HomeMy WebLinkAboutAgenda - 07/10/12 Eugene City Council and EWEB Joint Meeting M E M O R A N D U M
EUGENE WATER & ELECTRIC BOARD
TO: EWEB Board of Commissioners
Mayor Piercy and City Council
FROM: Roger Gray, General Manager; Jeannine Parisi, Community and Local Government
Outreach Coordinator
DATE: July 1, 2012
Agenda and Background Materials for July 10 Meeting
SUBJECT:
Issue
This is a joint meeting of the local elected officials of the City of Eugene and the Eugene Water &
Electric Board (EWEB) to discuss topics of mutual interest and/or inter-jurisdictional issues. Work
sessions between the two bodies typically occur on an annual basis.
Background
The Board and City Council last met in September of 2011. Main topics for discussion were
er demonstration project and status of key city and EWEB efforts related to
climate change initiatives. As with past joint work sessions, time was also allocated for open
discussion among elected officials on other topics of interest.
Discussion
The focus on this work session is on two primary topics: 1) the results of public opinion polling
regarding the need for a second source of drinking water, and alignment of local efforts to Governor
-year Energy Action Plan. See the agenda below:
1.Call to Order/Introductions (10 mins) 5:30 pm (starting)
President John Simpson and Mayor Piercy
2.Drinking Water Reliability Initiative (35 mins) 5:40 pm
- Brad Taylor, EWEB Water Planning Supervisor
3.10-Year Energy Action Plan (30 mins) 6:15 pm
- Jason Heuser, EWEB Legislative Representative
4.General Discussion (20 mins) 6:45 pm
- EWEB Board and City Council
5.Steam Plant Commemoration (10 mins) 7:05 pm
- President John Simpson
Securing access to reliable, long-term supplies of drinking water is a community-wide issue. The
first agenda item will include a presentation from consultants at Barney & Worth, Inc. who will
provide an overview of their research on public understanding and perceptions about drinking water
reliability issues. This multi-faceted public opinion polling effort was conducted last spring and
included stakeholder interviews, two focus groups and a statistically valid telephone poll. EWEB
contracted for this work as a critical step towards moving
plan goal of pursuing a second drinking water source. While staff recommendations for strategies
forward will be framed within the context of other major utility initiatives and financial
considerations later this year, this report will inform recommended next steps specific to expanding
community understanding and engagement in this critical issue. Please see Attachment 1 for the
report executive summary.
As for the second agenda item, City ManagerJon Ruiz and General Manager Roger Gray directly
participated in the development of the 10-year Energy Action Plan. Both executives will take a few
minutes to share key takeaways from this effort, as well as insights into how local initiatives align
with some of the report recommendations. Please see Attachment 2 for a staff summary of the
draft plan, which is available for review at
www.oregon.gov/energy/AnalyticsReports/Ten_Year_Energy_Action_Plan.pdf?ga=t
The joint session will also include time for open discussion. Of particular relevance is the budgetary
situation facing both organizations and how eachare striving to deliver high quality services to the
public while obtaining long-term financial health. Attachment 3 contains budget messages from
both the City and EWEB so that elected officials are more familiar with how each agency is working
towards long-term budget stabilization. Another potential area of discussion is the Envision Eugene
project. A staff status update in included as Attachment 4.
Lastly, after providing central steam heat to downtown Eugene buildings for 50 years, the steam
utility plant will close at the end of June. A brief commemoration is planned in honor of the steam
decommissioning effort.
Recommended Action:
None, this is a work session only.
EWEB Water Reliability Initiative
Communications Plan
Prepared for:By:
BARNEY & WORTH, INC
June 2012
Executive Summary
The Quest for Reliability
For more than 100 years, Eugene Water & Electric Board has reliably served the community
with cool, clean, clear water drawn from the mountain-fed McKenzie River source. Few
community members are aware, however, of the invisible risks. Currently, in summer months
there is only a one- or two-
source or treatment plant. Eugene is the largest city in the Pacific Northwest lacking a second
source of drinking water supply.
The single source of supply also limits
critical water facilities reservoirs and
transmission lines while keeping the
water system on-line.
To address this concern, EWEB has
undertaken a Water Reliability Initiative
that includes developing another water
has investigated many possible sources
over several decades, so far without
success. Developing a secondary source
of drinking water is challenging. There
are very limited local supply options.
Viable solutions are expensive and EWEB
needs to keep rates affordable for the
community.
of Directors has made it a priority to finish
the job: Rely on us.
