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HomeMy WebLinkAboutCC MInutes - 06/25/03 WS MINUTES Eugene City Council Work Session McNutt Room-City Hall June 25, 2003 Noon COUNCILORS PRESENT: Nancy Nathanson, Scott Meisner, David Kelly, Betty Taylor Bonny Bettman, George Poling, Jennifer Solomon COUNCILORS ABSENT: Gary Pap~ A. ACTION: Resolution 1025 Adopting a Supplemental Budget; Making Appropriations for the Urban Renewal Agency of the City of Eugene for the Fiscal Year Beginning July 1, 2002, and Ending June 30, 2003 Mayor Torrey called the meeting of the Urban Renewal Agency of the City of Eugene to order. He noted a public hearing had been held on the item on June 23. Ms. Taylor, seconded by Mr. Meisner, moved to approve Resolution 1025 adopting a Supplemental Budget; making appropriations for the Urban Renewal Agency of the City of Eugene for the fiscal year beginning July 1, 2002, and ending June 30, 2003. The motion passed unanimously, 5:0. Ms. Nathanson arrived. B. ACTION: Resolution 1026 of the Urban Renewal Agency of the City of Eugene Adopting the Budget and Making Appropriations for the Fiscal Year Beginning July 1, 2003, and Ending June 30, 2004 Ms. Taylor, seconded by Ms. Nathanson, moved to approve Resolution 1026 of the Urban Renewal Agency of the City of Eugene adopting the budget and making appropriations for the fiscal year beginning July 1, 2003, and ending June 30, 2004. The motion passed unanimously, 6:0. Mayor Torrey adjourned the meeting of the Urban Renewal Agency and convened a meeting of the Eugene City Council. C.WORK SESSION: Airport Governance Public Works Department Director Kurt Corey and Airport Manager Bob Noble joined the council for the item. City Manager Dennis Taylor indicated that Mr. Pap~ had requested that the council take no action on the issue in his absence. Mr. Corey said the policy issue before the council related to whether the City of Eugene operated an airport. He noted that the City had operated the airport for 84 consecutive years. He indicated MINUTES - Eugene City Council June 25, 2003 Page 1 Work Session that Mr. Noble would discuss why Eugene operated an airport, performance and policy issues related to the airport function, the current operating environment, and the current status of the airline industry. Mr. Corey indicated he would conclude by discussing policy options for governance. Ms. Solomon arrived. Mr. Noble provided a history of the Eugene Airport, which was established in 1941 at its present location. Commercial air service commenced in 1943 through a collaborative effort of the City and the Eugene Area Chamber of Commerce. In '1962, Eugene voters passed a bond measure for airport improvements, which helped construct a new terminal in 1964, at approximately the same time that jet service to the community began. Mr. Noble reported that in 1967, the City and Lane County discussed the issue of transferring governance of the airport from the City to the County, but the County had no interest due to the debt remaining from the bond. A discussion occurred in '1969 with similar results. In '1989, voters passed a bond measure to construct the present terminal. Discussions leading up to the vote included a discussion of whether other Lane County citizens could participate in supporting the airport, but ultimately the City went forward with the bond measure. In 2002, the bond debt was moved from the tax rolls to the airport. Mr. Noble called the council's attention to the airport's service profile, including in the meeting packet as Attachment E. He reviewed the objectives included in the profile, emphasizing the importance of the air service component to the community and its economic benefit. He said that prior to September 11, 2001, the airport had been generating a net surplus operating income to create seed money for its capital projects with the goal of not having to rely on any other form of support. Since September 11 and the transfer of the bond debt, the airport was no longer in that position. The airport would need to focus on air service even more to generate enough revenue to provide sufficient funds for matching federal grants. The airport had created a reserve large enough to pay the bond payments and continue a modified capital program, but that was not sustainable. Mr. Noble called attention to the performance measures associated with the service profile. He noted that landing weights in 2001 were down because flights were curtailed after September 11; in 2002, operations were further affected by United Airlines' decision to move to smaller jets. As a result, fee collections were down. Mr. Noble reported that the airport continued to receive high marks from surveys for its ability to provide traveler support facilities and services. He noted that fuel sales were down, although that trend had been evolving prior to September 11. Mr. Noble reported that trends indicated that air travel growth over the next ten years would double from current levels. He believed that was somewhat speculative given the airlines' recent profitability levels. He noted that much air travel was subsidized by business travel, which was also down, and which was likely to change as the airlines rethought their business fares. Mr. Noble noted that airport revenues had fallen after September 11 while expenses went up, and more of those charges were being passed on to the airlines as a result. The distribution of those costs had increased from three airlines to four airlines. If the airport lost a carrier, it would