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HomeMy WebLinkAboutCC Minutes - 04/08/09 Work Session M I N U T E S Eugene City Council Work Session McNutt Room – City Hall 777 Pearl Street—Eugene, Oregon April 8, 2009 12:00 p.m. COUNCILORS PRESENT: Chris Pryor, Mike Clark, George Poling, Betty Taylor, Alan Zelenka (via telephone), Jennifer Solomon, George Brown, Andrea Ortiz. Ms. Piercy called the work session meeting of the Eugene City Council to order at 12:01 p.m. A. WORK SESSION – FY10 Budget Strategies to Maintain Road Fund Service Levels Public Works Director Kurt Corey presented information regarding the current status of the City’s Road Operations Fund and proposed FY10 budget strategies to continue the City’s operations and maintenance (O&M) efforts. As part of his presentation, Mr. Corey briefly described the nature of the City’s O&M concerns. Referring to his statement from the agenda item summary materials submitted to the council, Mr. Corey noted that the Road Fund was currently facing an annual deficit of approximately $4 million and was, absent of any intervention, in danger of becoming insolvent by the fall of 2009. Mr. Corey commented that the current O&M funding gap was the result of a multitude of factors including a 15% reduction in revenues over the last five years and a 23% increase in the cost of providing services over the same period of time. Mr. Corey noted that the state gas tax, which had historically been the primary funding source for O&M funding, had been flat for more than 16 years and that the Lane County partnerships payments that had also partially funded O&M efforts, had been exhausted. He further noted that the O&M reserve funds would essentially be depleted in the current fiscal year and $4 million in ongoing new revenue would be required to stabilize the O&M portion of the Road Fund, with $2.8 million in new revenue required to close the FY10 budget gap. Mr. Corey recalled the input by the City Council during previous work sessions and noted that staff had been directed to consider one-time solutions in order to address the FY10 budget gap, to consider new revenue sources to address budget gaps beyond, and to avoid any service reductions to compensate for the current, and any future, Road Fund O&M budget gaps. Mr. Corey proceeded to review the strategies suggested by the council in their previous work session meetings as reflected in the agenda item summary materials. Mr. Corey noted that while the previous staff recommendation had been for the City to implement a 10% surcharge on solid waste hauler fees, the current recommendation to address the FY10 budget gap called for only a 5% surcharge in addition to a one-time transfer of funds from available stormwater/wastewater funds and local gas tax revenues. He added that the staff recommendation to address the budget gaps in the long-term would be to revisit the transportation utility fee based upon parking spaces. Mr. Corey briefly restated the rationales behind the recommended 5% garbage surcharge for the benefit of the council and reminded them that a previous subcommittee had determined that there existed a clear nexus between solid waste collection and the City’s transportation systems, and that a garbage surcharge would be consistent with similar MINUTES—Eugene City Council April 8, 2009 Page 1 Work Session charges to other local utilities-related businesses. He further noted that there already existed a billing/collection mechanism which would allow a surcharge to be implemented with very little administrative overhead. He summarized that the 5% solid waste hauler surcharge would ultimately result in an increase of approximately 98 cents per month to the average user and directed council members to the data regarding the garbage surcharge included as Attachment A in the agenda item summary materials. Ms. Solomon joined the meeting at 12:09 p.m. Mr. Corey briefly restated the rationales behind the recommended use of transferred funds from wastewa- ter/stormwater utility reserves as described in Attachment C of the agenda item summary materials. He noted that previous subcommittees had again determined that there existed a clear nexus between the City’s transportation systems and the City’s ability to provide effective wastewater/stormwater services. He noted that such transfers would be consistent with the O&M funding strategies of at least fifteen other Oregon cities. He again noted that the fund transfers would make use of existing billing systems, thereby minimizing administrative overhead costs, and that the one-time fund transfers would not result in wastewater/stormwater service fees. Mr. Corey noted that the next steps regarding the proposed strategies would include a public hearing regarding the draft ordinance language included as Attachments B and C in the agenda item summary materials. Mr. Corey describe d the elements of the draft ordinance for the benefit of the council. Mr. Corey expressed that while he had not ordinarily been in favor of using transfers of gas tax revenues to address the O&M budget gaps, he was now in favor of a one-time transfer of gas tax revenues in light of recent