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HomeMy WebLinkAboutCC Minutes - 01/22/07 Work Session M I N U T E S Eugene City Council Work Session McNutt Room—Eugene City Hall January 22, 2007 5:30 p.m. COUNCILORS PRESENT: Andrea Ortiz, Chris Pryor, Betty Taylor, Bonny Bettman, George Poling, Alan Zelenka, Jennifer Solomon, Mike Clark. Her Honor Mayor Kitty Piercy called the meeting of the Eugene City Council to order. A. COMMITTEE REPORTS AND ITEMS OF INTEREST FROM MAYOR, CITY COUNCIL AND CITY MANAGER Mayor Piercy announced that she would be attending the United States Conference of Mayors in Washing- ton, DC, on January 23, 2007. She thanked councilors for their participation in the recent two-day retreat to consider council goals. She said that the council’s goals included continuing goals on race, homeless initiatives, City Hall, neighborhood empowerment, arts and outdoors, and a hospital, and new goals related to a sustainability initiative, downtown initiative, police initiative, and transportation initiative. Mr. Pryor reported that the Human Services Commission (HSC) met earlier and began the process of determining how to make service cuts. He said that the HSC and the many agencies it funded would lose a significant amount of resources in the current budget cycle, both from one-time funding and County funding. He said that precipitated a conversation about which services could be cut and the extent of those cuts as the commission faced a growing need and declining revenue. He said the Council Committee on Intergovern- mental Relations would meet on January 23 and there were bills to consider. He encouraged councilors to let committee members know of any specific legislation they might be interested in tracking. Mr. Clark agreed with Mayor Piercy that the retreat was productive and he was pleased that it resulted in many issues on which there was consensus. Mr. Zelenka also expressed his appreciation for the retreat and said he enjoyed the process. He announced the first Lane County Public Energy Forum would occur from 7 to 9 p.m. on January 23 at the First United Methodist Church and encouraged people to attend. He also encouraged visiting the display of flags on the University of Oregon campus in commemoration of those who had died during the Iraq War. Ms. Taylor observed that Portland had recently reduced its tax on small local businesses and Eugene had no such tax. Mr. Poling was pleased that there would be a work session later in the month to “fine tune” the results of the goal-setting retreat. He thanked Public Works employees and public safety personnel for their efforts to keep the community safe during the recent storm. He noted that the EmX system began operations on MINUTES—Eugene City Council January 22, 2007 Page 1 Work Session January 14 and reminded everyone that the route from Eugene to Springfield was the first phase of a regional route. He said the initial travel times might not be as short as hoped but this was the initial phase of the project and the long-term the goal of the system was to reduce the number of vehicles on the roadway and increase ridership. He thought that once people became accustomed to the new system and the second route running from downtown Springfield to the RiverBend complex was in operation, the impact would be visible. Ms. Ortiz stated that the retreat was enjoyable and productive and she appreciated the opportunity to th become better acquainted with the new council members. She acknowledged the 34 anniversary of the Roe versus Wade Supreme Court decision. She described the various Martin Luther King Day events that she attended in the community. She said the Police Commission identified several issues to work on during the coming year, including use of force, how police policies affect the mental health community, and policies related to domestic violence. She said the Police Department was implementing the new Lexipol policy development system. City Manager Dennis Taylor thanked the council on behalf of the executive management team for the time and energy it put into developing goals. He said the follow-up session to refine goals was scheduled for January 31 and apologized for the many meetings that had occurred during the week. He noted that new cameras were recently installed in the McNutt Room that would provide better resolution for streaming videos of council meeting. Ms. Bettman reminded councilors that when the library levy was placed on the ballot there was some discussion of cutting library services. From her perspective the City was in a more positive situation than it would have been if it had gone out with a full levy as she did not think it would have passed. She was grateful the voters passed the reduced levy and supported the principle of ramping it down and incorporating library services, which were ongoing services, into the General Fund. She said her motion was intended to address the concern expressed by councilors about preserving library services. Ms. Bettman, seconded by Ms. Ortiz, moved to direct the City Manager to hold current library services harmless in the City Manager’s proposed budget and to the extent projections on future budgets are relevant, direct him to assume that the cur- rent level of library services and operations will continue without cuts or reduc- tions. Ms. Bettman said that library services was an ongoing service supported by the community and therefore was important to keep it in the budget. She reminded the council that the City Manager’s budget included many service