the community's livability and health and to the efficiency of municipal service delivery. He said that he was willing to use the City's money on improving downtown because he believed it required investment beyond that which the market was willing to make. Mr. Kelly asked Mr. Weinman if sample motions for the follow-up work session on February 12 could be crafted to be specific about what the council was saying yes to if it choose to move forward with any of the tools under consideration. Mr. Kelly agreed urban renewal was a tool that could be used many ways and it could be used positively. His decisions about urban renewal would be based on a clear understanding of what the tool would be used for. Mr. Pap8 asked about the impact of citywide bonds on the district and the potential that one could bring the City into compression. Mr. Kupper said if the City issued a bond, the tax rates for bonds would go up, potentially generating more revenues for the urban renewal agency. In the case of a very large bond, it could potentially create cause some compression problems under Ballot Measure 5. He said that the issue was somewhat complex. Mr. Meisner asked for more information regarding the relationship between bond tax rates and Ballot Measure 5. Mr. Meisner indicated interest in all the staff recommendations although he had questions about the details. Noting the potential that the staff recommendation would lead to several adjoining districts, he asked if the districts could be combined together into one urban renewal district. Mr. Kupper said that State law precluded the City from amending the boundary of a existing district by more than 20 percent of the original acreage. The most that could be added to the downtown district was 15 acres. He concurred with a statement from Mr. Meisner that one could allow the district to expire and reform a new larger district, but then the City would be starting "from scratch" with a new frozen base. Mr. Sullivan added that the area of a district could be decreased to accommodate adjusting priorities. Mr. Meisner said that a new district would affect the revenues received by other taxing entities, such as the school districts. He asked if all the increment that was gathered in the district must go to the district or if it could be directed to the school districts. Mr. Kupper said that could not occur under current Oregon law. Mr. Meisner indicated support for the extension of the MUPTE boundaries and wished to be able to examine the boundaries proposed by staff. Mr. Meisner noted that the downtown neighborhood organization had communicated strong support for the recommendations to him. MINUTES--Eugene City Council January 29, 2003 Page 2 Work Session Ms. Bettman was very interested in finding tools that attracted reinvestment and investment to downtown. Her interest was in focusing those tools for the greatest benefit and return. She requested information on which tool had the least impact on the delivery of other City services, and wanted to know the impact of each tool on the delivery of City services. Regarding the MUPTE, Ms. Bettman expressed concern that broadening the boundaries blunted the tool, and wanted to know if the City could apply it to specific sites where it wished to see vertical redevelopment and multi-storey mixed use. She confirmed with Mr. Kupper that parts of the district could be connected by streets. Ms. Bettman felt that the meeting materials in the packet missed the question of what the City's ultimate objectives were for downtown. She said that the Downtown Vision was deliberately general, and if the City was looking for ways to raise revenues, she wanted to know what those dollars would be spent on. She wanted to know if any of the funds were proposed to be used for the 6th Avenue road project. Ms. Bettman suggested it would be helpful to see the historical project list broken down so the council could see what percentage was funded with renewal dollars. Ms. Solomon said that the City did not have an exact listing of how all dollars would be used before it formed new urban renewal districts in the past; instead, projects had "percolated up" over time. She did not want to the limit the City's opportunities by predetermining exactly what projects would be funded by urban renewal. Mr. Kelly agreed with Ms. Solomon and indicated that rather that creating a specific project list, he was interested in creating parameters about expenditures before the district was formed, rather than leaving it open to anything. Mr. Kelly said that he believed the council had given clear direction that was reflected in a motion adopted on April 9, 2001, that added a sentence to the implementation work plan for the vision implementation tools stating the information provided to the council would also include proposals to balance downtown incentives with increased cost recovery elsewhere in the city. However, "there was not a single word in this packet" regarding the topic. He expressed frustration that the council's direction was not followed, and said he would be unwilling to support any of the proposals until the information was provided. Mr. Sullivan indicated that the information requested was coming to the council on February 12, 2003. The focus of today's presentation was on improving the quality of the opportunities that existed in downtown, which did not happen by inhibiting development opportunities on the periphery. He reminded the council that Mr. Kupper, in his presentation, had indicated that cities that had sought to protect their downtowns with regulation outside the core had found it did not create an incentive for downtown development as much as it impeded development overall. Mr. Kelly said the motion did not discuss reducing incentives but rather increased cost recovery for development outside downtown so that some of the tools could be made more revenue-neutral. He expected a response on