HomeMy WebLinkAboutCC Minutes - 07/23/03 WS MINUTES
Eugene City Council
McNutt Room-City Hall
July 23, 2003
Noon
COUNCILORS PRESENT: Gary PapS, Scott Meisner, David Kelly, Nancy Nathanson, Betty
Taylor, Bonny Bettman, George Poling, Jennifer Solomon.
Mayor James D. Torrey called the meeting of the Eugene City Council to order.
A.WORK SESSION: Fire Station 11 (Santa Clara) Construction Financing Plan
City Manager Dennis Taylor introduced Fire Chief Tom Tallon, who was to speak on this item.
Chief Tallon stated that the City had purchased the 1-1/2 acre Fire Station 11 property in 2002,
beginning service from the substation in July of that year. He explained that the property had two
existing dwellings on it, noting that the living quarters for the fire crew were located in one of the
houses. He said that the department had constructed a tent to provide cover for the vehicle. He
noted that there were pictures of the property, house and tent posted on the wall.
Chief Tallon reported that in October 2002, a policy project group including Assistant City Manager
Jim Carlson, Finance and Court Services Director Cindi Hamm, himself and members of the staff
had been formed and had met on a regular basis to formulate the proposal which he was bringing
before council at the present meeting. He said that the proposal was consistent with the City's
multi-year financial plan, as the fire station had been one of the top priorities in that plan. He felt
very positive about the workable financial plan to construct a permanent fire substation in Santa
Clara that was being presented.
Continuing, Chief Tallon listed the reasons the project should be constructed at this time, as
follows:
· After one year, it had been ascertained that the dwelling was too small for the
firefighters who resided there.
· The dwelling did not provide adequate separation for male and female firefighters and
was an unacceptable living arrangement.
· The tent that covered the vehicle was approved for six months at a time and approval
had expired.
· It would take approximately $500,000 to bring the house up to essential services and to
put a more substantial permanent/temporary structure around the vehicle. He said that
the $500,000 investment would be a "sunk cost" from which the City would not get
much in return and because the fire substation would continue in a temporary housing
situation.
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Chief Tallon stated that the site review and design review had been completed. He related that
the project group was recommending the structure size as indicated on the site plan. Regarding
concern expressed by some councilors that the building was larger than necessary, he stated that
the structure would be built for six people and that currently it was planned that at the initial
opening, a fire crew and a medic crew, totaling five people, would reside there. He explained that
the plan for three truck bays was intended to accommodate the possibility of additional vehicles in
the future. He said that one bay was for a fire truck, one was for a medical vehicle, and one
would be used for extra apparatus, which was being kept outside at present. He added that, as
the department had continued its partnership with Santa Clara, it was entirely possible that one of
the Santa Clara vehicles would eventually be parked at this substation.
Chief Tallon emphasized that this was truly one-time money. He introduced Ms. Hamm to speak
on the proposal for financing.
Ms. Hamm reiterated that Station 11 was a priority item on the multi-year financial forecast. She
presented two financing options, as presented in the attachment entitled Permanent Fire Station
11 Financing Plan, the first of which proposed a general obligation bond (GO bond). Regarding
this, she related that there was concern that the City voters would not provide a majority vote for a
bond to construct a substation that provided service for a small section of the City.
Ms. Hamm outlined Option B, noting that it would create an ongoing expense of $265,000 per
year for ten years to cover the debt service on any City of Eugene bonds. She supported approval
of the station, stating that this was an optimal time to take on such a project as construction
contracts were favorable and that the annual percentage rate was Iow.
Mayor Torrey called for questions and commentary from the councilors.
Mr. Meisner said that he was prepared to support the financing package in Option B. He
expressed his appreciation for the creativity that had gone into it.
Mr. Meisner questioned whether it was realistic to expect $780,000 from the sale of three surplus
properties. Ms. Hamm assured him that the department was confident the properties would bring
in at least this much.