additions that were processed and accepted before there was a decision regarding the Library and it was the City’s adopted financial policy that ongoing services would be funded through the budget before new services were added. She preferred to see all of the additions revisited and new services removed if necessary in order to hold the Library harmless. City Manager Taylor said the budget was still in the formative stages and there were $7.1 million in decision packages that included everything funded in the current level of service, such as additional police officers, police auditor, and park maintenance. He said the multi-year financial plan contained a strategy to incorporate $2.5 million per year over the next several years using reserves so that in three or four years library services would be fully funded within the projected budget. He said if the council wished to add recreation services at the level proposed by the Budget Committee or make progress on police staffing, an MINUTES—Eugene City Council January 22, 2007 Page 2 Work Session office of sustainability, or just include library services as they were currently funded by the levy, it would be necessary to use reserves, find new revenue sources, or establish other priorities and make strategic reductions in services. Mr. Poling stated that he could not support the motion because any councilor could make a similar motion with respect to his or her favorite department without knowing what the proposed budget was. He was a — supporter of the Library; but, putting library services above public safetyfire, emergency services, police — and public workswas a major mistake. He was also opposed to such a motion before a budget had been proposed because budgets fluctuated from year to year and it limited the council’s ability to decide where to make necessary cuts. He felt that library services were very worthwhile to the community but did not rise to the level of needed services such as public safety. Ms. Taylor asked about the extent of the cuts being contemplated to library services. City Manager Taylor replied that no reductions in library services were currently being considered, but there was a range of potential cuts that could avoid eliminating branch libraries. He said there would be a systematic review of all City services as part of a two-year strategy for balancing the budget. Ms. Taylor asked if the council’s adoption of a police priority meant even more money would be spent on police than previously planned. City Manager Taylor said it was difficult for him to see how in the budget for FY08 any police staffing could be added if 100 percent of Library costs were picked up. He said whether the council’s adoption of a police priority increased the commitment to police funding was a discussion for the council and the Budget Committee. Mr. Pryor stated he thought the subject of the motion should be brought before the Budget Committee and not decided ahead of time by the council. He was interested in having the City Manager prepare the best budget he believed possible under the circumstances and then have the discussion of that occur at the Budget Committee where everyone was present and all options were on the table. He said the value of the Budget Committee was that everyone could put forth their opinions and he was reluctant to place limitations on that discussion. He could not support the motion and encouraged the City Manager to prepare the best budget possible with the guidance already provided by the council. Mr. Clark said that library services were very important to him and he heard frequently from residents of the north central part of the City how important the Sheldon branch was to them. He heard in the City Manager’s discussion of strategies that branch library services might or might not be considered. He did not want to short-circuit the established budget process or tie the manager’s hands for developing creative options for funding all services adequately or take away the valuable input from the citizen members of the Budget Committee. He suggested at some point the priority matrix process could be used to determine how services could be funded. Mr. Zelenka recalled that the City Manager indicated the budget would be balanced by using reserves. City Manager Taylor said it was likely that using reserves would be necessary to maintain the budget for next year. Mr. Zelenka remarked that the plan was to fund half of library services from the levy and half from the General Fund and, over the next four years, phase all library services into the General Fund. He asked if cuts to library services would be unnecessary if no more services were added to the budget. City Manager Taylor replied that was not the case; just to fund the additions made last year with respect to the police MINUTES—Eugene City Council January 22, 2007 Page 3 Work Session auditor and police staffing meant at least $1 million of annualized costs going forward. He said that other additions approved by the council, such as the office of sustainability and increases in the cost of some services were trying to be resolved in a budget that met the needs of FY08, but established a pattern for a prudent, sustainable budget over the next several years. He said that process would take longer than the current fiscal year to complete and was a discussion the council and Budget Committee needed to have before development of the FY09 budget. Mr. Zelenka asked why the levy did not cover the entire funding needed for library services over the next