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HomeMy WebLinkAboutCC Minutes - 05/23/07 Work Session M I N U T E S Eugene City Council Work Session McNutt Room—Eugene City Hall May 23, 2007 Noon COUNCILORS PRESENT: Andrea Ortiz, Chris Pryor, Jennifer Solomon, Betty Taylor, Bonny Bettman, George Poling, Mike Clark, Alan Zelenka. Mayor Kitty Piercy called the meeting of the Eugene City Council to order. A. WORK SESSION: Recommendations of the Council Subcommittee on Transportation Funding Solutions Mayor Piercy thanked the subcommittee for the work that had gone into the proposal. She noted that City Manager Dennis Taylor and Assistant City Manager Angel Jones were indisposed and would not be attending the meeting. She stated that Executive Director of the Public Works Department Kurt Corey would provide an overview of the report. Mr. Corey conveyed City Manager Taylor’s regrets at not being able to attend the meeting in person. He explained that according to a report completed in 1998, the backlog of road repairs amounted to $32 million. He said the City Council determined in the year 2000 that it should assign a subcommittee of the Budget Committee to consider transportation funding; at that time the backlog had reached the sum of $67 million. He related that the subcommittee had come back with new information that $9 million in additional annual revenue would be required to make up for the backlog. He stated that two years after that point, the council adopted a three-cent-per-gallon tax on gasoline, generating $2 million annually, and some changes were made to the Systems Development Charge (SDC) methodology. Continuing, Mr. Corey recalled that the gas tax had been increased by two cents per gallon in 2005. He said at present $4.5 million was incorporated into the capital preservation budget annually and in that time the backlog had grown to an estimated $170 million. He reported that there had been no increase in the state gas tax in 14 years and, in addition, the revenue sharing from Lane County was likely to fall from $2.5 million to zero as of July 1 of this year. He stated that in response to this, Mayor Piercy formed the subcommittee consisting of Mr. Zelenka, Mr. Pryor, Ms. Solomon, and Ms. Bettman to review funding mechanisms and form a proposal to address the backlog. He highlighted the Council Subcommittee on Transportation Funding Solutions Final Report. Mr. Pryor averred that the subcommittee ultimately posited funding solutions that were workable, usable, and reasonable. He thanked staff for all of the help provided to the subcommittee, noting that the facilitation provided by Management Analyst for the Public Works Department, Roland Hoskins, had been “masterful.” He declared that the council and the City either needed to fix the problem or stop complaining about it. He understood that not everyone would be completely happy with the proposal but he believed it was important MINUTES—Eugene City Council May 23, 2007 Page 1 Work Session to move forward with the package in an expeditious fashion and not to tinker with it. He said the citizens should recognize the proposal as a thoughtful and considered approach. Mr. Zelenka thanked staff for the “great work.” He echoed Mr. Pryor’s sentiments with regard to moving forward with the package as proposed. He averred that the council should not waste $30 million talking about it. He reiterated that County funding was drawing to a close and the State gas tax had remained at the same level since 1993. He noted that the City of Salem had a $100 million backlog of road repairs and the City of Portland had a backlog of over $300 million. He cited an article in Time Magazine which reported that 93 percent of cities across the United States had this problem. He stressed that the proposal represented a “compromise package.” He commented that it might not be a fair package, but it was viable and doable. He urged his colleagues not to pull the package apart. He noted that money to be dedicated to the bicycle paths was included in the funding package in an effort to take a holistic approach to the transportation system. Ms. Bettman said she was the only member of the subcommittee who did not endorse the final package. She expressed surprise that it had been presented as a “total package.” Her impression had been that the subcommittee would identify the funding sources that it could support forwarding to the council or that the subcommittee opposed but was willing to forward to the council. She believed it was important to consider each component of the package separately. She opined that some were “supportable and some were not supportable” and each councilor should be able to make that choice. Ms. Bettman averred that the transportation system should be looked at in terms of how much service the City wanted to provide. She felt the subcommittee had looked at the problem from the standpoint of staff projections of how much was needed and how much was politically viable “to go after.” She opined that the total was malleable because it was based on the level of service. She thought the service should be reviewed during the budget process when all of the departments were being reviewed in order to determine what level of service the City wished to provide. Ms. Solomon said the subcommittee decided to hone in on items that had a nexus with the transportation system. She stated that the funding mechanisms were fair and equitable. She agreed with Mr. Zelenka and Mr. Pryor that the