HomeMy WebLinkAboutItem A: Sequencing of Financial Measures to be Presented to Voters
EUGENE CITY COUNCIL
AGENDA ITEM SUMMARY
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Work Session: Sequencing of Financial Measures to be Presented to Voters
Meeting Date: November 16, 2005
Department: Central Services
www.eugene-or.gov
Agenda Item Number: A
Staff Contact: Jim Carlson
Contact Telephone Number: 682-5524
ISSUE STATEMENT
The purpose of the work session is to provide information for council discussion regarding the
timing and sequencing of proposed local option levies, general obligation (G.O.) bonds and other
measures to be presented to the voters. Developing a tentative election schedule provides
direction to staff on where and when to focus their efforts in terms of ballot measure preparation.
BACKGROUND
The Council Vision Statement includes a vision around preservation of the City's physical assets
and natural resources, including beautiful parks and open space.
City Council goals include two relevant goals:
· Accessible and thriving culture and recreation: A community that recognizes that the arts
and outdoors are integral to the social and economic well-being of the community and should
be available to all.
· Fair, stable and adequate resources: A government whose ongoing financial resources are
based on a fair and equitable system of revenues and are adequate to maintain and deliver
municipal services.
On January 20,2005, staff presented the Multi-Year Financial Plan to the Budget Committee.
This plan identifies both the capital and operating needs of the entire organization for a six-year
period. The plan incorporates unfunded projects and revenue shortfalls from other planning
documents such as the Capital Improvement Plan and the General Fund Six-Year Financial
Forecast. A summary of the Multi-Year Financial Plan is included as Attachment A. The
complete Multi- Year Financial Plan was included in the Budget Committee materials distributed
for the January 20, 2005, meeting and is available on the City internet site as part of the
published budget document. An updated Multi- Year Financial Plan will be presented to the
Budget Committee in early 2006.
The council has been involved in planning for several major capital projects in recent years:
· On October 19,2005, the council held an extended work shop on the topic of City Hall
master planning. The goal of this master planning effort is to identify the preferred
solution for rebuilding or replacing City Hall within the next few years.
LICMOl200S Council AgendaslMOSll16lS0S1116A.doc
· On November 28,2005, the council will have a work session on the PROS
Comprehensive Plan, with a public hearing and adoption of the plan scheduled for
December. In January 2006, the council will consider the PROS Project and Priority
Plan.
In addition, voters have approved local option levies for library and youth/school-based services,
both of which are effective from FY04 through FY07.
The council considered alternate revenue sources during late 2001 and early 2002. Those
discussions resulted in no direction to staff to pursue non-property tax revenue sources for
general government purposes. The history of all City revenue measures presented to the voters
since 1990 is included as Attachment B.
Policy Questions: Specifically for this work session item, there are two policy questions:
1. Should the City pursue the local option levy proposals as described in the tentative
election schedule included as Attachment C?
2. Should the City continue to fund school-based services through four-year local option
levies?
The goal of this work session is to get feedback from the council about the strategy for making
the best use of available election dates given the currently identified needs of the City. That
means that this information does not focus on the financial feasibility or financing plan for each
of the proposed local option levy measures.
Proposed Measures: There are two property tax measures proposed to go before voters in
the November 2006 election:
· Renewal of the library local option levy
· Renewal of the youth/schools services levy
Future election cycles would include G. O. bond measure proposals for parks, recreation and
open space projects and possible City Hall projects, plus any other items related to the council's
eight priority action items or items in the Multi- Year Financial Plan.
Library Local Option Levy: The City has funded a portion of library operations since FYOO
through a local option levy. That levy has been renewed once, and the current levy is
effective through FY07. Library operating funding is split almost evenly between local
option levy and general fund resources. Renewal of the local option levy would provide the
necessary funding to maintain services at the current level at the Downtown Library and two
branches.
