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HomeMy WebLinkAboutCC Minutes - 05/12/03 WS MINUTES Eugene City Council Work Session McNutt Room-City Hall May 12, 2003 5:30 p.m. COUNCILORS PRESENT: Gary Pap~, Nancy Nathanson, Scott Meisner, David Kelly, Betty Taylor, Bonny Bettman, George Poling, Jennifer Solomon Mayor James D. Torrey called the meeting to order. A. ITEMS FROM THE MAYOR, CITY COUNCIL, AND CITY MANAGER Mr. Meisner, Ms. Solomon, and Mr. Poling had no items. Ms. Bettman referred to the pending replacement of the existing I-5 bridge over the Willamette River with a temporary bridge structure. She asked if the replacement bridge would require a TransPlan amendment. She wanted to know how big a staging area would be required if the staging area was on the Eugene side of the river, and if a Willamette Greenway permit would be needed. Ms. Bettman asked what other types of permits were required, and for information about the public process that would occur. She did not think people knew about the impact of the project, and suggested the public be informed of the project as soon as possible. Ms. Bettman noted the 15-year time line for the temporary and replacement bridge, and observed that was a long time for the park to be used for staging. Ms. Taylor asked if there was anything the City could to do to stop Union Pacific Railroad from spraying herbicides along its tracks through Eugene, or if the company could be required to give notice. Ms. Taylor recommended the council read an article in the latest Eugene Weekly entitled "Boondoogle." Mr. Pap~ thanked all those involved in the reconstruction of Pre's Trail in Alton Baker Park. Mr. Pap~ commended staff and community residents involved in the construction of the new library, noting that the new library was recently featured on the cover of American Library. Mr. Pap~, seconded by Ms. Bettman, moved to hold the Airport Development Services Fund until the budget committee process was complete and to direct staff not to commit funds to any Airport marketing projects until the future use of those funds was determined. Mayor Torrey expressed concern about the council offering motions during Items from Council, Mayor, and City Manager. Mr. Pap~ indicated that he offered the motion at this time at the suggestion of Assistant City Manager Jim Carlson. MINUTES--Eugene City Council May 12, 2003 Page 1 Work Session Mr. Carlson indicated that in the absence of other direction, staff would continue to manage the fund as it had been doing. He noted that a verbal commitment of funds had been made. Ms. Taylor and Mr. Meisner indicated support for the motion. Mr. Meisner added he was unsure how he would vote on the use of the funds when the Budget Committee considered the issue. Ms. Bettman also supported the motion. She thought it important the money be held pending the completion of the Budget Committee's work on the fiscal year 2004 budget. Mr. Kelly determined from Public Works Director Kurt Corey that there were no binding commitments on the money. He also supported the motion, pointing out the Budget Committee process meant the money would only potentially be held up for two weeks. Mr. Carlson determined from Mr. Pap~ that the motion was not intended to stop the expenditures of money that was already legally committed. The motion passed, 6:2; Ms. Solomon and Mr. Poling voting no. Ms. Nathanson referred to the monthly activity report from the Police Department, which discussed the community's use of radar guns to monitor speed. She asked if the City was sending letters only to first-time offenders. She was also curious about how the Police Commission interfaced between such a volunteer program, the department, and the public, and if the use of radar guns was discussed by the commission. Ms. Nathanson expressed appreciation for those times the organization worked across department boundaries to solve problems. She said she had requested information about the issue of traffic safety from the Neighborhood Program, Public Works, and Police, each of which was working on the problem. She was also impressed by the City's response to a neighborhood hazard in Ward 8. She noted the frequent multi-department response needed to such events. Speaking to Ms. Taylor's earlier concerns, Mr. Kelly recalled that Richie Weinman of the Planning and Development Department had mentioned last year that Union Pacific Railroad might be willing to contribute funds to the City so it could notify residents living near the tracks of pending spraying. Mr. Kelly provided an update on the Region 2050 Project, a long-range planning process examining the entire region. He reported on the focus groups conducted for the project and noted the variety of opinion expressed among the smaller cities. He said that in addition to the focus groups, 55 professionals from various governments, utilities, and school boards convened for a workshop in March to discuss jobs and housing allocation through the region. He said that there was considerable concurrence about issues among the workshop participants. Mr. Kelly said that