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HomeMy WebLinkAbout04/22/2013 Work SessionCity of Springfield Work Session Meeting MINUTES OF THE WORK SESSION MEETING OF THE SPRINGFIELD CITY COUNCIL HELD MONDAY, APRIL 22, 2013 The City of Springfield Council met in a work session in the Jesse Maine Meeting Room; 225 Fifth Street, Springfield, Oregon; on Monday, April 22, 2013 at 5:30 p.m., with Mayor Lundberg presiding. ATTENDANCE Present were Mayor Lundberg and Councilors VanGordon, Wylie, Moore, Ralston, Woodrow and Brew. Also present were City Manager Gino Grimaldi, Assistant City Manager Jeff Towery, City Attorney Matthew Cox, City Recorder Amy Sowa and members of the staff. 1. Downtown District Urban Design Plan and Implementation Strategy Recap and Update. Management Analyst Courtney Griesel presented the staff report on this item. In the three years since the Downtown District Urban Design Plan and Implementation Strategic adoption (2010), staff had worked to progress key Plan recommendations and projects. At this time, staff would like to revisit the Plan and recommendations with Council to recap its strategy and development concepts for new members, provide progress updates and confirm that the Plan recommended activities were still in line with Council priorities. The 2010 Downtown District Urban Design Plan and Implementation Strategy identified several key fundamental concepts integral to the revitalization of downtown. These projects had served as the priority Downtown activities for focusing the use of urban renewal resources and staff time, • Acquisition and Development of Mill Plaza • Conversion of Main Street from One -Way to Two -Way Circulation • Public Parking Infrastructure Development • Policy & Regulatory Updates • Economic Development & Planning Efforts Other staff integral to the listed catalytic projects and key concepts were present to provide insight during the presentation. Ms. Griesel presented a power point on this topic. Tonight she would be reviewing the Downtown Urban Design Plan & Implementation Strategy from the beginning to date. There had been a lot of change on the Council since starting this process. Staff had been moving through the implementation tasks so now was a good time to go over those priorities. She noted the topics she would be highlighting during this work session. Ms. Griesel said the planning process started in 2009 and the Council adopted the Vision Plan in September 2010. Five Citizen Advisory Committee (CAC) meetings were held as well as two stakeholder meetings. Technical staff met and a Parking Stakeholder meeting was also held. In July 2010 a letter was drafted by the CAC with unanimous support for the Plan, which was then adopted by the City Council in September 2010. Staff had made no amendments to the Plan since that time. The ultimate goal was to create a plan and strategy that focused on Downtown's core and revitalization of the core, to find the core and find the right uses and mixes in the core. There was also a list of community development objectives for the Plan such as identifying uses for retail and entertainment, City of Springfield Council Work Session Minutes April 22; 2013 Page 2 things that would draw people into the downtown, look at underutilized sites to revitalize them and increase density, and create standards and guidelines for development. When first looking at Downtown and Glenwood, staff worked with the consultant to determine existing constraints as well as opportunities. Often the things identified as constraints were actually locations for opportunities. She provided several examples. She referred to a map showing the Vision Study Area which included both Downtown and Glenwood. Staff felt they couldn't look at downtown without looking at the greater Glenwood area. She noted that this work was a precursor to the Glenwood Refinement Plan. Crandall Arambula did help staff develop images that were slightly different from the Glenwood Refinement Plan images, but it did help set a tone for that work. Ms. Griesel referred to a map of the Vision Study Area that highlighted a Retail Hot Spot. The Retail Hot Spot didn't have to be at the location shown on the map, but rather downtown as a whole became the retail hot spot. The focus was to grow the retail in downtown and the area currently considered downtown, especially towards the river. When thinking about downtown retail, they were looking at about 150, 000 square feet, but in Glenwood only about 50,000 square feet. Some of the things that helped make retail successful included access, a friendly and safe environment, and presented in an attractive manner. In designing retail, the size of a traditional mall ('/4 to 'h miles in length) was used as a model. She identified how that would fit in downtown from the Mill Plaza site to Vh Street. When thinking about a retail hot spot in downtown, that area encompassed a lot of downtown. Towards the river was the logical place Crandall Arambula pointed out to staff. Glenwood was more of a mixed - use district with focus on housing, while downtown was a retail district. They wanted to encourage visitors to come into downtown to shop and eat. There was employment in both districts. She quickly reviewed the land uses in downtown. She noted different types of parking to support this type of retail and office uses such as surface parking and parking structures. There were areas for employment use around the plaza above the ground floor. There were also government facilities. Arts and Cultural