have fewer parties to spread its fixed costs to, placing the airport in a downward spiral from which it would be difficult to recover. MINUTES - Eugene City Council June 25, 2003 Page 2 Work Session Mr. Noble referred the council to data regarding the performance measure related to travel out of Eugene as opposed to travel from Portland, which indicated Eugene was increasingly losing traffic to Portland. He had been asked over time if Eugene-Springfield had sufficient demand to support an airport and why airlines left if the demand was sufficient. He said that demand was sufficient, but the answer related to how good air service was as well as the fare levels. The airport had no control over fares, and travelers would likely continue to pay a small premium to fly out of Eugene rather than Portland. Mr. Noble said that communities such as Spokane, Billings, and Boise had similar catchment area populations but four times the service and four times the activity. That was due in part to the fact that those areas did not have a competing airport within a two-hour drive. Mr. Noble said that many local citizens decide to drive to Portland both to save money and because they were unable to get a seat out of Eugene for capacity reasons. He said that more local air service was needed. Mr. Noble briefly noted the governance models for other Oregon airports. Mr. Noble emphasized the importance of getting behind and supporting local air service, no matter the model of governance. Mr. Corey said there were approximately 17,000 airports in the United States. Of those, 3,500 had one lighted runway. There were no more than 500 with commercial airline service. About 50 percent of all United States airports provided more than 50 percent of all boarding. There was a great diversity in size and service provided by United States airports, and it was difficult to generalize about them. Mr. Corey said that Eugene's airport was unique. With the exception of some state-run facilities, most airports across the country were run by a local unit of government. Mr. Corey said that generally, organizations consider alternate forms of government for airports because the local government wants to get rid of a "hot potato," such as an environmental issue that the local government does not want to bear the cost of alone. He said that there was no history of a local government creating a port authority or special district to give up control of an airport that ran smoothly. He called attention to the information provided to the council regarding special districts in the meeting packet. Mr. Corey concluded by saying that the airport was not a hot potato; it was running smoothly, it was funded regionally by all its users, and had a good record of success in meeting its performance measures and other measures of success. He recommended that the City continue to own, maintain, and operate the Eugene Airport. Mayor Torrey called for questions and comments. Responding to a question from Ms. Bettman, Mr. Noble indicated that approximately 50 percent of all travel from Eugene was business-related. Ms. Bettman agreed with Mr. Noble that good air service was imperative to economic development. She believed the issue was one of regional economic development. She suggested that the time to regionalize the airport was when it was solvent, as it was now. Ms. Bettman was perplexed by the staff recommendation to retain the airport as a municipal airport for that reason. She favored regionalizing the airport to the entire catchment area to secure a broader base of funding. Ms. Bettman did not want to see the airport having to go to the Eugene taxpayers after the reserves were exhausted for money to upgrade runways or to make the airport more viable. She wanted to examine the potential of an airport district. Such a district could assess service charges. Ms. Bettman wanted to explore the difference between the use of the MINUTES - Eugene City Council June 25, 2003 Page 3 Work Session property tax to support the airport or a district tax to support it, and how that approach affected the issue of compression. She asked how a district with broader boundaries affected compression. Ms. Taylor was interested in the answers to Ms. Bettman's questions. She asked if the expected changes in the fare structures for business travel would make it impossible for nonbusiness travelers to get Iow fares in Eugene. She also asked about the airport's General Fund contribution. Mr. Noble clarified that the airport paid the General Fund for indirect and direct service costs. Mr. Meisner said that Ms. Bettman had asked most of his questions. He believed that Mr. Noble's comments highlighted the high-risk future facing the airline industry. Mr. Meisner maintained that the Eugene airport provided free service to people living outside the city limits. He believed that the cost of the airport should be spread beyond the Eugene taxpayers. Like Ms. Bettman, he also wanted to avoid asking the taxpayers for funding for the airport's capital improvements. He said that the service was a regional one. Mr. Meisner did not have a preference at this point as to a regional form, but he thought the City should begin a discussion of what was the best form. He suggested that another work session would be needed. Mr. Noble noted that the issue of whether to form an airport district would not be a council decision. It would be a decision of the Lane County Board of County Commissioners. The council could state a preference for the form of governance. Mr. Meisner