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HomeMy WebLinkAboutCC Minutes - 11/23/98 Work Session MINUTES Eugene City Council McNutt Room--City Hall November 23, 1998 5:30 p.m. COUNCILORS PRESENT: Pat Farr, Tim Laue, Bobby Lee, Scott Meisner, Nancy Nathanson, Laurie Swanson Gribskov, Betty Taylor, Ken Tollenaar. Mayor James Torrey called the November 23, 1998, Eugene City Council Dinner Work Session to order at 5:30 p.m. 1. WORK SESSION: AIRPORT SERVICE ISSUES Mayor Torrey noted that the work session was a continuation of council consideration of airport service issues begun on November 18, 1998. He invited councilors to ask questions and discuss concerns without a staff presentation. Ms. Taylor asked if it would be possible to transfer the separate management funds within the municipal airport fund into the General Fund. City Attorney Glenn Klein replied that it was possible to use the identified funds as unrestricted revenue. City Manager James Johnson added that there were no restrictions on use of the funds as there were on gasoline tax and road fund revenue. Mr. Farr asked if it would be possible for the council to designate the funds for non-airport use at another time. Mr. Klein replied that such a transfer was possible at any time, but that no other unrestricted airport funds were available in that way. Airport Manager Mike Boggs added that airport reserves were only legally available to be used for airport purposes. Ms. Taylor said she believed the airport management funds should be transferred into the General Fund because there was a need for revenue and because she questioned whether there would be success in attracting additional air service to Eugene. Mr. Meisner asked if there were other expenses for airport operations which would increase with the addition of airline service. Mr. Boggs said that airfield and terminal maintenance cost would not increase from such additional service and that other increased costs would likely be insignificant. Mr. Meisner noted that concerns related to the need for airport reserves was irrelevant to the funds under consideration. He said he would support a proposal designating all or part of the funds to be used for non-airport uses. Ms. Andersen pointed out that although the funds were not reserves, they were also not surplus operating funds. Mr. Meisner asked what uses of the funds in question were planned to develop new air service to Eugene. Public Works Director Christine Andersen replied that use of the funds had not been MINUTES--Eugene City Council November 23, 1998 Page 1 5:30 p.m. determined, only that they could be used in response to the community's desire for increased air service. She also said staff could develop potential strategies for air service recruitment for a work session with the council, if desired. Mr. Tollenaar stated that he had been convinced during the previous work session that funds generated by the airport should be used for airport purposes, not placed in the General Fund. He said he did not support direct cash subsidies to airlines. He suggested that some marginal costs at the airport would increase if additional air service was developed. Ms. Swanson Gribskov recalled that a general review of City financial reserves was scheduled during the term of the next City Council. Mr. Fart said that he would have a difficult time supporting placing the funds in question in the General Fund since how they would be used was unknown. He asked what the interest earning potential of airport funds was. Mr. Boggs replied that it was the same as that of General Fund reserves. Mr. Fart moved, seconded by Mr. Tollenaar, that no changes be made in the status of airport funds at this time. Mr. Fart asked what tax receipts had funded the airport to date. Ms. Andersen replied that the only non-airport generated funding provided to the airport had been for debt service on the General Obligation bond issue approved March 31, 1987. Mr. Fart said that he would like more airport service, but that the potential expense made it seem like a futile effort. Mr. Lee pointed out that all businesses needed reserves to protect long-term interests. He said he believed the proposal under consideration was a helpful management strategy to protect the General Fund. Mr. Laue said he would vote for the motion. He said that withdrawing reserves for alternate uses had not been uncommon during his tenure on the council. He said he believed increased air service in Eugene and the need for a new airport runway depended on regional and national trends, not local interest. He suggested that study of improved use of reserves was best considered within normal budget planning cycles. The motion to make no changes in the status of airport funds was adopted, 6:2, with Mr. Meisner and Ms. Taylor voting opposed. MINUTES--Eugene City Council November 23, 1998 Page 2 5:30 p.m. 2. WORK SESSION: AMENDMENT TO EUGENE CODE RELATING TO INTERESTS IN CONTRACTS Mr. Klein reviewed information related to Eugene Charter and Eugene Code provisions about interest in City contracts by City Councilors. He noted that provisions of the charter were intended to prohibit councilors from using the office for personal gain and that provisions of the code were an attempt to provide definition for statements in the charter. He pointed out that the proposed ordinance gave further clarity to the code by stating that the prohibition for councilors to have pecuniary interest in contracts would refer only to those contracts made or amended during a councilor's term of office. He stated that concern regarding the issue had been raised by staff, not councilors-elect, to prepare for any potential questions which might be raised about