sites and ancillary housing. Ms. Griesel said the plaza alone would not bring in revitalization, but was one key piece of a larger strategy. The plaza was in the Downtown Refinement Plan from the 1980's and was originally identified in the City Hall parking lot. When working with the consultant, they asked for some founding principles for locating the plaza. The consultant suggested moving the plaza site because the original site was not large enough and didn't have the auto and pedestrian visibility needed to support the catalytic retail that needed to develop. She referred to early drawings showing the proposed Mill Plaza site. Some of the fundamental building blocks that made a plaza successful included: placing the plaza in the center of the City Urban Area (defined as between Glenwood and Downtown); having the plaza at a crossroads for all modes of travel; being surrounded by buildings with active ground floor retail uses; being a place for all ages, season, and hours of the day; including a large paved area for holding public events; and having a simple and elegant design. She displayed photos of successful plaza in other cities. Ms. Griesel said during this process, they had learned valuable lessons from other communities that had built a downtown plaza. It required public private partnerships and the private market needed incentives. A master site developer could be key and vision plans needed to be flexible. There needed to be clarity on the timeline of expectations, although sometimes the sequence was more important than the number of years. Ms. Griesel noted that the City was currently looking to purchase property in the proposed Mill Plaza location. This would be the first acquisition of the plaza block. City of Springfield Council Work Session Minutes April 22, 2013 Page 3 Ms. Griesel spoke regarding a two -way Main Street which was also recommended in the Downtown Plan. The goal in doing that was to improve visibility and access to business along Main Street, calm traffic and increase pedestrian safety, and decrease ambient noise levels. The cost of doing a conversion was cost prohibitive, but the reasons behind a conversion were still key. There were other ways those needs could be met in the meantime, none of which would preclude a future two -way conversion. Some of those near-term projects could include pedestrian scale lighting, improving pedestrian crossing treatments, looking at a demonstration project in a specific block area, retiming current signals to slow traffic, and assessing South A Street to look at improvements. Staff had been working with the Main Street Organization and committees to determine where a demonstration block could occur and the needs and desires of the downtown community. Staff was assigned to a demonstration block estimate project with a goal of putting together cost estimates for the lighting and other treatments. The next step would be to bring those ideas to the Council and the community. Staff was also working on retiming of the lights and how that might look. Ms. Griesel spoke regarding public parking in downtown. The logic for public parking downtown pointed to a specific study done by Rick Williams. Enforcement needed to begin in order to generate turnovers to support retail. Infrastructure needed to be looked at from both a short-term and long -term perspective of users, and investments for parking needed to be considered. There were also recommendations for on- street parking reconfiguration in order to get more spaces in the inventory. One of the key recommendations was to identify a specific lot that would start as surface parking and later convert to a structured facility. For the purpose of the Plan, the location identified was the current site of the Springfield Utility Board building. Because this was a 20 -year plan, they could look at opportunities in and around that location for parking. She noted that several things had already started regarding the parking in downtown. Zones had been identified to accommodate different types of parking users. much of the old parking signage had been removed and new signs would be going up in the next several months. Enforcement could start later this year. The City had not acquired any property or had any discussions regarding property acquisition to date. Parking would be discussed in more detail during an upcoming work session in June. Ms. Griesel said there would be some amendments to the Springfield Development Code that were identified in the Plan. Also, the Downtown Refinement Plan needed updated and staff was currently working on that along with the CAC. There was also a recommendation in the Plan and a push from the community to engage in some downtown urban design guidelines and street standards. Some of those included what we wanted buildings to look like, how the City could help property owners think about materials and colors and lighting and the general look of their building and fagade. All of this was going on at the same time other great things were going on downtown. The NEDCO operated Main Street Organization had great ideas and energy. They were working on a retail strategy and implementation plan including identifying locations and financing incentives. In addition, NEDCO had the small business incentive programs. New business was coming to downtown such as PlankTown, Hatch, SPROUT and others, and existing businesses were seeing growth. Ms. Griesel reviewed the recommended implementation timeline. Although the time line had not been adhered