said that later that day, the Council Committee on Intergovernmental Relations would consider a new grant proposal for new service, and he believed that the council should be informed of what the airport was trying to do. Mr. Kelly emphasized the importance of the airport as a fundamental municipal service. He wanted to see the airport services maintain an upward trend. He said that initially, he had supported the idea of regionalizing the airport but then he had realized that the service was all user-fee funded and there were no General Fund dollars going to the airport. He questioned what the City would gain by regionalizing the airport. It would not lower Eugene residents' property tax payments or add new resources. Mr. Kelly said that Ms. Bettman and Mr. Meisner had articulated very well the need to look forward. He asked what was the best way to ensure the airport's continued viability and good service levels if airline service became more challenging for smaller markets. He believed that in that case, it would be more useful to be able to turn to a larger group of voters. He asked staff for feedback. Ms. Nathanson said for her the question was what Eugene would gain versus what it would lose. She thought the airlines' problems began with deregulation, when smaller airports lost out to larger hub airports. She noted that United Airlines had decreased flights from Eugene because it wanted to compete with Southwest Airlines in Portland. That move had nothing to do with the airline's profitability in Eugene. She suggested that in addition to fare and seat availability, the airlines' schedule had much to do with the airport's usage levels, particularly in terms of travel to the east coast, which was difficult for those wishing to reach the east coast and return without an overnight stay. She asked if there was a point at which the City would lose a critical mass of MINUTES - Eugene City Council June 25, 2003 Page 4 Work Session options or if the situation was already in a steady state of decline. She hoped no large problems were imminent. Ms. Nathanson suggested the issue of governance for the airport was a budget issue for the council. She hoped that the discussion did not imply criticism of the airport or suggest that the airport was not essential to the area's economic infrastructure. She noted that the City would lose direct oversight of the airport service if it was a regional service. If the airport was regionalized, the City was likely to be one of several partners. In theory, there was also the potential for a revenue loss. She looked forward to additional information. Mr. Poling thanked the Airport Commission and the Airport staff. He said that he received a press release earlier in the month indicating that flights, seats, and passenger numbers had increased since January 1. He asked if the Board of County Commissioners had indicated any interest in forming an airport service district or if the City had inquired of a larger multi-county areas of their interest, and of the property tax increase that would be gained by regionalizing the airport. Mayor Torrey expressed appreciation for the work done by Mr. Noble. He asked what benefit the City of Eugene would gain from regionalizing the airport. He had heard nothing about any benefits. He asked why Linn, Benton, Douglas, and Coos counties would choose to participate in a potentially bad situation. What did they owe Eugene? He suggested that regionalizing the airport would be best if the airport faced major problems. He asked what the City of Springfield could gain from regionalization. He was open to further discussion, but he questioned if Eugene would receive a buyer. Unless the airport was so substandard it impacted everyone's economy, others would probably not be willing to join with Eugene. Mayor Torrey solicited a second round of council comments and questions. Ms. Bettman said that one could have an airport district without levying any taxes at all. She believed the Metropolitan Wastewater Management Commission was a viable model for the airport. She wanted to examine if the City could expand that concept to include an airport district. Ms. Bettman said the organization needed to do a better job of advocating for the taxpayer, and she did not want the City to go to the taxpayers in a few years to ask for money to support what she believed to be a regional service. Mayor Torrey solicited a third round of council comments. Ms. Bettman called for the airport to be regionalized now. She said that if Eugene waited until the airport was in the red, it would be negotiating with other government partners from a position of weakness. Now it could negotiate from a position of strength. She saw regionalization as vital to the future of the airport. Ms. Solomon expressed appreciation for the information provided by staff regarding special districts. However, she said the airport was not broken, and she saw nothing to be fixed. She suggested the council focus its energy on transportation issues, economic development, and the potential human services that would come up when State budget cuts were implemented on July 1. She said that the council's discussion of the airport added to an already full work program. MINUTES - Eugene City Council June 25, 2003 Page 5 Work Session Mr. Meisner agreed the airport was not broken, but according to staff, it was breaking. He believed the City would be faced with the cost of funding the airport's operations or capital matches, and the City needed to start looking for a solution. He