the Region 2050 policy board would review two alternative growth scenarios at its June meeting prior to forwarding them to the public for review. City Manager Dennis Taylor had no items. Mayor Torrey announced the birth of his grandson. MINUTES--Eugene City Council May 12, 2003 Page 2 Work Session B. WORK SESSION: Responses to Request for Proposals for Sears Building Development Site Mayor Torrey closed the meeting of the Eugene City Council and opened the meeting of the Eugene Urban Renewal Agency. Denny Braud, Planning and Development Department, provided an overview of the Request for Proposals (RFP) process associated with the site in question. He noted the four responses before the Urban Renewal Agency, and asked the council sitting as the agency to identify a preferred response to send forward for further negotiation. Mr. Braud called the council's attention to the four responses to the RFP included in the meeting packet. They included three mixed-use housing projects, submitted by the Fogelstrom Group, Arlie & Company, and Sockeye Development, and a commercial office project submitted by Oregon Research Institute (ORI). He noted that staff reviewed the responses using a variety of criteria, including relevant project experience, density, readiness to proceed, financial capacity and feasibility, financial return to the City, contribution to downtown, and character of the development. Mr. Braud reviewed each response. He acknowledged the merits and uncertainties involved in each response, and recommended that the council select the response submitted by the Oregon Research Institute (ORI). He said that the uncertainties associated with the response appeared to be solvable if financing and a capable developer could be identified. ORI would be required to demonstrate it made progress on those steps within six months; if the project did not move forward, staff recommended that the City begin immediate negotiations with the Fogelstrom Group. He said that the council would review the final terms and conditions of approval. Mayor Torrey solicited a first round of council comments. Ms. Taylor concurred with the staff recommendation. She said that people were needed in downtown, and the 300 people working at ORI would want retail uses and the development would assist retail conditions in downtown. Employees would look for places to meet and shop. ORI also would draw clients into downtown. Ms. Taylor pointed out that all those traveling to the site could use the bus. She also noted the long-time presence of ORI in the community. Mr. Meisner asked if ORI intended to build underground parking. He did not anticipate all visitors and employees would ride the bus and questioned if the City would be required to provide all parking. He asked if the salary estimates for employees included benefits. Mr. Sullivan did not know. Mr. Meisner asked staff to follow up on both questions. He also wanted to know the long- term tax impact of the ORI response to the City if selected, noting that the lack of retail facilities in the response meant the property would be entirely tax-exempt. He asked for a comparison with the other responses. Mr. Meisner noted the council's goals for mixed-use in downtown, but the staff evaluation appeared to downgrade responses that responded to that goal. That was a concern for him. Mr. Meisner asked if the City intended to secure a non-refundable deposit from ORI, suggesting that it ought to. MINUTES--Eugene City Council May 12, 2003 Page 3 Work Session Speaking to the issue of parking, Mr. Braud said that some of the parking could be absorbed by Broadway Place, although not all of it. He said that a matrix in the packet included some information on the tax exemption issue. He said that the other three responses would probably also include a ten-year tax exemption. Speaking to Mr. Meisner's concerns regarding mixed-use, Mr. Braud said that the staff recommendation was based in part more on feasibility than use. He said that ORI was not opposed to retail and might be open to negotiations about the topic. Mr. Meisner asked if ORI had applied for the federal grant mentioned in the materials. Mr. Braud indicated that ORI intended to apply for the grant in October 2003 as that was the next available opportunity. Ms. Nathanson referred to the financial return to the City, and asked what the City would have expected to receive compared to what it paid for the parcel, what it would like to receive, and what it needed to receive to make the deal work for the citizens. With regard to the federal rules, Ms. Nathanson asked if anyone had explored with the federal granting agency whether exceptions to the grant time line were allowed, and what it takes to get an exception. She asked if the district's congressional representative help ORI in securing an exception. Ms. Nathanson suggested that the one-tenant approach proposed by ORI made the response both attractive and risky. She believed there was greater risk to the City of having a single tenant in the building as opposed to having multiple tenants. Ms. Nathanson asked staff to speak