Ms. Nathanson approved of the substation construction and the financing package outlined in
Option B. She affirmed that the fire substation was an asset now and would be into the future.
She felt that there was no risk inherent in this plan.
In response to a question from Ms. Nathanson, Mike Penwell, Principal Facilities Project Manager,
stated that both houses on the property were in good shape and it was likely that they would be
moved to another location rather than razing them. Ms. Nathanson approved of doing so.
Regarding Station 4, which had yet to be sold, Ms. Nathanson asked if there was any merit to
delaying the sale so that the worth of the facility would increase. Glen Svendsen, Division
Manager/Central Services Facilities, responded that staff had worked with people who had done
the pre-bid walk-through and the current plan was to hold an oral auction. He noted that there
was a reserve price, should the auction not meet the needed price.
Mr. Kelly approved of the site plan and stated his support for the facility. He asked if the funds
freed up when the AIRS contribution ended and those from the fire contract savings were from the
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FY04 budget. Ms. Hamm responded that they were, but that the AIRS contribution was not in the
baseline budget for Fire Services.
Mr. Kelly, noting that the recent budget process had been harrowing, asked why the Budget
Committee had not been aware of this possible source of working revenue. Chief Tallon
responded that the funding was certainly being utilized. It was noted that the temporary station
was costing $50,000 per year and that approximately $200,000 was currently being spent on
architectural design. Mr. Kelly expressed concern that it would not look good to the media for the
Budget Committee to be unaware of a substantial sum of money.
Ms. Hamm pointed out that the negotiation with AIRS had only been completed in June. She
added that the remainder had been utilized in the expenses of preparing and maintaining the site.
Ms. Bettman agreed with Mr. Kelly regarding the design of the facility. She noted that Police
Commission had tried to work at the State level to remove the prohibition on systems
development charges (SDCs) for City facilities but it had not been successful in that effort. She
felt that, had the City been collecting these, it could fund this project. She questioned the merit of
building this station for existing needs and not the future. She noted that the area to be served
was only comprised of 6,000 to 7,000 citizens.
Chief Tallon stated that a station located in a neighborhood of 7,000 would also serve a much
larger population as staff do not only respond to calls. He clarified that the population of the area
was approximately 17,000, but that only 7,000 were actual residents of the City of Eugene. He
said that he would bring a risk analysis study to the council in the fall to determine how best to
address the future needs of the area.
Ms. Bettman objected to using money for infrastructure at a time when there was a funding
shortage to staff the station once it was built.
Ms. Taylor asked if the Valley River station was still under-staffed. Chief Tallon responded that the
substation in question was staffed only by firefighter cross-trained medics and housed no fire
vehicles. Ms. Taylor echoed Ms. Bettman's concern that construction of another facility without
staffing existing facilities to their fullest extent might not be the best use of municipal funds.
Chief Tallon responded that a decision to cover the Santa Clara area had been made with City
Council support. He said that he brought before the council the proposal to follow through on this
plan. He stressed that he was aware that there was still a risk factor in the Valley River area and
reiterated that a complete assessment of fire and emergency services needs would be presented
to the council in two months.
Mr. Penwell clarified, at Ms. Taylor's request, that the existing houses did not represent much
value. He said that, should the houses go out to bid, the likelihood that bids of more than $2,000
or $3,000 would be submitted was slim and the process was costly to the City. He felt that the
houses would be better used as part of the city's pool of affordable housing. He further noted that
it cost approximately $30,000 to move such a house.
Mayor Torrey was pleased that the City had this option to finance the fire substation. He
recognized Mr. Kelly's concern regarding the existing moneys that had not been brought forth
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during the budget process but opined that the City was not "good at setting aside rainy day funds."
He averred that, should the City Council not opt to tackle this project in a timely fashion, it would
regret it. He agreed that this was an optimal time for construction contracts as there were many
people looking for work.
Mayor Torrey remarked that moving the houses did not seem to be an endeavor that would make
the City money, but it would provide an opportunity for Iow-income housing.