to, the sequence of events was going along as planned. The next steps included proceeding with the current plan and strategy, changing the implementation and timeline sequence, and re- evaluating the Mill Plaza. Changes to the Plan could impact the City s ability to secure currently available property, would require re- engaging the CAC and public, and would require staff to draft plan amendments for Council review and adoption. Councilor Ralston asked why the two -way Main Street conversion was listed in the one -year plan if it was not feasible anywhere in the near future. City of Springfield Council Work Session Minutes April 22, 2013 Page 4 Ms. Griesel said staff was working on the key principles of the two -way conversion. The key principles (traffic calming, pedestrian safety, ambient noise level, etc) were still the priority and were being addressed by staff in other ways. Councilor Moore said a number of things had started since this Plan was adopted. The Farmers' Market had started along Main Street and then moved to the area near the fountain. It was great to see kids playing in the fountain and all of the people around at the market. It was like a small mini -plaza happening now. They had now moved the Farmer's Market to SPROUT where it would be mostly indoors, taking away some of what was happening in front of City Hall. This Plan included great ideas but the Mill Plaza seemed so abstract and far away. She asked how they could get something to happen sooner or in the meantime. Ms. Griesel said they could keep doing what they were doing on the Mill Plaza. The point of Mill Plaza was different than what she described in front of City Hall. Councilor Moore said she understood the Mill Plaza involved private investment. It would be great if a conference center or hotel could be built there overlooking the river, but she knew that took a major private investment and that was lacking. Mr. Grimaldi said they could do something in the immediate vicinity of City Hall now. Currently, improvements to the fountain area were being considered. The other item of discussion was what to do about the potential for a new Library. Some of the concepts from the Sustainable Cities Year project included a lot of open space involved in a new Library. Another option to consider was to put a public plaza, which was different from the Mill Plaza idea, in that location instead of the Library. Councilor Brew said he was sorry to see the two -way conversion shelved. They would have only one chance for a big capital bond in the next 10 -15 years. If they went for a bond for the Library, they should look bigger and at something that would solve more of the problems downtown. If it was a good idea, they needed to embrace it and get started. Ms. Griesel said the two -way conversion was not only cost prohibitive, but also bisected the block between South A and Main Street nearly in half. It was difficult making retail function at such shallow depths. There was the cost, but also the impacts to the properties to accommodate the conversion. Councilor Brew asked if they looked at making South A a truck route. Ms. Griesel said they did. In order to get South A Street as a truck route, and to provide enough space for large trucks to turn, they needed five lanes. That cut into the back half of the block south of Main Street. There could be some point in the future when they could find a way to make it work. Mayor Lundberg said she was here when the Downtown Plan was approved. Based on the timeline, the Plaza should have been constructed in two or three years. That was a pivotal piece of why the Plan made sense as it provided a signature right away, making an impact statement. In reality it was going to take much longer. First the City had to commit to building a plaza and then they needed to find retailers to build around the plaza. She backed off that idea with the idea of what could be done sooner that would be impactful. She clarified that the Community Advisory Committee (CAC) was different from the Main Street Group. City of Springfield Council Work Session Minutes April 22, 2013 Page 5 Ms. Griesel said they were different and were tasked with different things in a coordinated effort. Currently, the CAC was much more active than the Main Street organizations. Mayor Lundberg said we had Refinement Plans for Downtown and Glenwood, but we didn't have a marketing plan. A marketing plan needed to be based on what we wanted and who we were and we didn't have that identified vet. We needed to decide what we wanted our downtown to look like and develop some standards. There was a nice start with P1ankTown and other businesses in that block that blended well together. She wanted to look at what could be done in the shorter term. We had more opportunities to look at Main Street and A Street rather than Main and South A Street. SPROUT was going to be expanding and the City Hall steps by the fountain were theater style, creating a good space. In between was properr currently owned by the City. Perhaps we could do something in that area that was a signature for downtown, with food carts and use of the kitchen at SPROUT. It could be positive to do something sooner with a smaller price tag that made a public space and could make things happen. People liked being off the Main Street and they should capitalize on the momentum going on in that area that could be done in a shorter timeframe while they continued to work on the longer term plan. She didn't want to displace tenants in the Carter Building