did not think it was not a big commitment of council time to direct staff to do further work with the County on the issue. He asked if a motion was necessary. Mr. Taylor reminded the council that Mr. Pap~ had asked that no action be taken in his absence. Ms. Taylor said that the airport was an obvious example of where the City was providing services for nonresidents. She thought there was logic in asking the region to pay for the airport. Mayor Torrey asked where the money to support a regional airport would come from if there were no property taxes being collected. Ms. Taylor suggested that taxes could be levied when and where needed. Mayor Torrey asked the staff to contact the city managers and county administrators of the cities and counties in the airport's service catchment basin and inquire about their interest in regionalizing the airport. Mayor Torrey solicited a fourth round of comments. Ms. Bettman suggested that the district's boundary was predicated on the catchment and it would not be necessary to involve all the counties mentioned by Mayor Torrey. Mayor Torrey pointed out that the catchment included five counties. Mr. Noble indicated that both Ms. Bettman and Mayor Torrey were correct. There being no further comments or questions, Mayor Torrey moved onto the next agenda item. D.WORK SESSION: Land Use Audits Review Planning and Development Department Director Tom Coyle introduced Paul Zucker of Zucker Systems of San Diego, consultant for the City. He noted Mr. Zucker's work as a trainer with the American Planning Association and his consulting work with both the public and private sectors. Mr. Coyle noted that Mr. Zucker had visited Eugene in March for three days and had done extensive investigation at that time with staff and several focus groups. The results of the work were included in a report provided to the council entitled OrganizationalAudit - Planning and Development Department - Planning Division. He reported that the majority of the recommendations were directed at staff, with three directed toward the council. Mr. Zucker briefly reviewed his firm's study methodology, noting the focus groups that had been convened and the staff interviews that had occurred. He said that he had repeatedly heard from customers of the Planning Division that Eugene was a hard place to do business. That perception seemed to be quite strongly felt. Focus group participants across the board appeared to want more clarity in community direction and planning. He reported that the citizen group did not feel represented in the planning process. Many participants did not feel the new code was well understood, even by City staff. Mr. Zucker said that there was a continuing concern about the prescriptive nature of the code. All participants indicated that communication between the development community and division could be improved. The applicant focus group participants were very concerned about the City's Public Works function as well, indicating it was creating more problems than the Planning Division. MINUTES - Eugene City Council June 25, 2003 Page 6 Work Session Mr. Zucker highlighted some of the report's findings and recommendations. Among the highlighted recommendations were that: · The City should develop an implementation plan for the report's recommendations; · The City should consider the benefits of being less prescriptive in its approach to permitting; · The City should examine Planning Division staffing levels; · The City should clarify its overall City policy and approach to planning and development; · The City should strengthen the division's management function; and · The City should strengthen the role of planners as project managers who worked on behalf of both the applicant and the neighbors. Mayor Torrey opened the floor for council comments and questions. Mr. Meisner asked how many other Oregon jurisdictions that Mr. Zucker's firm had worked with. Mr. Zucker said that his firm had worked with Clackamas County. Mr. Meisner said he objected somewhat to Mr. Zucker's reference to the City's regulations as prescriptive, adding that the State had largely precluded the City's ability to be flexible. He questioned how the City could implement the recommendations given Planning staff reductions. Mr. Meisner wished that there was more reflection of the citizen group's input in the report. He said that City residents were very concerned with how City plans were implemented. Mr. Zucker said that Mr. Meisner's remarks spoke to his statements regarding a work program that cut across the department. He did not want to appear to be challenging the fact of the State mandates, but he emphasized the importance of the City being clear about its objectives, which required a slight degree of flexibility He thought that tweaks could be made to the current approach that would improve the situation. Mr. Meisner said that would require staff effort and the right kind of questions. He pointed out that staff, for example, did not ask the council what kind of neighborhood it wanted for the courthouse area; it asked if the council wanted to see commercial or mixed-use zoning on the site. Mr. Zucker said that was a good point. Mr. Kelly thanked Mr. Zucker for his report, which he commended as excellent. He asked Mr. Coyle if he expected to be able to implement the majority of the recommendations over the next two years. Mr. Coyle said yes. He noted that staff had about 53 items for follow-up; the council had three. He added that work on some of the recommendations was already