that. Ms. Taylor thought any new district formation proposal should be referred to the voters. She tended to oppose renewal districts because they diverted money from the General Fund. She thought the MUPTE should stay in a limited area. If the MUPTE boundaries were extended, the City would be encouraging development, not encouraging the downtown. She noted the City's MINUTES--Eugene City Council January 29, 2003 Page 3 Work Session contributions to downtown in opening Broadway, and suggested it was time for downtown property owners to spend some money. Ms. Taylor called for more housing in the center of the core. She opposed the proposed ring district, and asserted that most citizens would be opposed to it as well. Ms. Bettman questioned if staff had data showing which of the projects had an actual demonstrable public benefit. She also wanted to know how many of the projects on the list could actually be credited to urban renewal when they would have been done otherwise. She agreed with Ms. Taylor about the diversion of dollars from the General Fund and the need to ensure that those dollars were spent carefully. Ms. Bettman also wanted to know about other variables that impacted downtown development, such as rents. If the rents downtown were "off the scale," she questioned if urban renewal was the best use of the City's money, given it had no control in that area. Ms. Nathanson was pleased with the information provided by staff and wanted to move ahead on all or most of what was being recommended. She felt it was important for the City to continue to pay attention to the health of downtown. She said that when she considered the projects list, she perceived a great deal of benefit, mostly for the public. The City had assisted with more than a dozen new construction projects and the rehabilitation of more than 30 buildings. The City did not bear the entire costs of the public improvements as private property owners also participated in most of the projects, as well as Lane County. Ms. Nathanson recalled that the council had implemented the MUPTE with limited boundaries and agreed to revisit those at a later time. She favored that examination. Ms. Nathanson said that the City had gained more residential units downtown and more were under construction now. Mr. Meisner asked staff to provide information to the council about the projects the City did on its own and those that involved loans, and in the case of those involving loans, how repayment occurred. Ms. Nathanson noted Ms. Bettman's suggestion that many of the projects would have been built in the absence of urban renewal, and indicated disagreement. She believed it was important to acknowledge many projects occurred because of urban renewal. Ms. Bettman asked staff to identify the administrative costs, including full-time equivalent employees, incurred by the recommendation. Ms. Taylor referred to the New Markets Tax Credit and asked if it was available to single-room occupancy (SRO) construction. Mr. Weinman clarified that the New Markets Tax Credit Program was available to private developers, but it had not been used in the community, and staff were not experts. However, he believed that those credits were available to such developments. Ms. Nathanson said she would like more information from staff regarding the possibility of distinguishing renter- and owner-occupied housing. B.WORK SESSION: Living Wage MINUTES--Eugene City Council January 29, 2003 Page 4 Work Session The council was joined for the item by Human Resource and Risk Services Director Lauren Chouinard. Mr. Pap~ excused but did not recuse himself from the discussion because of the perception of conflict of interest that had been raised by the Eugene-Springfield Solidarity Network (ESSN) and others. He wanted the discussion to focus on economic and policy issues rather than on whether he had a conflict. Mr. Pap~ clarified that his action was not a precedent for the future regarding this or another issue, and it should not be taken as a precedent for any other councilor. Mayor Torrey determined from City Attorney Jerome Lidz that Mr. Papa's future participation in action related to the living wage was not precluded by his excusing himself from the discussion. Mr. Poling declared a possible conflict of interest as his wife worked for the Metropolitan Partnership, an organization partly funded by the City. He noted she was paid more than the living wage being proposed. Mayor Torrey solicited a two-minute round of comments. Ms. Solomon said that she did not support a living wage ordinance as it was not good public policy. She said that it would apply to those who already have jobs and did not address those without jobs. She could not find data in support of claims that the living wage would reduce poverty. Ms. Solomon suggested that it would be more appropriate for the council to focus on economic development tools that create jobs if its goal was to reduce poverty. She further suggested that that the council should address the high cost of living in Eugene mentioned by living wage proponents. Speaking to those who suggested that the City's adoption of a living wage would force private sector wages up, Ms. Solomon said she had seen no data to support the conclusion, and questioned why the public sector should drive market wages. It was a market-driven, not a needs-based, process. The living wage would be unfair to the consumer, who would pay twice for its costs, and to the Iow-skilled laborers who would be displaced by higher skilled workers. Regarding the potential of a phased implementation of a living wage, Ms. Solomon termed it bad public policy to spend money that may or may not exist in the future. Mr. Meisner said that the goal of a living wage was to reduce poverty. While it was indisputable the goal of the living wage was worthwhile, he questioned whether a living wage was the right tool to accomplish the goal. The council was being