now, but the building was aging and would eventually start costing the City. She asked if perhaps the CAC or Main Street Committees could look at how to complement or choose something that could be done in a shorter timeframe. Mr. Grimaldi asked if the Mayor was referring to using the property owned by the City without any buildings. Mayor Lundberg said that was correct. Mr. Grimaldi said staff would need to step back and look at cost estimates, what it might look like and any impact it could have on future plans for the Library. Mayor Lundberg said she wanted to see what it would look like as a park plaza. Mr. Grimaldi asked if that concept involved removing the Mill Plaza from the Plan. Mayor Lundberg said that was farther off. It had been meant to be done almost immediately. To have an initial impact, something should have been done in the first two or three years. Mr. Grimaldi noted that the economy took a downturn when the Plan was first adopted. Mayor Lundberg said she understood that so wanted to look at what could be done that would be impactful if they scaled it back. Councilor Woodrow said she liked the Mayor's idea. She felt doing something in that area with things that already existed would attract growth in the Mill Plaza in the long term. Ms. Griesel said a key component of the Plan was to increase density of uses, not necessarily of open space. One way was to go up, but there were already empty stores along Main Street that needed to be filled. Government uses were not considered active edges. As they created more open space and non - active areas, they could have issues with the plaza not looking vibrant and healthy. One of the concerns about the location near City Hall was that there was not a lot of primed redevelopment area. The current location included City Hall and other government facilities that would be here for years to come, and abutted residential to the north. They wanted to make sure they built an open space in an City of Springfield Council Work Session Minutes April 22, 2013 Page 6 area that could stay vibrant and that could find surrounding properties for continued redevelopment to increase density use. More-people needed to be drawn into downtown. Things seemed to be going well and people were coming to the existing businesses, but we didn't want to spread it too thin. It was difficult to be patient waiting for the long -term vision. Staff would try to keep their eye to the future and also look at the immediate. Councilor Brew said what the Mayor said had merit. He was not confident about the idea of an outdoor plaza in western Oregon. If there was property the City already owned, the cost to convert it to a Plaza may not get in the way of a long term vision. He didn't feel it would cost a lot if they needed to change course later. Councilor Moore said the Library was very vibrant and brought people downtown. She still wanted to do intermediate things that already celebrated what was currently happening and encourage it to happen more. She asked if there would be room on the Carter Building property for both a new Library and open space. Mr. Grimaldi said there was potential. Councilor Moore said she was not sure retail would work in downtown. Springfield was more than just downtown and she wanted to encourage development in all areas. Councilor Ralston asked about the estimated cost of constructing a plaza at Mill including the purchase of the three buildings and tearing them down. Community Development Manager John Tamulonis said it was estimated at about $5.1M. It would likely be the front door of a private development, not built on its own. It would be built in conjunction with an anchor tenant. Ms. Griesel said the estimate of $5.1M was from several years ago and could be closer to $6M now. That cost included construction of the plaza. This conversation was important because staff was looking at acquisition of that middle parcel while maintaining the tenants in that space until ready to acquire the other two properties. Councilor Ralston said if it was $2M he would be more supportive. but $5.1M or $6M was a high price tag for something that may not be supported until other things were built around it. Ms. Griesel said they wouldn't build it in hopes of businesses coming. The City would own it and hold it until we had anchor partners. Councilor Ralston said there was really no other place they could do the plaza without tearing down some buildings. Mr. Tamulonis said current (rental) costs were .45 to .85 per square foot for some of the buildings downtown. The cost needed to be up to about $1.25 square foot before a building could be built in downtown. The vacancies first needed to be filled in order to get the rents increased. As we came out of the recession, we were seeing some development coming in which they would like to continue. It may take a year or two to fill up the buildings currently in place to get the rent to the right level for new construction. Keeping the interest and excitement going would be part of staff s charge as well as looking at the long -term. It involved patience. The City was offering incentives, but it would take some time to get the empty buildings filled. City of Springfield Council Work Session Minutes April 22, 2013 Page 7 Councilor Ralston asked where the empty lot was located where a building had recently been torn down. Mr. Grimaldi reminded Council that particular parcel was not for sale. The owner did not want to sell, but wanted to build a building. The City did own the land across the