Communications Plan
Reaching decisions on a second source
requires a series of technical
For 100 years, the McKenzie River has
investigations assessing risks and
been Eugenesource of drinking
vulnerability, and carefully examining water
water. It is treated at the Hayden
rights, source water quality, treatment
Bridge Filtration Plant.
technology, storage and conveyance options,
and costs. But improving water system reliability will introduce a new water source for the
community and requires significant, long-term investments. EWEB customers are certain to be
interested in those decisions.
Drinking water is the most basic of public services. Every citizen and every business uses
water every day, and all EWEB customers have
reliability.
EWEB i
Water Reliability Initiative
Communications Plan
Educating and involving the community in decisions about the Water Reliability Initiative and
second source is important to EWEB. Communications starts with the most interested parties,
including Springfield Utility Board and other water suppliers. But many other organizations and
individuals will want to learn more and join in the discussion.
Informed by public opinion research on water system reliability, EWEB staff and consultants
h
customers and others about this subject. The communications plan is intended to inform and
engage interested parties in a community conversation leading up to dec
major investments to improve water system reliability.
The communications plan outlines ways to strategically utilize available resources with the goal
of providing multiple opportunities for customers and others to learn more and get involved.
Different methods will be used to engage the public, increase awareness, and gain useful and
timely input. The conversation begins in 2012 to get EWEB customers and others up to speed in
time to contribute to ecisions to achieve water system reliability.
Highlights
Key findings water system reliability are
highlighted below.
EWEB Water Reliability Communications
Highlights
on a single water source, and
become concerned when they learn the facts.
They see the Willamette River as a logical alternative
source to be considered.
current low water rates, and are reluctant to invest in
major reliability improvements.
include: technical investigations, community outreach,
and exploring partnership opportunities with other
water suppliers.
A broad-based community conversation is needed to
educate and engage interested customers and others
about water system reliability and supply options.
EWEB ii
Water Reliability Initiative
Communications Plan
Attachment 2
M E M O R A N D U M
EUGENE WATER & ELECTRIC BOARD
TO: Commissioners Simpson, Brown, Cassidy, Ernst and Cunningham
FROM: Debra Smith, Assistant General Manager;
Jason Heuser, Legislative Affairs Coordinator
DATE: July 2, 2012
SUBJECT: Summary of Draft 10-Year Energy Action Plan
Issue
Governor John Kitzhaber is in the process of developing a 10-Year Energy Action Plan for Oregon.
The plan has implications and interest for both EWEB and the City of Eugene.
Background
Since 1985, the Oregon Department of Energy has been tasked with the biennial preparation of a
state energy plan. Governor Kitzhaber has asserted that state government planning and vision is too
focused towards the near-term horizon of Oregon electoral cycles and has called for a decade-
oriented horizon for state planning and policy over multiple areas, especially energy.
In the fall of 2011, Governor Kitzhaber appointed and charged the Oregon Energy Action Plan Task
Force, an advisory committee, with recommending actions and initiatives for a 10 Year Energy Plan
that Oregon could undertake to:
-intensive fuels and foreign oil
-grown renewable energy resources
reenhouse gas emissions
The Energy Action Plan Task Force was made up of 35 volunteer participants hand-selected by the
e on the merits of their individual expertise and experience rather than on the basis
of their organizational affiliations. EWEB General Manager Roger Gray served on the Energy
Efficiency/Demand Management Design Team and Eugene City Manager Jon Ruiz chaired the
Transportation Design Team. Other committees included: 1) Energy Resource Mix Design Team; 2)
Siting Issues Design team; and 3) Governance Design Team. It is important to note that
participation in the subcommittee work does not signal endorsement of all the subsequent
recommendations in the plan.
1
Attachment 2
The subcommittees forwarded reports in January to an executive committee for synthesis and
formulation into a Draft 10-. The draft plan was released
on June 5 for stakeholder review and comment; several public workshops were held to solicit
additional feedback. Tfice willfinalize the plan by the end of the year.
Discussion
In an introductory cover letter to the draft plan, Governor Kitzhaber focuses on three core strategies:
Maximizing energy efficiency to meet 100% of new electricity growth. This strategy
1)
proposes
:
a) Allowing investor owned utilities like PGE and PacifiCorp an incentive for shareholders
to invest in energy efficiency.
b) Creating a State Building Innovation Lab to develop new energy efficiency retrofit
strategies for commercial buildings, tested first on state buildings.
c)
all Oregon homeowners. (This tool has been a topic of interest to both EWEB and the
City).
d) Restoring funding for the new Conservation Energy Incentive (formerly the Business
Energy Tax Credit, or BETC)
(SELP).
e) Continuing funding and support for the Energy Trust of Oregon and Clean Energy Works
to support innovating financing of energy efficiency projects.