underway. Mr. Coyle agreed with Mr. Meisner that staff needed to ask better questions of the council. Mr. Kelly asked staff to speak at some point to the report's recommendation that the City should consider the benefits of being less prescriptive in its approach to permitting, saying it seemed to be a huge project. He asked what staff resources existed to do the project. Ms. Nathanson noted that as a member of the Planning Commission, she had been an advocate for performance-based zoning but the idea had not gone far. Ms. Nathanson referred to page 4 of the Zucker report, which included a finding that referred to the many variables that affected the prescriptive approach, and suggested that technological changes and advances in materials also had made a difference, even to the kinds of services that existed. She referred to page 6 of the Zucker report, and highlighted the statement that said staff MINUTES - Eugene City Council June 25, 2003 Page 7 Work Session was too much into regulation and not enough into problem solving. She found the statement important. Ms. Nathanson referred to page 16, saying she found the conclusion that Eugene's practices were well within the norm of other jurisdictions and states to be worth noting. Responding to a question from Ms. Bettman regarding which recommendations the department planned to implement in the short-, medium-, and long-term, and if there were recommendations the department did not intend to implement, Mr. Coyle said that he did not know if the City could staff the code it now had in place. There were many standards, and once implemented, they must be measured, monitored, and reviewed. He estimated that sufficient staffing for the code required six planners, and the City had three planners. The City's current regulatory approach hampered the department's ability to be enabling, and if the City maintained that direction he doubted the department would be able to implement at least six of the recommendations. Ms. Bettman suggested that the department could easily evaluate the cost of implementing many of the operational recommendations. Those predicated on policy changes could be noted, and that could be part of the report. Ms. Bettman determined that Mr. Zucker looked at the extent to whether a policy was in ordinance form and the extent to which the community clearly understood the policy. For example, he had looked at the City's policies on growth and economic development, as well as all the process materials. He had attempted to understand, for example, what somebody who wanted to add a bedroom to their house went through: What was handed to them by City staff? How long did they wait for service? Did they find out where they needed to go? Could they find where they needed to go? Ms. Bettman said she was sorry to hear Mr. Zucker's answer because she had hoped for something different. She thought the intent of the audit was to look at staffing needs and turnaround times. She cited the American Heritage Dictionary definition of "audit," which was "an examination of records or accounts to check their accuracy." Ms. Bettman likened the report to the recent Business Climate Survey, which had centered mostly on industry's perceptions. Mr. Poling found it interesting that some of the comments made by those participating in the focus groups were the same comments the council heard in the Business Climate Survey and at the nodal development hearings, that is, that citizens do not feel involved in the process. He said the City needed to work on that. Mr. Poling noted the recommendation for planners as project managers and recalled discussion among the councilors about that prior to his joining the council. He suggested that cross-training of inspectors would be of great benefit and for more information about the status of that discussion. Mr. Coyle indicated he would provide the council with information on what had been done. Mr. Poling found the report informative and well-done and hoped the council took its recommendations to heart and implemented as many as possible as quickly as possible. Ms. Taylor asked if Mr. Coyle supported the recommendations. Mr. Coyle indicated he supported the majority of the recommendations. Speaking to the policy issue, Mr. Coyle cited Recommendation 55, "Shorten time goals for Type 1 permits and adjustments." He said that the issue of how many applications had been approved in contrast to how many had been denied had been raised several times by the council and Planning Commission. When staff walked away from that discussion, it did not know if the council wanted it to deny more applications, or if it was moving quickly enough. He said that was the policy issue the planners frequently faced. He said the department was trying to be consultative in nature with the goal of getting applications to approval. If the department was in disagreement with the developer, such applications could be discarded early. Mr. Coyle said that if the council wanted MINUTES - Eugene City Council June 25, 2003 Page 8 Work Session him to deny more applications, Recommendation 55 was probably not a significant issue. Ms. Taylor suggested that the question was one purpose of the division: Was it to process applications quickly or to consider what kind of community was wanted? Ms. Taylor noted that she had not favored funding the audit. She said the audit had been presented to the council in the context of a sample performance audit. She had expected to see something about efficiency and whether planners were being used