final report was not perfect but she considered it a true compromise. She echoed their support for retaining the proposal as a “package deal.” She believed that the proposal was a good start in the right direction in a process that would likely take 15 to 20 years. She hoped her colleagues would “honor the work” of the subcommittee. Mayor Piercy asked if the subcommittee had considered phasing in the strategies. She also wondered whether there had been conversations regarding adjustments to the cost to citizens based on income. Additionally she requested elaboration on the subcommittee’s deliberations that led them to recommend an eight-cent-per-gallon gas tax. With regard to phasing in the proposal, Mr. Corey explained that there was a goal of resolving the problem over a certain period of time. He said the subcommittee lit upon the idea of working on the backlog over a period of 15 or more years and in some ways this was tantamount to phasing it in. Mr. Corey said it was generally recognized that the recommended solutions would be subject to debate as they moved forward and because of this, the subcommittee had not gotten into the details such as whether people could get rebates or reduced rates. MINUTES—Eugene City Council May 23, 2007 Page 2 Work Session With regard to the gas tax component, Mr. Corey related that it was generally perceived to be a mechanism that had worked well over the previous four years and that it was easy to implement administratively. He noted that the three- to five-cent differential between the City of Eugene and surrounding communities had not been perceived as resulting in market flight. Mr. Pryor commented that phasing in a problem that cost $15 million per year would ultimately increase the cost. Regarding income, he related that the subcommittee discussed a number of mitigations. He noted that if the council chose a parking space basis for a utility fee there could be mitigations of the required spaces. He said the subcommittee wanted to get the basic package together and assumed that details would be worked out through the process. He understood that the gas tax would be controversial; people would be unhappy with an eight-cent-per-gallon tax. He underscored that if the council chose to reduce the increase, the cost would have to be shifted to another funding mechanism. Mr. Zelenka agreed that phasing in the proposal would make the problem bigger, but he believed that it did have “sort of a natural phase in” because the work would have to occur incrementally. Regarding the gas tax, he believed that this was a proxy for a carbon tax which he strongly supported. He pointed out that people could keep from paying the tax by walking and bicycling more. Mr. Clark thanked the subcommittee members for their work. His chief concern was that though the council would want the residents to see the proposal as a package they would most likely perceive it as “five new taxes.” He felt the council needed to address citizen distrust by reducing the amount of the gas tax and adding a component from the General Fund. Mr. Poling conveyed his appreciation for the subcommittee’s work. He acknowledged the need for a funding source for the growing problem of transportation infrastructure maintenance and preservation. However, he said, he would be hard-pressed to support anything that had not been put to a vote of city residents. He predicted that an increase in the gas tax ran the risk of voter repeal. He felt the amount of money the gas tax increase would bring in could be added to the local option levy. Mr. Poling recalled that when he campaigned in 2002, he had heard numerous complaints about the potholes in city streets. He said he wanted all along to provide curb-to-curb repairs, but the proposal would address the street, bicycle paths, and trees. He felt people were saying they wanted better streets and because of this it would be hard for him to support anything but curb-to-curb repairs. He believed that without the gas tax included, the package would cost approximately $171 per year for the average household. He added that he felt singling out waste haulers as a funding mechanism was not fair. Ms. Taylor said she had suggested that the subcommittee “keep in touch” with the council and let the council know what they were considering. She asserted that otherwise they ran the risk of having the council oppose all of the elements of the package. She supported separating the five funding components for consideration. Ms. Taylor observed that there was no tax for commuters in the package. Mr. Zelenka pointed out that it included a street utility fee. Ms. Taylor thought a vehicle registration fee would be most fair. She acknowledged that it was not within the City’s purview to institute such a fee. She thought the City should address it on a “bigger level” in order to work to change the legislation so that the City would be allowed to institute a fee. She added her support for discussing the five funding mechanisms in the package separately. MINUTES—Eugene City Council May 23, 2007 Page 3 Work Session Ms. Ortiz also wished to thank the subcommittee and staff for their work. She intended to support all of the funding recommendations but she wanted to discuss them separately. She averred that it was time to move ahead to work on the backlog of transportation maintenance and preservation. Ms. Bettman related that the subcommittee had reached consensus in its desire to not use General Fund money for the backlog. She noted