2)Enhancing clean energy infrastructure development by removing finance and
regulatory barriers. This strategy proposes:
a) Convening -
values.
b) Creating a Strong Project Officer Model to improve state agency coordination and
consistency in facility siting review.
c) Supporting less mature renewable technologies ((i.e. biomass, wave, distributed
generation, smart grid, energy storage.) by aligning state incentives and removing
regulatory barriers.
d) Developing a Multistate Infrastructure Exchange to aggregate and attract private
investment to renewable energy projects.
3)Accelerating the market transition to a more efficient, cleaner transportation system.
This strategy proposes:
a) Converting fleets to alternative fuels.
b) Extending the 2015 sunset date of the Low Carbon Fuel Standard requiring 10 percent
ethanol in gasoline and 5 percent biodiesel in diesel.
c) Deploying Metropolitan Area Scenario Planning and incorporating the Least Cost
Planning Tool to measure the true costs and benefits of transportation plans.
d) -in Electric Vehicle readiness.
e) Developing alternatives to gas taxes for transportation system funding.
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Attachment 2
Recommendation
S-Year Energy Action Plan
stakeholder and public input process to help align local interests and initiatives with the overarching
shared objectives of the plan
Requested Board Action
This is an informational item. No Board or Council action requested.
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Attachment 3
M E M O R A N D U M
EUGENE WATER & ELECTRIC BOARD
TO:Mayor Piercy, Eugene City Council and City Manager Jon Ruiz
FROM:Roger Gray, General Manager
DATE:July 2, 2012
SUBJECT:EWEB Budget Update
This memo is intended to brief you on the Eugene Water & Electric Board’s 2013 budgeting process. As you
are aware, the 2013 budget is being developed under a very different context than previous budgets. EWEB
began service priorities discussions withthe Board and internal cost-cutting/efficiency measures in 2011. As
we looked at our most recent financial forecasts, it became evident that EWEB was facing cost increases that,
without budget reductions, would result in a 2013 electric rate increase of up to 20 percent, as well as a
double-digit water rate increase. This would follow electric rate increases in the previous two years totaling
about 14 percent. Immediate action was needed to stabilize costs and lessen the impact of future rate
increases.
Like other public agencies, the combination of growing personnel costs and less revenue is part of the bleak
financial picture. However, for the utility, the primary drivers for cost increases are:
A 15 to18 percent increase in wholesale power costs from the Bonneville Power Administration
(BPA), where EWEB gets about 60 percent of its electricity. See attachedfor more information from
BPA on this increase.
Costs associated with relicensing EWEB’s largest hydroelectric facility, Carmen-Smith.
Reducedreimbursement funds from BPA for EWEB conservation activities.
Pre-recession long-term power costs for renewable energy.
Lower revenues generated from the sale of surplus power.
Affordability is a long-held core value for EWEB. But with the lingering effects of a poor economy and
mounting rate pressure, our customers have begun to question the utility’s commitment to financial
stewardship. In response, EWEB is making hard choices to focus resources on essential services that provide
highest value to customers. In all, EWEB is reducing its 2012 budget by between $2 -$3 million, and its
2013 budget by approximately $10 million.
Because we cannot influence power costs, meeting our budget re-alignment goals required decisions with
direct impacts to our employees and community partners. EWEB has offered early departure incentives to
employees to reduce the need for layoffs and offer opportunities for impacted staff to move into newly vacant
positions. Shrinking the organizational footprint not only means workforce reductions, it implicates a number
of programs valued by EWEB and held in high esteem in our community. These hard choices are being
approached from a recalibration perspective rather than ‘slash and burn’, but the reality is that there will be
ripple effects in the community. Our goal is to look for new ways of delivering key services in a way that
captures savings and efficiencies and minimizes the side-effects of our budget stabilization efforts.
1
Attachment 3
Even with this significant mid-course correction, EWEB anticipates a 10 percent electric rate increase will be
needed in 2013 to balance the budget, as well as a water rate increase. EWEB will be seeking other on-going
cost reductions to continue to effectively manage its resources without impacting the reliability or quality of
our core services. To do this, we must adopt a nimble, flexible mindset and approach to staffing and
operating the utility if we are to survive and thrive for another century of service. EWEB is still refining its
strategies and many decisions are still in flux as we re-adjust our management structure and staffing levels. In
the meantime, here is some more detail on some of the higher profile program impacts.