to the potential longevity of ORI. Ms. Nathanson asked staff to compare the readiness to proceed and financial feasibility of the ORI and Fogelstrom Group responses. Mr. Braud deferred Ms. Nathanson's questions about the federal grant process to ORI. Mike Sullivan of the Planning and Development Department indicated that ORI believed the federal granting source could limit its options to research-only purposes. Ms. Nathanson said it appeared that while the federal government would not provide 100 percent of project costs, it controlled ORl's abilities to raise the needed revenue, which did not seem fair. Mr. Sullivan concurred. In response to Ms. Nathanson's questions about the financial return of the Sears site to the City, Mr. Braud said the Sears site was purchased for about $900,000. The three-quarter block site, which included the new library property, would now be valued at about $1.5 million. He thought the City would come out ahead in the purchase over time. Mr. Sullivan added that the original value of the site was recovered through the library project alone, without consideration of the site the former Sears building stood on. Mr. Carlson recommended that if the City realized any additional money from the site, the money be directed to the Facilities Reserve. Mr. Braud addressed Ms. Nathanson's question about ORl's longevity, saying that it was difficult to predict the future, but given ORl's 40-year history he thought it would be around for some time. Mr. Kelly believed all four projects being proposed would be good additions to downtown. He asked what a multi-family housing revenue bond was, and how it would be guaranteed. Mr. Sullivan said that staff had some awareness of the instrument, which was allowed for in the federal statutes, but it had never been used in Eugene. He understood it was an appropriate tool for a mixed-income project, but the City had, to this point in time, only supported Iow-income projects. However, staff was interested in pursuing its use for this site or other downtown sites. MINUTES--Eugene City Council May 12, 2003 Page 4 Work Session Mr. Kelly thought the mixed-income nature of the Sockeye response a good one. While he thought a systems development charge (SDC) waiver was a significant public subsidy, he pointed out that in the past the City waived SDCs for Iow-income housing projects and paid for the cost from another fund. He suggested that SDCs could be waived for the Iow-income portion of the Sockeye development. Mr. Kelly determined from Mr. Braud that the council would review the terms and conditions related to the final agreement in an executive session. Mr. Kelly noted the grant application date was several months out, and asked what more information ©RI could provide the City two months after that. Mr. Braud said that the City would know that ©RI made the application, but it would not know the grant results until May 2004. Mr. Kelly said that the delay made the time line for the Fogelstrom Group's response appear not unreasonable. He liked both responses. Mr. Pap~ determined from Mr. Braud that ©RI was a tax-exempt entity, which would pay the City no property taxes. Mr. Pap~ concurred with Ms. Taylor about the positive impact of an increase in downtown employees. Mr. Pap~ confirmed with Mr. Braud that the Fogelstrom Group's project would bring about 128 residents downtown. Responding to a question from Ms. Bettman, Mr. Braud said that the City did not own all the surface parking adjacent to the former Sears building, and he anticipated that Fogelstrom and Sockeye would be interested in its acquisition. He believed that they would determine whether to move forward with that acquisition on the basis of the success of the first phase of development. He confirmed, in response to a follow-up question from Ms. Bettman, that all of the housing responses were phased. Ms. Bettman saw no commitment to the second phase in the materials before the council, and that was a concern to her. If only the Sears portion of the site was developed, the developer would make back its investment from the revenue from parking alone. Mr. Braud clarified that the City would probably not sell the one-eighth block of surface parking if the developer was not going to move forward with the entire development. Ms. Bettman asked about downtown commercial vacancy rates. Local property appraiser John Brown said for retail uses, vacancy rates downtown were about ten percent but he anticipated that would drop in the future. Ms. Bettman suggested that issue should be considered when the council discussed whether it wanted mixed use in the same building or whether it wanted to see an anchor for the rest of downtown. Ms. Bettman asked staff where ©RI was likely to locate if it did not locate downtown. Mr. Sullivan said that ©RI had looked throughout the community, and was interested in both the downtown and at the Riverfront Research Park. Mayor Torrey asked what would happen if the City put both the ©RI and Fogelstrom Group responses on hold for six months. Mr. Braud said that the question was hard to answer. Mayor