Continuing, Mayor Torrey said that the area this particular fire station was going to provide
services to was an area that had a growing population of senior citizens. He stressed that this
area had the fastest growing population in the City, with the exception of the Bethel area.
Mayor Torrey solicited a second round of questions and comments from councilors.
Mr. Kelly concurred that Fire Station 11 was needed. He wondered if there was any value in
waiting until the risk analysis was completed prior to making a final decision on the placement of
the station.
Chief Tallon replied that Santa Clara, the urban growth boundary, Lane Rural, and Highway 99 had
a critical transition of annexed properties and this required an urban level of services for the area.
He explained that a temporary risk analysis, made and then validated by a consultant, said that
adding this substation represented an improvement of fire coverage. He added that an ongoing
issue was whether there still existed a vacuum of services in the northern part of the City. He
predicted that the risk analysis would lead to a recommendation that more stations needed to be
constructed in this area to meet the needs of its burgeoning population.
In response to further questions from Mr. Kelly, Chief Tallon explained that the Lane Council of
Government (LCOG) fire station site review had been used when placing this station. He stressed
that, even with Fire Station 11, the River Road area was underserved, but the site that had been
chosen had been shown, nonetheless, to provide the best coverage possible for the areas it
served.
Mr. Kelly voiced reluctant support for the station. He reiterated that he had felt "left in the dark"
with regard to the available funding.
Ms. Bettman registered her opposition to Option B. She felt that Option A, the GO bond, should
be "step one," and that the public could be made to understand the need for Fire Station 11. She
expressed a preference that the fire contract savings be applied to staffing the facilities. She
suggested that furnishings could be purchased with General Capital Project funds. She added
that moneys from the aforementioned fund could also be used to bring down the amount of the
proposed GO bond. She stressed that, looking at the multi-year financial plan, the City was facing
more budgetary shortfalls for Fire and Emergency Medical Services.
Mr. Meisner commented that it was a misnomer to think that the Lane County Home Builders
Association was the sole lobbying force against SDCs in the State Legislature. He noted that the
democratic representative from this area was opposed to SDCs.
Regarding Option A, Mr. Meisner stated that he would support a GO bond if he believed that the
public at large would vote for a bond to build a localized fire substation. As it was not likely, he
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supported Option B. He added that he hoped that a public meeting space for area residents could
be incorporated into the plan.
Ms. Nathanson agreed with the analysis that said a GO bond limited to such a narrow geographic
area was not likely to be successful. She felt that it was not an option to provide firefighting
services from a temporary facility. She stressed that it was a vital service and needed a
permanent facility. She commented that the population served was not the only criterion as the
substation protected not only the residents of the area but the people whose work, school, and
travel brought them to the area.
Ms. Nathanson, seconded by Mr. Meisner, moved to approve Option lB, the
implementation plan for site development and facility construction of a
permanent Fire Station 11 in the Santa Clara area of Eugene. The station
would be funded with the package of internal funding sources set out in
Attachment C.
The Mayor called for comments from those wishing to speak to the motion.
Ms. Taylor, seconded by Ms. Solomon, moved to extend the time to on this
item by seven minutes. The motion carried unanimously, 7:0.
In response to a question from Ms. Taylor, Ms. Hamm stated that most fire stations were funded
with City resources, though she could not assert that debt backed up by the General Fund had
been utilized. She noted that the most recent fire station, the downtown station, had been funded
by a GO bond.
Ms. Bettman, seconded by Mr. Kelly, moved to amend the motion to
substitute Option A for Option B as the funding package for Fire Station 11.
Mayor Torrey opened the floor for discussion on the motion.
Ms. Bettman reiterated that she did not support the use of funds for a capital project when fire
fighting services and EMS were currently understaffed. She felt that this did not look good in the
eyes of the public.
The amendment failed, 4:3; Mr. Kelly, Ms. Bettman, and Ms. Taylor voting in
favor.