Conservation
For the past several years, EWEB has invested in conservation at a level much higher than our actual growth
in energy use. This is partly due to our popular conservation programs, but also reflects the downturn in the
economy (e.g. Hynix closure, International Paper, general economy/recession). The 2011 energy resource
plan showed that pursuing conservation in excess of load growth (demand) isnot a cost-effective strategy. In
addition, beginning in 2012, BPA reimbursements that help support our conservation programs were cut
significantly.
EWEB is currently surplus power, so recalibrating our spending on energy conservation programs to more
closely match current and estimated near-term future demand makes business sense. However, conservation
is not just about offsetting future resource needs; it encourages customers to use energy more efficiently and
helpspeople save money on their bills. EWEB will retain incentives, low-interest loans and rebates for high
impact programs, as well as continue to offer programs targeted towards renters and low income customers.
The utility will also be re-directing resources to “demand response” programs, which focus on shifting
customerusage to times when existing energy resources, particularly renewables, are available. With a more
adaptive conservation acquisition strategy and emphasis on exploring demand response programs, EWEB will
be able to stay on target to meet the progressive goals of the 2011 energy resource plan.
Limited-incomeand education programs
These programs are specifically approved by the Board each year, and were not cut for 2012. Funding
discussions for 2013will occurin the July-to-September timeframe, with final decisions coming in November
or December. While no specific decisions have been made, I expect that the context of decision making by
the Board will be different this year. Also, EWEB has been using reserves for enhanced support for limited
income customers (about $1 million of the $2.7 million budget)during the economic recession.Limited
income funding may potentially be returned to pre-recession levels (about 1% of rates). We will also look at
focusing more conservation dollars towards limited income housing and households. The concept here is to
create long-term solutions by making homes more energy efficient rather than providing direct dollars to help
pay bills.
Customer service
EWEB will be reducing the number of customer service employees, which will likely impact the public’s
ability to access services or information. Lobby services will be reduced, for example. However, the way
customers interface with service providers is changing, with growing expectations for 24/7 remote access. To
address changing customer needs, EWEB recently contracted with a vendor to provide amuch more
customer-friendly online bill payment service, as well as improved paperless billing options.
Other reductions
EWEB will significantly reduce the marketing and advertising of its services and products in 2013, in terms
of traditional paid advertising, brochures and other media. However, the utility continues to engage the
2
Attachment 3
community in less-costly ways, such as withsocial media, use of email lists and newsletters, and other free
forms of communications. Getting information to customers about energy efficiency programs and incentives,
for example, is a key component of meeting our conservation goals. Participation/sponsorship of community
events is another high profile activity that will be reduced as we focus resources on essential services.
Water
The water utility faces a short-term budgetary issue due to three consecutive summer weather patterns that,
combined with a poor economy, have reduced revenues from water sales. However, the water utility is in a
much different position in terms of rates and comparative costs. EWEB water rates remain among the lowest
in the Pacific Northwest. EWEB plans to continue investments to upgrade our aging water system as well as
address other long-term needs, such as securing a secondary water source, and expects water rate increases to
continue in each of the next several years to pay for these initiatives.
Summary
In terms of process, to prepare for the 2013 budget that begins Jan. 1, EWEB will be conducting two
important check-ins with the Board of Commissioners: An update and discussion of the utility’s Strategic
Plan, scheduled for the regular Board meeting following the July 10 joint work session; and a July 17
financial retreat, in which the Board will give general direction specific to the 2013 budget. Staff will then
draft a budget proposal during the summer and fall of 2012, with Board review and approval in December
following two public hearings.
This work is not occurring in a vacuum. In addition to the annual benchmark survey, staff has engaged the
community in three distinct survey activities designed to better understand customer perceptions about EWEB
in general, and their opinions related to trade-offs between service priorities and rates. The results of these
surveys will be discussed with the Board at the financial retreat. Staff isalso preparing to change the format
and timing for rate hearings, beginning in the fourth quarter of 2012, and have developed a high-level plan for
increasing customer involvement in our budget and rate-setting process.
In closing, we ask for your patience and understanding as we continue to adjust to new business models and
confront the implications, both known and unknown. In the coming weeks, EWEB will be in direct
communications with agency partners directly impactedby these service reductions. Like our other public
agency partners, EWEB remains absolutely committed to providing value and high quality services to the
community, while preparing the utility to meet the challenges and opportunities in the future.
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Natural gas prices may drive FY 2014-2015 power rates
May 30, 2012
It might seem surprising, but the price of natural gas is likely to be a significant driver of BPA’s power
rates for the 2014-2015 rate period – most notably, the priority firm rate paid by public utility customers
in the Pacific Northwest.