street. Ms. Griesel showed a map with the Carter Building location and the relationship to the Justice Center, Councilor Wylie said she liked the idea of catering to and encouraging what was currently happening. That along with experimenting with an open space concept could work for awhile. She liked the long term approach, but felt that in the short term they needed to encourage retail. such as filling up the empty spaces. Going with the flow of activity and encouraging new activity was a sound idea and process. She didn't want to change the Plan so much that it was not useful; but the Plan did need to remain flexible to development that was occurring. Councilor VanGordon said he liked the idea, too, but felt they should have a sound conversation about it in the future. Everything still met the long -term vision of the Plan, but it would be nice to have something now that could be pointed out helping to build more momentum. The Mill Plaza didn't need to be taken out of the Plan. They needed to have a conversation about what to do around City Hall now and then discuss the Plaza further. He asked if there were other locations considered for the Plaza when developing the Plan and how that location was chosen. Ms. Griesel said that location hit all of the key points. There were also a lot of prime redevelopment properties and concrete areas around that location. That was the primary spot looked at because it met the criteria and was large enough. Councilor VanGordon said he would like to have a discussion about how the parking lot (Carter property) could be used and what could be done between City Hall and Sprout. There was currently a lot of activity in this area. Councilor Moore asked who owned the parking lot next to the Carter Building. Ms. Griesel said the City owned the Carter Building and the parking lot next to it. NEDCO owned the other half of the block. NEDCO would continue to keep their parking lot as a surface parking lot. The idea was to build a Library on the remaining property to maintain a dense block. Councilor Moore said if the Library was built at that location, it would open up more space in City Hall for some of the tenants currently in the Carter Building that might be displaced. Ms. Griesel said that was correct. There were also needs for City Hall to expand. Councilor Moore said if the Library became more of a reality that could contribute to the plaza idea. That could be a good place to focus. Councilor Brew said if the City bought the parcel at the proposed Mill Plaza site, we had nothing to lose because there were current tenants that would stay on. If later, the City decided the Plaza was not a good idea, it could be sold. If the City had funds and we wouldn't lose money on it, they could still purchase it and also talk about the site across the street for a plaza. City of Springfield Council Work Session Minutes April 22, 2013 Page 8 Councilor Woodrow said because the City owned half the block, it wouldn't be a big investment to create an enjoyable plaza at that location. If in the future, they went out for a bond measure for the Library and it was supported by the citizens, it could be done because they wouldn't be investing a lot into a structure. She saw this occurring in steps and the mini -plaza might be an attractive first step which would increase interest in downtown. Mayor Lundberg said we needed to do something sooner rather than later. She agreed that buying the property at the Mill Plaza site was fine because we would still have an income from it and control over what it became later. Currently there was momentum with NEDCO spreading out towards City Hall and with the upgrade to the fountain area. It would make a statement and create interest if we started doing something now, such as lighting and open space. She talked with Willamalane Superintendent Bob Keefer about working together on something at this site. Springfield was good at piecing together all of the things that needed to happen. The CAC could help create design standards and we could take advantage of the Economic Development Department in Washington DC who could assist with a marketing plan. She asked if they could take a look at what could be done between City Hall and SPROUT. Mr. Grimaldi said staff could do that and come back with some broad cost estimates. At that time_ he would also encourage the Council to look at that investment compared to other investments, such as lighting, and what could provide the most impact. He asked for Council direction on what staff should do regarding the purchase of the building for the Mill Plaza. The opportunity to buy that property may not become available again at this price Councilor Moore asked where the funds were coming from for that purchase. Ms. Griesel said a small amount was from Community Development Block Grant (CDBG) funds, with the remainder from Urban Renewal funds. Councilor Moore said the Urban Renewal funds might be needed for a mini -plaza across from City Hall. Finance Director Bob Duey said financing for the Plaza would involve incurring debt for the Urban Renewal Agency by borrowing City funds earmarked for urban renewal. He explained how it was a revolving fund and how it was paid back through tax increment. It would look like a negative cash flow in the short term, but payment to the City could be delayed five to seven years if needed, providing time to decide whether or not to resell the building or pay off the loan. They could finance construction of the plaza over the long term through the Urban Renewal Agency. Council was fine with the City moving forward with purchase of the property at the Mill Plaza site. Ms. Griesel said staff would work with the City Manager to start the process of putting together the requested information. 