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HomeMy WebLinkAboutCC Minutes - 07/18/05 Mtg M I N U T E S Eugene City Council Regular Session Council Chamber—City Hall July 18, 2005 7:30 p.m. COUNCILORS PRESENT: George Poling, Jennifer Solomon, Bonny Bettman, David Kelly, Gary Papé, Chris Pryor, Betty Taylor, Andrea Ortiz. Her Honor Mayor Kitty Piercy convened the meeting of the City Council. 1. PUBLIC FORUM Mayor Piercy welcomed everyone to the City Council meeting and observed that 18 people signed up for the Public Forum. Councilor Kelly, seconded by Councilor Taylor, moved to hold the Public Forum for 50 minutes, given the number of people who were signed up to speak. Roll call vote; the motion passed unanimously, 7:0. (Councilor Solomon had not yet reached the dais.) Councilor Solomon arrived. Mayor Piercy reviewed the rules of the Public Forum. G. Scott Purcell , 3425 Strathmore Place, spoke in support of the proposed enterprise zone. He stated that he was a Certified Public Accountant and Chief Financial Officer for two mid-sized businesses. He said that the former zone created more than 1,500 new jobs for the community and helped a significant number of small and mid-sized businesses expand and become more stable. He urged the council to adopt the resolution before them. He underscored that the businesses that utilized enterprise zone incentives helped to foster a more lucrative tax base for the City of Eugene; those taxes helped to pay for City services. He declared that by encouraging new investments today, the zone added money to the City coffers “tomorrow,” a “wise financial decision.” Mr. Purcell asked the council to be thoughtful when considering whether to reward existing businesses as well as new businesses for the jobs they provided. He opined that a failure to take into account the existing jobs would be disrespectful to existing businesses “that create this great community we live in” and would encourage them to leave. He said the resolution appeared to be a compromise between the County and the City and urged the council to “stop pointing the finger at Lane County.” He noted the County agreed to a more restricted map, job quality standards, and made headway on the cap. He asked the council to work with the Lane Board of County Commissioners and stop taking actions that “impair our reputation” and put the community at economic risk. He hoped the council would work with the Governor’s vision for Oregon MINUTES—Eugene City Council July 18, 2005 Page 1 Regular Session and not operate in a vacuum. He pointed out that the City of Eugene had safeguards with respect to the environment and its quality of life. Mayor Piercy acknowledged that Lane County Commissioners Bobby Green and Faye Stewart were in attendance. th Bob Cassidy , 1401 East 27 Avenue, commented that on its surface, the enterprise zone seemed like a “win-win situation” because its basic purpose was to create jobs and promote growth, thereby increasing revenues for the City. He asked, then, why it had not worked. He felt such zones forced growth and caused more expenses than revenue or that the benefits were going elsewhere. He averred that jobs provided in Eugene often were taken by people who live in outlying communities. He alleged that half of the citizens in Springfield and 72 percent of the population of Veneta worked in Eugene. He opined that the County should help pick up the tab for “forced growth” in the city of Eugene. He recognized that the County did not have an excess of funds, though it would be more possible if a new public safety district was approved. He remarked that after all the years of growth, the city of Eugene could not afford to maintain its streets, among other things. He said the enterprise zone was not a “win-win for everybody.” th Don Kleinsmith , 940 West 18 Avenue, said he was tired of picking up the tab for an enterprise zone and urged the council not to support it. He observed that the zone required a wage of $9 per hour and this was less than what he was making on the day he retired 18 years earlier. He felt the enterprise zone was “giving things away” when the City could not afford to adequately fund its police and fire departments. He asserted that the City should not give tax breaks to businesses. He said the City had given “thousands in tax breaks to Jean Tate - to create what?” He added that when he moved to Eugene it had a population of 14,000 and was a nice little city. Ladonna Carlisle , 120 North Seneca Street, assistant to the president of Glorybee Foods, stated that the company started in 1975 out of a garage at a residence on River Road and had grown to a company that employed 90 people. She said the growth was directly attributable to outside financial help as the company never had sufficient capital to “grow the business.” She recalled that the company borrowed the down payment for its property from a business associate in 1987 and was then able to expand three different times through loans from the bank as well as the tax-exempt status provided by the enterprise zone. She averred that the tax exemption facilitated the reduction of capital needed to continue to grow the business. She stressed that verification of the company’s success was on record as the enterprise zone required regular reporting. She reiterated that the tax exempt investment benefit was a major component of the enterprise zone proposal and would factor into a decision to be made by her company on its next building site. She underscored that the business would prefer to remain in Eugene. She related that Glorybee Foods intended to build a $6 million dollar plant and anticipated a 20-percent increase in the number of employees. She believed that sustainable economic incentives brought about by an enterprise zone would provide improved wage and benefit standards to the community and could support business prosperity while protecting the environment. She reiterated that the renewal of the zone would be of great assistance in the projected expansion of Glorybee Foods. Mike Clark , Cheryl Street, thanked the Mayor and councilors for their service. Mr. Clark observed that a significant portion of the reserve-for-revenue shortfall had been used in the last budget cycle in order to get the budget to balance. He said the six-year financial forecast indicated the reserve-for-revenue shortfall would be depleted in two to three years. He was concerned that sending a de MINUTES—Eugene City Council July 18, 2005 Page 2 Regular Session facto message that the City was not interested in companies growing in west Eugene would discourage Hynix Semi-Conductor Incorporated from expanding. He noted that Hynix currently paid six percent of City tax revenue. He noted that other businesses were looking to expand and if they chose to go elsewhere, as Williams Bakery had recently done, it could be the makings of “a perfect financial storm a few years down the road” with tough decisions to be made about where to cut vital services. He said bearing the frustrations of the process involved in the enterprise zone and helping it along could provide several million more dollars to spend three to five years down the road. He thought this could be used to expand fire and public safety services and help fund the action items resulting from the Cultural Services Division Comprehensive Plan. He encouraged the council to act