existing contracts. Mr. Meisner stated that he did not fully understand all of the consequences of the proposed ordinance and was unsure of how he would vote on it. He suggested, for example, that it could be difficult to determine whether long-term growth in the value of a business was due to contracts it held with the City that were in effect before a councilor-owner took office. Mr. Laue said that he did not believe Oregon conflict of interest statutes applied to municipal matters, but that they were a potential problem which all councilors needed to understand. Mr. Klein stated that the proposed ordinance did not alter the provisions of the City Charter. He said that the ordinance would not affect conflict of interest questions which councilors could continue to face. He said that when actual conflicts became known, it was the responsibility of a councilor to recuse her/himself and not participate in relevant deliberations. Ms. Swanson Gribskov stated that the concern was complicated because it would be important to not penalize persons for volunteering to serve the City as a councilor. She said she did not believe the issue would be significant because the City Council did not normally make contract decisions. Ms. Taylor suggested that consideration of the ordinance be postponed until an actual contract interest issue was evident. Mr. Johnson replied that it might be better to deal with the issue before councilors who might be affected by it began to serve. Mr. Tollenaar asked if the proposed ordinance dealt with the concern raised in the agenda item summary that the City should be allowed flexibility to contract with a company partially owned by a councilor if that company provided the lowest cost service or product. Mr. Klein pointed out that the City Charter precluded such a contract only if a councilor was receiving a monetary return from the contract. Mr. Tollenaar noted, in reply, that provisions of the Eugene Charter were more comprehensive than related State statutes. He said that the State provisions recognized that rural and small town situations would not allow an absolute prohibition of contract interest by elected officials. Mr. Fart asked why the seemingly repetitive phrase "...pecuniarily interested in any contract the expenses of which are to be paid..." was included in the existing section of the Eugene Code. Mr. Klein explained that the legislative history of the phrase had not been able to be determined. Mr. Johnson stated that a general "rule of thumb" in developing legislation was to not make more changes in an existing ordinance than was required. MINUTES--Eugene City Council November 23, 1998 Page 3 5:30 p.m. Ms. Nathanson said she was only partially satisfied with the proposed ordinance. She suggested that the solution provided to dilemmas relating to extending of contracts was misleading and could be unintentionally misapplied. Mayor Torrey said that he believed the proposed ordinance did not fully take into consideration issues related to the net operating income of a business because existing contracts were part of what was used to determine the value of a company. He said that if a councilor-owned business was sold, its net operating income would affect its selling price. He suggested that a better way to deal with problems related to interest in contracts was for a councilor to publicly identify all potential increases of value in companies with which she/he had an involvement and to recuse her/himself from consideration of anything related to it. He said he believed the City Manager should be required to avoid discussion of such issues with individual councilors. Mr. Meisner said that he did not believe the phrase "direct, present, and personal interest contracts" in the proposed ordinance dealt adequately with issues related to deferred payment to councilors having partial ownership in a company contracting with the City. Mr. Laue said he did not believe the proposed ordinance solved all issues related to Section 14 of the City Charter. Mr. Laue commented that the Council/Manager type of city government had been devised to help deal with issues related to contracts benefitting elected officials. Mayor Torrey asked what legal responsibility the proposed ordinance placed on the City Manager. Mr. Klein replied that it would be the responsibility of the manager to determine if a contract could produce a benefit to a councilor. That responsibility could be met by the councilor and the company certifying that the councilor was not receiving any tangible monetary return from the contract; and, if necessary, by auditiung the financial records of businesses which might be affected by interest in contract provisions. Mayor Torrey said it was his personal experience that there was potential for significant public interest in the area under consideration. He said he did not believe the full answer to potential problems had been solved and that he wanted to ensure that all issues were resolved before the term of councilors-elect began. Mr. Klein stated that there was no provision for the forfeiture of a person's elected position on the City Council if there were to be violation of the provision of the City Charter under discussion. He said an opinion from the Office of the City Manager 15 years previously had clearly so stated. Mr. Meisner asked who was at risk and what were the liabilities for a successfully challenged City Council decision related to interest in contract ordinances. Mr. Klein replied that violation of the provision under consideration resulted in fines of $100 a day for the duration of the violation. He said that it was assumed that the City Manager would not establish a contract which could be