Torrey asked if the two parties would opt out because they had no guarantee of location. He was MINUTES--Eugene City Council May 12, 2003 Page 5 Work Session worried about delaying the process for a year and then ending up with nothing. Mr. Braud responded that in the case of the Fogelstrom Group's response, the question was what more the City would want to see. He believed that the expectations of ORI would be more clear. He said that the Fogelstrom Group's response was more speculative because it depended on the marketability of the residential units proposed, and he questioned whether six months would provide the City with any more information in that regard. Mayor Torrey solicited a second round of council comments and questions. Speaking to Mr. Meisner and Mr. PapS's earlier remarks, Ms. Taylor said that while the City would not receive taxes from ORI, she thought that over a ten-year period it would attract tax-paying entities downtown, while she did not see the same result from a residential development. She did not think that downtown residents would necessarily stay downtown as they might work someplace else. She believed the benefit of having more employees downtown would be the fact they would naturally patronize downtown businesses. Mr. Meisner suggested that ORl's response to the RFP was even more speculative than the Fogelstrom Group's response given that the organization had not written the needed grant. He thought ORl's offer was financially inadequate and assumed that future negotiations would occur. Mr. Braud concurred. Mr. Meisner assumed there would be a penalty clause for breaching an option without meeting its conditions in any agreement between the agency and ORI. Mr. Braud said that such a clause could be included. Mr. Pap8 endorsed an approach that would keep two responses on the table to create a more competitive environment. He asked what the property in question yielded in revenues now. Mr. Braud said that the City realized about $25,000 yearly for the surface parking. He noted that the first-floor tenant in the former Sears building recently gave the City notice, and he believed it would be difficult to bring in a new tenant due to the poor condition of the building. He said that the tenant lease netted approximately $15,000 annually. Responding to a follow-up question from Mr. PapS, Mr. Braud said that both the Fogelstrom Group and Arlie & Company indicated their intent to use the basement of the former Sears building for underground parking. Mr. Kelly assumed that there would be a non-refundable deposit associated with the property. He also liked an approach that kept two responses on the table for some period of time, suggesting nine to twelve months. Mr. Kelly noted that he downgraded the Sockeye response in his evaluation because of the financial return and the subsidy being requested; however, he praised the firm's work in Portland and said he would like to see it do work in Eugene. He said he rejected the Arlie response because of financing and the firm's inability to point to other similar projects it had done. Mr. Kelly observed that the Fogelstrom Group had done several speculative ventures that had proved to be successful, including the Quail Run development. It appeared the company had done its homework on the response. However, it was hard to argue against a long-time firm like ORI with several hundred employees. Ms. Nathanson concurred with Mr. Kelly's latter remarks regarding ORI. She said that it appeared from the numbers alone that the responses submitted by the Fogelstrom Group and ORI were the top two candidates. The intangible results also argued for those responses. MINUTES--Eugene City Council May 12, 2003 Page 6 Work Session Ms. Nathanson asked if it was possible to require onsite parking in the parking exempt zone downtown. Mr. Sullivan said that the parties to an agreement could agree to any set of terms, but he pointed out that the zone was in place for a purpose. Parking was intended to be shared throughout the system. There were a substantial number of parking spaces at the Broadway Place parking structure, parking spaces adjacent to the site, and spaces irregularly available in the Parcade, Eugene Performing Arts Center, and Overpark parking structures. The system had considerable capacity. He said that staff preferred to see money invested in the development rather than in parking. Mr. PapS, seconded by Ms. Nathanson, moved to direct the City Manager and staff to work with both ORI and the Fogelstrom Group to put together an agreement or agreements for an option for either party to purchase the building in nine months. Mayor Torrey called for discussion on the motion. Ms. Bettman recalled that she had asked if the City could pursue two responses during the Olive Street development process, and had been advised against it. She asked what the difference was in this case. Mr. Braud suggested that in that case, the response selected was clearly much more responsive to the criteria that staff did not support moving forward with the other responses. Ms. Bettman asked if nine months