asked to devote a large amount of money toward realizing the goal, but he needed to be convinced the living wage was the most effective way to use the money to reach that goal. He did not think the issue of the effectiveness of the living wage had been examined. Regarding the potential of a phased implementation, Mr. Meisner noted the Budget Committee's priority-setting exercise and said he was uncomfortable with placing the living wage as a higher priority over extra police officers or firefighters when the funds were available. Ms. Bettman believed there was a bias emerging on the part of the council against the working poor. It was willing to provide tax breaks and incentives to multi-national corporations and fund certain economic development strategies from the General Fund, but it was unwilling to address MINUTES--Eugene City Council January 29, 2003 Page 5 Work Session the working poor who worked for the City. She said that none of the City's economic development strategies had proved to be effective and the level of public benefit was unknown. Ms. Bettman thought the council should also be willing to spend economic development dollars to support the working poor. She said that public dollars should not be used to perpetuate poverty. She was prepared to support the ESSN's living wage proposal. She thought it was a good proposal and gave the City latitude in implementation. However, Ms. Bettman indicated willingness to consider a ramped-down amount. Ms. Nathanson said that regardless of the issue, she was not moved by assertions that something was obviously the "right thing to do." She looked at issues from many various points of view and tried to be fair. Speaking to Mr. Meisner's comments regarding whether the living wage was the best way to achieve the goal of reducing poverty, Ms. Nathanson agreed it was not the best way to achieve the desired goal. She said that other cities that had passed a living wage were reconsidering them, and that signaled to her that there was no one best solution. She was concerned about the right way to address the problem. Was it helping the working poor, or reducing poverty? She perceived a difference between the two. Ms. Nathanson noted that she met with the proponents of the proposal three times and had reviewed the information they provided. She said she also considered the discussion of the Budget Citizen Subcommittee in reaching her decision. Mr. Kelly said that the council heard testimony that nearly 90 jurisdictions had adopted a living wage and noted that he had been provided no information about cities scaling back. He requested that data. He said there was evidence supporting the claim that the living wage reduced poverty, citing a Baltimore-based study. Mr. Kelly said that there was no single best tool to address poverty. The problem of societal health had to be addressed in many ways. He said that one way could be economic development strategies that could include incentives for large companies; another way could be programs and incentives that help the working poor. Mr. Kelly agreed with Ms. Bettman that the City did not do enough in the latter area. He said yet another way could be programs and incentives for the jobless and homeless. Mr. Kelly agreed with the citizen who characterized the living wage as a "trickle-up" economic tool. He said that people would spend their increased pay in the local community. He agreed with another citizen who testified that adopting a living wage was a right and moral thing to do. Mr. Kelly indicated interest in seeing a draft ordinance based on scaled-down version of the ESSN proposal. Mr. Poling said that he received many constituent contacts about the living wage proposal and had done some research. He found information both in support and in opposition to a living wage. In response to Mr. Kelly's question about cities that have rescinded the living wage, Mr. Poling noted that in November 2002, Santa Monica, California, rescinded its living wage ordinance. He further noted the unintended consequences experienced by Montgomery County, Maryland, when it adopted a living wage. Mr. Poling expressed concern that cities that adopted such an ordinance had no data demonstrating its effectiveness. He believed that the living wage concept was "wishful thinking fraught with fundamental flaws." He did not believe it was the most effective way to use City resources to fight poverty. He suggested the residents were better served by placing any available money toward restoring social services, energy assistance, food, shelter, and drug and alcohol treatment. MINUTES--Eugene City Council January 29, 2003 Page 6 Work Session Ms. Taylor agreed the City would not wipe out poverty on its own, but she believed that the City should pay its employees an adequate amount of money. She suggested it was more important to have jobs that pay wages that a person could live on rather than to create more jobs that do not. Ms. Taylor pointed out that many of the working poor were working two or three jobs. Those people could not get by on one job, meaning they will need more jobs, which did negative things to the social and family structure. Ms. Taylor did not think the City was sufficiently concerned with preventing people from becoming homeless. She was willing to use a phased approach but wanted to adopt the ESSN proposal with triggers to phase in the pay increases. Ms. Taylor said people should not be forced to apply for the earned income tax credit. If they were working at a job and doing a good job, they should be paid for that. The City should set an example. Ms. Taylor indicated willingness to exempt apprentices from the ordinance. Mayor Torrey also thought the proposal a bad one. He suggested that while those in the faith- based community were sincere about the living wage as a way to better the lot of the people in the community, the major emphasis for the proposal appeared to be