The motion passed, 5:2; Ms. Bettman and Ms. Taylor voting in opposition.
Mayor Torrey adjourned the meeting of the City Council at 12:50 p.m.
B. WORK SESSION: Use of Downtown Urban Renewal Funds for Downtown Projects
Mayor Torrey convened the meeting of the Urban Renewal Agency (URA) at 12:51 p.m.
Mayor Torrey requested that City Manager Taylor introduce the topic.
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Mr. Taylor introduced Richie Weinman, Urban Services Manager for the Planning and
Development Division.
Mr. Weinman highlighted the agenda item summary included in council packets. He stressed that
loan programs were a very common urban renewal tool, found all over Oregon and the United
States. He said that tax increment financing was the keystone financing tool and the most common
way of financing revitalization.
Mr. Weinman noted that the second motion before the council, as described in Attachment E,
Downtown [lrban Renewal District Goals and Objectives, was to initiate the process to amend
the downtown urban renewal plan to allow the use of actual tax increment funds for projects in
addition to the new library.
Mr. Pap~ arrived at the meeting.
Sue Cutsogeorge, Financial Analysis Manager, spoke to the financing issues. She stated that, in
order for staff to determine whether it would be possible to use downtown urban renewal
resources for projects other than the library, two questions needed to be asked:
· What were the legal issues surrounding the use of those moneys in the downtown
district?
· How could the City be reasonably sure that urban renewal would be able to meet the
commitment that the City had made to pay debt service on the Library Bonds through
2009?
Ms. Cutsogeorge stated that the City Attorney had advised staff that the only actions needed to use
URA funds would be approval of this program at the current work session and a supplemental
budget approved on SB#1 in December. She said that the City Council action taken in 1998 only
related to tax increment revenue and did not dedicate the program revenue, revenue not related to
property taxes. She related that the legal issues surrounding the use of urban renewal funds for
projects other than the library were complex and would need more research pending approval of
the plan amendments.
Ms. Cutsogeorge reported that more than 97 percent of the resources needed to pay for the library
construction had been attained and, thus, a revenue shortfall was not anticipated. She said that the
City would continue to pay circa $2.5 million per year in debt service until 2009. She stressed
that, when making changes to the use of downtown urban renewal resources, the City needed to
ensure that there would be adequate protections against future revenue shortfalls in the tax
increment funds. The staff recommendation was to maintain a reserve that was equal to one year
of debt service, i.e. circa $2.5 million. She asserted that this should provide a reasonable level of
protection against future revenue shortfalls and that this would free approximately $2.5 million in
FY04 that could be used for other things. She explained that $1.8 million was in program revenues
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and that this could be used for a loan program, while tax increment funds could not be used for a
loan program. She added that the remaining $700,000 in tax increment funds could be used for
other projects, but the plan would have to be amended. She thought that there would be
approximately $1 million to $1.2 million per year in each future year to initiate projects. Staff was
recommending that the process to initiate the plan amendment begin.
Mayor Torrey called for questions and comments.
Mr. Meisner conveyed his support for both items. He appreciated that the City had been able to
build its library and would still have some capacity to do more. He supported the development of
criteria that addressed need as well as financial capability, so that the loans would not only be
granted to large developers.
Mr. Meisner supported adjustment of the boundaries so that eastern downtown, before the
Courthouse District, would be included.
Continuing, Mr. Meisner strongly urged that a set of priorities be developed for the plan. He
expressed concern that something, such as undergrounding of utilities, could cost money that
would be better allocated to another sort of project. He recommended the formation of a
committee to establish priority criteria. He stressed that he wanted a loan program that was
respectful of all of the markets.
Mr. Pap~ expressed appreciation that the City was looking into, on an "umbrella" basis, helping
small businesses grow and helping the downtown become revitalized. He advocated for the
development of an economic plan.
