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HomeMy WebLinkAboutCC Minutes - 06/10/09 Work Session M I N U T E S Eugene City Council Work Session McNutt Room – City Hall 777 Pearl Street—Eugene, Oregon June 10, 2009 12:00 p.m. COUNCILORS PRESENT: Chris Pryor, Mike Clark, George Poling, Betty Taylor, Alan Zelenka, Jennifer Solomon, George Brown, Andrea Ortiz. Ms. Piercy called the work session meeting of the Eugene City Council to order at 12:03 p.m. Mr. Zelenka, seconded by Mr. Clark, moved to ratify the Intergovernmental Relations com- mittee’s unanimous actions on bills and approval of staff recommendations in the May 27, 2009, IGR Bill Reports for bills not pulled for discussion at those IGR meetings. Ms. Piercy, responding to a question from Mr. Clark, noted that Mr. Zelenka’s motion addressed all of the outstanding IGR issues from the council’s most recent meeting on the matter. Ms. Piercy called for a vote on Mr. Zelenka’s previously stated motion. The motion passed unanimously, 8:0. th WORK SESSION – Update on Sale and Development of 10 and Charnelton Site A. Mr. Clark stated that while the City Attorney’s office had advised him that he and his private business had no apparent conflicts of interest regarding any developers involved in the discussions surrounding the sale and th development of the 10 and Charnelton site, he was recusing himself from the current work session discussion and subsequent vote regarding the matter. Ms. Piercy adjourned the meeting of the Eugene City Council and convened the meeting of the Eugene Urban Renewal Agency (EURA) at 12:06 p.m. th Senior Planner Nan Laurence provided an update on the 10 and Charnelton development project and noted that W & G Development (WG) was currently requesting a certain amount of scheduling flexibility as well as the authority to lease some of the developed office space to the City of Eugene. Ms. Laurence directed the council member to copies of WG representative Nathan Phillip’s June 2, 200, letter to City Manager Jon Ruiz and noted that Pacific University was currently unable to move forward with any plans to occupy th space at the 10 and Development site and that no replacement anchor tenant had been as yet identified. Ms. Laurence briefly outlined the proposed amendments to the Purchase and Sale Agreement (PSA) with WG as described in the agenda item summary materials. Ms. Laurence noted that with respect to the two-phase development strategy described in the proposed PSA amendments, WG intended to build a project substantially similar to their previously approved plans for the site with MINUTES—Eugene City Council June 10, 2009 Page 1 Work Session four floors of housing over one floor of office space. Ms. Laurence noted that the City Manager’s recommendation was to direct the EURA director to amend the PSA in accordance with WG’s requests. Mr. Ruiz, responding to a question from Ms. Piercy, noted that the intent of his recommendation was to provide the development flexibility necessary to facilitate the improvement of the downtown area and also to help facilitate the execution of the Beam development project. He further noted that the proposed PSA amendments did not commit the City to a lease agreement with WG but rather called for the negotiation of terms regarding the potential lease of 15,000 square feet of office space in the west quarter-block of the development site. Mr. Ruiz, responding to a question from Ms. Piercy, commented that Lane Community College’s (LCC) own lease plans for the Beam development project would be made known sometime within the next 60 days. Ms. Taylor asked how much downtown office space was currently leased by the City. Ms. Laurence did not have exact figures with which to respond to Ms. Taylor’s question. Mr. Ruiz noted that staff would research the question and get back to Ms. Taylor with further information. Ms. Laurence stated that in addition to leasing office space for its own use, the City periodically leased office space out to commercial tenants. She noted that she would provide Ms. Taylor with information regarding both applica- tions of downtown office space. Mr. Ruiz, responding to a question from Ms. Taylor, noted that the City had committed to leasing up to 50,000 square feet of office space at the Beam development site. Ms. Taylor hoped that any actions taken regarding the WG development would not jeopardize the Beam Develop- ment project and felt that, in light of LCC’s uncertain plans regarding that development, the City should postpone th further action regarding the 10 and Charnelton site. th Ms. Taylor noted that she would support a motion to sell half of the 10 and Charnelton development site, particular- ly if such a sale would encourage the development of a public park on the remainder of the site. She felt that any revisions to the lease provisions previously agreed upon would be inadvisable and further stated that any earnest monies paid on the project to date should not be split. Mr. Ruiz, responding to Ms. Taylor’s comments, noted that the City might not need to utilize its full commitment of 50,000 square feet of office space for the Beam development project should LCC move forward with its plans to also lease space at that site. Mr. Ruiz noted that the recommended options regarding the WG PSA were not considered to be detrimental to the Beam development project. Ms. Taylor noted that she would not support the staff recommendations regarding the WG PSA if they resulted in th any relocation of