Since we concluded the BP-12 rate case, natural gas prices have fallen significantly. Prices have moved
steadily downward to levels thought inconceivable just a year or two ago. The changed outlook for the
price of natural gas has significant implications for future electricity prices and, therefore, BPA’s net
secondary revenue forecasts and resulting power rates.
Natural gas prices drive wholesale electricity prices several months of the year, and the price of electricity
largely determines the amount of net secondary revenue the agency receives. Net secondary revenue, in
turn, augments the agency’s revenues and, thus, affects power rates. As revenues increase, power rates
can go down. However, if this source of revenue decreases, then revenue from preference customers
needs to make up the difference.
At this point, BPA’s forecast of natural gas prices for the FY 2014-2015 rate period suggests that net
secondary revenue will decline by $114 million annually relative to what was assumed when the agency
set FY 2012-2013 power rates. This decline could increase to $196 million annually if gas prices stay at
their currently depressed level. This issue is likely the most significant driver of BPA’s power rates for
FY 2014-2015. A $114 million reduction alone results in a roughly 8 percent rate increase for public
utility customers. The $196 million reduction translates into a 14 percent increase, all other things being
equal. (Note: These forecasts will continue to be updated until rates are set in July 2013.)
The graphs below demonstrate the connection between natural gas prices and power prices – and reveal
how low both are.
What is driving natural gas prices?
Production
Much has been written over the last few years about “fracking,” or the technology of hydraulic
fracturing in horizontally drilled wells that has made it possible to extract natural gas from
abundant shale formations. This has radically changed the U.S. natural gas supply picture.
Production in the U.S. lower 48 states has increased at an accelerating pace since 2009 and hit
record levels of over 62 billion cubic feet per day in 2011. The steady increase in supply has
been a major contributor to the low prices of the past few years compared to 2008 and earlier.
Additionally, rig technology continues to improve, leading to lower drilling costs and higher
initial production rates. And gas is essentially being produced free as a byproduct of drilling for
oil using the same technologies that unlocked the shale gas boom. All of these factors have led to
increased domestic supply at lower cost.
Weather and storage
In spite of strong domestic production, natural gas prices held at around $4 per million British
thermal units (MMBtu) until falling dramatically over the last six months. The main cause of the
recent precipitous price decline is weather, specifically, an unusually mild winter.
On average across the U.S., the winter of 2011-2012 was the warmest in 60 years by a large
margin. The estimated decline in U.S. demand for gas ranges from 400 billion cubic feet (Bcf)
to 800 Bcf due to temperature variation alone. Combined with the continued strength in
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production, the mild weather resulted in an end-of-winter gas storage level of almost 2.5 trillion
cubic feet (Tcf), which is projected to hit storage capacity limits of 4.1 Tcf by October and has
recently sent forward prices below $2/MMBtu.
Can prices remain low?
It is our view that the current $2 price level does not represent the equilibrium long-term
marginal cost of gas production in a balanced market but is a reaction to the current storage,
which is probably the most significant driver of current prices. Over time, the market should
rebalance to reflect a more appropriate equilibrium gas price around the $4-$5 range.
However, production remains high, storage is at record levels and there are limited short-term
opportunities for increases in demand, all of which contribute to continuing lower prices as well
as lower price forecasts.
Further, we think substantial restrictions on fracking via environmental legislation or national
policy are unlikely. A more likely scenario would be an excise tax or other financial penalty, or
legislation surrounding fracking fluid or wastewater disposal, which would have a limited impact
on the marginal cost of production.
Predicting when natural gas prices will return to the $4 to $5 range is very difficult given the
variables at play – but important to setting rates sufficient to recover our costs.
While current prices seem unsustainably low, it is not clear when gas prices will return to higher
levels. The price of gas seems determined to stay in the $2-$3 range before approaching $4 in
2014. BPA is monitoring the market closely for any trends in production as we head into the
summer months.
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City of Eugene, Oregon
Fiscal Year 2013 Budget Message
Mayor Piercy, City Councilors, Colleagues, Members of the Eugene Community:
The FY13 Proposed Budget is framed by an ever-changing economy and several years of hard work to
live within our means. Despite the lingering impacts of the recession, our approach has remained
constant: maintain community services, minimize impacts on City employees and achieve a stable
budget. Our strategies have aligned the budgets behind the Council’s vision and goals, as expressed
through Eugene Counts, invested in the future prosperity of the community, minimized fee increases and
maintained a responsible savings account. In meeting these strategies, employees have found
efficiencies, responded to Council direction to move toward goals that meet community needs, engaged
the Budget Committee, and worked with area partners to find new ways to provide a sustainable set of
services.