with caution and accept the City Manager’s first proposal so that the City could return to the table and talk with the County and bring the zone to fruition. Dan Herbert , 1913 Potter Street, spoke on long-range planning. He noted it was his third presentation to the council on organization for urban development in the next decades. He recapped his presentations, to date, the first of which focused on the need for public/private partnerships and the second argued that such partnerships would require proactive efforts by specially designated public agencies. He offered five examples of such agencies and commented on their role in planning and development. He suggested that elements of any of the examples could be utilized to benefit the city and none were meant to be taken in their entirety. The examples he provided were, as follows: 1. The Brookings Institute research paper he already distributed to the council; 2. The Portland Development Commission, a separate city department with its own policy board and staff which brought together the public/private partners needed to realize complex projects, coordinating land acquisition, financial resources, market analysis, etc.; 3. In 1967, the City Council set up the Eugene Renewal Agency, much like the Portland Development Commission, though on a smaller scale. In 1982, the City Council dissolved it and it was subsumed into the Planning and Development Department (PDD), which took over its policy functions; 4. Public/private partnerships, set up in 1997 for the Mixed-Use Broadway Place; and 5. The City’s affordable housing program, lauded for doing an excellent job in its area, having built 20 successful projects since its advent in 1989. Mr. Herbert indicated that he would return to the next City Council meeting and summarize his points made over three Public Forums. Zachary Vishanoff , Patterson Street, provided a packet of articles for the council. He commented that sustainability, smart growth, and “branding” were intertwined. He thought the City of Eugene should have a dialogue about “branding” the town to determine why Eugene should be branded and who this might attract. He felt the brand should not be egocentric or overstated. He thought the current suggestion exuded ignorance and if Eugene were, perhaps, Barcelona, Spain, it might qualify to claim it was the world’s greatest city. Mr. Vishanoff asked if Eugene was trying to attract the Olympic Trials in 2008. He said “track and doping” were having a bit of a crisis and some of the technologies that were coming up were not traceable. Mr. Vishanoff questioned the need for economic development incentives because it was difficult to know who to attract. He was concerned that not enough regulation was in place to govern bio-hazards. MINUTES—Eugene City Council July 18, 2005 Page 3 Regular Session Teresa Callahan , 537 Honeysuckle Lane, explained that she was speaking as a taxpayer, a local physician, a mother of three school-aged daughters, a former small business owner, and the person who headed her church’s committee on economic justice issues. She had been involved in local discussions about economic development strategies with various community groups over several years. She was not convinced that enterprise zones were the best use of taxpayer dollars, but she appreciated the efforts of several councilors and the Mayor to incorporate fair community standards into the enterprise zone to ensure taxpayers received the best return on investments. She believed that more, not less, public accountability needed to be part of the discussion in which public tax subsidies were provided to private businesses. She thought this kind of accountability had been somewhat lacking in the past. Dr. Callahan recalled that when she first moved to the city of Eugene, Hynix was being built and had been given a series of tax breaks. She said those tax breaks seemed to be “deals made behind closed doors.” She asserted that Hynix failed to keep its promises of keeping certain wage levels and standards of non- discrimination in hiring and certain levels of management jobs for local people and there had been no consequences. She further asserted that many people in the community were left feeling that such tax breaks and zones were a waste of money with no method for public accountability. She wanted “real teeth” in an enterprise zone. She averred that the community standards incorporated into the City Council’s original proposal was a positive response to the unhappiness many in the community felt about past tax breaks. She added that not enough time or opportunity for real public input had been provided. John Brown , 1260 Charnelton Street, thanked the council on behalf of the Cal Young Neighborhood Association for restaffing Fire Station 9, which served his neighborhood. Mr. Brown also wished to bring to the council’s attention the critical need for increased vigilance along the river banks for the next 60 days. He said, as a long-time advocate for the river and the Willamette Greenway, the increase in recreational usage and homeless camping because of warmer weather caused a negative impact to the riparian area. He stated that an increase in preventive measures over the next 60 days would be greatly appreciated by area residents. Kathy Smith , 88649 Fir View Street, asked the council to vote to accept the City Manager’s recommendation for the enterprise zone resolution. She wished to remind councilors that a citizen’s advisory committee on which she had served had reviewed the zone and she underscored its diverse constituency. She related that the group reached an agreement to recommend to the City and the County the creation of an enterprise zone to promote jobs and new investment in the community. She noted that the recommendation provided for greater potential benefit for firms that expanded on existing redeveloped brownfields and infill sites and that the group believed community standards warranted consideration. She related that the citizen group gave significant time, study, and discussion and had learned much in order to frame a proposal to the council and to reflect agreement on key issues for a “uniquely Eugene zone.” She asked the council to continue the group’s progress and vote to accept the resolution. Joseph McKinney , 2968 Summit Sky Boulevard, president of Oregon Roads, submitted his testimony in writing. He explained that his field was commercial and consumer lending. He averred that a business owner would focus on opportunities available through the creation of an enterprise zone. He thought one company might try to take advantage of such a zone and outmaneuver its competitors. He suggested that brokers and contractors would profit. He said information moved fast and such a zone was not sustainable. MINUTES—Eugene City Council July 18, 2005 Page 4 Regular Session Mr. McKinney asked what incentive a community had to accept this zone if it did not come with good standards. He said, as a local business person, he did not believe something that was not good for the local economy at large was in his best interest. Because the economy is consumer-driven, it is important, he felt, to recognize that the consumer benefited from community standards. He likened incentives to business as public assistance and it was reasonable to attach caveats in order to ensure that such assistance achieved the