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HomeMy WebLinkAbout11/23/2009 Work Session City of Springfield Work Session Meeting MINUTES OF THE WORK SESSION MEETING OF THE SPRINGFIELD CITY COUNCIL HELD MONDAY, NOVEMBER 23, 2009 The City of Springfield Council met in a work session in the Jesse Maine Meeting Room, 225 Fifth Street, Springfield, Oregon, on Monday, November 23, 2009 at 6: 15 p.m., with Mayor Leiken presiding. ATTENDANCE Present were Mayor Leiken and Councilors Ralston, Lundberg, Wylie, Leezer, Simmons, and Pishioneri. Also present were City Manager Gino Grimaldi, Assistant City Manager Jeff Towery, City Attorney Bill Van Vactor, City Recorder Amy Sowa and members of the staff. Mayor Leiken noted there would be a change in the order of the meeting because the presenters of the MWMC item also needed to get over to Eugene to present to their City Council this evening. 1. Proposed Amendments to the Metropolitan Wastewater Management Commission (MWMC) System Development Charge (SDC) Methodology. Public Works Director Susie Smith and Environmental Services Manager Ron Bittler presented the staff report on this item. Ms. Smith said staff recognized that it was an unfortunate time to bring fees and charges to the Council. Staff met with Coun~illeadership on this topic last week. The MWMC budget had been driven by the 2004 Facilities Plan which had a cost of about $200M, that addressed environmental protection and community growth. Funding for the projects in the plan were primarily SDCs and user rates, and most of the funding was coming from issuing revenue bonds, which had a lot of requirements regarding revenue sufficiencies. It was a combination of these charges that provided total funding for this project. In the budget preparation process for 2008/2009, the regional partners became concerned about the state of the SDC revenues and the lack ofthe methodology's ability to collect all SDC eligible charges. The user rates had primarily paid for the capital program for several years. The SDCs were being paid down quickly in order to repay debt service, causing user rates to increase to accommodate those revenue bond payments. During the budget ratification process in May of 2008, both the Lane County Board of Commissioners and the Eugene City Council asked MWMC to review its methodology to ensure SDCs captured full recovery of capital expenses in a manner that achieved equity between newly connected and previously connected users. This objective was specifically called out in the MWMC Intergovernmental Agreement (IGA) under Section 3(t) (4). Additionally, the IGA in Section 8(c) obligated the Governing Bodies to adopt sewer user charges and system development charges and impose such charges on behalf of the Commission at the rates and amounts recommended by the Commission. City of Springfield Council Work Session Minutes November 23, 2009 Page 2 During the June 2009 MWMC meeting, all four elements were presented to the Commission and staffwas directed to move forward with the SDC methodology update and to begin the public involvement process. Written notice was sent to all individuals listed in the MWMC Interested Parties list on June 10,2009. In addition, the MWMC held a public hearing on September 11, 2009, at which no testimony was received. At the September 11, 2009 MWMC meeting, the Commission approved Resolution 09-15 approving the amended MWMC SDC methodology and directed staff to take the amended methodology to the Cites of Springfield and Eugene for adoption and implementation in accordance with the MWMC Intergovernmental Agreement. o Council was requested to review the proposed amendments to the MWMC SDC methodology which was scheduled for a public hearing and Council action on December 7th. Staff needed to get approval for the bonding authority from the regional partners, but Lane County did not approve the entire bonding amount last Spring, but asked staff to come back with additional information. Because this was a regional partnership, all three jurisdictions (Springfield, Eugene, and Lane County) must approve the methodology. Eugene and Lane County were waiting for the changes in the methodology. Mr. Bitt1er said in July of 2008, the MWMC contracted with Deb Galardi of Galardi Consulting to review the MWMC SDC methodology. At the October 2008 MWMC meeting, staff presented five elements which could be modified including: project re-costing, compliance costs, financing costs, rate-supported credit, and the SDC assessment schedule. The Commission directed staff to further review the proposed changes and it was determined that project re-costing would not be included in the proposed amended methodology. Mr. Bitt1er said the update to the methodology suggested using actual debt service costs, rather than estimated values. The SDC compliance charge was a new charge in the new methodology. He explained that charge. The SDC assessment schedule was originally developed based on a study from 1988 using strength categories, amended in 2006 to update eating and drinking establishments. The methodology change took the decision making process outside of the methodology and allowed the pretreatment staff to adjust the actual industrial