federal stimulus funding that had been made available to offset the transfer. Mr. Clark said that while it would be unwise to consider cutting back any City services in order to address the Road Fund’s O&M budget gap, he was not in favor of a solid waste hauler surcharge that would ultimately raise the public’s garbage bills. He further stated that while he supported the one-time transfer of gas tax revenue funds, the City should investigate a swap of reserve funds with Lane County similar to previous funding processes rather than instigating a transfer of wastewater/stormwater funds. Mr. Ruiz, responding to Mr. Clark’s comments, noted that while it might be possible to swap reserve funds with Lane County, it would be prohibitively difficult to do so as there were currently no funds that were not already committed in some way. Mr. Ruiz noted that in the council’s upcoming goal setting he would be recommending a series of community discussions regarding the budget prioritizations and the corresponding outcomes that the council specifically wanted to pursue. Mr. Clark felt that specific budget prioritizations would be a necessary first step in addressing the O&M Road Fund and any other budget gaps faced by the City of Eugene. He further suggested that the City discuss the possible use of the City’s real property assets to address budget gaps. Mr. Corey, responding to a question from Mr. Poling, noted that any negative effects from the potential transfer of gas tax revenue funds would be offset by federal stimulus funding that was expected to be received. Mr. Poling opposed the solid waste hauler surcharge and noted that he might be willing to support such a measure only if it were opened up to include other types of large vehicles or if the revenues generated could be specifically directed to maintaining and improving only residential streets. Mr. Corey, responding to a question from Ms. Ortiz, noted that the transfer of wastewater/stormwater reserve funds would not adversely affect or displace any element of wastewater/stormwater services since only reserve funds would be transferred. MINUTES—Eugene City Council April 8, 2009 Page 2 Work Session Ms. Ortiz agreed with Mr. Poling’s earlier statements regarding the garbage hauler surcharge and similarly noted that she might be more supportive of the measure if it were opened up to include other types of large vehicles. Mr. Zelenka asked for a status update on the street utility fee that the council subcommittee had recently recommend- ed. Mr. Corey replied that staff had recently met with representatives from EWEB to discuss a street utility fee and that some of the people involved in that meeting had been concerned such a fee might add an additional line to EWEB utility bills. He noted that further discussions with EWEB and the City Council would be necessary to determine the feasibility of such a strategy. Mr. Zelenka said he was concerned that the strategies being discussed did not appear to be part of a comprehensive package of transportation funding solutions that he had moved forward as part of the Council Committee on Transportation Systems Funding (CCTSF). He further commented that absent a more comprehensive strategy he would be willing to support the short-term solutions being recommended. Mr. Zelenka, responding to earlier comments by Mr. Poling and Ms. Ortiz, noted from his work with the CCTSF that the nexus between garbage trucks and the City’s transportation system was unique in that garbage trucks were not restricted from traveling down residential streets as many other large vehicles were. Mr. Pryor was frustrated by the lack of options presented by staff as a result of their following the council’s direction and noted that, while difficult, it would be important to continue the conversation about the best ways in which to reprioritize the use of the City’s general fund. Ms. Taylor expressed that any funds to address the O&M budget gaps should come out of the City’s general fund, and felt that the garbage hauler surcharge represented an unfair and unduly burdensome business privilege fee and that certain people might choose to discontinue their garbage collection service rather than have their fees increased. She noted that she might be more in favor of the surcharge if single family residences could somehow be exempted or if the garbage haulers could be made to pay the cost of the surcharge without passing the costs along to their customers. Ms. Taylor worried that the solid waste hauler surcharge was being misunderstood as a new property tax by certain members of the public and noted that she had received several calls in that regard. Ms. Solomon concurred with Ms. Taylor that any funds to address the O&M budget gaps should come out of the City’s general fund and further supported Mr. Pryor’s comment that it would be important to continue the conversa- tion about the best ways in which to reprioritize the use of the City’s general fund. Ms. Solomon noted that she would not be in favor of any vehicle surcharge that might exempt certain portions of area school districts. Mr. Corey, responding to a question from Ms. Solomon, noted that the $500,000 for the Urban Forestry Program, listed in Attachment D under the summary of Road Fund services likely to be eliminated, was not the total funding for the Urban Forestry Program but rather represented the portion of the program devoted to street trees. Mr. Corey, responding to a request for clarification from Ms. Solomon, noted that the motion proposed by staff would only call for the re-purposing of wastewater/stormwater fees and not for any increases in those fees them- selves. He noted that there were no specific rate increases associated with staff’s recommendation. Ms. Solomon was skeptical that the re-purposing of wastewater/stormwater funds would not eventually lead to rate increases. Mr. Brown asked if it might be necessary to have conversations regarding the staff’s recommendations included as part of the City’s budget committee meetings also. He noted that he was inclined to support the staff recommenda- tions. MINUTES—Eugene City Council April 8, 2009 Page 3 Work Session Mr. Zelenka moved to direct the City Manager to proceed with implementation steps for a new 5% transportation surcharge on solid waste hauler revenues by scheduling public hearings and council action as appropriate to meet operational implementation timelines for FY10, to direct the City Manager to proceed with scheduling a public hearing and action on proposed code amendments to expand the use of stormwater and wastewater user fees for road- related purposes, and to bring back to the City Council within 30 days, a report and plan on how to proceed with the street utility fee concept. The motion died for lack of a second. Mr. Zelenka, seconded by Ms. Ortiz moved to direct the City Manager to proceed with implementation steps for a new 5% transportation surcharge on solid waste hauler revenues by scheduling public hearings and council action as appropriate to meet operational implementation timelines for FY10, and to direct the City Manager to proceed with scheduling a public hearing and action on proposed code amendments to expand the use of stormwater and wastewater user fees for road-related purposes. Mr. Clark, seconded by Mr. Poling, moved to extend the Eugene City Council work session meeting by an additional 15 minutes. The motion passed unanimously, 8:0. Mr. Clark expressed that it was important for the council to recognize that it had, with respect to the proposed garbage hauler surcharges, been focusing primarily on the effect of large garbage trucks on the city transportation systems. He further maintained that such recognition tended to overshadow the effect of the proposed surcharges on the public at large and that, as such, the surcharge was an unwise course of action. Mr. Clark noted that a more comprehensive package of transportation funding or a reprioritization of such funding was necessary to address the budget gaps faced by the O&M Road fund and agreed with Mr. Zelenka’s earlier comments in that regard. Mr. Zelenka felt that the budget crises faced by the Road Fund and other City divisions was likely to continue and that it would not be possible to address them using only the City’s general fund. He further commented that statistical data regarding the transportation system impact of large vehicles other than garbage trucks was very difficult to compile which was one of the primary reasons he had supported the garbage hauler surcharge. Mr. Pryor asked what the likeliest outcome would be if Mr. Zelenka’s previously stated motion were to fail. Mr. Corey responded that the failure of the motion would seem to indicate to staff that the council wished the staff to investigate the possibility of service reductions. Mr. Pryor wanted to keep the process and discussions moving forward with the staff recommendations and stated that he was willing to support them, especially with regard to the fund transfers from wastewater/stormwater reserves and the gas tax revenues. Ms. Taylor expressed that she would only be able to support the staff recommended motion if the garbage hauler surcharge fee were somehow made to last only one year. She further stated the need for the council to advocate for a countywide vehicle registration fee. Ms. Taylor moved to limit to one year the garbage hauler fee specified as part of the proposed ordinance revision to Section 3.250 of the Eugene Code. The motion died for lack of a second. Ms. Piercy called for a vote on Mr. Zelenka’s previously stated motion. The motion passed 5:3; (Mr. Clark, Mr. Poling and Ms. Taylor voting in opposition). Ms. Piercy adjourned the work session meeting of the City Council to an executive session at 12:55 p.m. and MINUTES—Eugene City Council April 8, 2009 Page 4 Work Session reconvened the work session at 1:25 p.m. Ms. Piercy began a discussion of possible dates regarding interviews for the police auditor position. The council members and staff discussed potential dates for the police auditor interviews. The council agreed to 12:00 p.m. to 4:00 p.m. on Tuesday, May 12, 2009. Ms. Piercy adjourned the meeting at 1:29 p.m. Respectfully submitted, Jon Ruiz City Manager (Recorded by Wade Hicks) MINUTES—Eugene City Council April 8, 2009 Page 5 Work Session