desired effect. He said it was reasonable, just as when granting a loan, to attach performance requirements to the zone such as good jobs, clean and lawful business practices, and a long-term commitment to the community. He underscored that the public expected a net gain from the incentives provided by an enterprise zone. He asked if there were guarantees such as a penalty clause for a business that “cut and ran.” Lucy Lahr , 2095 Pierce Street, stated that she worked with the Eugene/Springfield Solidarity Network - Jobs with Justice Chapter. She acknowledged the work the councilors and Mayor had undertaken to provide a good tax incentive that invested tax dollars in business development and maintenance. She conveyed the Solidarity Network’s appreciation that the council’s language provided opportunities for both existing and new businesses and that the council and the Lane Board of County Commissioners were engaged in a discussion, hoping it would benefit the entire community. The network had been “somewhat surprised and dismayed” that the commissioners had not followed through with the agreement “forged with the City Council” the previous week. She averred that the reason for economic tools such as an enterprise zone was to create new jobs, attract new businesses, and to support existing businesses looking to grow. She iterated it was critical that elected officials and quasi-government agencies using taxpayer money for economic development represent the taxpayers. She stressed that taxpayers wanted family wage jobs so that they could afford to live in this community, obtain affordable healthcare, and contribute to a stable tax base to support public services, public education, and local infrastructure. She said that in order to maintain the public trust, the process had to be transparent. She supported the enforcement of community standards and accountability, so that businesses were accountable for adherence to those standards. She quoted from a business recruitment brochure from the Lane Metro Partnership, as follows: “Lane County businesses enjoy working as a team with local government to find win-win solutions to satisfy business and citizens alike.” Ms. Lahr asked that Eugene citizens keep working together to satisfy the needs of the entire community. th Paul Conte , 1461 West 10 Avenue, submitted his testimony in writing. He supported the City Council’s original position on appropriate community standards for a new enterprise zone. He thought the agreement provided for “sensible assurance” that tax breaks would be tied to job creation. He felt that recent positions taken by some of the Lane Board of County Commissioners was not what “most Eugeneans would endorse.” He advised the council to mutually support one another after “hammering out” a difficult position on an issue. He felt a shift from the original agreement could undermine the council’s ability to work in good faith toward future compromises. Continuing, Mr. Conte presented an update on the work of the Chambers Area Families for Healthy Neighborhoods (CAFHN). He called it a positive example of “constructive and creative public involvement.” He reported that CAFHN completed an inventory of neighborhood sites that were zoned R-3, R-4, and C-2 and identified over 30 parcels with high potential for residential development. The group thought this could support more than 475 new dwelling units and could help stabilize existing neighborhoods in that area. He said the work served to improve the outlook for a Chambers Multi-Use Center Plan that would protect the irreplaceable close-in established neighborhoods. He pointed out that CAFHN delivered its full density analysis, which was included in council packets. He stressed that the group’s proposal for MINUTES—Eugene City Council July 18, 2005 Page 5 Regular Session infill standards exceeded “every metro, city, and local density benchmark.” He felt the group kept its promise to aid in the work and expressed hope that the work would be of value to the council and the Planning Commission in discussions of Multi-Use Centers. He thanked the council for its efforts to work toward the well-being of the entire community. Bruce Blonigen , 1039 Taylor Street, spoke in tandem with Mr. Conte. Regarding neighborhood design standards, he underscored that as a professor of economics at the University of Oregon, he believed in the power of market forces. He said the compelling argument based on the power of the market was the notion that the way to encourage compact residential neighborhoods in the core of the cities was to make them attractive places to live. He asserted that no amount of “hand-wringing” would stop pressure on the urban growth boundary (UGB) should those neighborhoods not be attractive relative to dwellings on the periphery. He observed that in his neighborhood, the current zoning standards were allowing the degradation of core neighborhoods, making them less attractive. He pointed out that some residents of his neighborhood left because of just such elements, noting that an ugly multi-unit dwelling had been constructed next to his house. He remarked that the housing market was not so simple as to equate one unit of infill with one less unit of sprawl. He averred that in order to make the infill unit preferential, it needed to have a greater appeal. He suggested that the design standards developed by CAFHN went a long way to ensure new development would be compatible with core neighborhoods. Mr. Blonigen lauded his experience with CAFHN. He shared that he and his wife participated in many meetings and the group dedicated many hours to come up with detailed analyses and solutions, much based on decades of residence in the neighborhood. He asked the City Council to consider the recommendations of CAFHN as it considered the Chambers Multi-Use Center. Phillip Carroll , 1054 Van Buren Street, spoke as a resident of the Jefferson/Westside Neighborhood and a representative of the Eugene Tree Foundation. He said that during the Chambers Neighborhood Revisited (CNR) process, the urban forest was frequently referred to citizens because they recognized the value of the landscape. He underscored that one goal of the CNR process was to promote density and infill that was compatible with existing neighborhood character. He averred that the urban forest was a component of said character and the successful function of the neighborhood. He stated that the landscape was due to the health and diversity of the area, which depended on sufficiently large areas of contiguous plantable soil, especially those formed by neighboring back yards. He said such yards provided area residents with the opportunity to participate in the creation of the urban forest and the stewardship of the neighborhood. He felt that the construction of infill that was out of scale with the rest of the neighborhood would chop up planting areas and create challenges to the landscape. He commented that a healthy urban forest was not the enemy of density. He cited an experience he had living in a row house in San Francisco in which his backyard supported a variety of plantings, as did all of the backyards in that neighborhood. He asked the council to think about these factors and to look closely at the proposals from CAFHN. He averred that contributing to the desirability and quality of downtown living would increase