discharge to the user rate so there was a match between the user rate and the SDC compliance. This allowed staff to go out and do some on-site sampling or make adjustments as new strength categories were identified. Mr. Bitt1er said those updates were submitted to the LCBC on September 11 and adopted as read. This would increase the residential SDC by $351, including the compliance cost. The commercial impacts were variable based on strength and volume. The total impact on an annual basis was about $900,000. A public hearing was scheduled on December 7, and it was staffs recommendation to approve the new methodology with an effective date of January 1, 2010. Ms. Smith said this methodology was on the Eugene City Council agenda tonight for action. Mayor Leiken said these updates were to meet Department of Environmental Quality (DEQ) requirements. The City was currently looking at residentia11ands ne~ds and future growth. The Federal government no longer funded these types of projects. Other communities were facing City of Springfield Council Work Session Minutes November 23, 2009 Page 3 even larger costs for these upgrades, and Springfield was pretty fortunate. MWMC had requirements we had to meet from a regulatory standpoint. Councilor Simmons said we didn't have much choice. Unless there was a statement from legal counsel that this was not in line with State law, we needed to go forward. The City was required to adopt what MWMC proposed unless we could find legal fault, and there didn't appear to be any. Councilor Pishioneri asked about the cost in 2006 dollars and whether or not those costs could be lower in the current economic times. He asked if the physical improvements at the plant were only those that were required. Ms. Smith said the plant was being put in at minimum compliance. The guiding parameters of the 2004 Facilities Plan were the regulatory requirements for permit, and those couldn't be violated. The other piece was regarding temperature and the million gallons per day (MGD). Sizing of the plant was related to statewide growth based on population projections and was a requirement. MWMC was obligated to the level of performance set by DEQ. There could be a change as the City looked at a possible UGB expansion, and new growth projections would need to be considered for future capacity requirements. When the original plan was drafted in 1984, it was supposed to be a twenty year plan. During that period there were slow years of growth in the 1980's which allowed time for planning the next twenty years. Councilor Lundberg asked if Council would be seeing figures of actual charges. Ms. Smith said the charge schedule would be in the next Council packet. Councilor Lundberg said she would like to see comparisons with other fee increases Springfield and Eugene were facing. She asked if the costs for the project could possibly have gone,down because of the economy. Ms. Smith said when the plan was originally put together, the cost was $144M in 2004 dollars. She noted the years when concrete and steel prices increased by very large amounts. Prior to those years (2004 and 2006), the inflation rate was easily projected. Those costs had come down allowing them to provide a closer estimate. No projects had been added to the list. Councilor Ralston said as much as he hated to raise fees, he felt Springfield's hands were tied. It was a zero sum game and either the SDCs or user fees had to be increased. He noted the cost of sewer for Coburg residents. Councilor Leezer asked if the DEQ had addressed pharmaceuticals in the water. Ms. Smith said it was something that was being discussed, but there were no new requirements for that yet. Normal treatment processes did not treat all of that. She noted legislation that related to toxins and the list of 129 toxic pollutants that would be coming forward soon. That list did not include pharmaceuticals. Councilor Leezer said that would be very expensive. City of Springfield Council Work Session Minutes November 23, 2009 Page 4 Ms. Smith said they were concerned about the list of toxins that would be coming out shortly and how they could address those in the pre-treatment programs. Councilor Simmons said the capital work was on an old target and the target constantly moved and changed due to regulatory requirements. This was always going to be a work in progress, and staff did the best job they could. Not only would the rates need to increase, but also the methodology. Ms. Smith said the reuse program, such as the Poplar program, would be a benefit to the system as we moved forward. The more of the discharge taken out ofthe river that way, the further we got to compliance. She referred to a comment from Commissioner Stewart regarding what would be coming out of the Willamette River. As the water became more of a commodity and the streams became more challenged, the use of the product became more valuable. The reused program would be beneficial for more than just temperature abatement. Councilor Leezer noted Silverton's Oregon Gardens and how they dealt with wastewater. Councilor Pishioneri said Lane County Solid Waste was looking at ideas for disposal of items such as pharmaceuticals, using protective drop