interpreted to give benefit to a councilor without an opinion from the City Attorney stating that it was lawful and that such an opinion would relieve the manager of personal liability. Mr. Johnson said that the council was moving toward a public hearing and action regarding the proposed ordinance. He said he agreed with an earlier comment of Ms. Swanson Gribskov that separate issues were involved in the proposal: (1) contracts entered into before a councilor takes office for which the proposed ordinance seemed to be acceptable to councilors; and (2) allowing MINUTES--Eugene City Council November 23, 1998 Page 4 5:30 p.m. such contracts to occur without violation of the charter, which continued to be questioned by councilors. He suggested that the issues could be considered separately. Ms. Nathanson said she preferred to not hold public hearings on ordinances which were not in the final form in which they were to be considered by council. She said she preferred to split the issues, hold a public hearing about the first issue identified by Mr. Johnson immediately, and postpone a public hearing regarding the second until more council-consensus was evident. Mayor Torrey said that the current council would likely have only one opportunity for public hearings and that, if an additional public hearing was required, at least two new councilors would need to recuse themselves from involvement in deliberation regarding the portion of the proposed ordinance in question. Mr. Swanson Gribskov asked if alternatives to the currently proposed ordinance could be prepared in time for the current council to consider making a proposal to a public hearing. Mayor Torrey suggested that the council could submit to a public hearing those provisions of the ordinance related to existing contracts at the current meeting and that any other elements of the proposal be considered by the new council to convene in January. Mr. Meisner said that he agreed with the comments of Mayor Torrey and Ms. Nathanson and favored separating the issues identified by Mr. Johnson and holding two separate public hearings. Ms. Taylor said that she agreed the council should hold a public hearing only on the provisions of the proposed ordinance which dealt with pre-existing contracts. Mr. Laue said he was concerned that a councilor who was an employee holding a contract with the City might have a pecuniary interest in that contract. Mr. Klein stated that the provisions of the ordinance only related to councilors with ownership of a business. Mr. Laue said he was also concerned that provisions of the ordinance under consideration could require that contracts be established with businesses that did not provide the lowest cost provisions. He suggested that doing so was not in the public interest. Mr. Fart said he hoped that the council would never take any matter to a public hearing which it did not expect to change. He said the purpose of a public hearing was to receive input which might improve what was being considered. Mr. Tollenaar said he believed the council should take both issues dealt with in the proposed ordinance to a public hearing because it would be awkward for the next council to deal with them. Ms. Nathanson said she agreed with the comments of Mr. Fart. She said changes needed to be made to a proposal in response to public testimony, but that a completely different approach to an issue developed after a public hearing should not be adopted by the council without the benefit of further public input. Mr. Lee moved, seconded by Mr. Tollenaar, to direct the City Manager and City Attorney to draft a proposal for amendment of Section 2.106 of the Eugene Code related to existing contracts consistent with the charter. MINUTES--Eugene City Council November 23, 1998 Page 5 5:30 p.m. Mr. Lee said that he did not believe many persons would testify at a public hearing regarding councilor interests in contracts. He said the proposals under consideration were a good attempt to address the issues involved, but that he was unsure if their provisions were enforceable because it was impossible to know what was gained in a contract with the City. He said he felt sympathy for councilors-elect who would need to deal with issues related to the ordinance. Mr. Klein stated that the Office of the City Attorney would seek to draft alternate language for the proposed ordinance to address concerns raised by the council. Ms. Swanson Gribskov said she would vote for the motion to avoid having newly elected councilors deal with the issues involved. The motion was adopted, 5:3, with Mr. Meisner, Ms. Nathanson, and Ms. Taylor voting opposed. III. WORK SESSION: SYSTEMS DEVELOPMENT CHARGES AND GROWTH MANAGEMENT POLICIES Mr. Laue suggested that it might be more appropriate for the newly elected members of the City Council to deal with issues related to Systems Development Charges (SDCs) and Growth Management Policies. Ms. Andersen replied that this work session was important for input to be provided for the ongoing work of the Public Works Rates Advisory Committee (PWRAC). City Engineer Les Lyle described the membership of the PWRAC and commended it for its work. He explained that, by State law, SDCs could be developed for park, storm water, transportation, water, and wastewater treatment systems. He said the council was being asked to provide direction on how it wished to engage the PWRAC with the implementation of Growth Management Study (GMS) policies as they relate to the SDC review currently underway. Mr. Lyle referred to a document entitled "Land Use and Urban Form--Adopted Policies and Example Actions" distributed with the agenda of the meeting and discussed SDC issues related to GMS policies, as