was sufficient for the federal grant cycle. Mr. Braud did not know the answer. He pointed out, however, that the grant was a small percentage of the total funding package, and ORI had financing issues to work out that went beyond the grant, as did all the responses. Ms. Bettman said of the three housing proposals, she considered the Sockeye response the best because of the firm's experience in Portland and because it included Iow-income housing. However, she was leaning toward the ORI response because of its long-time community history, its provision of family-wage jobs, and the proposed downtown location. She said that a mix of uses in one building was not as important to her as the overall mix of uses downtown. She believed that there were other suitable locations downtown for housing, but fewer opportunities in downtown to locate a large employer anchor. Ms. Bettman thought in this case, the proposal was worth the public subsidy. Mr. Pap8 said that he offered the motion because he wanted the City to put an agreement together with both parties to "start the horse race," and in nine months the council would have created criteria for which response would prevail. Ms. Taylor requested staff comment on the motion. She preferred to adopt the staff recommendation to select the ORI response. Mr. Sullivan said that without talking to the parties involved, it was difficult to know if they would want to go through another competitive process. He also believed it would be difficult to create an evaluation process for such different projects. Each project had characteristics with merits and each had unknown elements. He did not know if the City could keep both parties interested. Mr. Poling called for predictability in the process. He said that the City established a process, the respondents followed it, and staff returned with a recommendation that he supported. He pointed out that if the council adopted the staff recommendation, staff would enter into negotiations with the Fogelstrom Group if the ORI proposal did not appear to be feasible within a six-month period. Mr. Poling agreed with the remarks of Ms. Bettman and Ms. Taylor regarding the benefit of the MINUTES--Eugene City Council May 12, 2003 Page 7 Work Session ©RI response to the downtown. He suggested that the council remain with the process as outlined. Mr. Kelly expressed concern about Mr. Papa's use of the word "competition," saying he considered the provision of additional time a way of letting each party do more due diligence. He asked for staff's reaction to that. He also assumed that if the motion passed and one or both parties were not comfortable with it, staff would return in the near-term to inform the council of that fact. Mr. Sullivan responded that the proposers might consider that the motion set up a competition. He said that if the motion passed, staff would return to the two parties to determine their continued interest. Mr. Sullivan suggested that the motion essentially requested those responding to the RFP to do what they just did. Mr. Meisner indicated support of the motion with some reservations. He was not interested in providing a temporary or permanent public subsidy to move jobs from one part of the city to another part. He said that selection of the ©RI proposal could mean that the City could actually end up "in the hole" since the response required mediation. Referring to the financial analysis, Ms. Nathanson said that it did not address the fact that although ORI would bring in no tax revenue, to the extent it contributed to a healthy downtown, property taxes would increase with a commensurate benefit to the City. She asked City Manager Taylor to comment. City Manager Taylor noted his support for the ORI response because of its simplicity, the jobs involved, and the history of the organization in the community. He pointed out that if ORI was not able to develop an acceptable financial package in a reasonable time period, the City could move rapidly to re-engage in discussions with the Fogelstrom Group. He preferred the more detailed staff-proposed motion. Mayor Torrey believed that with more certainty about the financial feasibility of the ORI response, the council would support it outright. He questioned whether the City Council would have the information it needed from ORI in six months, and asked how the City could keep Fogelstrom Group involved in that period. Mr. Braud said that in addition to providing more information about the grant, ORI would need to identify its entire funding package in that time period, as well as select a capable developer. Ms. Bettman asked if the motion would prejudice ©Rl's ability to seek funding. Mr. Braud did not know, but said it could be an issue. Ms. Bettman agreed. Ms. Bettman said that some of Fogelstrom Group's numbers appeared to be overly optimistic, and that appeared to indicate a lack of experience with such projects. Mr. Braud said an analysis of the downtown housing market by the consulting firm EcoNorthwest indicated that it cost more to build in downtown, and that downtown housing generally required a