Mr. Pap6 asked Mr. Kelly if the Metro Partnership felt that the urban renewal tools the City was
looking into were appropriate for downtown. Mr. Kelly replied that the Metro Partnership had an
interest in downtown, but the primary focus of the partnership was in industrial development.
In response to a question from Mr. Pap~, Mr. Weinman said that urban renewal was the only
substantial financial tool available to the City. Mr. Taylor added that every strong economic
development plan affecting a city center included downtown revitalization and tools and incentives
to get that revitalization going. He stressed that bids were favorable on projects that were going
out at this time and that modest gap financing so that everyone could participate through a loan
program that was properly structured would be the "psychological and financial" advantage needed
to make the commitment while things were moving in such a positive direction. He called
downtown revitalization a "core rudder" of any community's economic development plan.
Ms. Cutsogeorge stated that there would be citizen involvement on the plan amendment and the
Planning Commission would be called upon to review it and provide comments.
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Ms. Cutsogeorge affirmed, at Ms. Taylor's request, that it would be possible to complete payment
for the library earlier than had been originally forecasted.
Ms. Taylor asked if it would be possible to reinstate a free parking program with urban renewal
funds. Ms. Cutsogeorge responded that the money could not be used for operating purposes. Ms.
Taylor opined that free parking would provide the greatest contribution to downtown
revitalization.
Ms. Taylor expressed her preference for a loan program over a grant program. She opposed
extending the time for urban renewal. She opposed the expansion of the boundary of the urban
renewal district as well. She recommended paying for the library prior to considering other
projects.
Mr. Kelly agreed with Mr. Meisner regarding the loan program and the urban renewal program.
He supported the loan program with the caveat that Mr. Meisner had expressed regarding the
formation of a body for purposes of review of loan proposals.
Mr. Kelly echoed council support for tools that revitalize downtown, adding that urban renewal
was almost the only tool to do significant things. He remarked that the "key" element for the plan
was the project choice. He encouraged there to be brainstorming on the part of both the council
and staff as to what sorts of projects should be taken on prior to adoption of any amendments.
Mr. Kelly noted that the River District Urban Renewal Plan from the City of Portland showed the
level of specificity that could be put into an urban renewal plan. He cited, as an example of citizen
involvement, the Portland Gateway Regional Center Plan, which had a citizen advisory committee
that had been formed prior to the development of the plan and had been maintained until well after
the plan had been implemented. He felt that this was an optimal model to follow.
Ms. Nathanson commented that the undergrounding of utilities was mentioned in several adopted
plans. She stated that, as such, this could be a qualifying criterion for a project.
In response to a question from Ms. Nathanson, Mr. Weinman stated the vast majority of past loans
were for $50,000 or less and that, given that history, one could assume that a loan program could
be stretched far. He felt that the loan program would be somewhat first come, first serve, but
more likely, it would be opportunity-driven.
Ms. Nathanson averred that there would be a great deal of interest in such a loan program, given
that the downtown area was undergoing substantial rejuvenation, and counseled Mr. Weinman to
consider in advance about increased competition for this source of funds.
Ms. Nathanson lauded the program, calling it a "move in" incentive that would be versatile in its
application from small projects to large ones. She affirmed her support for the program.
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Ms. Bettman expressed concern that the risk was not minimal, as the staff report had asserted. Ms.
Cutsogeorge responded that the projects would be done only after it had been ascertained that the
debt service had been met and the reserve was in place.
Ms. Bettman supported an early pay off for the library as the City was facing such huge deficits.
She asserted that urban renewal was a diversion of money from the General Fund and before it had
a chance to be applied to school funding. She felt that, as such, it was exempt from the existing
budget process scrutiny. She stressed that there was a multi-year financial strategic plan, in which
the downtown vision and related projects ranked very low on the priority list. She stated that a
police headquarters was high on the list, as well as a new City Hall. She commented that the only
urban renewal allocations she would support would be the aforementioned buildings.
Mayor Torrey called for a second round of questions and comments.