Youth/School-Based Services Local Option Levy: One of the policy questions for the
council to consider is whether to continue to fund school-based services through a City local
option levy. City voters have approved local option levy funding for school-based services
twice, first for the two-year local option levy in effect during FY02 and FY03, and then with
the current four-year local option levy that is in effect during FY04 through FY07. When the
council debated placing the current levy on the ballot, councilors acknowledged that the
LICMOl200S Council AgendaslMOSll16lS0S1116A.doc
measure was a stop-gap until a state-wide solution was found for school funding issues. In
addition to the school-based services provided in the local option levy, the City provides
youth services from the proceeds of the levy, such as the Summer Fun for All program. If
the council decides not to renew the levy for school-based services, a second decision will be
how to handle those City youth services.
Parks, Recreation and Open Space Funding: Since 2002, the City has been working with
the community to develop the Parks, Recreation and Open Space Comprehensive Plan. The
Comprehensive Plan provides a specific, community-supported strategic plan for the future
of parks, community facilities, and programs in Eugene. The Comprehensive Plan is
scheduled for City Council approval in December, with consideration of a project and
priority plan in January. Once the plan is complete, the community must begin to develop
strategies for funding the projects included in the plan. A significant portion of the almost
$200 million of additional land acquisition and development of parks and recreation facilities
included in the plan is assumed to be funded from General Obligation bonds. In addition to
the capital costs, a local option levy would need to be designed to pay for the increased
operations and maintenance (O&M) costs from these new parks and recreation projects.
Without a local option levy for O&M costs, the City would have to decrease the maintenance
efforts at existing parks and recreation facilities in order to accommodate the added facilities
paid for with the General Obligation bond proceeds. Staff is assuming that the G. O. bond
measure and associated local option levy for O&M would occur in 2008, after the PROS plan
process is complete and funding strategies have been finalized.
Measure 5 Compression: The City is beginning to experience tax revenue compression as a
result of the Measure 5 tax rate limitation of $10 of general government taxes per $1,000 of
assessed value (as described more fully in a memo to the council included in this week's
packet explaining the property tax bills). As a result of compression, each of the proposed
local option levies will have an impact on the amount of property taxes collected for these
local option levy purposes. Therefore, staff has deemed it important to coordinate efforts for
the local option levy proposals in order to better ensure that the net amount of property taxes
received for each purpose will be what's expected.
Debt Policies: Anticipated measures in future election cycles could result in a significant
increase in the City's debt load. As the council proposes to fund new projects with G.O.
bonds or other types of debt, careful consideration must be given to the affordability of that
new debt. The City's current policy limit on net direct debt is 1 % of real market value. As
reported in the updated Debt Capacity Analysis in February 2005, the City was at about 0.4%
of real market value as of June 2004, and was projected to reach a peak of 0.9% in FY09,
assuming issuance of$30 million in G.O. bonds for parks, recreation and open space projects
and $70 million of G. O. bonds for renovation or replacement of City Hall.
Double-Majority Requirements: As a result of Measure 50, which was passed by voters in
1997, opportunities to propose new facilities or services to be funded by local option levies
or G.O. bonds have become more complex and less frequent. Any property tax measure
requires a double majority, which means that the measure must be passed by a majority of
voters in an election where at least 50% of registered voters have cast a vote. There is an
exception to the double majority requirement for elections in November of even-numbered
years.
LICMOl200S Council AgendaslMOSll16lS0S1116A.doc
Permanent Funding for On-Going Services: In addition, prior to Measure 50 the City could
propose a permanent increase in the City's tax rate in order to provide new services.
Measure 50 removed that ability and funding for new services is limited to local option levies
with a maximum length of five years for operating purposes and 10 years for capital
purposes. The City has begun to rely on these temporary tax levies to provide library and
youth/school-based services, which places these services at risk of losing their funding every
four years.
One solution to the temporary tax levy problem that has been proposed for several different
services in recent years is creation of a special district that would be able to levy additional
permanent taxes. The City has discussed the possibility of creating a special district for
either fire services or airport services in recent years. Springfield has discussed providing
fire services through a special district. The County has discussed a special district for public
safety services. In general, the council has been unwilling to pursue the idea of a special
district for any purpose, for a variety of reasons.