that the concerns her colleagues brought up had all been discussed by the subcommittee. Regarding the gas tax, she agreed with Mr. Zelenka that it was akin to a carbon tax. She averred that it would hit commuters as well as residents. Ms. Bettman, seconded by Ms. Taylor, moved to separate the motion for today’s meeting so the council could consider each taxing/fee mechanism separately. The vote was a tie, 4:4; Ms. Taylor, Ms. Bettman, Ms. Ortiz, and Mr. Poling voting in favor; Mr. Zelenka, Mr. Clark, Ms. Solomon, and Mr. Pryor voting in opposition. Mayor Piercy voted for the mo- tion and the motion passed on a final vote of 5:4. Mr. Poling asked how the second mechanism, a utility fee based on parking spaces, would be implemented. Mr. Corey replied that the subcommittee generally conceded that there was no inventory of parking spaces. He believed it would apply to residential parking and non-residential parking. Mr. Poling surmised that the average household would pay $60 per year for this fee. He asked how many times he would have to pay for the parking spaces in front of his house “before they were paid off.” He added that it may be time to see if the County would work with the City to pass a vehicle registration fee. Ms. Solomon wished to respond to the issue raised that the subcommittee’s proposal did not provide a curb- to-curb solution. She said as a group the subcommittee had compromised and decided to take a look at the transportation system as a whole. She added that the subcommittee discussed at length different ways of imposing fees on heavy vehicles and determined that there was not a practical way to do so. She related that a lot of the heavy delivery trucks come from out of the area. She thought it could have been captured with the transportation system maintenance fee (TSMF) because it had been based on trip generation. Mr. Pryor found the discussion to be interesting. He reiterated that there were elements in the proposal that he did not like and would prefer not to do. He underscored that the proposal contained the funding mechanisms that had garnered enough votes to pass. He said it was what they could do as opposed to what they “preferred to do.” Mr. Pryor noted that the only heavy vehicles that could be easily identified and assessed were the garbage haulers. He underscored that garbage haulers drove on every street of the City and worked every day. Mr. Pryor said while curb-to-curb repairs were important and he supported this approach, he had to give on that idea. He encouraged his colleagues to be flexible as well. Mr. Clark reiterated his contention that some money should be drawn from the General Fund. Mr. Zelenka commented that with a looming multi-million dollar deficit he was not willing to take money from the General Fund. He assured his colleagues that the transportation funding addressed the concerns regarding curb-to-curb repairs. He said if the package was exclusively curb-to-curb it would be “no deal” at the subcommittee level. MINUTES—Eugene City Council May 23, 2007 Page 4 Work Session Mr. Zelenka noted, regarding the waste haulers, that the biggest waste hauling company in the City worked 19 hours per day, seven days a week, and caused a lot of damage. He said the garbage haulers were not concerned with the fee as it would be a pass-through. Ms. Ortiz, seconded by Mr. Pryor, moved to increase the City of Eugene’s motor vehicle fuel tax by three cents per gallon to the eight-cent level to generate an additional $2 million annually. Mr. Clark moved to amend the motion to send the item back to the committee for adjust- ment. The motion died for lack of a second. Ms. Bettman asked if there would be a public hearing on the gas tax. Mr. Corey replied that a public hearing had been conducted earlier in the year. He said action was currently scheduled for May 29, absent direction to the contrary. In response to a question from Ms. Bettman, City Attorney Jerry Lidz assured her that the only element of the ordinance that would be changed was the sunset clause, which would be removed, and that the tax would be increased. He stressed that nothing else would be changed. Ms. Bettman indicated her support for the motion. She felt the fuel tax was a “quintessential carbon tax.” Mr. Poling preferred to drop the sunset clause for the two-cent increase implemented two years earlier and not to increase the amount of the gas tax above it. In response to a question from Mr. Poling, Mr. Lidz stated that only the gas tax would be acted upon at the May 29 meeting. Mr. Poling said he would oppose the gas tax. He indicated that he would move to amend it at that time. Mr. Clark, seconded by Ms. Solomon, moved to amend the gas tax to change the three-cent increase to a two-cent increase, changing the eight-cent level to seven cents, and that the dif- ference in funding be made up by increasing the capital local option levy. Mr. Pryor opined that this was the price the council would pay for separating the motion. He felt the recommendation of the subcommittee was beginning to fall apart. He said the difficulty that lay in what Mr. Clark was proposing was that by putting it into the bond it would not be an ongoing funding mechanism. He stressed that the package had been a blend of one-time funding sources and ongoing funding sources. Mr. Clark reiterated his feeling that it would be a gesture of goodwill to take some of the funding from the General Fund. Mr. Pryor offered a friendly amendment to change the motion so that