residency. Ruth Phelps , 5445 Donald Street, wished to bring to the attention of the City Council and residents of the South Hills area that Station 5 no longer had an ambulance and that the Fire and Emergency Medical Services (EMS) Department expected Station 1 to provide coverage. She maintained that this would impact the four-minute response time the department aspired to because the other stations were too far away. She noted that the other ambulance that was to cover the area was located at the fire station on Bailey Hill Road. She clarified that the ambulance itself was still located at Station 5, but the crew was no longer there. MINUTES—Eugene City Council July 18, 2005 Page 6 Regular Session Becky Riley , 202 Hawthorne Street, encouraged the City Council to stand firm when deliberating over tax breaks. She did not support giving tax breaks to corporations. She found it difficult to believe that an enterprise zone was the best way to support the local economy and promote business growth. She wondered if tax breaks were truly necessary and whether they outweighed the community benefits to be reaped. She thought the cost was too high to the environment, public schools, roads, public welfare and safety. She questioned whether such tax breaks were necessary to attract and retain quality jobs in the area. She averred that voter-approved limits on property taxation and declining corporate tax rates helped to push State services and infrastructure into deep funding crises. She noted that the Oregon Center for Public Policy indicated that in the upcoming budget cycle, corporations operating in Oregon would pay 71 percent less in state corporate income taxes as a share of the economy than they did in the late 1970s. She underscored that working families and small businesses were paying a larger share of state income taxes than a generation ago. She felt it was difficult to understand why additional tax breaks would be a priority in the face of such a shift. She said that, at the very least, the council should stand firm behind the rules it had adopted, including limiting tax breaks to the industries that build or expand on former industrial sites and limiting the size of tax breaks per job created. Specifically, she thought given that jobs created was one of the key goals of the enterprise zone concept and that the limit made sense as an important way to ensure accountability. She urged the council not to abandon the community standards because they provided rational limits on the subsidies that were being offered. She asked that the council abandon the enterprise zone should the Lane County Commissioners refuse to accept the conditions. Should this be the case, she asked that the council redirect its energies to finding other strategies to attract new businesses. She preferred that new strategies not be dependent on “offering open-ended public subsidies.” Jozef Siekel-Zdzienicki , 1025 Taylor Street, submitted written testimony from his partner on another subject, primarily focused on the possibility of the construction of a Whole Foods Grocery in the downtown area. Mr. Zdzienicki said he participated on the steering committee for CAFHN, comprised of professionals and others who were trying to set standards to maintain a “bungalow-type” neighborhood while promoting multiple use in parts of the special zone in that area. He felt that the commercial aspect between Chambers Street and Garfield Street had not been emphasized by consultants and the Planning Department. He opined that it was the place to intensify density as housing could be built in the upstairs of these commercial buildings. He proposed that the neighborhood be maintained as it was with one-and-a-half story houses. He thought the other commercial areas with “tin sheds” and vacant lots were ripe for development. th Lauri Segel , 1210 East 29 Place, echoed Ms. Riley’s comments regarding the enterprise zone. She urged the council to consider everything Ms. Riley said regarding the zone and community standards. Lisa Arkin , 29136 Gimpl Hill Road, supported the council’s original agreement on community standards for the enterprise zone. She expressed appreciation for the work of the Mayor and councilors to reach consensus, or near consensus, on a “very controversial issue.” She believed that by respecting those efforts, the council demonstrated good faith to one another and to the members of the community. She averred that when public tax subsidies are awarded, the public should be able to expect accountability and standards that move the community toward a realization of its values such as smart growth, economic justice, worker and environmental protections. She said it was reasonable to expect such guarantees. In conclusion, she noted that she had been appointed to the Mayor’s Sustainable Business Initiative (SBI) Task Force. It was her assumption that the task force would be working on development of community standards for sustainable economic development. MINUTES—Eugene City Council July 18, 2005 Page 7 Regular Session Moshe Immerman , 1295 McLean Boulevard, invited the council to the anniversary celebration of the Corvallis food co-operative. Mr. Immerman alleged that Hyundai, now Hynix, had received “illegal tax breaks.” He asserted that Hyundai, when originally looking at Eugene, walked away from over $800 million in tax breaks in the state of Oklahoma. He maintained that Hyundai came here because of the water and other factors and not tax breaks. He believed that many programs had been cut in order to give tax breaks to Hyundai, programs such as the Human Rights Program and parks and recreation programs. Mr. Immerman said that the Corvallis food co-op was the most “joyful, positive, magical place” to work in Oregon. He said he was working to start a food co-op in Eugene, thinking it would be possible to open a branch of the Corvallis co-op. He suggested that Homeland Security funds could be used to create a food co-op. He averred that local food security was a “huge issue.” Mayor Piercy closed the Public Forum and called for questions and comments from the council. Councilor Kelly thanked everyone for their testimony. He explained that the council would be retiring into an executive session before taking action on the enterprise zone resolution in order to ask the City Attorney several legal questions. He called it disingenuous to say that outside businesses would be favored over resident businesses. He underscored that the rules treated everyone equally; should a job be created, a tax break would be granted. He did not believe that enterprise zones were the only tool for economic development. He felt there had been a great deal of misinformation regarding the zone. He cited Glorybee Foods as an example and said that, according to his calculator, the company would receive the same benefit in an enterprise zone, with or without a job cap. Councilor Bettman stressed that the City and the County wanted an enterprise zone, but now the two jurisdictions were “haggling over the price.” She said one issue was whether the two would have “real standards” or whether such standards would be “window dressing.” She thought the proposals on the table were “window dressing” and the impact on the magnitude of the benefit would be negligible. Councilor Taylor thanked everyone for speaking. She asserted that an enterprise zone could not