follows: · Policy 14 Should SDCs subsidize in-fill, mixed use, and nodal development? · Policy 18 Should commercial and industrial development share in the cost of parks through SDCs? Should more than neighborhood park development be included in the calculation of SDCs? · Policy 15 Should the relationship of SDCs to publicly financed infrastructure extensions to support development for higher densities be considered in relationship to the Capital Improvement Program (CIP)? · Policy 8 Should the City encourage affordable housing through waivers of property tax and SDCs? Mr. Meisner stated that he believed the ClP was an important way to implement GMS policy 15. MINUTES--Eugene City Council November 23, 1998 Page 6 5:30 p.m. Ms. Taylor listed proposals included in the Agenda Item Summary with which she agreed, as follows: · Delay consideration of the incentives portion of Policy 14. · Postpone consideration of ways SDCs could promote construction of affordable housing. · The PWRAC should discuss ways the CIP could be used to implement policies. · Commercial and industrial development should be charged park SDCs. · Regional parks and open spaces should be included in the calculation of SDCs. · The PWRAC should generate ideas regarding implementation of GMS policy, even though the proposals may not all be approved by the council. · SDCs rate-setting should go beyond directly related issues of Policy 14, especially issues of Policy 15. Mr. Laue said that he agreed with the proposals of Ms. Taylor. He said he also hoped a comprehensive strategy for supporting affordable housing could be developed by the council. He suggested that use of the CIP would be most helpful for Policy 15 and that consideration of issues related to nodal development should be postponed until such development was more imminent. Mr. Farr said he believed the proposed changes to SDCs would lead to a better Eugene, but that he was concerned that they would also add to pressures creating an inflated housing market. He suggested that the council goal of affordable housing was in conflict with other policies and that entry-level housing needed to be ensured. In response to questions from Ms. Nathanson, Mr. Lyle explained that the parks SDCs were charged for all residential uses, including multi-family developments. He also said that parks SDCs included the cost of land, equipment, and associated infrastructure of a typical neighborhood and community park, but not of swimming pools, which were considered regional facilities and not included in the rates. Ms. Nathanson said that she would like to re-visit the definitions of regional and neighborhood/community parks because it has seemed to encourage inequitable park development. She said she was also concerned, in general, about waivers because revenue lost through them had to be made up from other sources. She said she favored continuation of incentives for certain identified development. She noted that requiring new development to pay for new infrastructure was pioneered in the northwest, but was becoming more common throughout the country. Mr. Meisner said that he agreed that the definitions of regional and neighborhood parks needed to be re-visited. He said he believed SDCs should pay the full cost of infrastructure development and also consider impacts of a development on infrastructure in other areas of the City. He said he supported keeping an affordable and liveable community, and suggested that SDCs were not the sole or major cause of inflationary housing costs. Ms. Swanson Gribskov observed that it was positive to levy SDCs against a larger base of development for the parks SDC. She said discussing such issues in the abstract was more difficult than when specific situations were in front of the council. She said whatever produces the greatest public good needed to be determined when considering fee and SDCs waivers. She MINUTES--Eugene City Council November 23, 1998 Page 7 5:30 p.m. suggested that it would be helpful to develop a cap or maximum for SDCs for affordable housing. She said she agreed that regional parks should be included in SDCs. Mr. Tollenaar said he believed resolving issues related to the Policy 14 requirement that development pay the full cost of extending infrastructure and services was most pressing. He suggested that the PWRAC should develop proposals for SDCs to cover the cost of infrastructure while allowing for reductions for redevelopment, in-fill, and mixed-use projects. He said he agreed that Policy 14 was in conflict with Policy 8 and would not be able to be resolved. Mr. Lee said that the issues being discussed were also being dealt with on the state level. He said he supported requiring commercial and industrial development to pay park SDCs. Mayor Torrey said that he agreed promotion of affordable housing would be impacted by constraints imposed by the Urban Growth Boundary. He said he would like to have a chart showing the location of SDCs uses provided to the council. Mr. Lyle said that such a map was being developed. Mayor Torrey said that he agreed with Mr. Tollenaar regarding the importance of resolving issues related to infrastructure. Mr. Fart stated that he would like additional information regarding the cost of re-development in comparison to that of new development. Mayor Torrey determined there was agreement that the PWRAC should review and recommend how SDCs might be best used to address in-fill redevelopment goals outlined in Policy 14. MINUTES--Eugene City Council November 23, 1998 Page 8 5:30 p.m. The meeting adjourned at 7:30 p.m. Respectfully submitted, James R. Johnson City Manager (Recorded by Dan Lindstrom) MINUTES--Eugene City Council November 23, 1998 Page 9 5:30 p.m.