in the best possible way. Speaking to the latter issue, she suggested that depended on what one considered what planners should be for: Were they to plan for a good community or to satisfy the needs of developers as quickly as possible? She asked Mr. Zucker if he perceived the audit as an overall look at efficiency or as a look at a service to a particular group of people. Mr. Zucker said that he viewed his work as focusing on the customers. The question was, who were the customers? He said that applicants were one group of customers. Neighbors were customers, as was the City Council. In many ways, staff was a customer. He attempted to place his recommendations in that broader context. In terms of efficiency, he believed that everything came back to the customer. Mr. Zucker said in the permitting process, it was dangerous to say the customer was the developer because many customers were residents and homeowners who wanted to carry on with their lives. He believed that an applicant that came to a city for a permit should be able to get a clear understanding of what was needed, what it would cost, how long it would take, and what requirements existed. Mr. Zucker said he did not think the City had to revise its entire code. He said that both applicants and other citizens say that they wanted clarity in the code, or exactly what was being asked of us. Citizens will call for proscriptive codes. However, when there was actually a development proposal, everyone wanted flexibility to solve their own problems. He said that the reasonable way to approach the problem was to provide flexibility in the process to ensure a better product at that end. Ms. Taylor asked if Mr. Zucker considered his work similar to what a performance auditor did. Mr. Zucker said yes. He followed the federal yellow book approach to auditing. He said that the audit approach was partially dictated by the budget. In the time his firm was in Eugene, he thought it did a credible job. He believed that for the amount of time allotted, the firm did a pretty good staffing analysis. Mayor Torrey asked if staff could provide the council with information on focus group in which participants were citizens seeking to remodel their homes. He said that there was a perception on the part of some councilors that developers were somehow bad and other people were not. Mr. Coyle indicated he would provide that data to the council. Mayor Torrey commended the report as excellent. He said that he met monthly with a group of small business owners, who wanted to know what they had to do, asked for help if needed, and for the process to occur in a timely fashion. People complained that the process was short- circuited by different City departments involved in the plan review process. Mayor Torrey said that he was told by a City employee that he had been unable to make it through the permitting process because it was so complex. Mayor Torrey solicited a second round of council comments. Speaking to Mr. Coyle's earlier remarks, Mr. Kelly did not think the council wanted the department to deny more applications. The council wanted the department to implement the code, and if an MINUTES - Eugene City Council June 25, 2003 Page 9 Work Session application met the code it should be approved as quickly as possible. If not, that should be communicated to the applicant as quickly as possible. The department should also help the applicant get the application right. Mr. Kelly expressed appreciation for Mr. Zucker's clarification about flexibility, but pointed out that the City's approach must be based on policy. He believed the City should start with Recommendation 5 and clarify its policy framework first. Ms. Nathanson was unhappy to read the results of the audit but not surprised. She said that there seemed to be two completely different organizational cultures at the City that had not been brought together. Perhaps the audit would help create an environment where improvements could be made. Ms. Nathanson said that some in the organization had tried to make improvements and sometimes it took another event or situation to realize those improvements. Ms. Nathanson found Recommendation 53, calling for the Hearings Official to assist with staff training, to be very interesting. Ms. Bettman maintained that the council that created the Land Use Code Update was "ahead of the curve" because it felt it needed to be proscriptive for the sake of certainty but acknowledged the fact that there needed to be a degree of flexibility. For that reason, the alternative path was added to the work program. Work on that effort had been stalled consistently because the division's resources had been redirected to other things, including the Land Use Board of Appeals remand and litigation. She questioned why the City Council would adopt a different approach when it had already identified a solution there had been much agreement around. Speaking to the issue of customers and to the mayor's remarks, Ms. Bettman said that no councilor thought that developers were bad. The issue was how much they should dominate the process. She said that government was in place to regulate to protect citizens, and that was the purpose of the code. Mayor Torrey thought the audit the right way to approach the issue of evaluating the division because an in-house audit would have been politicized. Mayor Torrey adjourned the meeting at 1:30 p.m. Respectfully submitted, Dennis Taylor City Manager (Recorded by Kimberly Young) MINUTES - Eugene City Council June 25, 2003 Page 10 Work Session