four years in order to avoid making any cuts. City Manager Taylor said the council’s intent, supported by the voters, was not to continue funding library services through levies but there was no predictable revenue stream in the future that would allow maintenance of the current mix of services across the board. He said the City faced a number of budgeting dilemmas including how to absorb half of library services into the General Fund, how to fund recreation services no longer supported by the school levy, fund police patrol staffing, park maintenance, the transportation system, and other items identified for attention in the near term. Mr. Zelenka said his understanding of the police staffing priority was not to increase staffing beyond what had already been decided upon but rather to direct resource priorities to community policing and property crime reduction. Ms. Bettman asserted this was the established process. She said the next Budget Committee meeting was February 7, 2007. She notified people at the last Budget Committee meeting of her intent to make the motion because there was not time to consider it at the meeting. She said that giving the City Manager direction on the proposed budget as soon as possible was something the council and the Budget Committee had requested in the past. She said the more than $7 million added to the budget, when weighed against things like public safety and library services, would not have emerged from the priority process if one had been done. Ms. Taylor stated that the time to discuss the budget was before it was in a book in front of the council. She reiterated that the City needed new sources of revenue such as the Portland business tax to avoid financial emergencies. She hoped that eventually new sources of revenue that were equitable would be considered. Mr. Zelenka supported the motion because when he was campaigning for the library levy he told people that the levy was being reduced by half and implicit in that was an understanding that library services would be maintained at their current level. He questioned why the levy would not have been for a larger percentage if cuts were going to be considered. Ms. Ortiz supported the motion with the thought that the issue would still go before the Budget Committee. She felt that the motion simply directed the City Manager to provide that scenario but she expected that other scenarios would be provided to the Budget Committee. Ms. Solomon pointed out that the motion did not request other scenarios; it only directed the City Manager to hold library services harmless in the proposed budget. Mayor Piercy commented that if, in fact, the motion simply stated it was the wish of the council to hold libraries harmless and work toward that goal, which she felt was already the City Manager’s intention in MINUTES—Eugene City Council January 22, 2007 Page 4 Work Session balance with other things, it would still be the Budget Committee’s decision. She would support the motion with the understanding the decision was not being made now and would be made by the Budget Committee. Ms. Bettman said the motion required that the initial proposed budget hold library services harmless and that budget would go through the full budget process. Ms. Taylor stated that ultimately it was the council’s decision, not the Budget Committee’s. The vote to hold library services harmless in the budget was a 4:4 tie; Councilors Bettman, Zelenka, Ortiz and Taylor voting in favor and councilors Pryor, Clark, Solomon and Poling voting in opposition. Mayor Piercy voted in favor and the mo- tion passed on a final vote of 5:4. Mr. Poling remarked that the council voted on the Spay and Neuter Voucher Program several years ago and asked for a status report on the program that indicated how much revenue had been collected and how it was used. B. WORK SESSION: Funding Strategies for Transportation System Operations, Maintenance and Preservation City Manager Taylor said that when the council considered an ordinance to establish a transportation system maintenance fee (TSMF) in November 2006, it was tabled until 2007 with the direction that staff develop a proposed funding strategy that included several components such as a TSMF, gas tax, bond levy and commuter tax. He introduced Public Works Director Kurt Corey to outline strategy options for the council’s consideration to address the backlog of road maintenance and preservation projects. Mr. Corey provided an overview of the transportation system funding shortfall and options for addressing that shortfall that had been considered since 2001. He said there was a current backlog of more than $100 million in pavement preservation projects, with a projected FY08 operating deficit of nearly $1.5 million for operation and maintenance activities in the Road Fund. He described the proposed funding options for addressing the backlog and funding shortfall developed in accordance with council direction: ? $.03 per gallon gas tax increase, remove February 2008 sunset on current $.02 per gallon gas tax, with monies earmarked for operations and maintenance – would close the gap for operations and maintenance funding ? Capital local option levy for the November 2008 ballot – no revenue target identified but for each $1 million of revenue generated annually the average taxpayer’s cost would be approximately $12 ? Ordinance establishing a TSMF modified to eliminate the flat base rate component – no revenue target identified but $5 million funding gap would represent approximately a $3.35 cost per month