League of Oregon Cities Workshop on Bonds and Ballots: In 2003, Councilors Pape and
Solomon, along with City staff, attended a League of Oregon Cities (LOC) workshop on
placing bond measures on the ballot. One of the basic messages from that workshop was that
there are limited opportunities to ask voters to approve money measures and governments
should be strategic about what they place on the ballot. The LOC will hold another
workshop on this topic in January 2006 in Salem.
Timing: In order to think strategically about opportunities for asking voters for additional
funding, staff used the following set of questions to develop the tentative election schedule:
1. If applicable, what is the likelihood of a 50% turnout of registered voters?
2. At the time of the election, will voters have had the opportunity to consider the benefits
and financial impact of the measure?
3. Will the proposed City measure(s) compete with each other or with measures offered by
other jurisdictions?
4. Is the measure politically feasible?
5. When are the funds needed?
6. Is there an optimal time-frame in advance of needed funding in which to ask for voter
approval in order to provide for multiple attempts, if necessary?
7. Are there any alternate funding mechanisms that could be used to pay for the service?
The November 2006 election cycle is the next opportunity for an election without a double-
majority requirement. Planning and preparing to place measures on the November 2006
ballot will take a significant period of time. The council must take action before going on
break in early August of 2006 for a November 2006 ballot measure. Staff presentations
leading up to a council decision to place a measure on the ballot for the library and
youth/school-based services levies will be scheduled for late winter and spring.
RELATED CITY POLICIES
The Budget Committee adopted Financial Management Goals and Policies that guide financial
decisions of the organization. The policies include statements related to the appropriate level of
LICMOl200S Council AgendaslMOSll16lS0S1116A.doc
property taxes, such as the policy on diversification of the General Fund revenue base, the level
of unappropriated ending fund balance, and the use of G. O. bonds to finance capital
improvements. In addition, there is a policy on serial tax levies that states that, to the maximum
extent possible, serial tax levies will be used only for time-limited operating services or for
capital improvements subject to the rate limitation for non-school governments.
COUNCIL OPTIONS
1. The council may provide direction to approve the tentative election schedule as presented.
2. The council may provide direction to staff on modifying the tentative election schedule with
alternate direction on pursuit of renewal of the school-based services local option levy.
CITY MANAGER'S RECOMMENDATION
The City Manager recommends approval of the tentative election schedule.
SUGGESTED MOTION
Move to approve the tentative election schedule.
ATTACHMENTS
A. Summary of the Multi-Year Financial Plan
B. Summary of Revenue Measures Election Results - 1990 to Present
C. Tentative Election Schedule
FOR MORE INFORMATION
Staff Contact: Jim Carlson, Assistant City Manager
Telephone: 682-5524
Staff E-Mail: James.R.Carlson@ci.eugene.or.us
LICMOl200S Council AgendaslMOSll16lS0S1116A.doc
ATTACHMENT A
Summary of Multi-Year Financial Plan
Presented to the Budget Committee
January 20, 2005
LICMOl200S Council AgendaslMOSll16lS0S1116A.doc
Multi-Year Financial Plan FY06-11
Unfunded Costs by Year
Items
AI
Grand Total
8,180
1,380
5,244
3,389
2011
4,79
2010
4,217
343
3,528
856
2009
4,668
209
3,278
836
2008
4,504
158
3,082
818
2007
210
1,563
2006
460
Type of Cost