boxes that could be picked up by law enforcement and disposed of properly. He felt the City should start looking in that direction. Ms. Smith said staff had been actively involved with the drug take-back legislation and had participated in its development. They had been active in the promotion of that through the Association of Clean Water Agencies. There was a program in British Columbia they were trying to base that program from. Staff was hoping that conservation would be started at the legislative level. There were pilot programs underway for drug take-back activities. Councilor Pishioneri asked about enforcement of private lot sweepers which could be a source of chemicals, and if that was being tracked. Ms. Smith said those were regulated regarding where they dumped their waste. Councilor Pishioneri said he had seen some of them filling up with water from City hydrants. He was not sure all of them were paying their fees and dumping appropriately. Ms. Smith said she was not aware that they were using City hydrants to fill up their tanks, but she would have staff follow up. Councilor Lundberg asked that Council members receive information on pharmaceuticals and the system used at Oregon Garden so they could be thinking ahead and being proactive. Ms. Smith said a recent Communication Packet included information with the new toxins list. Staff could prepare another memo when the next level of implementation came out, and also include additional information. Mr. Bitt1er said there should be news on toxics and trigger levels from the State. The fift:y-two largest treatment plants in the State would be required to sample for ,those toxics and if they exceeded the trigger value, each facility would need to develop toxics reduction plans. As that unfolded, staff could update the Council. City of Springfield Council Work Session Minutes November 23,2009 Page 5 Mayor Leiken said his confidence in the Department of Environmental Quality (DEQ) was low based on personal experience. He liked Councilor Leezer's idea about looking at other alternatives such as the Oregon Gardens to work through some ofthese issues. He trusted staffs judgment more than the State. 2. Community Development Advisory Committee (CDAC) Application Review. Housing Manager Kevin Ko presented the staff report on this item. There were three vacant positions on the CDAC. The vacancies were the result of term expirations of Andrea Ash, Erin Lynch and Gerald Strebendt. Council was being requested to review three applications received for the vacant CDAC positions, and to recoinmend three applicants to fill the CDAC vacancies. The recommended applicants would be formally appointed to the CDAC at the regular session of the Council on December 7, 2009. ' The CDAC consisted of six at-large positions from the community, one representative from the City Council and one representative from the Planning Commission. The CDAC advised the City Council on all matters related to the City's housing and community development activities which were funded annually by Community Development Block Grant (CDBG) funds and HOME Investment Partnership Program (HOME) funds received from HUD: Applications were encouraged from lower income earners, residents of lower income neighborhoods, racial and ethnic minorities, senior citizens, disabled individuals and female heads of households. All applicants must live within the city limits or urban growth boundary of Springfield. Three vacancies were created as the result of term expirations. All vacancies were for at-large positions which would expire on December 31,2013. A public notice of available positions on the CDAC was released by the City's Community Relations Manager on October 14,2009 and applications were accepted through Noverpber 6,2009. Three applications were received for consideration. Staff was requesting that Council review the three applications at a work session on November 23, 2009 and recommend the three applicants to fill the available positions on the CDAC. Mr. Ko said the applicants met the requirements for the CDAC. Councilor Pishioneri asked if Mr. Vohs was in the Cherokee Drive area local improvement district (LID). Yes. He was pleased to see someone from that area nlterested in serving on this committee. Councilor Simmons asked if there would be a conflict if there was an economic qualification for the LID neighborhood. Mr. Grimaldi said there would, but Mr. Vohs would just need to excuse himself when that item was discussed. Councilor Lundberg said she liked the diversity of the applicants. It was nice to have a lot of perspectives. This committee always had great representation. Council consensus was to.appoint the three applicants during the next meeting. City of Springfield Council Work Session Minutes November 23, 2009 Page 6 3. Recommended Funding Allocations - Additional FY20 1 0 Funding for the Springfield Home Ownership Program (SHOP). Housing Assistant Jodi Peterson presented the staff report on this item. The demand for the SHOP assistance was very high and funding allocated for the program in FY1 0 was depleted. Since July 1 st, the SHOP had processed nearly 40 loans. This was four times the average volume for the program in the same