require family wages, long-term commitment, local hiring, or environmental protection under current State law. She opposed any enterprise zone. She opined that the standards, as proposed by the council, were minimal and should not be lowered. Mayor Piercy thanked Mr. Brown for bringing the need for extra patrols on the river banks over the next 60 days to the council’s attention. She understood that there had been an increase in the number of police bicycle patrols in that area. She also wished to thank the members of CAFHN for their work with the City, calling it “extraordinary.” Councilor Poling expressed his enthusiasm for the tour he would be taking of the Chambers area the next day, courtesy of CAFHN members. Regarding the enterprise zone, Councilor Poling wished to clarify and address some of the assertions made during the Public Forum. He stated that, though some would portray the City Council and the Lane Board of County Commissioners as being at “complete odds,” the truth was that the two jurisdictions had agreed MINUTES—Eugene City Council July 18, 2005 Page 8 Regular Session upon the interim standards, the map, brownfield development and the removal of some railroad properties, as well as the $30,000 per job cap. He said the only remaining issue was job retention. He stressed that no taxpayer money would be “going out” as an existing company or new company would continue to pay the existing amount of tax and the only thing that the exemption applied to was the improvements that would be made. This exemption expired after three to five years and the amount of tax on the improvements would be added to the amount already on the tax rolls. He stated that there were safeguards in place, should a company renege on a deal. He cited HMT, which left before its tenure and had to pay approximately $750,000 as a result. Councilor Papé reiterated that the enterprise zone utilized tax breaks and not tax subsidies. He also commended CAFHN for the work the group had done. He called the group a community model for creating neighborhood solidarity to bring an issue to the council’s attention. 2. CONSENT CALENDAR A. Approval of City Council Minutes June 8, 2005, Work Session - June 13, 2005, Work Session - June 13, 2005, City Council Meeting - B. Approval of Tentative Working Agenda C. Approval of Minutes, Finding, and Recommendations from the Hearings Official and Adoption of Resolution 4847 Forming a Local Improvement District for Paving, Constructing Curbs, Gutters, Sidewalks, an Storm System on Debrick Road from Clinton Drive to Valley Butte Drive, and Butte Lane from Clinton Drive to 700 Feet South (Job #4111) D. Approval of Minutes, Finding, and Recommendations from the Hearings Official and Adoption of Resolution 4848 Forming a Local Improvement District for Paving, Constructing Curbs, Gutters, Sidewalks, Landscape Medians, Street Lights, Street rdth Trees, Wastewater, and Storm Water Drainage on 3 and 4 Avenues between Pearl Street and Lincoln Street, North of the Southern Pacific Railroad and South of Skinner Butte Park (Job #3827) E. Initiation of Code Amendment for Downtown Zoning District F. Adoption of Resolution 4846 Authorizing Lease of Kaufman Center to Emerald Empire Council on Aging Councilor Poling, seconded by Councilor Solomon, moved approval of the Consent Calendar. Councilor Kelly stated that he previously submitted one correction to the minutes electronically. He pulled items B and E. Councilor Bettman said she previously submitted minutes corrections. She pulled items C and F. Councilor Taylor indicated that she had also submitted one correction to the minutes. Mayor Piercy noted the corrections. MINUTES—Eugene City Council July 18, 2005 Page 9 Regular Session Roll call vote; the motion to approve the Consent Calendar, with the exception of items B, C, E, and F passed unanimously, 8:0. Regarding Item B, the tentative working agenda, Councilor Kelly requested a work session on outdoor smoking areas prior to the public hearing scheduled for September 12. City Manager Taylor asked if it would be sufficient to do so on the same evening as the action. Councilor Kelly responded that he preferred to separate the two. Councilor Poling noted that the July 20 work session item on compensation for the City Manager had been moved to July 25. Councilor Bettman reiterated the Police Commission request for the entire work session of July 25. City Manager Taylor assured her that the compensation item would be scheduled for the council’s regular meeting. Councilor Bettman concurred with Councilor Kelly regarding his request for a work session. Roll call vote; the motion to approve Item B, Tentative Working Agenda, passed unanimously, 8:0. Regarding Item C, a resolution to form a Local Improvement District (LID), Councilor Bettman wished to know if systems development charges (SDCs) would be involved in the project. Principal Civil Engineer Paul Klope replied that storm SDCs would be involved but because it was a local street, transportation SDCs could not be used for it. Councilor Bettman surmised that City Road Funds were being used instead. She opposed using Road Funds for such a project because she averred the council had determined that such funds should only be used for maintenance and preservation. Councilor Kelly asked what non-assessable portion of the road project the funds covered. Mr. Klope replied that in accordance with Eugene City Code, intersections could not be assessed, nor could existing improvements that had to be “removed to fit” be assessed. City Attorney Glenn Klein explained that because the item had been pulled, two motions would have to be voted upon. Councilor Poling, seconded by Councilor Solomon, moved to approve the Hearings Official’s Minutes, Findings and Recommendations of July 11, 2005. Roll call vote; the motion passed, 7:1; Councilor Bettman voting in opposition. Councilor Poling, seconded by Councilor Solomon, moved to adopt Resolution 4847 forming a Local Improvement District for paving, constructing curbs, gutters, sidewalks, and storm system on Debrick Road from Clinton Drive to Valley Butte Drive, and Butte Lane from Clinton Drive to 700 feet south. (Job #4111) Roll call vote; the motion passed, 7:1; Councilor Bettman voting in opposition. MINUTES—Eugene City Council July 18, 2005 Page 10 Regular Session Councilor Kelly felt there were significant considerations in initiating the Downtown Zoning District, as set forth in Item E, and requested a work session. City Manager Taylor indicated his willingness to schedule a work session after the council break. Councilor Kelly, seconded by Councilor Taylor, moved to table the initiation of a code amendment for a Downtown Zoning district to a September work session. Roll call vote; the motion passed, 7:1; Councilor Poling voting in opposition. Councilor Bettman conveyed her opposition to Item F as it was written. Councilor Bettman, seconded by Councilor Ortiz, moved to amend the second sentence of Recital F to read as follows: ‘The basic rent may increase each year during the term of the lease, but the monthly rent may not exceed an annual amount of $10,000 if the facility is providing services and activities to senior citizens.’ Councilor Papé asked if staff had determined market rent for the facility. Glen Svendsen, Division Manager for the Facilities Divisions, responded that staff had not done so. He added that comparable rentals ranged from 50 cents to $1.25 per square foot. He pointed out that a good portion of the structure was basement and that access to the upstairs was limited. Councilor Papé surmised that as proposed, the City would provide somewhat subsidized space for this senior services facility. Mr. Svendsen agreed and, in response to a follow-up question, explained that the City had made a number of exterior improvements to the facility and had cleaned up some of the brush at a cost of $21,000. Mayor Piercy ascertained from Mr. Svendsen that the Emerald Empire Council on Aging (EECA) organized a number of projects with community groups, with much of the work and materials donated. Councilor Kelly indicated he would support the motion. Roll call vote; the motion to amend the Resolution passed, 7:1; Councilor Papé voting in opposition. City Attorney Klein explained that the council should now vote on the resolution. Roll call vote; the motion to adopt Resolution 4846 passed unanimously, 8:0. Councilor Bettman, seconded by Councilor Ortiz, moved to direct the City Manager to negotiate a lease or lease amendment for the Kaufman Center with the Emerald Empire Council on Aging. The new lease or lease amendment should extend the five-year term approved by Resolution 4846, and include a basic rent cap that does not exceed an annual amount of $10,000, so long as the facility is providing services and activities to senior citizens. City Manager Taylor asked for clarification as to whether the maker of the motion intended the lease agreement to be specific to the EECA or if it was specific to services provided to senior citizens. Councilor MINUTES—Eugene City Council July 18, 2005 Page 11 Regular Session Bettman indicated that she assumed the EECA would be the only provider, but she was willing to be less specific in the language. Councilor Bettman modified the language to delete the Emerald Empire Council on Aging. The second was amenable to the modification. In response to a question from Councilor Kelly, Mr. Klein explained that the first motion intended to address the fourth and fifth years of the lease and the second motion sought to deal with sixth year and beyond. Councilor Kelly said while he supported the work that the EECA did on behalf of senior citizens he objected to fixing the maximum rental amount into perpetuity. Councilor Bettman suggested inclusion of a reference to making changes to reflect inflation Councilor Kelly offered a friendly amendment that added ‘plus an inflation factor’ beginning in Year 6’ after ‘$10,000.’ The maker and second accepted the friendly amendment. Councilor Papé expressed concern that his service on the board of the Willamette Community Health Solutions could be construed as a conflict of interest. Mr. Klein assured him that it was only a potential conflict of interest and that having declared it, Councilor Papé could continue to participate. The motion passed unanimously, 8:0. 3.ACTION: Interim Appointments to the Human Rights Commission Councilor Poling, seconded by Councilor Solomon, moved to appoint Christina Greening to Position 6 on the Human Rights Commission for an interim appointment to serve the unexpired term of Dwight Souers, for a term beginning on July 18, 2005, and ending on October 31, 2007. Roll call vote; the motion passed unanimously, 8:0. Councilor Poling, seconded by Councilor Solomon, moved to appoint Jeremiah Megowan to Position 10 on the Human Rights Commission for an interim appointment to serve the unexpired term of Megan Thompson for a term beginning July 18, 2005, and ending on October 31, 2006. Councilor Solomon thanked her colleagues for supporting Mr. Megowan, a representative for Ward 6. Councilor Bettman thanked Mr. Souers for his years of service. Councilor Papé lauded all five applicants and expressed hope that the other three would continue with their interest in the Human Rights Commission. Roll call vote; the motion passed unanimously, 8:0. MINUTES—Eugene City Council July 18, 2005 Page 12 Regular Session 4. EXECUTIVE SESSION Pursuant to Oregon Revised Statute (ORS) 192.660(2)(f) the City Council went into an executive session for the purposes of consulting with legal counsel regarding the proposed West Eugene enterprise zone at 9:10 p.m. The City Council returned to the Council Chamber at 10:05 p.m. 5. ACTION: Resolution 4849 Establishing Interim Local Criteria Applicable in the Proposed West Eugene enterprise zone and Adopting a Public Benefit Scoring System; and Repealing Resolution 4845 Councilor Papé, seconded by Councilor Poling, moved to extend the meeting by one-half hour. Roll call vote; the motion passed unanimously, 8:0. Councilor Ortiz moved to direct the City Manager to inform the State and the County that the City does not intend to appoint a Local Zone manager under ORS 285C.105 and Oregon Administrative Rule (OAR) 123-065-0200 until after City and County elected officials have additional discussions and reach agreement about how to deal with the question of job retention. The motion died for lack of a second. Councilor Papé, seconded by Councilor Poling, moved to direct the City Manager to cease his efforts to terminate the newly created enterprise zone. Councilor Bettman, seconded by Councilor Kelly, moved a substitute motion that the City Council reinforce its commitment to its previous resolution for the enterprise zone application of April 20 and its Interim Standards Resolution of June 27; Lane County would be a welcome partner in the enterprise zone should it notify the City of its concurrence by July 22, 2005. Failing such concurrence the City Manager shall end Eugene’s participation in the enterprise zone. Councilor Papé raised a point of order in that he had not been provided the opportunity to speak to his motion. Councilor Bettman asked him to speak to his motion. Councilor Papé felt Councilor Bettman’s motion was “splitting hairs.” He regretted that his participation in the work session at which the initial vote on the enterprise zone had been taken had been prevented by a poor telephone connection. He said he would have opposed the motion to direct the City Manager to cease pursuance of the enterprise zone. He felt that both the City and the County wanted what many people in the community wanted. He thought walking away from this mechanism for increasing economic vitality in the community over a minor change in the tax breaks would make the City Council “look like a ship of fools.” Councilor Bettman thought the council adopted a compromise motion for interim standards. She averred that this near-consensus had led to the success of the application. She said the zone, as conceived with those standards, would provide benefits for local businesses and for new businesses as well as providing jobs and MINUTES—Eugene City Council July 18, 2005 Page 13 Regular Session balancing the City’s need for enough revenue to provide essential services. She recalled that the County agreed to it in April and had no language about job retention or the possibility that the cap could be waived. She asserted that the County retroactively tried to change the terms of the agreement. She believed that raised legal issues. She thought the standards as proposed by the County provided “extraordinary” benefits to business developers. Councilor Kelly supported Councilor Bettman’s substitute motion. He