for the average property owner ? Commuter tax based on persons who work but do not live in a jurisdiction based on either the concept of a payroll tax, income tax on employees or business privilege tax – Eugene would be the first community in the state to enact a commuter tax. A $50 per employee business privilege tax would generate approximately $4 million annually; a payroll tax of one-quarter of one percent would generate the same level of revenue, as would an employee income tax of two-tenths of one percent. MINUTES—Eugene City Council January 22, 2007 Page 5 Work Session ? Garbage truck tax – documentation of the effect of trucks on residential streets was available and could provide a rationale for a surcharge. A ten percent tax would generate approximately $1 mil- lion annually. Mr. Pryor commented that business trips were only a fraction of the miles driven in a community; the majority of trips related to family and personal activities. Relative to the issue of who should pay for —— transportation system improvementsusers or the community as a wholehe said the transportation system was a civic need and community responsibility like police, fire, and education. He said demand management could meet part of the goal by reducing vehicle trips but could not address all transportation system needs. He agreed with the importance of accommodating bicycles and pedestrians but the $110 million backlog of street projects required that to be the focus of the City’s attention. Regarding one-time versus ongoing expenses, he said the City had to develop a mixed funding strategy that considered all of the options presented by staff. Ms. Taylor stated she was pleased the commuter tax was listed as a possibility and hoped it would be seriously considered. She did not feel that decreasing the disposable income of nonresidents was relevant as other taxes within the City decreased the disposable income of residents. She strongly encouraged the commuter tax as part of the funding strategy. Mr. Zelenka pointed out that data indicated half of the 80,000 jobs in Eugene were held by nonresidents and any fee or taxed imposed would only fall on the half who lived in the City; the other half would pay nothing, but still use streets. He said that also meant the half who were taxed were subsidizing the other half who were nonresidents. He urged a funding mechanism that would provide transportation system support from both residents and nonresidents. He said the transportation system included cars, bicycles, trucks, pedestrians, and buses and that should be taken into account. He urged a connection between how the funding would be used and where it came from. He said there was a direct connection between a fuel tax and use of the streets but a tenuous connection with a property tax levy. He did not feel the value of a house or business had any relationship to use of the roads. He said the TSMF had a better connection but was not fair to those who did not drive cars on the roads and used other modes of transportation. He preferred a carbon tax or one based on miles driven. Mr. Corey observed that the idea that only those with vehicles benefited from the transportation system was at odds with the findings of an earlier Citizen Budget Subcommittee report on the issue. He said the basis of the TSMF recognized that there were people who did not drive cars but did use sidewalks, bike paths and transit and therefore the gas tax component placed a greater burden on those who used the street. He said the report concluded that everyone who lived in the City benefited from the road system through delivery of mail, goods and services, transit and other services, whether or not they drove a vehicle. Ms. Bettman noted that the $53 million backlog of preservation projects in 2001 had doubled and stated that the transportation system as designed was not sustainable and would also siphon funds from other services unless there was a way to balance funding among transportation modes. She did not think the options provided by staff accomplished that. She said the transportation system served everyone but at drastically different levels. She said what the council was trying to encourage with its long-term sustainability goals for transportation should be built into the funding strategy. She would consider options that were equitable and sustainable. Ms. Bettman said the commuter tax was defined as a tax on income but it should be a fee that paralleled whatever fee was allocated to residents of the City who paid a tax to fund transportation. MINUTES—Eugene City Council January 22, 2007 Page 6 Work Session Mr. Clark said he believed the transportation system as a whole was a public utility and residents expected that it would be maintained as a basic service. He agreed that residents and nonresidents should share the burden of supporting the system. He thought the idea of a garbage truck surcharge was interesting as a more user-oriented approach to charging people for using the road. He suggested other users for which a similar approach could be considered such as other utility providers, school buses or other buses. Ms. Solomon stated that the problem was not that the transportation system was unsustainable, rather that revenues from other federal and state sources had decreased; it was funding that was unsustainable not the transportation system. She appreciated the option of a capital local option levy to add balance and stability to the funding strategy. She asked how much funding could be requested in the levy. Larry