significant public subsidy. He concurred with Ms. Bettman that the Fogelstrom Group's response did not reflect those facts. Ms. Bettman believed the staff-proposed motion was more professional and cleaner than the motion offered by Mr. Pap~, and indicated her intent to offer it as a substitute motion. Ms. Bettman, seconded by Ms. Taylor, moved to direct the City Manager to enter into negotiations for the sale of the Sears development site to ©RI, for development consistent with the response to the RFP, on terms and for such amount that he determines is in the public interest, final terms of which would be approved by the URA, allowing ORI up to six months to demonstrate satisfactory progress towards selection of a developer and identification of financing sources. In the event that the MINUTES--Eugene City Council May 12, 2003 Page 8 Work Session City Manager determines that the ORI proposal has not made satisfactory progress at the end of the six months, or at any time the City Manager determines that the ORI proposal is not feasible, direct the City Manager to negotiate the sale of the site to The Fogelstrom Group, for development consistent with the response to the RFP, on terms and for such amount that he determines is in the public interest, final terms of which would be approved by the URA. Ms. Bettman said that the staff-proposed motion represented a more professional way to approach ORI. She thought giving both responses equal weight prejudiced one response over the other. Ms. Taylor concurred with Ms. Bettman's remarks. She said that, given ORl's tax-exempt status, it did not matter where it was located, but in downtown it would have a positive benefit. Mr. Pap~ said he wanted to keep both companies in the process, and that was what his motion was intended to do. He interpreted the staff-proposed motion as meaning that the Fogelstrom Group would no longer be involved. He preferred to see housing downtown rather than an office building. Mayor Torrey deemed the motion an amendment to the original motion. The amendment to the motion passed, 5:3; Mr. Meisner, Mr. Pap~, and Ms. Nathanson voting no. Mr. Kelly hoped the public and staff understood that the council understood the Fogelstrom Group to be a very viable respondent in the process. The amended motion passed, 6:2; Mr. Pap~ and Mr. Meisner voting no. Mayor Torrey adjourned the meeting of the Urban Renewal Agency and convened the meeting of the Eugene City Council. C.CONSENT CALENDAR 1. Approval of City Council Minutes - April 9, 2003, Joint Public Hearing with Lane County Board of Commissioners -April 14, 2003, City Council Meeting - April 16, 2003, Work Session 2. Approval of Tentative Working Agenda 3. Approval of Resolution 4756 to Ratify FY04 Metropolitan Wastewater Management Commission Budget 4. Approval of Resolution 4757Authorizing the Issuance and Sale of Electric Utility System Revenue Bonds in the Aggregate Principal Amount of Sixty-Four Million Dollars ($64,000,000) for the Purposes of Financing Electric Utility System Improvements and Refunding Electric Utility System Revenue Bonds Series 1994, Series 1996 and Series 1998b; and Providing for Related Matters 5. Approval of Resolution 4758 Supporting Application for State of Oregon Parks and Recreation Department Local Government Grant Matching Funds for Parks MINUTES--Eugene City Council May 12, 2003 Page 9 Work Session Ms. Bettman, Mr. Kelly, and Ms. Nathanson noted corrections to the minutes. Ms. Bettman pulled Item 3. Mr. Pap~ pulled Item 4. The Consent Calendar, with the exceptions of items 3 and 4, passed unanimously, 8:0. Regarding Item 3, ratification of the Metropolitan Wastewater Management Commission (MWMC) fiscal year 2004 budget, Ms. Bettman said that the budget indicated that $750,000 was moved from the Operating Reserve to the Capital Reserve. In addition, the MWMC proposed to raise rates by 6.5 percent. Ms. Bettman asked if there were capacity-enhancing projects in the MWMC's capital budget that were not being funded through SDCs. In response to Ms. Bettman's question regarding the use of SDCs, Susie Smith, General Manager of the Metropolitan Wastewater Management Commission (MWMC), responded that the agency had a combined reimbursement/improvement SDC fully allocated by statute to capital improvements. Under the current MWMC's methodology, the agency would not collect enough money from either the reimbursement or improvement SDC to fund the Capital Improvement Program (CIP) in its entirety, including capacity enhancing projects. Ms. Smith anticipated that the MWMC would have to continue to subsidize capital-enhancing projects with user fee revenues. Ms. Bettman suggested that the proposed 6.5 percent increase in fees could be attributed to the fact the citizens were subsidizing the cost of growth. Ms. Smith said that was true, in part. Ms. Bettman referred to the size of the agency's SDC reserves and suggested that if the reserves were used for capital-enhancing projects, the proposed fee increase could be postponed or decreased significantly. In response, Ms. Smith said she could not say that