2. City Stormwater Permit and Activities Update —Item to be rescheduled for future work session 3. Regional Wastewater, Local Wastewater, and Local Stormwater User Fees for Fiscal Year 13 -14. Katherine Bishop, Senior Finance Analyst in Environmental Services presented the staff report on this item. User fees for local and regional wastewater and stormwater were reviewed by the Council annually as part of the City's budget development process. Staff was in the process of developing user City of Springfield Council Work Session Minutes April 22, 2013 Page 9 fees for consideration by Council later this spring. The Metropolitan Wastewater Management Commission (MWMC) approved a schedule of FY 13 -14 regional wastewater user charges on April 12, 2013 and would be forwarding them to the cities of Springfield and Eugene for implementation. Each year, staff presented proposed user fee rates for local wastewater and stormwater programs to Council. These fees were established to provide adequate revenue to fund operations and maintenance, capital improvement programs, and the debt service payments and bond covenants requirements for the City of Springfield. In addition to the local fees. MWMC developed regional user fee rates to support the Regional Wastewater Program. Regional Wastewater User Fees On March S. 2013, staff presented a preliminary FY 13 -14 Budget and Capital Program based on a 3% user fee rate increase to the Commission. On April 12, 2013, MWMC adopted the FY 13 -14 regional user fees following a public hearing. The 3% rate increase in FY 13 -14 would increase the typical residential customer's monthly bill $0.68. This rate would be forwarded to Springfield and Eugene for implementation. Local Wastewater User Fees Last year. Council approved a 4% rate increase, with rate increases projected at 4% annually over the next four years. Based on the 2013 rate analysis, Council was requested to consider the proposed 3% rate increase for FY 13 -14. The proposed 3% rate increase in FY 13 -14 would increase the typical residential customer's monthly bill $0.60. Stormwater User Fees Last year, Council approved a 4% rate increase, with rate increases projected at 4% annually over the next four years. Based on the 2013 rate analysis, the proposed stormwater rates included a 4% increase in FY 13 -14. The proposed 4% rate increase in FY 13 -14 would increase the typical residential customer's monthly bill $0.49. Last year during discussion of the rates, Council asked staff to take a closer look at forecast of rates to reduce increases. Staff had done some work on that and would continue to doing that work. Ms. Bishop noted the Council goals and revenue goals associated with the services and rates. She described the proposed rate changes for local wastewater, stormwater services and regional wastewater services. Stormwater was the smallest share of the customer's bill. She noted that when taking the 3 %. 3% and 4% increases for the three fees, the total impact was 3.2% overall. Ms_ Bishop discussed the local wastewater rates. In 2008 the Wastewater Master Plan was adopted and later in 2009 a 522.8M a bond was issued to fund that Plan. That was followed by a 9% increase, with 4% increases annually the subsequent two years. Staff was proposing a 3% rate increase for FY13 -14, although last year a 4% increase was forecasted. She noted that a 1% increase generated about $100,000. The reason it was generating that level was due to an increase in flow activity in Springfield. It was unclear whether that trend would continue, so it would be monitored. She identified what that increase would mean for a typical resident. She reviewed the FY 12 -13 wastewater rate forecast and explained factors that had allowed the increase to be smaller. It was important to have the capital transfers into capital reserves to position the fund to be ready to take on more of a `pay as you go' financing as opposed to another revenue bond. At the same time, the City needed to maintain a healthy position in the event a bond was required. She reviewed the rate comparison between the City of Springfield and other communities. The figures were based on current rates as of January 2013. City of Springfield Council Work Session Minutes April 22, 2013 Page 10 Rate factors for local wastewater rates included: the $22.8M revenue bond repayment; the adopted FY14 -18 Capital Improvement Plan; the revised Capital Funding Plan assumptions; and inflation. Councilor Brew asked how the actual performance of fee revenue had changed the assumptions used when going out for the 2009 revenue bond. It was noted that information had been distributed to the Council while Councilor Brew was on vacation. Ms. Bishop reviewed the average monthly residential wastewater flows billed. She noted some of the possible reasons for the increase in water use. A chart was displayed showing the proposed FYI 3-14 wastewater rate and forecast for the next five years. The forecast was much more favorable than what was anticipated last year. She felt that staff was responding to Council's request to keep the increases lower in a conservative manner. Over the next three years, with the proposed forecast, about $11M could still be transferred to capital programs, operating costs could be maintained and the debt