The FY13 Proposed Budget ensures that we make progress toward achieving a structurally balanced
budget by FY14. We’ve kept our sights on being good stewards and on minimizing impacts to
employees and the community. Fee increases are not proposed to close the General Fund gap.
Community investments continue, and a responsible reserve is maintained. And new partnerships are
contemplated that ensure the viability and sustainability of several regional services. We have focused
on being the best at what we can do, rather than on what we can no longer afford to do. While our work
that began with the economic downturn four years ago has reduced General Fund expenditures by $20
million, the economy has not improved and we continue to face financial challenges that make
identifying a path to long term financial health more important than ever.
In February, the Six-Year General Fund Forecast was updated and as we anticipated last spring, the City
is facing a deficit. As shown in the graph below, expenditures continue to outpace revenues through the
forecast period. The General Fund is facing a gap of $7 million that must be managed or reserves will
be depleted by FY14. More detail on the General Fund Forecast is included in Attachment A.
FY13FY18
GeneralFundForecast
$160,000,000
$150,000,000
$140,000,000
$130,000,000
$120,000,000
$110,000,000
$100,000,000
FY12FY13FY14FY15FY16FY17FY18
RevenuesExpenditures
City of Eugene, Oregon
Fiscal Year 2013 Budget Message
Upon updating the forecast, I also introduced a two-year strategy to close the projected gap and stabilize
the General Fund by the end of FY14. This approach entails capturing $4.4 million in savings in FY13,
and an additional $2.6 million in FY14, resulting in a structurally balanced budget and a reserve balance
at the 8% target level by the end of the forecast period.
The strategies used to develop this budget were presented to the Budget Committee for discussion in
February and are detailed in Attachment B. These strategies revealed that while we’ve previously been
able to capture savings and minimize impacts to employees and the community, we must now impact
both in order to align costs with resources. Although we’ve known that without a turn in the economy
or an increase in revenues we’d have to look at service level adjustments to find savings, the reality of
these changes does not come easily.
With personnel costs accounting for about three-quarters of General Fund expenditures, we must
continue to reduce the organizational footprint in order to get to a stable budget. The organization will
work with 20 fewer positions in FY13. This presents the lowest population to employee ratio in the past
generation.
FullTimeEquivalentEmployees(FTE)
per1000Population
12
10.3
10.4
10.2
10.110.110.1
10.0
9.6
9.4
9.3
9.2
10
8
6
4
2
0
FY03FY04FY05FY06FY07FY08FY09FY10FY11FY12FY13
In addition to controlling the number of employees, reducing the footprint means slowing the rate of
growth in the costs for our employees. The FY13 budget takes a step in that direction with a zero cost of
living adjustment for non-represented employees. The City will bargain with three of its four unions
this spring with contracts that expire on June 30. A goal of keeping personnel costs flat in FY13 would
go a long way toward achieving a stable budget by reducing next year’s budget reduction target by
nearly two-thirds, down to about $900,000.
The proposed budget would result in other visible impacts: branch library hours and Ridgeline Natural
Area maintenance would be reduced. The City would hold its membership dues to Lane Regional Air
Protection Agency and Lane Council of Governments in abeyance. These strategies exemplify that we
are in difficult times faced with difficult choices.
City of Eugene, Oregon
Fiscal Year 2013 Budget Message
The prospect of these changes to our services and our employees is unsettling, and will directly impact
our neighbors and our City team. The Budget Committee heard from citizens who emphasized that the
adjustments and reductions present difficult choices. The Budget Committee received public comment
and deliberated the FY13 General Fund reduction strategies at several meetings. As a result, two
motions were passed that I recommend the Budget Committee vote to be included in the adopted FY13
Budget:
Move to recommend restoring $175,000 in funding of budget strategy #6 to the Human Services
Commission on a one-time basis and identify Opportunity Eugene funding from another source
(outside of the FY 13 Budget adoption process).
Move to reallocate $65,000 from the unspent one-time money that was earmarked for Occupy
Eugene back to animal services.
I also recommend that the adopted FY13 Budget include the following motion:
Move to restore $31,000 of LCOG funding by reducing council contingency by $3,000, sister
cities by $10,000, council travel by $14,000 and council memberships by $4,000.
Eugene’s LCOG dues for FY13 are $61,629, which represents a 16% decrease from FY12. $31,000
represents the first six-months of dues which allow a new LCOG Executive Director time to develop a
financially stable organization in partnership with all members. Any future dues would be appropriated
as part of a supplemental budget contingent upon the completion of the Director’s organizational review.