was correct. The MWMC was holding those reserves for a very large project. She said that the SDC funds were allocated annually on the basis of the financial plan for the long-range CIP. The agency could not spend all SDC revenue in one year because there would be no money in the next year. She said the financial plan adopted by the MWMC involved metering that money out to support projects over a five- and ten-year horizon. Those expenditures were largely driven by MWMC's wet weather flow management plan improvements that would cost about $35 million over five years. For that reason, those reserves could not be spent today. Ms. Smith attributed the proposed rate increase to a decrease in user fee revenues since 2000. The need for the rate increase was driven by an extreme drop-off in revenue collection due to the economic downturn, and other factors such as utility rate increases and billing and collection increases. The rate increase was to make up for lost revenues in past years. Ms. Bettman continued to maintain that ratepayers were subsidizing new growth. Mr. Kelly recalled a proposal to raise the regional element of the wastewater SDC. He asked about the status of the increase, and if that increase would help cover the SDC revenue shortfall. Ms. Smith said that the MWMC had adopted and forwarded to the local jurisdictions a change in the SDC methodology that would have allowed it to change the ClP list for which improvements fees could be collected from a five-year to a ten-year basis. In the long-term, that would address, in part, Ms. Bettman's issues. Regarding the status of the fee, Ms. Smith said that the Lane County Homebuilders Association had indicated its intent to take legal action against the City of Springfield if it adopted the methodology change. Springfield had scheduled a public hearing on the item but that was postponed. She said that MWMC felt it had a strong legal position and was working to be prepared for an appeal. MINUTES--Eugene City Council May 12, 2003 Page 10 Work Session Ms. Bettman repeated her earlier arguments that ratepayers were subsidizing growth because the SDCs were not set at a rate adequate to fund the capacity needed by new development. She objected to that, particularly in an economic downtown. She indicated opposition to the budget. Mayor Torrey called for a vote in favor of the MWMC's budget, saying that the needed wet weather improvements planned for in the agency's ClP had nothing to do with development. The agency had to deal with that because it had not been sufficiently dealt with before. Ms. Smith said that the original SDC was an equalization charge developed in 1991. That approach had worked well until Hynix came to town and then the agency found its methodology inadequate to address that type of user. Ms. Smith said that at that time, a citizen advisory committee was formed to review the methodology and to develop a new approach that adequately addressed SDC issues in the community. That committee had recommended the methodology now in place. She noted that the last SDC review took place six years ago, and if it was the wish of the governing bodies to do so, they could call for a review of the SDC for its adequacy. Ms. Smith said that she would be happy to return with that message to the MWMC. Responding to a question from Mr. PapS, Ms. Smith said that the past review of the SDC methodology had not been focused on large users alone, but on all factors related to the SDC, including capacity, net asset value, and the future CIP. The vote to approve Item 3 of the Consent Calendar passed, 6:2; Ms. Bettman and Ms. Taylor voting no. Mr. Pap8 clarified the details of the EWEB-related resolution with Sue Cutsogeorge of the Central Services Department. The vote to approve Item 4 of the Consent Calendar passed unanimously, 8:0. D. ACTION: Approval of Findings and Recommendations from the Hearings Official and Adoption of an Ordinance Levying Assessments for Paving, Curbs and Gutters, Sidewalks, Street Lights, Wastewater Systems, and Drainage Systems on Royal Avenue from Terry Street to 1,000 Feet West of Terry Street; and Declaring an Emergency; and Providing an Immediate Effective Date (Contract #2002-20) (Job #4044) Mr. PapS, seconded by Ms. Nathanson, to approve the findings and recommendations of the Hearings Official of April 21, 2003. Ms. Solomon reviewed the details of the assessment process with Mr. Carlson, who indicated that the assessments could not be issued until the City knew the full construction costs. Ms. Bettman believed that the funding for the project should include a higher proportion of SDCs and assessments. She said that the Lane County Road Fund was paying nearly $500,000 toward the project. She believed that money could be used for other purposes, such as maintenance and reconstruction, and it should be available to pay for what the transportation system maintenance fee was intended to pay for. MINUTES--Eugene City Council May 12, 2003 Page 11 Work Session The motion passed, 7:1; Ms. Bettman voting no. Mr. Pap~, seconded by Ms. Nathanson, moved that the City