City Hall offices to the 10 and Charnelton location. Mr. Ruiz responded that no City Hall offices would be moved until the council had made decisions toward the end of July regarding the use of its owned and leased properties. Mr. Ruiz, responding to a question from Ms. Piercy, noted that he would be comfortable with returning to the council at a later time for their final decisions regarding the potential WG PSA amendments. MINUTES—Eugene City Council June 10, 2009 Page 2 Work Session Ms. Solomon felt that the timing of the WG requests regarding the PSA was unfortunate as the City still did not know the intentions of LCC in relation to the Beam development project. She worried that the City might find itself committed to the use of the full 50,000 square feet on that project in addition to the use of another 15,000 square feet th at the 10 and Charnelton location. Ms. Solomon maintained that the lease considerations of the Beam and WG development projects ran contrary to the City’s goal of consolidation of its services. Ms. Laurence, responding to a question from Ms. Solomon, stated that in accordance with the proposed PSA th amendments, WG would be committed to begin construction on the west quarter-block of the 10 and Charnelton site by the end of May 2010. Ms. Laurence, responding to a question from Ms. Solomon, understood that WG hoped to move forward with the development of the west quarter-block as the first phase of their development in the hopes that the successful development of that section of the property would facilitate the continued development of the east quarter-block of the property as the second phase. Ms. Laurence, responding to a question from Ms. Solomon, noted that WG had paid $50,000 in earnest money th regarding the development of 10 and Charnelton which would be split into two equal parts should the development proceed in two phases as requested by WG. Mr. Brown indicated he found the phased approach to the WG development project acceptable. Ms. Laurence, responding to a question from Mr. Brown, noted that the current plans for the WG development project called for a mixed-use facility with one floor of commercial space below four floors of residential housing. Mr. Zelenka found the WG requests acceptable and believed that current economic conditions were likely to improve over the coming year. Mr. Zelenka averred that approving WG’s phased development approach and subsequently delaying the development th of the east quarter-block of the 10 and Charnelton site might give the City the flexibility to potentially develop a civic campus as had often been discussed. Ms. Laurence responded to Mr. Zelenka’s comment and noted that under their phased approach WG would develop th the east quarter-block of the 10and Charnelton site if they chose to purchase the property with the intent of doing so no later than September 30, 2010. She further noted that the City had not specifically negotiated any options to withdraw from the PSA with WG. Mr. Zelenka stated that he found splitting the earnest money to be acceptable to him. Ms. Ortiz supported the City Manager’s recommendation but worried that the WG development project might not ultimately proceed. Mr. Brown shared Ms. Ortiz’s concerns and further warned that there might be further revisions and purchasing delays regarding the WG development project. He suggested that it might ultimately be advisable to open up the east th quarter-block of the 10 and Charnelton site to other development interests. th Mr. Poling was uncomfortable with the idea of opening the development of the east quarter-block of the 10 and Charnelton site or repurposing that portion of the site for a civic campus. He commented that he shared Ms. Ortiz’s MINUTES—Eugene City Council June 10, 2009 Page 3 Work Session concerns regarding the WG development project but felt that the improving economic conditions and the expertise of WG warranted approval of the amendments to their PSA. th Ms. Solomon felt it would not be fair for the City to open up the development of the east quarter-block of the 10 and Charnelton site to other developments while WG was still under contract to the City for the development of the site. Mr. Pryor shared concerns that the WG project might be delayed or ultimately cancelled but noted that he was willing to give WG the benefit of the doubt. Ms. Taylor expressed that negative experiences with development projects involving ORI had ultimately been the result of the former City Manager’s ineffectiveness. Ms. Taylor asked if WG might eventually construct only the first phase of the development project with the west quarter-block of the 10th and Charnelton site. Ms. Laurence responded that WG was committed to the development of both phases of the project contingent upon the City's commitment to lease 15,000 square feet of office space. Ms. Laurence further noted that the terms of the PSA required WG to have an anchor tenant committed in order to proceed with the development of the first phase of the project. Planning and Development Division Manager Mike Sullivan believed that it was WG's intention to ultimately purchase and develop both halves of the development site. Planning and Development Executive Director Susan Muir agreed with Mr. Sullivan's assessment and further expressed that WG had made no indication that they wished to develop a smaller portion of the site. Ms. Piercy hoped that any revisions to the WG PSA would facilitate the City's ultimate goal of fully