its utility as a negotiating tool for the City's unions. He pointed out that Eugene had a city manager form of government that required the City Manager to negotiate contracts with employees. He suggested that if the council was concerned about the community's needy, it could direct whatever dollars proponents were prepared to spend on the proposal to the Budget Committee and asked the committee to spend it on social services that would help the community's most needy. Mayor Torrey said the voters' recent rejection of Ballot Measure 28 would create a tremendous impact in the community on those without jobs. Mr. Kelly noted support across the political spectrum for a living wage as expressed by former councilor Pat Fart. Speaking to the mayor's suggestion that the proposal was a union bargaining tool, Mr. Kelly found the suggestion offensive, as the president of the local chapter of the American Federation of State, City, and Municipal Employees (AFSCME) vowed in writing not to use it as a negotiating tool. Mr. Kelly expressed frustration with the process, saying that until the council had a draft ordinance before it to review, he did not see how it could make a decision about what to include or exclude. Mr. Kelly, seconded by Ms. Bettman, moved to direct the City Manager to draft a living wage ordinance to be brought back for a public hearing in April 2003 that would be based on the ESSN proposal, with implementation starting in fiscal year 2005, with a wage level of $10 an hour with benefits or $11.50 an hour without benefit (benefits primarily meaning health insurance). The ordinance would include City employees at a threshold of over 900 hours year, service contractors with contracts above $15,000 annually, and businesses that receive financial assistance from the City greater than $25,000 yearly. Implementation would be phased over three years, with the first year being fiscal year 2005. MINUTES--Eugene City Council January 29, 2003 Page 7 Work Session Ms. Solomon, seconded by Mr. Poling, moved to exempt anyone from the motion who was not a direct City employee. Ms. Bettman indicated opposition to the amendment. She said that the City spent considerable money on job creation; it was a focus of its economic development policies. It made no sense to her that the City created jobs that did not pay enough money for people to purchase basic living needs. She noted that Food for Lane County indicated that any job paying less than $9.50 per hour for a single person required supplemental social services. The City was enabling a cycle of poverty by creating jobs that did not provide a living wage, and then had to spend money on social services to support the underpaid. She believed that the council had to justify its expenditures on incentives and tax breaks by ensuring that the public money provided living wage jobs. The living wage ordinance was one way to do so, and the amendment negated it. Mr. Kelly also opposed the amendment. He believed as modified by the amendment, the motion would apply to only 10 to 20 employees. He suggested that another result of the amendment would be that City employers could eventually be converted into contractors. Ms. Nathanson indicated opposition to the amendment. She said that as she worked through the possible exclusions to the ordinance and potential triggers for a phased implementation, the issue got very complicated. She said that once she attempted to make all the details work, the concept became internally inconsistent, pointing to the problems with the living wage as a solution to address poverty. Ms. Taylor also opposed the amendment for the reasons previously stated. She said that the City had already privatized some former City services, which was a means of reducing wages. Mayor Torrey indicated support for the amendment. Speaking to Mr. Kelly's comments regarding the position taken by AFSCME, he said that unions supported the living wage measure because it reduced the potential of privatization, making them better able to compete more effectively with outside contractors when privatization was contemplated. He said that he did not want to eliminate the City's work force, but questioned why the council would stand in the way of more efficient service delivery by increasing the costs of providing services, which was of deep concern to the voters. He said that he would be interested in seeing a letter from AFSCME that the issue was not related to privatization. The amendment to the motion failed, 7:0. Ms. Bettman said that the living wage enjoyed support beyond that of the unions. She noted letters of support received from legislators Phil Barnhart, Pat Fart, Al King, former Senator Susan Castillo, and senators Tony Corcoran, Vicki Walker, and Bill Morissette. Mr. Poling pointed out that even during the more prosperous 1990s, local governments were cutting their budgets. He was not able to foretell better economic times in 2005 than in 1995, and did not think it feasible to plan to spend money now that the council did not know would be available in the future. Ms. Nathanson said the City was spending down its fiscal reserves and would shortly be in deficit. She questioned how phasing in the living wage over time helped financially. She had wanted assurances there would be no job losses or service reductions as a result of its adoption. Ms. MINUTES--Eugene City Council January 29, 2003 Page 8 Work Session Nathanson also wanted to ensure that the City's contribution to the Human Services Fund was not further reduced. Ms. Nathanson noted that she had committed herself to supporting efforts related to increased use of the earned income tax credit, which was an effective way to bring money into the community to those who needed it. She said that Eugene's economy was not isolated from the remainder of the region and she did not want to isolate it additionally. Mayor Torrey said he asked several of the State legislators