The Budget Committee concluded meetings with a tabled motion that could potentially restore $317,000
to Fire Services for a second fire company at Station #2. My recommendation is to not restore funding
for the second fire company. If, however, the committee chooses otherwise, I recommend the funding
come from the following list of sources. Some were previously provided on the full list of alternatives
requested by the committee as presented in Attachment C and a few of them are newly proposed
options. The options are not listed in priority order, but are listed from largest to smallest. Dollar
amounts reflect the three proposed motions above.
Ongoing Reductions One-Time Funding
Reduce Neighborhood Publications, $55,000 Reduce Creekside Park Development,
Eliminate Mental Health Court, $50,000 $300,000
Reduce Neighborhood Matching Grants, $30,000 Reduce funds from Occupy Eugene,
Reduce Contingency, $25,000 $85,000 (after Budget Committee
Reduce Council Memberships, $18,000 motion)
Reduce the Sister Cities Program, $10,000 Eliminate Portable Restroom Funding,
$25,000
These reductions would minimize impacts to employees while achieving ongoing savings and
maintaining reserves. I ask that you be mindful of the fact that this is the first in a two-year plan to
make reductions to fill a $7 million General Fund gap. Strategies that do not move forward this year are
likely to be presented as FY14 balancing strategies because other options to reduce our footprint have
been exhausted.
City of Eugene, Oregon
Fiscal Year 2013 Budget Message
Even when we successfully close the General Fund gap, we will have to overcome many other
challenges before we see financial sustainability. Here are some of the challenges we’ll face:
Stabilizing the Ambulance Transport Fund
Stabilizing the Parking Fund
Ensuring adequate public safety funding
Continuing to eliminate the street maintenance backlog
Adequately funding human service needs
Identifying sufficient resources to maintain City-owned buildings and replace equipment
Finding a long-term funding solution for parks and recreation operating and maintenance costs
The plan presented in this proposed budget is a step towards obtaining long-term financial health for our
organization. Seeing this through will require that we avoid “kicking the can down the road,” which
would make next year’s discussions that much more difficult. We have an opportunity to continue to
work together with the same leadership, vision, and discipline that placed us in a position to be proactive
in our approach. Taking action now will allow us to address our General Fund gap thoughtfully, and to
begin focusing on the currently unfunded needs of the community. I am confident that we can do that.
The FY13 Proposed Budget continues a necessary organizational reset that prepares our community for
the future. We remain focused on what we can do, but there are no easy solutions when it comes to
responsibly living within our means and closing the additional FY14 gap.
I would like to thank the executive team, division managers, finance team and the many employees who
helped develop this budget. These professionals remain committed to providing the highest quality of
services today, preparing the organization for tomorrow, and investing in the community’s future.
As we turn this spending plan over to you for your review and approval, we ask for your guidance, trust
and confidence.
Sincerely,
Jon R. Ruiz
City Manager
Alternate Budget Reduction Strategies
Attachment C
Ongoing One-Time
#ItemImpactImpact
$300,000 to
1Rolling Brownouts or Closing a Fire Station
$1,425,000
2Close Downtown Library One Day per Week$450,000
3Close Neighborhood Park Restrooms$94,000
$400,000 to
4Close a Pool
$500,000
Reduce One Additional Planner (in addition to FY13 restructuring
5$100,000
reductions)
6Eliminate Sustainability Program$100,000
7Eliminate Equity & Human Rights Program$380,000
8Eliminate Neighborhoods Program$630,000
$85,000 to
9Reduce Community Service Officers
$185,000
10Eliminate Second CAHOOTS Van$300,000
11Eliminate Council Memberships Budget$22,000
12Eliminate Council Travel Budget$14,500
13Eliminate HazMat Team $200,000
14Eliminate Jail Funding Added in FY13 Budget Strategy$350,000
15Eliminate Mental Health Court Program$50,000
16HSC Discretionary Funding$860,000
17HSC Directed Funding - Looking Glass Station 7$36,000
18St Vincent dePaul Contract for Homeless Camping (City Contract)$81,000
19Eliminate Sister Cities Contracts$20,000
20Eliminate Council Contingency (could be ongoing or one-time)*$50,000 $50,000
21Eliminate Opportunity Eugene Funding Added in FY13 Budget Strategy$175,000
22Eliminate Funding for Portable Restrooms from SB#1$25,000
23Remainder of Occupy Eugene Allocation (no additional spending occurs)$150,000
*Leaving $28,000 for possible election costs.