re-invigorating the downtown area. Ms. Piercy pointed out that no other development groups were "beating our doors down" with respect to development of either the east or west portions of the 10th and Charnelton development site and felt that the City should work as hard as possible to encourage the development of a fiscally sound project such as had been initiated by WG. Mr. Zelenka, seconded by Ms. Solomon, moved to direct the Agency Director to amend the PSA consistent with the updated terms included in Attachment A: Update of Key Terms to allow WG to purchase only the west quarter-block of the 10th and Charnelton development site by September 30, 2009. The motion passed unanimously, 7:0. Ms. Piercy asked if it might be advisable to adjust the second part of the recommended motion to direct staff to return to the council with further information. Mr. Zelenka, seconded by Ms. Taylor, moved to direct the Agency Director to amend the PSA consistent with the updated terms included in Attachment A: Update of Key Terms to negotiate an option for WG to purchase the east quarter-block and the alley by September 30, 2010, and to return to the council for final approval regarding the same. The motion passed unanimously, 7:0. Mr. Zelenka, seconded by Ms. Solomon, moved to direct the Agency Director to amend the PSA consistent with the updated terms included in Attachment A: Update of Key Terms to negotiate terms for the City to lease up to 15,000 square feet of office space in the west quarter-block development and to return to the council for final approval regarding the same. The motion passed, 4:3 (Ms. Solomon, Mr. Brown and Ms. Taylor voting in opposi- MINUTES—Eugene City Council June 10, 2009 Page 4 Work Session tion). B. WORK SESSION - An Ordinance Concerning Solid Waste Administrative Powers and Amending Section 3.250 of the Eugene Code 1971 Public Works Director Kurt Corey provided background on a variety of issues surrounding the solid waste surcharge and described in detail how the surcharge would generate approximately $900,000 in revenue which would be directed toward the repair, maintenance and preservation of local roadways. Mr. Corey said that the solid waste collection surcharge was one of five strategies recommended to the council and was based on the assumption that the surcharge could not only be implemented relatively quickly but also on the assumption that solid waste collectors represented a unique and significant class of users of the City’s roads. He noted that solid waste vehicles routinely weighed in excess of 30,000 pounds and used virtually every square inch of every City street and alley. Mr. Corey reported that a public hearing to discuss the solid waste collection surcharge had been held on June 8, 2009. Mr. Corey provided a brief summary of the responses to the commonly asked questions raised during that hearing included as Attachment A in the agenda item summary materials. Mr. Corey noted with respect to the public and the council’s concern regarding the potential impact of the solid waste collection surcharge on public school districts in Eugene that the council might consider a motion to explore exemptions to the surcharge which might reduce or eliminate the impact of the surcharge on those school districts. Mr. Corey responded to previous concerns regarding potential rate increases on the surcharge and noted that any such increases were generally the responsibility of the City Manager. Mr. Corey responded to previous concerns regarding administrative burdens placed on solid waste haulers by the surcharge and noted that there appeared to be no reason to believe that the surcharge could not simply be incorpo- rated into the existing administrative structure. Mr. Clark noted that the overall problems addressed by the surcharge would be the significant backlog of deferred roadway maintenance and the ongoing transportation operations/maintenance funding issues. Mr. Clark further commented that the implementation of a new tax such as the surcharge might currently be difficult for citizens to accommodate and that the surcharge might have the unintended consequence of prompting customers to reduce the amount of their garbage which might ultimately lead the collectors to increase their rates in order to guarantee their profits. He believed that the surcharge was “too heavy a solution to this actual problem.” Mr. Clark hoped that the City might continue to explore other funding opportunities such as state funding assistance and the sale of the City’s surplus real property in order to address the roadway maintenance issues faced by the City. Ms. Taylor agreed with Mr. Clark that consumers might attempt to reduce or cancel their garbage collection service as a result of the surcharge and suggested that any funds for roadway improvements come out of the City’s general fund. Ms. Taylor suggested that a City vehicle registration fee would be a much more fair system of generating revenue. Mr. Brown asked what other funding remedies had been explored to address roadway maintenance and other local transportation system issue and further asked how an increase in the state gas tax might be utilized to address local roadway problems. Mr. Corey noted that successful implementation of the provisions of House Bill 2001 might MINUTES—Eugene City Council June 10, 2009 Page 5 Work Session generate as much as $3 million but that any portion of those funds would not be available until late in FY2011. Mr. Corey proceeded to describe