time period. The $8,000 federal tax stimulus to fIrst time home buyers certainly increased the activity. The loan volume was at its highest just prior to the original expiration of this incentive. Extension of the tax stimulus was now applicable to homes purchased by April 30th and would likely keep the demand high. The SHOP had been helping low and moderate-income fIrst time home buyers purchase homes in Springfield since 1993. Since that time, approximately 475 first time homebuyers had been assisted. SHOP assistance, which started at $2,000 per home, had increased to $10,000 in response to the growing gap between income and home prices. The cm:rent economic situation had created opportunities for fIrst time home buyers through decreased interest rates, changes in lending practices and stabilization or drop in home prices. The SHOP was created in response to the high priority the City Council placed on home ownership in Springfield. The HOME Investment Partnership program funds budgeted in the interim fund were made up of a combination of loan repayments, funds not allocated in the annual funding round (in FY 09 $153,872 was not allocated), and funds set aside or reserved to assist projects with interim fmancing and contingency funds. There was currently $478,908 in the interim fund line item. If $250,000 was allocated to the SHOP, it would leave a balance of $228,908 for the remainder of FYlO. If the SHOP did not receive additional funds for FY 10, the $250,000 would be offered up in the annual request for proposals for affordable housing projects. Transferring an additional $250,000, as requested, would allow the City to assist 25-30 more first time homebuyers in Springfield in FY20l0. In addition, staff would continue to encourage and promote the use of the Neighborhood Stabilization Program (NSP) funds for the purchase of eligible foreclosurelbank owned properties. Councilor Ralston asked if they felt they would need $250,000 through the rest ofthe fiscal year. Ms. Peterson said they did because of the extension on the fIrst time homebuyers program. Councilor Pishioneri asked about the loan rate. Ms. Peterson said it was 0% until sale of the property or transfer of title. Councilor Pishioneri asked about recovery efforts. Ms. Peterson said the Finance Department handled every foreclosure. They had made some concessions in short sale to recover some rather than going to foreclosure. Their rate of recovery, considering the fragile clientele they served, was quite well. City of Springfield Council Work Session Minutes November 23, 2009 Page 7 Mayor Leiken said the first time homeowner stimulus funds had helped the real estate business and he was not surprised to see the success of SHOP. It was a positive sign that houses were moving. Councilor Ralston referred to Attachment 1, which showed the amount of funds awarded in previous years. It wasn't unusual to give over $500,000. Ms. Peterson said Mr. Grimaldi had asked her to show where the funds would be allocated if not to SHOP. She explained where the funds would be coming from. Councilor Ralston said the fund had money available for this type of project. Councilor Wylie said she was encouraged about this and felt it was a good opportunity. Councilor Pishioneri said the program was great. He asked if the interim funds were dedicated or if they could be used for other programs. Ms. Peterson said they could be used for other things such as other affordable housing projects. She noted that NEDCO had built some homes that were not selling and had been sitting vacant for almost 2 years. Those homes were now selling and the City was getting those funds back because they were loans from the City. Councilor Lundberg said it was a program where we got money back and the loan rate was very good. The income ratio was important so those buying could maintain their home once they purchased it. It was important to give them every chance to be successful. Councilor Pishioneri asked how long the $10,000 per house cap had been in place. Ms. Peterson said it was increased from $6000 to $10,000 a couple of years ago. Councilor Pishioneri said that was raised because of sharply rising cost of homes. With home prices going down, he asked if it could be dropped back down. Ms. Peterson said not everyone needed the full amount. Councilor Pishioneri said maybe we should look at lowering the cap. Ms. Peterson said she didn't believe the value of the homes they were helping with had changed that much. She would check further into that. Councilor Pishioneri wanted to look at lowering our maximum. He explained further. He was supportive of the project. Discussion was regarding how the most people could be assisted. Ms. Peterson said she would look into lowering the maximum. City of Springfield Council Work Session Minutes November 23, 2009 Page 8 Mayor Leiken said the market had adjusted itself with the drop in housing after the sharp increase. Councilor Ralston agreed. In a roundabout way, we were helping the whole housing industry by getting people into entry level homes and bringing up homeownership in Springfield. ADJOURNME~l The meeting was adjourned 6:56 p.m. Minutes Recorder - Amy Sowa Attest: ~~. Amy So City Rec er