Council adopt Council Bill 4833, an ordinance levying assessments on Royal Avenue. The motion passed, 7:1; Ms. Bettman voting no. E.ACTION: A Motion Concerning the Appeal of the Planning Commission's Decision Affirming the Planning Director's Determination that Only the Standard Subdivision Procedures, Rather than the Site Review or Planned Unit Development Procedures Shall Apply to a Proposed Four-Lot Tentative Subdivision (Whitbeck Knoll) Mr. Pap~, seconded by Ms. Nathanson, moved to affirm the Planning Commission's decision that only the standard subdivision procedures should apply to the proposed four-lot subdivision, including the final order and findings and conclusions of the Eugene City Council regarding Whitbeck Knoll (Attachment A). Mayor Torrey called for council discussion on the motion. Ms. Taylor said she would not support the motion. She believed that the development being proposed should go through the planned unit development (PUD) process, because that was what the residents wanted. The development would have a significant impact on the neighborhood in terms of storm drainage and traffic, and the PUD process would give more scrutiny to the development. She believed similar situations could arise in other areas, and it would be setting a bad precedent not to follow the wishes of local residents. Ms. Bettman believed, contrary to staff's assertions, there was much to be gained from having a public hearing and hearing testimony from people familiar with the area. She supported the use of the PUD process rather than the subdivision process. Ms. Solomon referenced a letter the council received from the developers Alan deGeneault and Gordon Anslow, who had met with the affected property owners. She was satisfied that the issues of concern to the neighbors had been addressed by the developer and believed that the public process had worked. She indicated support for the motion. Mr. Pap~ agreed with the remarks of Ms. Solomon. He applauded that the neighbors and the developer for meeting, even if they had not been able to resolve all the issues. He asked if the developer had followed the applicable City rules. Alissa Hansen of the Planning and Development Department said that the applicant submitted a tentative subdivision application that had been reviewed for completeness and was essentially on hold pending completion of the appeals process. Mr. Pap~ confirmed with Ms. Hansen that a property at 701 feet in elevation in any other area of the city would not be required to go through the PUD process unless there was a PUD overlay the property, and there was no such overlay in this case. Mr. Kelly expressed appreciation to the developers and neighbors. He said that it was clear there were drainage and traffic issues associated with the development, but he believed those would be addressed with the same level of scrutiny through the subdivision process as through the PUD process. He supported the motion. Ms. Nathanson said that she had previously supported the PUD process as she thought there was nothing to gain from it and little to lose. She said that the property was in the boundaries of the MINUTES--Eugene City Council May 12, 2003 Page 12 Work Session South Hills Study and a part of it was above the 701' elevation. However, she said that she was influenced by the letter from Alan deGeneault and Gordon Anslow to support the motion as it appeared that things were proceeding as they ought to. Ms. Bettman also appreciated that the developer met with the neighbors and said that it appeared two of the issues of concern to the neighbors were addressed. She asked if the neighbors were happy. Ms. Hansen did not know as she had not heard from the neighbors. Mayor Torrey solicited a second round of comments from the council. Ms. Taylor did not think the council could assume the neighbors were happy. If the two review processes were comparable, she thought the neighbors should be given the process that made them "feel better." She suggested that the neighbors might regret the meeting with the developer if it was misinterpreted. She noted that five trees on the site had already been cut down. Mr. Kelly said that in terms of process downsides, he perceived as a downside to the PUD process that more paperwork would be generated by the applicant and an additional fee would be required. The only difference in process was that of the oral, as opposed to written, testimony. Mr. Pap8 agreed with the remarks of Mr. Kelly. He advocated for approval of the motion given that the development season was fast approaching. Ms. Taylor determined from Ms. Hansen that beyond the required public hearing, the PUD process also required that the development team include additional professionals. She further determined from Planning Director Jan Childs that the cost of an appeal for a PUD was higher than for a subdivision. The motion passed, 6:2; Ms. Bettman and Ms. Taylor voting no. The meeting adjourned at 7:18 p.m. Respectfully submitted, Dennis Taylor City Manager (Recorded by Kimberly Young) MINUTES--Eugene City Council May 12, 2003 Page 13 Work Session