several other funding mechanisms associated with HB 2001 that might be used to generate funds for local roadway improvements. Mr. Brown suggested that the City might utilize funds from its facility reserves to cover the operations and maintenance needs for local roadways until state gas tax funds generated by HB 2001 were available. Mr. Corey responded that full implementation of HB 2001 would still not generate enough revenue to cover the operations and maintenance funding gaps currently faced by the City. Mr. Pryor thanked the staff for their information and the diligence of their research regarding the matter. He disagreed that people might try to find ways to illegally dump their garbage or find other ways to circumvent local garbage service practices as a result of the surcharge but felt that the cost of the surcharge was unfortunately still going to be passed down to average consumers. He suggested that a City transportation utility might be a more equitable way to generate revenue for the City. Ms. Ortiz was frustrated that many of the same concerns from previous council and budget committee meetings were being raised regarding the solid waste collection surcharge with little advancement. She hoped that a motion on the matter might finally be put forth. Mr. Zelenka noted that local garbage haulers had recently increased their fees in order to cover their own increased costs by double the amount being suggested by the City and had seen absolutely no decrease in the amount of people using the service. He also noted that a recent editorial in the Register-Guard had reflected that many funding sources that used to go towards repairing and maintaining local roadways had been taken away and not replaced. He felt that the solid waste collection surcharge represented a fair and equitable revenue source that would be easy to admini- strate. Mr. Zelenka commented that state funds from HB 2001 would not be seen locally for more than a year if in fact the bill actually passed. Ms. Piercy noted that the overwhelming indication from the public and the City’s budget committee had been that the repair and maintenance of local roadways was of paramount importance. She further maintained that if citizens were to use smaller garbage containers, or similarly reduce their level of garbage service, that would not necessarily be bad for the community. Ms. Piercy expressed that the City was currently prohibited from implementing a vehicle registration fee as Ms. Taylor had previously suggested. Ms. Piercy read the motion that had been recently passed by the Budget Committee: “Move that the Budget Committee recommend that the City Council impose a 5% transportation surcharge on solid waste haulers to generate an estimated $900,000 for road maintenance and operations. All monies collected are to be designated to local streets for operations and maintenance. Should the City receive any extra road funding from state or other sources in the 2010 budget cycle, that money should be used first to offset the fees as a priority in order to rescind the surcharge.” Mr. Pryor felt that the solid waste collection surcharge was not the right mechanism to address the operations and maintenance funding gaps and maintained that the City should continue to explore the use of a transportation utility fee. MINUTES—Eugene City Council June 10, 2009 Page 6 Work Session Mr. Clark maintained that the solid waste collection surcharge represented a short term fix to the operations and that maintenance funding problems and other state funding mechanisms might provide more long-term solutions. Mr. Clark indicated he would be willing to reconstitute a subcommittee of the council to explore long- term funding solutions for operations and maintenance funding. Mr. Zelenka expressed that foregoing the solid waste collection surcharge would cause a serious service reduction with respect to local roadways and amounted to a significant step backwards with regards to the City’s responsibility to maintain local roadways. Mr. Zelenka felt that a street utility fee might be used to fill other portions of the operations and maintenance funding gaps in conjunction with the solid waste collection surcharge. Mr. Zelenka noted that HB 2001 would prohibit any new local gas taxes from being created until 2014 and that the current City gas tax expired in 2011. Mr. Zelenka expressed that to delay the solid waste collection surcharge would only make the roadway problems in Eugene and surrounding areas worse. Mr. Corey, responding to a question from Mr. Poling, commented that the council could vote to make the City’s local gas tax permanent within 91 days after the signing of HB 2001. Mr. Poling noted he had received a countless number of emails and phone calls from citizens who opposed the solid waste collection surcharge. Ms. Taylor expressed that the council should work to make the local gas tax permanent and further maintained that the City’s leaders had not tried hard enough to implement a vehicle registration fee. Mr. Zelenka, seconded by Mr. Clark, moved that the City Council adopt City Council Bill 5002, an ordinance concerning solid waste administrative powers and amending Section 3.250 of the Eugene Code, 1971. The motion failed, 3:5 (Mr. Clark, Ms. Solomon, Ms. Taylor, Mr. Pryor, Mr. Poling voting in opposition). Ms. Piercy adjourned the meeting at 1:16 p.m. Respectfully submitted, Jon Ruiz City Manager (Recorded by Wade Hicks) MINUTES—Eugene City Council June 10, 2009 Page 7 Work Session