Planning & Development
Planning
City of Eugene
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99 West 10 Avenue
M
EMORANDUM
Eugene, Oregon 97401
(541) 682-5377
(541) 682-5572 FA
www.eugene-or.gov
Date: June 27, 2012
To: Roger Gray, EWEB General Manager, and the EWEB Board
From:, Planning Division
Subject: Envision EugeneUpdate
Background
The goal of Envision Eugene is to create a community vision for how and where to accommodate
of about 34,000 people over the next 20 years. State law requires
all cities to plan for projected population growth and to ensure that their urban growth boundary (UGB)
meets the projected need.
Envision Eugene Status Update
Over the bulk of 2010, Envision Eugene collected community input through workshops, surveys, art
contests and a Community Resource Group. That input informed the creation of a draft proposal -
Envision Eugene: A Legacy of Livability. The draft proposal was released on March 2, 2011. A year of
technical analysis followed to refine land needs for different kinds of housing, jobs, parks and
schools.
In March 2012, the Envision Eugene Recommendation was published, including an urban growth
boundary (UGB) expansion proposal and more specific strategies for accommodating growth. The
Recommendation was considered by the City Council at work sessions in May and June, 2012. On June
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13, the City Council directed staff to move forward with implementation of the Recommendation with
some revisions. The Recommendation documents, City Council motion and amendments are posted at
www.envisioneugene.org. The Community Vision Map, showing growth areas and expansion study
areas, is attached. Note: the Council added the Russel Creek basin and DAG Trust property (southwest
corner of the UGB) as additional study areas. Maps of the expansion study areas can be found on the
Expansion Analysis page of the web site.
EWEB staff has provided assistance on Envision Eugene in several ways. Roger Gray and two other staff
members participated in theCommunity Resource Groupand Roger was a member of the Technical
Resource Group. EWEB staff has estimated the feasibility of providing water service for key transit
corridors, core commercial areas, and partially vacant land. In addition, EWEB has estimated the
feasibility and costs of providing water within potential UGB expansion areas. As the potential expansion
area analysis is refined, the city will be asking for more detailed analysis on utility needs and costs.
EWEB and the city will also need to identify amendments to facilities plans to ensure that land within
the new UGB can be cost-effectively served.
Key Growth Strategies and Urban Growth Boundary Expansion
As found in the Recommendation, housing and job capacity provided on vacant and underutilized land
as well as through new strategies and actions can accommodate most of Eugen
current UGB. However, a portion of the land need will also be accommodated through a UGB expansion.
The Recommendation includes the following key themes:
Accommodate all of projected commercial and multi-family needs inside the current
UGB. Focus redevelopment efforts for more commercial jobs and multi-family housing on key
transit corridors and in core commercial areas. See the key transit corridors and core
commercial areas on the attached map.
Encourage reuse and redevelopment of existing industrial lands. In addition, expand the UGB for
large lot industrial uses. Approximately 12 sites 10-100 acres in size will be accommodated
through a UGB expansion. Land in the Clear Lake Road area, adjacent to the airport, will be
studied for suitability for lot size, natural resource constraints and other site characteristics. See
potential expansion areas for industrial jobs on the attached map. Note: the Council also asked
for an analysis of the pros and cons of bringing the airport into the UGB.
Protect existing single-family neighborhoods by continuing work on design standards and finding
opportunity sites for higher density housing. Complete Area Planning in South Willamette, the
university area and in River Road/Santa Clara. Re-designate some areas from Medium Density
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Residential to Low Density Residential, including a large part of the Crow Road/West 11 Area,
and complete high level master planning for that area.
In addition, expand the UGB to accommodate our remaining single-family land needs.
Approximately 910 single-family homes will be accommodated through a UGB expansion. Land
in the Clear Lake Road area, the Bailey Hill/Gimpl Hill area, the Russel Creek (LCC) area and the
DAG Trust Property (adjacent the SW corner of the UGB) will be studied for potential UGB
expansion. See the expansion areas for single-family homes on the attached map (note: this
map has not been updated to reflect study of the Russel Creek area and Dag Trust Property for
potential single-family expansion).
Expand the UGB to develop two community parks and to include the Bethel School District
property. See the expansion areas for parks and schools on the attached map.
FOR MORE INFORMATION -
Associate Planner, heather.m.odonnell@ci.eugene.or.us
Terri Harding, Senior Planner, terri.l.harding@ci.eugene.or.us
See Envision Eugene on the web at: www.envisioneugene.org
ATTACHMENT
Community Vision Map, March 2012