coverage ratio could be maintained. She reviewed the essential services provided by these rates, including: scheduled maintenance of the 240 mile wastewater pipe system; maintenance of 17 pump stations; manhole inspection and repair; and high priority rehabilitation projects. Staff did look at other options with lower rate increases. Doing so would negatively impact all of the areas in the revenue goals. Councilor Moore asked if they were looking at an ongoing rate increase over the next 20 years. She asked if it would ever stabilize. Ms. Bishop said staff looked out beyond the 5 year forecast and found that there would likely be increases. It was driven by changes in both Federal and State environmental standards, increases to the system treatment and the operations and maintenance to meet the standards. They were able to lower the increases from what was projected last year. Usually utility services didn't track with inflation, but on other factors such as construction costs and materials. Councilor Moore asked about the projections for regional wastewater Ms. Bishop said they had previously forecasted a 4% increase for regional wastewater, but the Commission approved a 3% increase. Over the next few years, it would likely be a 4% increase. Councilor Moore said her household had doubled what they paid over the last 10 years. She wondered if it was going to double again over the next 20 years. Mayor Lundberg said it was the one place where they didn't have to pass bond measures. The cost of the facility had been very high and it took SDCs and fees to reimburse the City for that cost. Rates had to be increased to continue to pay for those bonds. Councilor Moore said she would like to see if there was somewhere on the bill that they could explain the different fees (local and regional) that were separate. It was very discouraging and although the increases were small, they continued to add up. Councilor Woodrow said MWMC was in the process of creating an educational component. The City didn't have control over the federal requirements on certain things related to wastewater. It raised costs to meet those standards. Ms. Bishop reviewed the local stormwater timeline. In 2008, the Local Stormwater Master Plan was adopted and a $ 1 OM bond was issued in October 2010 to pay for that Plan. Rates were increased 15% City of Springfieid Council Work Session Minutes April 22, 2013 Page l I in FY 10 -11. That was followed by a 3% increase in FYI 1 -12 and a 4% increase in FY 12 -13. Staff was proposing a 4% rate increase for FY 13 -14 which what was forecast last year. She noted that a 1 % increase generated about $57;000. Rate factors that affected the local stormwater rates included: the $IOM revenue bond; the adopted FY 14 -18 Capital Improvement Plan; increased operations and maintenance and the stormwater rate structure of a flat rate. She discussed the rate forecast from last year which showed 4% annually over the next five years. She referred to a chart showing the comparison of Springfield's stormwater fees compared to other communities. Comparing the stormwater fees with other communities was difficult because not all communities had an adopted stonmwater fee and program. Essential services provided by these rates included: implementation of the Stormwater Management Plan: inspection and cleaning of 206 miles of stormwater pipe and 6250 catch basins; maintenance of 29 water quality facilities; maintenance of public and private bioswales; and high priority capital improvement projects. She reviewed the proposed FY 13-14 stormwater rates and forecast for the next 5 years. The forecast included 4% increases for the next 3 years, followed by a 3.5% increase. She discussed the importance of maintaining the debt coverage ratio above 1.4 and the difficulty in getting that ratio back up once it had dropped. Over the next three years, with the proposed forecast, about $4.8M could still be transferred to capital programs, operating costs could be maintained and the debt coverage ratio could be maintained. Councilor Moore asked if this was only charged to City residents. Ms. Bishop said she had found there were areas within the urban growth boundary (UGB) that were unincorporated. Lane County did provide some stormwater services in terms of collection in ways that were not connected to the Springfield system. Lane County was looking at the possibility of establishing a stormwater fee. There were other stormwater services that Lane County relied on the City for through an agreement. Councilor Brew said he liked the charts provided, but said it would be helpful to see the proposed transfer to capital figure in the future. He asked why the debt coverage ratio for wastewater was so much higher than stormwater. Ms. Bishop said when the $I OM revenue bond was in the forecast, the debt service obligation was included which reduced the coverage amount. That caused the debt requirement to increase, but the debt coverage ratio decreased. Ms. Bishop noted the monthly increase for an average residence at the 4% increase. Staff also looked at scenarios with a 3% and 2% increase. Both would require an immediate and ongoing budget reduction in personnel starting July 1. Other negative impacts included a reduction in funds transferred to the capital fund, lowered debt coverage ratio, impacts to the City's ability to meet service and permit requirement, and higher rate increases in the future. Ms. Bishop spoke regarding the regional wastewater rates. She reviewed the timeline for the budget