Hill, Financial Services, explained there was room within the Measure 5 rate cap for an additional capital local option levy and there would be no compression if the levy was appropriately sized. He said an average tax rate of $.75 per $1,000 of real market value could generate about $10 million annually. He said the levy was a “pay as you go” approach and unlike a bond there were no interest or issuance charges. Ms. Solomon felt there was a compelling argument for going to the voters with a capital local option levy as there did not seem to be enough support among councilors for a TSMF and the gas tax could not fill the funding gap. She hoped a TSMF would eventually be considered and that the option of a levy would be explored. Mr. Poling concurred with Ms. Solomon that it was incorrect to label the transportation system as unsustainable; the problem was that the council had lacked the courage to properly fund road repairs. He referred to a description of the levy as being for pavement reconstruction capital projects and asked if that meant roads that had to be torn down to the roadbed and rebuilt but capacity would not be added. Mr. Corey clarified that the language was a recommendation and not a limiting factor of the levy as a funding mechanism. He said that would ensure that the levy funds would be used to address the reconstruction backlog and other funding mechanisms could be used to address ongoing operations and maintenance and capital preservation. He said the levy could be used for a broader range besides reconstruction. Mr. Hill explained that a capital local option levy could be used for any capital construction that was legal under State statutes and only limited by what the council authorized it for and the use for which funds were appropriated. Mr. Poling suggested that if a levy was considered it be limited to fixing current roads and not used for adding capacity to roads or constructing entirely new roads. Referring to people who did not own or use a car, he agreed with Mr. Corey that they still benefited from having a transportation system in place. He was willing to consider reducing the burden on those people if they were required to prove limited road use, but would not consider exempting them from fees. He felt the commuter tax or employment tax was unfair as nonresidents had no voice in that. He was in favor of holding a public hearing on the gas tax but not certain if he would support the proposed increase. Mayor Piercy cautioned about the balance between a user tax on school buses and trying to put funding into the schools. Ms. Bettman thought the local option levy and a TSMF, if considered by the council, should both go on the ballot. She said how funds could be spent should be defined in the ballot measure instead of ordinance and explicitly exclude projects or components of projects that were SDC (system development charge) MINUTES—Eugene City Council January 22, 2007 Page 7 Work Session improvement fee eligible or assessment eligible; not just funded but eligible for funding. She asked if staff was recommending a uniform local option levy or a tax rate local option levy. Mr. Hill responded that the local option levy could be either rate-base or based upon an amount. He said the benefit of a rate-based levy was it adjusted to the increase of the value in the community and essentially indexed to growth and reflected growing demand on the community’s infrastructure. He said the benefit of a fixed amount each year was it was a known amount and the rate decreased each year as assessed value grew, spreading more thinly across more value. He said which option to pursue was a policy decision by the council. City Manager Taylor said it was the council’s choice which levy approach to take and the amount targeted over the life of the limited levy. He said there were some practical considerations in terms of what meaningful amount of construction could be accomplished each year but staff could provide high- and low- end predictions. Ms. Bettman expressed interest in the commuter tax as a parallel fee, not as a tax on income. She said it was unfair to ask residents to be burdened with the entire cost of maintaining the infrastructure that everyone used. She said that would discourage people from living within the city limits. Mr. Zelenka appreciated Mr. Poling’s suggestion to reduce the user fee for people who did not own cars. He stated it was not the transportation system that was unsustainable; it was the financing of the system that was unsustainable. He said it was important to have a package of strategies to solve the entire funding problem and not just a piece of it. He said there was an opportunity to have an incentive to encourage people to use alternative modes of transportation; that would become even more important as the community grew and congestion increased. He agreed it was important to place a burden of proof on those would might be eligible for a reduced fee. He asked if rebates were permissible under a TSMF. Mr. Hill said that the council would need to make that determination but he thought that rebates were permitted. City Attorney Jerome Lidz added that to the extent a fee for service was imposed, that rationale was undermined by an exemption of entities that used the service; therefore, finding a subsidy toward the portion of a user’s fee that the City wished to reduce would be preferable. Mr. Zelenka, seconded by Ms. Bettman, moved to direct the City Manager to bring back creative solutions for adequately funding the transportation system