the difference in fund- ing would be made up with General Fund money. The maker and the second accepted the friendly amendment. Mr. Zelenka said he had initially preferred to impose a larger gas tax. He could not support decreasing the amount of the gas tax and offsetting this with General Fund money which came from property taxes. He thought the tax would encourage people to get off the streets and “out of their cars.” MINUTES—Eugene City Council May 23, 2007 Page 5 Work Session Ms. Bettman opposed the amendment. Ms. Taylor commented that she would support the main motion and not the amendment. The motion to amend failed, 5:3; Mr. Clark, Ms. Solomon, and Mr. Pryor voting in favor. The main motion passed, 6:2; Mr. Clark and Mr. Poling voting in opposition. Ms. Ortiz, seconded by Mr. Pryor, moved to establish a street utility fee based on parking spaces to generate annual net revenue of approximately $6 million, with $150,000 per year dedicated to funding traffic calming measures (estimated to cost the average household $4.50 to $5 per month). Ms. Taylor asked how the fees would be assessed and collected and how much it would cost to collect them. Mr. Corey reiterated that no work had been done on the methodology. He said this was a concept at this point that had come from the subcommittee. Ms. Taylor moved to delete the residential component from the motion. The motion died for lack of a second. Ms. Bettman said she had opposed the original TSMF but she was willing to support this item because she felt it combined sustainability issues with the nexus of the charge. She believed that parking equaled use of the system. She related that the subcommittee’s assumption was that the options would be brought back to the council for further consideration and determination of what the phasing would be and what the actual ordinance would look like. Mr. Zelenka did not agree that it was a parking tax; rather, it was a street utility fee. He said it was an attempt to get people to pay because of their use of the streets. He averred that the TSMF had died from “its own weight” because it was too complicated. He stated that the subcommittee considered numerous mechanisms to capture money from the use of streets and this model had proven to be the best one for the city. Ms. Solomon noted that two other municipalities use this model. She believed that the City could work from their models to develop its own. Mr. Poling affirmed that passing the motion merely moved it forward for further discussion. He questioned how a person who lived on a corner would be assessed given that he or she would have “two front yards.” Mr. Pryor said the utility fee was attractive to him because the City could charge the tax to everyone. He noted that he did not envision charging people for street frontage and curbs. Mr. Zelenka commented that there were 19 cities in Oregon that used some kind of utility fee; the City of Eugene would not be “reinventing the wheel.” He agreed with Mr. Pryor that the fee should be simple to administer, but he underscored that at this time the council was voting on the concept and not the details. Mr. Poling said he would support the item for discussion purposes only. He requested that the Mayor consider postponing the joint meeting with the Eugene Water & Electric Board (EWEB) scheduled for May MINUTES—Eugene City Council May 23, 2007 Page 6 Work Session 30 in order to finish the present discussion, should it not conclude prior to adjournment of the present meeting. Mr. Clark indicated that he would vote for the item in order to forward it for further discussion. The motion passed unanimously, 8:0. Ms. Ortiz, seconded by Mr. Pryor, moved to institute a street and bike path lighting fee to generate sufficient funds to operate and maintain and provide for reasonable expansion of Eugene’s street and bike/pedestrian path lighting system (estimated to cost the average household $1.50 per month). Ms. Bettman did not support the item. She asserted that some people did not want street lighting and she opposed charging people for what they do not want. She hoped another funding mechanism could be determined. Ms. Solomon observed that this funding mechanism had been implemented in other municipalities successfully. She ascertained from Mr. Corey that it could be structured to include an ‘opt-out.’ Mr. Corey related that this mechanism worked well in the jurisdiction from which he had come. He viewed it as an efficient way to deal with the “ups and downs” of energy costs and to provide the service. Mr. Zelenka stated that he would support it in part because it took $850,000 from the Road Fund and made it available for another use. Mr. Poling asked what the procedure would be to do so. Mr. Lidz replied that the original motion directed the City Manager to develop the idea further and bring a proposal back before the council. Mr. Poling reiterated his preference to address the need for curb-to-curb repairs as this was what the constituents wanted. For this reason, he said, he would not support the motion. Ms. Bettman averred that a person who lived on a minor arterial street could not opt out of the street lighting fee. She could not support the motion because many people would be “subjected” to the street lighting fee whether or not they wanted their street lit. Mr. Corey pointed out that street lighting on arterial and collector streets was part of the City’s design standards. He said there would not be an ‘opt out’ for residents if it would be