asserted that it had only been through compromise and collaboration that the City Council was able to arrive at a decision on the enterprise zone in the first place. He felt the County’s changes jeopardized this level of agreement. He noted that the enterprise zone was an agreement to give up tax revenue in order to provide an incentive to a business for expansion. He said the balancing act for an elected official was to maintain equilibrium between the incentives provided with the revenue needed for services. He averred that the council’s proposal did so. He asserted that it had been hinted that “all economic development would cease” without the enterprise zone. He disagreed with this notion and hoped that the enterprise zone could be retained with the cap as originally proposed. Councilor Ortiz was disappointed that no one was willing to discuss the motion she had set forth. She underscored that she would vote on behalf of the best interests of her constituency. She pointed out that her constituents needed jobs. Councilor Pryor could not support the motion. He refused to head down the path toward termination of the enterprise zone. He believed a solution could be reached. He acknowledged that councilors would have different perspectives but by trying to terminate the zone, pressure was being created that was unnecessary. He thought the council had gone a long way in terms of reaching agreement, having agreed on standards, boundaries, that brownfields would be targeted over greenfields, a cap, and a whole variety of other areas. He pointed out that the County had accepted some of the council’s agreements and now it was the City’s turn to accept some of the County’s decisions in a spirit of compromise. He stressed that the first step would be to not continue to try to terminate the zone. He believed that termination would create problems and could “blackball” the City from being able to apply for another one. He supported the original motion and not the substitute motion. Councilor Poling indicated his opposition to the substitute motion. He agreed that the County made concessions as had the City. He noted that the vote on the cap had been a 5:4 vote and that based on that vote, the council voted 7:1 to move forward. He thought it unfortunate that the council had not included the County in its discussions on what the dollar amount of the cap would be. He said support for the original motion would allow the council an opportunity to follow up with the suggested motion in the agenda item summary (AIS) and the City would have some local control and local standards over the enterprise zone that was now in effect. He stressed that a company could come in at present and it would be under State guidelines; there would be no local control. He felt it boiled down to the “retention part.” He averred that a company that had been in the community for a long time and wanted to make a substantial investment in the company would, in the long run, allow the City to make more money even if no employees were added. He opposed treating them differently from an out-of-state or out-of-country entity that would bring in new jobs and ultimately create more work for the infrastructure and public services. He noted that Mr. Cassidy asserted in the Public Forum that the City of Eugene was creating jobs for people who resided outside of City limits and opined that this was not a bad thing. He pointed out that the City received tax money that resulted from the business such employees worked at while the services to those employees were being provided on “someone else’s tab.” He reiterated that the principle of an enterprise zone was to increase the MINUTES—Eugene City Council July 18, 2005 Page 14 Regular Session tax base through job creation, job retention, stabilization of the base, and through the support for growth and for local businesses. He commented that six companies were looking at the enterprise zone. He predicted the City would lose those companies should the substitute motion be passed. Councilor Papé explained that he had not seconded the motion made by Councilor Ortiz because he thought anything that could be interpreted by the State as an inclination toward termination of the enterprise zone would be detrimental to the application and future applications. He fully supported Resolution 4849 and hoped it would be followed by a resolution to appoint two councilors or the Mayor and a councilor to meet with the Lane Board of County Commissioners to resolve the issues. Mayor Piercy called for a second round of comments. Councilor Bettman averred that the issue boiled down to the need to “uphold contracts” and that the City made a contract to apply under “certain circumstances” and the County agreed to it. She opined that people who did not “want to uphold and honor those contracts” called for more discussion. She felt that one did not go back and renegotiate the terms of a contract after one had the job. Councilor Bettman asked if Hynix would receive, under the retention standards, tax breaks based on both the existing jobs for which it had already received a tax incentive and the new jobs when it reapplied for a new factory in the enterprise zone and only created 50 jobs though it was a $2 billion investment. Denny Braud, of the Planning and Development Department replied that Hynix would have to increase its employment by 10 percent to be eligible for the program. He explained that given that the plant employed 900 people, it would have to generate at least 90 new jobs to meet the basic eligibility criteria. Councilor Bettman surmised that Hynix could receive tax credits for both existing and new jobs. She felt the company would be “double-dipping.” Mr. Braud underscored that credits would only be based on the new jobs created. Councilor Bettman responded that this was not her question. Continuing, Councilor Bettman averred that her motion did not eliminate the enterprise zone but rather endorsed a zone that she thought would be workable and a benefit to businesses. She did not think the community was in favor of “unlimited benefits” for businesses. She believed the community wanted assurance that tax dollars and public services would be protected through this process. She pointed out that the jobs being considered were limited to manufacturing jobs by the State. She did not think all of the economic development dollars should be channeled into this. She said the question was how much taxpayers wanted to pay per job. Councilor Taylor said an enterprise zone was not the only way to create jobs or attract businesses. She thought there were other ways to help businesses that did not need to be restricted to manufacturers. She opined that good companies go to communities for reasons other than tax breaks. Councilor Pryor pointed out that the motion on the table continued to try to terminate the enterprise zone, which he did not see as reaffirming its value. He suggested that the way to reaffirm such an incentive would be to figure out how to make it work. He said the council had come close to arriving at local standards and pointed out that presently the City had no such standards. He underscored that for whatever time period the enterprise zone was in effect with no standards, someone could apply and, whether the City picked up the application or not, the “non-standards” (i.e., State standards) would