for cars, trucks, bicycles and pedestrians that collected funds proportionately or equally with residents and nonresidents that use the roads, was more consistent with the sustain- ability goal, had more direct connection to use of the roads like a carbon tax or garbage truck fee and that rebated or gave incentives to those that did not have cars or used them very little. Ms. Bettman supported the motion because it could result in a proposal that had a broader-based council support that would reflect broader community support. She was interested in other strategies discussed by the subcommittee such as regional SDCs, taxes or fees on provided parking and heavy axel fees. She said there needed to be a way to fund the bicycle system and many people had told her they would be willing to support taxes if the bike path system would benefit. Mr. Pryor appreciated the interest in a creative solution with broader options and opportunities but felt some pressure to act immediately, at least on some parts of the proposal. He would not support Mr. Zelenka’s motion but did encourage the conversation about options and would support the suggested motions. He was motivated to take action on solving the problem and liked the idea of a levy and some form of TSMF. MINUTES—Eugene City Council January 22, 2007 Page 8 Work Session Mr. Clark concurred with Mr. Pryor and said he would support a hearing on the gas tax and a resolution with regard to the levy, but would support Mr. Zelenka’s motion if it meant moving forward on a systemic approach. Ms. Ortiz said she would support the motion although it was “muddying the water,” but encouraged the council to spend more time considering options for transportation system funds. Ms. Solomon said she could not support the motion because it was “muddying the water” and, while she did support the concepts identified in the motion, it did not include a capital local option levy and only directed the City Manager to bring back more options. She said that same direction had been given by the council many times in the last several years and staff had provided good ideas that the council could act upon. She felt Mr. Zelenka’s motion could increase the number of options but echoed Mr. Pryor’s comments about the need to take action now. Mayor Piercy said as much as she wanted to see the council move forward, there did not appear to be a strong majority for any option. She did not want to send out a funding strategy on which the council was divided and it was too important to not try to achieve consensus. She suggested the council form a subcommittee to work on the various ideas and try to combine them into a proposal that would garner broader support on the council. Mr. Zelenka felt that more time was needed to obtain additional information and develop a funding strategy. He felt the motions suggested in the agenda packet were premature. He wanted to avoid a piecemeal approach to transportation system funding and preferred a complete solution. Mr. Pryor said that spending more time considering the options should include a timeline. Mr. Pryor offered a friendly amendment to establish a date certain, such as in three months, for the council to act on a package proposal. Ms. Bettman said she was concerned that three months was not enough time and was more comfortable taking up the matter in September when the council returned from its break. Mr. Pryor, Mr. Zelenka, Mr. Clark, and Ms. Solomon felt September was too long to wait. Mr. Corey agreed that it would be helpful to have a council subcommittee assigned to work with staff. He felt a proposal could be developed by mid- to late-April 2007. Mr. Zelenka and Ms. Bettman accepted the friendly amendment. Ms. Bettman said she hoped that a funding strategy would take into account broader public interests as the current options had divided support among councilors. She was in favor of a public hearing on the gas tax to determine public sentiment about removing the sunset provision and increasing the rate. Ms. Taylor stated she would support the motion and was interested in a commuter tax, a local option levy, a gas tax, and inclusion of bicycles. MINUTES—Eugene City Council January 22, 2007 Page 9 Work Session Mr. Clark said he would support the motion but encouraged the council to send the gas tax to a public hearing so that it was moving forward on a parallel track. The motion as amended passed, 7:1; Mr. Poling voting in opposition. Ms. Ortiz, seconded by Mr. Pryor, moved to direct the City Manager to conduct a public hearing on February 20, 2007, on a proposed amendment to Ordinance No. 20278, increasing the Business License Tax on Motor Vehicle Fuel Dealers by three cents to the 8-cent level and repealing the sunset provision on the two-cent fuel tax increase enacted 2005, with the intent that the proceeds from the addition three cents be dedicated to funding Road Fund operations and maintenance activi- ties. Ms. Bettman asked if the gas tax covered diesel fuel and where there diesel suppliers were within the City limits. Mr. Corey explained the tax was a business license tax on the sale of fuel delivered to retailers inside the City and there were many retailers selling diesel. The motion passed unanimously, 8:0. Mr. Zelenka, Mr. Pryor, Ms. Solomon, and Ms. Bettman agreed to be on a subcommittee to work with staff on a funding proposal. The meeting adjourned at 7:10 p.m. Respectfully submitted, Dennis M. Taylor City Manager (Recorded by Lynn Taylor) MINUTES—Eugene City Council January 22, 2007 Page 10 Work Session