in conflict with other adopted standards. Ms. Ortiz underscored that there would be more time to refine the item. Mr. Clark expressed his support for the motion because he believed it was a political compromise that would take the $850,000 from the Road Fund and free it for curb-to-curb repairs. The motion passed, 5:3; Ms. Taylor, Ms. Bettman, and Mr. Poling voting in opposition. Ms. Ortiz, seconded by Mr. Pryor, moved to seek voter approval in May 2008 for a capital local option levy to generate approximately $6 million-per-year over a 10-yer period dedi- MINUTES—Eugene City Council May 23, 2007 Page 7 Work Session cated to pavement capital preservations projects, including approximately $350,000 per year for capital bike path preservation (estimated to cost the average homeowner $80 per year). Ms. Solomon underscored that this element of the package required voter approval. She appreciated this mechanism because the money would be taken out only as the City needed it. She said she would not make a motion at this time but she hoped that the council would consider increasing the amount of the local option levy from $7 million to $7.5 million. Ms. Bettman indicated her support for the funding mechanism. She reiterated her assertion that what had put the City in this position had been a prioritization of the building of new capital construction over operations and maintenance. Mr. Zelenka supported the motion because it required voter approval. He believed it to be the least fair funding mechanism of the five as nearly half of the people who use the roads did not live in the city of Eugene. He opined that the City had too much reliance on property taxes and needed to diversify its revenue. Ms. Taylor indicated her support for the motion. The motion passed unanimously, 8:0. Ms. Ortiz, seconded by Mr. Pryor, moved to implement a solid waste collection fee sur- charge to generate approximately $1 million annually (estimated to cost the average house- hold $1 per month). Ms. Taylor opposed the motion. She felt it could cause some people to decide they could not afford to pay to have their garbage hauled away. Ms. Bettman asserted that it was unfair to single out garbage haulers given that other heavy trucks utilized the roads. She said she had “vigorously” opposed the funding mechanism at the subcommittee level. Mr. Clark opined that the funding mechanism was “too arbitrary.” He did not think he could support it. Mr. Zelenka differed, noting that the garbage haulers did not think it was an onerous funding mechanism. He believed the nexus was there. He reiterated that the largest garbage hauler in the City utilized 85 trucks that traveled every street in the City. He stressed that these trucks traversed streets that no other trucks visited. He did not believe charging an extra dollar per month would cause people to begin dumping their garbage elsewhere. He also wished to note that the garbage haulers gained nothing from the fee. Mr. Pryor recognized the principle behind the funding mechanism. He underscored that it was not administratively possible to assess other heavy trucks. He added that the garbage haulers that had been contacted had indicated they did not oppose the fee. Mr. Clark, seconded by Mr. Pryor, moved to extend the meeting by five minutes. The mo- tion passed unanimously, 8:0. MINUTES—Eugene City Council May 23, 2007 Page 8 Work Session Ms. Solomon agreed with Mr. Zelenka and Mr. Pryor. She pointed out that the City of Eugene already received $2 million per year from the statewide weight/mile tax. Ms. Taylor averred that charging a dollar a month garbage hauling fee would not reduce the amount of driving and would not stop any damage. She disagreed with people who did not consider a dollar to be very much money. She felt it could be the tipping point at which some people would decide they could not afford garbage service anymore. Mr. Clark commented that the value of the diversity of income streams was offset with the political resistance to complicating the solution. He thought simplifying the solution had a greater political value. He said while the garbage haulers would not mind the fee he believed the citizens would. He also felt the fee added to the taxes citizens paid while the people in the Santa Clara area remained exempt from it. Ms. Bettman observed that the funding mechanism did not charge a fee to the haulers; it was a pass-through charged to the resident. Mr. Poling asked if everyone would be charged the fee. Mr. Lidz replied that all entities utilizing a garbage service would be charged a fee equal to five percent. Mayor Piercy said she wanted to support the whole package but could not support forwarding a portion of it with less than majority support. The vote on the motion was a tie, 4:4; Ms. Solomon, Mr. Zelenka, Ms. Ortiz, and Mr. Pryor voting in support and Ms. Taylor, Ms. Bettman, Mr. Poling, and Mr. Clark voting in opposition. Mayor Piercy voted against the motion and it failed on a final vote of 5:4. Mr. Zelenka stated that the funding that the garbage hauling fee should come from somewhere. Mr. Zelenka, seconded by Mr. Clark, moved to split the $1 million that the garbage hauler fee would have garnered between the street utility fee and the capital local option levy. The motion passed, 7:1; Ms. Taylor voting in opposition. The meeting adjourned at 1:37 p.m. Respectfully submitted, Dennis M. Taylor City Manager (Recorded by Ruth Atcherson ) MINUTES—Eugene City Council May 23, 2007 Page 9 Work Session