apply. He stressed the importance of MINUTES—Eugene City Council July 18, 2005 Page 15 Regular Session stepping back and maintaining the discussion with the County, adding that he could not see that this would occur while the council was still making an effort to terminate the zone. Councilor Poling reiterated that no one was asking taxpayers to pay for jobs and no one was giving any tax money to companies. He wished to underscore that the enterprise zone provided tax exemptions on improvements to an existing site only. He commented that he did not wish to be part of the legacy that took perhaps the biggest and best economic tool out of the toolbox and tossed it away because of “one sticking point with the County.” He said to throw away the enterprise zone would be devastating to the business community. He felt such a jettison would send a bad message on how the City treated business and took care of its citizens. He could not support the substitute motion. He thanked councilors Pryor and Kelly for the work they had done with County Commissioners Green and Stewart to reach a middle ground but he did not think further discussion, given how immovable the two sides had become, would gain any ground. He suggested that the council step back and try to return to the original proposed motion as it allowed “some breathing room” and local control over an enterprise zone. Councilor Kelly clarified that Councilor Bettman’s motion did not suggest termination of the zone unless the County would not agree to the per job cap. He also wished to point out that, though the City did not hand money to a company per job, it was lost revenue. He said whether one handed the money to a company and it did not give it back or whether it was not handed the money in the first place, it was lost revenue. He said it was only lost revenue if the company left the community entirely if it did not receive the dollar. Mayor Piercy predicted a tie vote. She stressed the importance of having an enterprise zone that worked, but she averred the zone before the council was no longer the “zone we signed up for.” She recalled that when the council voted to move toward termination because the County Commissioners decided not to accept the interim standards passed by the council, she was uncertain she would have voted to terminate at that point had the vote been a tie. She related that she asked councilors Pryor and Kelly to meet with the two commissioners because she thought the enterprise zone was too good to terminate. She thanked Commissioners Green and Stewart for their willingness to meet with the councilors. She said the first issue had been about the number on the job caps and the councilors were willing to make some movement on that. She said the next issue had been the possibility of an optional waiver on the caps and it was thought that there could be agreement on this. She stated that the commissioners called out the “retention piece,” though it had not been subject to discussion previously. She had thought the agreement had been reached. However, she returned to work and the commissioners tossed out the retention part of the agreement. Because of this, she supported Councilor Bettman’s motion to reaffirm the council’s commitment to its original agreement. She predicted that the City and County could still have its enterprise zone. Councilor Solomon asked what the legal implications of Councilor Bettman’s motion were. City Attorney Klein explained that should the motion pass, people would be able to file applications for the enterprise zone because it would be in effect until the date specified. Should there be no motion to discontinue the termination, the City Manager would be required to take steps to terminate it. He was uncertain how long this would take. Councilor Solomon remarked that nothing in the motion encouraged the council to work with the County. Rather, she said, it seemed the motion was an ultimatum to the County to “get on board” or the City would walk away. Councilor Bettman restated the motion. MINUTES—Eugene City Council July 18, 2005 Page 16 Regular Session Councilor Solomon asked if the council had not just learned in the Executive Session that it was not possible to make such a motion. City Manager Taylor responded that he would travel to Salem and ask the interim director to reconsider the application because he believed the State had erred in its designation. This would be the best course of action, that the State reconsider and then the City would not be subject to being barred from submitting future enterprise zone applications. He said the City staff would work toward termination on the basis of its inconsistence with the application the City submitted. He felt face-to-face communication with the department in Salem would be in order and this would allow staff to argue the issue of the City’s unwillingness and inability to fulfill the requirements of such a zone. Councilor Solomon remarked that the City was able to fulfill such requirements, but a majority of the council was unwilling to do so. Councilor Papé asked what the motion on the table would do to the motion of June 29. City Attorney Klein replied that it would instruct staff not to try to terminate the zone before July 22. Mayor Piercy called for a third round of comments. Councilor Bettman believed that the City possibly had the right to legal redress because the resolution that applied for the zone articulated the cap per new job created and the intent to adopt community standards and interim standards set by community members. She opined that the County had breached a contract by returning to earlier agreements and opening a dialogue as if it had been the City that had breached the agreement. She asked that the County honor its original agreement. She thought the 7:1 vote by the council in support of the application as drafted helped influence the progress the application had made. She said she was hoping that the County would not be “willing to sacrifice” the zone and that it would be willing to “uphold its original agreement” with the City. Councilor Poling recalled that Councilor Kelly once said that the councilors were politicians and politicians sometimes changed their minds. It was important to realize that one had to work with that. He reiterated the importance of installing the enterprise zone at present with interim standards and then working through the details of community standards. He urged the council not to give it up. He felt giving it up would preclude the City from being granted any future enterprise zones. Councilor Taylor indicated her support for the substitute motion. Roll call vote; the vote for the substitute motion was a tie, 4:4; councilors Bettman, Ortiz, Kelly, and Taylor voting in favor; councilors Pryor, Poling, Solomon, and Papé voting in opposition. Mayor Piercy voted for the motion and the motion passed. Roll call vote; the vote for the amended motion was a tie, 4:4; councilors Bettman, Ortiz, Kelly, and Taylor voting in favor; councilors Pryor, Poling, Solomon, and Papé voting in opposition. Mayor Piercy voted for the motion and the motion passed. The meeting adjourned at 10:48 p.m. Respectfully submitted, MINUTES—Eugene City Council July 18, 2005 Page 17 Regular Session Dennis M. Taylor City Manager (Recorded by Ruth Atcherson) MINUTES—Eugene City Council July 18, 2005 Page 18 Regular Session