indicating support for the ordinance if they would introduce similar legislation at the State level. He noted that there were no such bills pending in the State legislature. Mayor Torrey said the motion should be defeated and the money that it would require to implement be "placed on the table" for allocation by the Budget Committee to human services. Ms. Bettman believed that the issue was one of whether the City would provide more incentives and tax breaks to the rich and big business, or whether it would focus some of its economic development strategies on the working poor. She suggested the living wage would reduce turnover, saving the City money, because those who were well-paid tended to stay on. It would mean that employees hired through TempSource would receive a pay increase. Ms. Bettman said that in terms of funding social services instead, she said that the Budget Committee had cut the City's funding for human services on the "pretext" that the City paid more per capita than the other jurisdictions. She did not see the Budget Committee dealing with the issue. She suggested that if people were paid the money they needed to live, they would not need social services. Ms. Taylor envisioned a working mother who worked all day for a wage she could not live on; then she must find a way and time to go to a social service agency to beg for help, which she termed humiliating and time-consuming. If she got paid enough to live on, the mother could stay at home with her children at night and perhaps help someone else. The motion failed, 4:3; Mr. Kelly, Ms. Bettman, and Ms. Taylor voting yes. Mr. Kelly noted that the costs of the phased implementation of the living wage as envisioned in his motion would be about $200,000 - $300,000 in Year 1; he proposed to reduce that amount to $100,000, and reflect the council's discussion on the failed motion by directing the manager to develop poverty-reduction strategies. Mr. Kelly, seconded by Ms. Bettman, moved to direct the City Manager include $100,000 in the base fiscal year 2004 budget of new funds for poverty-reduction strategies. Mr. Kelly indicated that the motion was phrased generally because he did not want the council to have a debate now as to what approaches were preferable. He wanted to include the amount in the base budget to ensure that it was as much an assumption as other basic City services. Mr. Kelly accepted a friendly amendment from Ms. Bettman to increase the amount to $175,000. Mr. Meisner opposed the motion. He pointed out that the budget forecast did not indicate any money was available at all for added services; instead, significant reductions were being contemplated. Speaking to the comments of Ms. Bettman, Mr. Meisner said that while the City's contribution to the Human Services Fund had been slightly reduced, that was because the City was picking up more in other social service costs. The $69,000 proposed for reduction over MINUTES--Eugene City Council January 29, 2003 Page 9 Work Session three years was precisely the amount being spent by the City on homeless services. Mr. Meisner said that the Police Department and other City departments put significant money toward social services. He acknowledged the need for more funding, but said that until the expenditure was discussed in the context of the City's other goals, he was not prepared to support an increase. Ms. Solomon concurred with Mr. Meisner. She also wanted a broader discussion before the Budget Committee began to identify impacts in the budget. Ms. Bettman noted that in arguing against the proposal for a living wage, several councilors had suggested there was a need for other poverty reduction strategies to alleviate the conditions of the working poor. She suggested that the motion was an opportunity for councilors to put their "money where your mouth is." She pointed out that the motion merely gave the Budget Committee the opportunity to identify strategies councilors believed were better than the living wage proposal. Ms. Nathanson did not want to circumvent the budget process that had just started. She pointed out that if the council was to have a full discussion of poverty-reduction strategies, it would require many work sessions. She said that although it looked on its face as though it was the right thing to do, she would exercise restraint and vote against the motion, and wait for the council goals session and completion of the budget process. Mr. Poling agreed with Ms. Nathanson that the topic of the motion was appropriate for the goals setting session. He agreed with Ms. Bettman that the council needed to put its money were its mouth was, but given the budget reductions that were anticipated, he thought "we're beyond that." He suggested the issue be delayed to the next budget year. Mr. Carlson noted that Mr. Pap8 had no conflict of interest as it regarded the item under consideration. The motion failed, 5:3; Mr. Kelly, Ms. Taylor, and Ms. Bettman voting yes. Mr. Kelly, seconded by Ms. Bettman, moved that the base budget contain no reduction in the City's contribution to the human services service area. Mr. Meisner indicated opposition to the motion. Ms. Nathanson said that but for the fact the process presupposed the budget process, she would have voted yes on the motion. She hoped the manager could find a way to demonstrate to the Budget Committee the City's expenditures on social and human services generally. Mr. Kelly said that as part of the budget process, he was attempting to supplement the Budget Committee's direction to the City Manager in one area of 37 General Fund services. The motion failed, 5:3; Mr. Kelly, Ms. Taylor, and Ms. Bettman voting yes. The meeting adjourned at 1:30 p.m. Respectfully submitted, MINUTES--Eugene City Council January 29, 2003 Page 10 Work Session James R. Carlson City Manager pro tem (Recorded by Kimberly Young) MINUTES--Eugene City Council January 29, 2003 Page 11 Work Session