Operating
Operating
Operating
Operating
Operating
Name of Item
Maintain Current Library Service Levels
Parking Fund Shortfall
Transportation System Operational Funding Shortfall
Youth Recreation Afterschool and Summer Activities
General Fund Shortfal
Service Category
3,793
879
Capital
Capital
Operating
Operating
Deferred Maintenance
Hult/Cuthbert Facilities Master Plan Development & Implementation
0,000
1,250
50
4,357
2,000
2,000
2,000
250
2,000
250
2,000
750
535
1,013
913
783
638
50
475
Parks & Open Space Maintenance & Operations Capacity
2,000
2,000
Capital
Center Roofing Replacement
Hult
22,500
3,500
5,000
,525
325
4,500
900
4,500
900
4,500
900
4,500
500
4,500
300
2,500
1,525
2,500
325
Capital
Capital
Operating
Operating
Operating
Pavement Preservation Program
Wastewater System Rehabilitation
Early Redemption of Pension Bonds
Early Redemption of Santa Clara Fire Bonds
POD Web-Enabled Document Management System
Faci ities
Transportation
Wastewater Collect
& Treatment
Achieving Efficiencies Financial Services
or Long Term Cost
Savings
All General Fund
Services
Library
Parking
Transportation
Youth & Family
Recreation Svcs
Capital
Hult/Cuthbert
Amphitheater
Parks and Open
Space _
Public Buildings &
Type of Item
General Fund
Shortfall
Continuing Current
Services
Preserving and
Maintaining Existing
Assets
its
Land Use Perm
Grand Total
1,775
4,500
144
699
5,800
144
1,110
0,322
5,230
0,000
116
20,000
2,070
930
250
2011
320
2010
310
2009
300
2008
290
2007
280
2006
275
Type of Cost
37
8
36
176
36
172
35
170
35
268
1,58
4,500
37
288
~
4,730
36
280
1,773
36
274
1,674
5,800
1 ,496
500
1,917
59
57
0,000
320
180
330
170
340
60
20,000
350
50
360
140
250
370
30
Operating
Capital
Facility
Operating
Capital
Facility
Operating
Operating
Capital
Capital
Facility
Capital
Capital
Operating
Capital
Name of Item
mplementation
Economic Development Planning and
Service Category
Affordable Hsng/Job
Creation
Aquatics
Type of Item
Implementing
Adopted Plans or
Pol icies
Echo Hollow Pool Remodel
Sheldon Center and Pool Remodel
Community Centers
Fire & EMS Station #9 Staffing
West Side Fire Station
Fleet Maintenance Faci
Emergency
Medical/Fire Svcs
ity
Fleet & Radio
Communications
Greater Downtown
Services
Courthouse District Millrace Restoration
Courthouse District Plan Implementation and Related Projects
Cuthbert Amphitheater Renovation Phase
Hult/Cuthbert
Amphitheater
Metro and
Community Planning
1,950
350
340
330
320
310
300
Operating
Implementation
Development
(formerly 'Nodal
Mixed Use
3,227
1,770
0,000
300
20,000
2,000
1,200
1,000
20
3,690
13,198
72,000
1,539
944
24
2,600
243
354
572
~,92~
1 6
930
320
779
310
613
300
454
290
300
280
5
270
Operating
Operating
50
5,000
1,200
600
50
5,000
600
400
50
5,000
200
200
1,000
50
5,000
10,000
100
o
1,261
3,408
o
1,229
3,742
72,000
1,200
3,042
1,937
1,069
1,539
8
83
121
81
8
572
Capital
Facility
Capital
Facility
Operating
Capital
Facility
Facility
Operating
Capital
Facility
Capital
Facility
Capital
Facility
Operating
Capital
Capital
Capital
Hobson Study
Municipal Court & City Prosecutor Staff Additions
Neighborhood Program Staff Addition
Municipal Court
Neighborhood
Program
Parking
Parking Structure Siting Design & Construction
mplementation of PROS Comprehensive Plan Projects
Parks and Open
Space
Owen Rose Garden Community Building
City Hall Replacement Phase 1
Patrol Officers & Communications Staff Additions
City Hall Replacement Phase 2
Police Services
Public Buildings &
Facilities
8
8
79
5
944
2,600
Building
Laurelwood Golf Course Maint.
Campbell Center Remodel/Fitness Room Addition
Berntzen Rd-Royal Ave. to Elmira Rd.
Bethel Drive (Hwy. 99- Roosevelt)
Bike Path/West Bank Trail- Wastewater Treatment Plant to Formac Ave.