Mr. Meisner advocated for an expansion of the boundary of the Riverfront District so that
neighborhood- scale amenities could be made to East Broadway. He preferred to coordinate and
connect the two districts so that urban renewal resources could be used for the improvements on
that street.
Mr. Kelly requested staff to clarify, in a memorandum, how the tax increment financing would
affect the other tax districts and the school districts in particular.
Mr. Pap~, seconded by Ms. Nathanson, moved to direct the Agency Director
to implement a loan program for the Downtown Urban Renewal District and
to include an appropriation on SB#1 in FY04 for the loan program.
Mayor Torrey opened the floor for those who wished to speak to the motion.
Ms. Bettman, seconded by Ms. Taylor, moved to amend the motion to direct
the City Manager to return to the council with a proposal to dedicate present
and future urban renewal revenue to fund a new City Hall and police
headquarters in downtown Eugene.
Ms. Bettman reiterated her assertion that the police headquarters and the City Hall should be the
City's priority. She felt that the revitalization of City services would substantially aid the process
of downtown revitalization and reminded councilors that this was included on the strategic plan
that had been adopted by the City Council.
Mr. Kelly disagreed, stating that, in terms of the broad public, the public opposition would be
stronger if all urban renewal dollars were allocated to a new City Hall than other projects. He
added that the strategic plan had been proposed by staff, but had not been adopted by the council.
Ms. Taylor opined that using urban renewal funding for a new police station would be a good
choice.
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Mr. Meisner declared his opposition to the amendment.
Ms. Nathanson clarified that the discussion was on two separate and distinct sources of money.
She expressed her opposition to the amendment. She felt that after the downtown became more
vibrant, voters would be more amenable to support a source of revenue for a new City Hall or
police station.
Mr. Pap~ agreed with Mr. Kelly. He noted that there had been staff work regarding the funding
for facilities. He asked Jim Carlson, Assistant City Manager, to speak to this.
Mr. Carlson stated that the council had approved the long-term financial plan and the Downtown
Space Plan and that the top two priorities on that list had been the new City Hall and police
station. He explained that money was being set aside in the facility reserve under the current plan
with an eye on potential bond measures to be put before the voters at a future date. He affirmed
that accessing urban renewal funds for these improvements had not been considered.
Mr. Taylor stated that, in addition to meeting public needs, the other theory behind tax increment
financing and urban renewal was that the tax base would be increased. He asserted that the
redevelopment would stimulate thriving businesses and would also support the increased land
values that would allow the City to do other things in the financial plan. He noted that the loan
program had a modest amount of money that could be used to leverage much more in funding and
that the money would be repaid and could be, then, reinvested.
Ms. Solomon called for the question. Mr. Pap~ provided the second. The
motion carried, 6:2; Ms. Bettman and Ms. Taylor voting in opposition.
Mayor Torrey called for the vote on the amendment. The motion was
defeated, 6:2; Ms. Taylor and Ms. Bettman voting in favor.
Mayor Torrey called for the vote on the main motion. The motion carried,
6:2; Ms. Bettman and Ms. Taylor voting in opposition.
Mr. Pap~, seconded by Ms. Nathanson, moved to direct the Agency Director
to initiate the process to amend the Downtown Urban Renewal District Plan
to allow the use of tax increment funds for projects in addition to the new
main library.
In response to questions from Ms. Bettman, Ms. Cutsogeorge said that there were a variety of
options, such as an option to extend the district or an option to increase the maximum
indebtedness, and that these could be discussed during the next City Council work session on this
item. Ms. Bettman declared that she would vote against the motion as she did not feel it wise to
allow for an increase in the maximum indebtedness or to extend the district term.
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The motion passed, 6:2; Ms. Taylor and Ms. Bettman voting in opposition.
Mayor Torrey adjourned the meeting at 1:30 p.m.
Respectfully submitted,
Dennis Taylor
City Manager
(Recorded by Kimberly Young)
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