including public hearings before the MWMC. The MWMC adopted the 3% rate increase for FYI 1-14 on April 12, 2013. The Springfield City Council; Eugene City Council and Lane County Board of Commissioners were scheduled to ratify the MWMC Budget and CIP in May, with final ratification of the MWMC FY13 -14 budget in June. She discussed the regional rate strategy which included using SDC revenues for debt service, maximizing capital transfers, maintaining rate stability reserve at $2M, future borrowing planned at $20M in 2017 and implementing the lowest possible rate increase to remain financially positioned for future bond issuance, maintain stable debt service coverage ratio, avoid future rate spikes, and maintain a favorable credit rating. She reviewed the FYI 3-14 regional City of Springfield Council Work Session Minutes April 22, 2013 Page 12 rate and forecast. A chart was displayed showing the overall fees by the City (including MWMC fees) compared with other communities. She reviewed the three fees and the proposed increases of each. Councilor Ralston asked if other communities were as far along as Springfield in meeting requirements. Ms. Bishop said on the stormwater side there were different permit requirements for different communities. Springfield was ahead in terms of permit standards and was actually a model and resource for some of the other communities that were a few steps behind and trying to meet those increased requirements. Councilor Ralston said the fact that Springfield was ahead was a benefit. It would cost the other communities more once they decided they needed to do something. Discussion was held regarding the costs being high when Springfield built, yet current bids on other projects coming in low and how that affected how our rates would compare. Ms. Bishop said it depended on the services and projects. Staff had gone back and recosted the remaining 2004 Facilities Plan projects based on current construction costs and had revised those. That reduction in cost allowed them to propose the 3% increase. Mr. Grimaldi said a public hearing was scheduled for May 6 with the proposed rates. If Council wanted to look at something different, now would be the time to let staff know. Mayor Lundberg said it was always a concern because rates were constantly being raised. There was still an option to look at where the funds were placed and what was put into reserves. Ms. Bishop said the constraints were somewhat driven by the debt coverage requirement so a reduction in the budget would need to be on the operating side such as personnel service. The department had already trimmed the materials and services budget as lean as possible while still meeting the permit requirement. Hopefully, they would see some changes in development activity with changes in the economy. As that occurred, SDC revenues from new customers would buy into the system and could offset some rate changes. Councilor Brew asked what they could reduce in rates if they lowered the debt coverage to 1.8 in the local wastewater Ms. Bishop said they had been able to reduce the forecast increase from 4% to 3 %, and looking at 2% in years to come. They were banking on the customer's usage and wastewater billings. She would like to give that another year to see if that was realized to know if that could be sustained. To reduce the increase further at this time would increase that risk. Also, if a large industrial customer reduced productivity or closed down, that would be an impact to our reserves or could cause a second rate change within one fiscal year. Staff could work up those impacts if Council asked. Councilor Moore asked how much savings that would generate monthly per house hold. She wouldn't mind looking at it, but wasn't sure what the savings would be for the customer. She referred to Ms. Bishop's comment about cutting personnel if the revenues dropped and asked about retirements and other positions that had been left vacant. Ms. Bishop said those were on the regional side, not local City of Springfield Council Work Session Minutes April 22, 2013 Page 13 Development and Public Works Director Len Goodwin said there was one additional risk. For the past number of years, when there was an increase in water usage in Springfield; Eugene had a decrease. They were not sure why and had asked the Springfield Utility Board to do an analysis of usage to see why Springfield trended opposite of Eugene. Until they knew why that was happening, they needed to be very cautious about depending on that increase in water usage. Councilor VanGordon said he appreciated staff and felt they had listened to the feedback from last year and looking at keeping increases low. He was comfortable with the rates as proposed. He would like to look at this again neat year. Councilor Ralston said he was also comfortable with the rates as proposed. The rest of the Council was fine with the proposed rates. Councilor Moore said she was still interested in the educational component for citizens. Ms. Bishop said staff was committed to come back with the lowest responsible rate. She acknowledged the many staff members in the audience who had contributed to this work. She hoped they could come back with a reasonable rate next year. 4. Springfield Transportation System Plan Update— Updated Draft Policies Review— P41014 — reschedule to another date. Item to be rescheduled for future work session ADJOURNMENT The meeting was adjourned at 7:36 p.m. Minutes Recorder —Amy Sown Christine L. Lun ere Mayor Attest: Amy Sow City Recorder