Senior Program
Transportation
4,924
6
1,200
300
300
300
300
Capital
Community Sewers Rehabilitation
Wastewater Collect
& Treatment
1,200
36
37
296,934
36
37
46,086
1,200
07,708
42,853
51,224
41,840
7,223
Capital
Facility
Operating
Grand Total
Riverhouse Expansion
Youth & FamilY
Recreation Svcs
ATTACHMENT B
Summary of Revenue Measure Election Results
1990 to present
Election Date Description Results
May 1990 Downtown Development District Tax Passed
March 1993 City Restaurant Tax Failed
May 1994 $19.0 Million of G. O. Bonds for Library Construction, Failed
Emergency Equipment and Facility Repair
November 1994 $26.1 Million of G. O. Bonds for Library Construction Failed
March 1995 Tax on Retailers' Video Poker Revenues Passed
(subsequently pre-empted retroactively by Legislature)
September 1995 $19.1 million of G.O. Bonds for Emergency Medical Passed
Services and Fire Station Construction
March 1996 Affordable-Housing Utility Consumption Tax Failed
May 1997 $32.7 Million Serial Levy to Partially Restore Measure 47 Failed*
Losses Over Three Years
November 1998 $25.3 Million of G.O. Bonds for Parks and Open Space Passed
Projects
November 1998 $8.7 Million Local Option Levy for Library Purposes Over Passed
Four Years
May 2000 $36.6 Million ofG.O. Bonds for Downtown Police and Fire Failed
Stations
November 2000 $3.5 Million Local Option Levy for Youth Activity Passed
Programs Over Two Years
November 2000 $25.1 Million of G. O. Bonds for Downtown Police and Fire Failed
Stations
May 2002 $8.7 Million of G.O. Bonds for Downtown Fire Station and Passed
Training Facility
May 2002 $19.5 Million Local Option Levy for Library Purposes Over Passed
Four Years
November 2002 $0.86 per $1,000 of A V Local Option Levy for Youth/School Passed
Based Services Over Four Years
November 2004 $6.79 Million G.O. Bond for Civic Center Projects Failed
*Received a majority YES vote, but did not receive 50% voter turnout.
LICMOl200S Council AgendaslMOSll16lS0S1116A.doc
ATTACHMENT C
Tentative Election Schedule
Tentative
Election Date
March or
2006
M~y~99~mm
November
2006
Ag~~-;yp~~-;~iP!~~~m
Lane County Tax Measure for Public Safety Purposes
~(?<?~~Qp!i(?~~~yyf<?~~<?~(?<?IQp~~~!i<?~~m
Library Local Option Levy Renewal
Youth/School-Based Services Local Option Levy
Renewal
G. O. School Construction Bonds
City Hall Reconstruction/Replacement Bonds
G.O. Bonds for Parks, Recreation and Open Space
Proj ects
City of Eugene Local Option Levy to Maintain Parks, Recreation and
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2010 City of Eugene Library Local Option Levy Renewal
City of Eugene Youth/School-Based Services Local Option Levy
Renewal
Bethel School District Possible Renewal of Local Option Levy for School
Bethel School District
City of Eugene
City of Eugene
2008
4J School District
City of Eugene
City of Eugene
2012 City of Eugene G.O. Bonds for Parks, Recreation and Open Space
Proj ects
City of Eugene Local Option Levy to Maintain Parks, Recreation and
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2014 4J School District G. O. School Construction Bonds
City of Eugene Library Local Option Levy Renewal
City of Eugene Youth/School-Based Services Local Option Levy
Renewal
Bethel School District Possible Renewal of Local Option Levy for School
Other possible ballot measure proposals:
· By 2015, Bethel School District expects to present a General Obligation Bond measure to
voters for future school construction.
· Lane Community College is considering a General Obligation Bond measure that would
replace the existing bond payments that end in 2009. The measure would most likely be
presented to voters prior to 2010, but is only in the very early planning stages now.
LICMOl200S Council AgendaslMOSll16lS0S1116A.doc