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HomeMy WebLinkAbout04/18/2011 Work SessionCity of Springfield Work Session Meeting MINUTES OF THE WORK THE SPRINGFIELD CITY i MONDAY, APRIL 18, 2011 ,SSION MEETING OF UNCIL HELD The City of Springfield Council met in a work session in the Jesse Maine Meeting Room, 225 Fifth Street, Springfield, Oregon, on Monday, April 18, 2011 at 6:00 p.m., with Mayor Lundberg presiding. ATTENDANCE Present were Mayor Lundberg and Councilors Pishioneri, VanGordon, Wylie, Moore, Ralston and Woodrow. Also present were City Manager Gino Grimaldi, Assistant City Manager Jeff Towery, City Attorney Matt Cox, City Recorder Amy Sowa, and members of the staff. 1. Fees and Charges. Finance Director Bob Duey and Assistant Public Works Director Len Goodwin presented the staff report on this item. This was the second work session on fees and charges. Following the March 21, 2011 work session, there were seven fees that were identified for further discussion and information. All seven were listed on page 1, Attachment 1 of the agenda packet, but staff had determined it would be too difficult to discuss all seven during this meeting so were just planning to discuss the first three (Wastewater and Stormwater Right-of-Way Fee, Street Preservation Fee, and General Obligation Bond Issue for Capital Projects). These three were related to transportation issues. The other four would be discussed during the May 23 work session. Mr. Duey said the Right-of-Way (ROW) fee had been considered for ad, number of years. The ROW fee was to be used in conjunction with existing revenue for transportation, which was primarily the fuel tax. The fuel tax had not been a growing fee, partly due to the economy. The ROW fee supplemented the fuel tax to try to get growth back into the Street Fund and address issues the fuel tax had been meant to address. The Street Preservation Fee was recognizing that the long-term use of the Fuel Tax would be problematic and looked at what could replace the Fuel Tax ai d provide more stability. The General Obligation (GO) Bond did not address operating issues or street preservation, but rather how to address the backload of needs in transportation, such as overlay and reconstruction. The bond would allow the City to bring the system back up to a higher level so the other fees could generate funds to continue to maintain the system. Mr. Duey spoke in more detail about the ROW fee. This was a way to have the utility enterprise funds pay their share of the use of the streets and rights-of-way. This fee seemed appropriate as a transportation issue and would go directly into the Street Fund, not the General Fund. There were 30+ cities in Oregon that used ROW or franchise fee on their own internal utilities as a funding mechanism. When looking at the City's fees and charges for stormwater and sanitary, it seemed like a good time to do this and not financially impact the ratepayers. I . Councilor Woodrow referred to Table 2 of Attachment 3 of the agenda packet. She asked what percentage (1, 3 or 5 %) was needed to get the preservation work done; Mr. Duey said if the tax was implemented at 3%, the City could get just past the slurry seal for local streets (about $227,500). The first dollars from this fee would go to cancel the General Fund support of the Street Fund. City of Springfield Council Work Session Minutes April 18, 2011 Page 2 Councilor VanGordon asked if the ROW fee would impact the and wastewater fees. Mr. Duey said the first time Council was presented with the ROW fee, they had not yet talked about stormwater and wastewater rates. From the direction Council gave staff on March 21 regarding those rates, staff took the ROW fee into account and included it when developing the stormwater and wastewater rates. Councilor VanGordon asked for examples of the private utilities ROWS fee. Mr. Goodwin said it was 5%, with the exception of Qwest, which had a separate charge. Councilor Ralston asked who paid the ROW fee. Mr. Duey said it would be billed into the monthly rates for wastewater and stormwater. That was built into the rate Council looked at last week. Councilor VanGordon asked if the ROW fee would be in place for all time for future preservation projects, or just until the City got caught up on current preservation projects. Mr. Goodwin said if the Street Preservation Fee was implemented and produced the results expected, it would probably be self-sustaining. The Fuel Tax would continue to ble a source of revenue, but would be a declining source. It would be difficult to determine if the fees would still be needed out into the distant future. If the Council was interested in a utility type fee for the transportation system, they could create a fee that was self-sustaining. Mr. Duey said if the Council chose to move forward with a GO Bond, the ROW fee could be dedicated towards the debt service on those bonds. Councilor Moore asked how long the General Fund had subsidized the Street Fund. Mr. Duey said they just started in FYI 1. In the past, the specialty funds normally supported the General Fund. The last two or three years, the General Fund had been supporting the Street Fund, the Ambulance Fund, and the Jail. They needed to change that in order to continue to fund core General Fund services. Councilor Moore asked how soon this would go into effect. Mr. Duey said the ROW Fee would begin in FY 12, starting July 1, 2011. The amount needed to reimburse the General Fund was $150,000. Councilor Moore asked if that had been worked into the current budget. Mr. Duey said it had been. The gross amount would be about $350,000-$400,000, less $150,000 which would go to the General Fund. Mr. Duey discussed the Street Preservation Fee. This fee was to address long-term needs to finance transportation maintenance. There weren't as many cities implementing this fee as the ROW fee, but there were a few. It transitioned transportation into something like a utility and into a user based City of Springfield Council Work Session Minutes April 18, 2011 Page 3 funding system. There were a variety of ways to determine level of use in calculating this fee. The City looked at this several years ago and Council took action to implement it, but it met with some resistance due in part to lack of community conversations and education. At that time, it was unknown how the fee would be collected. If Council was interested in this fee, it would probably take about a year or so to get everything ready. During that time, staff would look at collection options, either through Springfield Utility Board (SUB) or in-house on a quarterly basis. If implemented, this fee could bring in about $1.6M annually. Councilor Moore said there were those in the City that didn't own cars or were low income. She asked if there would be a way that people could file for an exemption. There were some people that weren't using the streets. Q Discussion was held regarding use of streets for goods and services, a#d public transit. Mayor Lundberg asked staff to go over some general information on Transportation Utility Fees (TUFs). Mr. Goodwin referred to page 4 of Attachment 3 of the agenda packet that listed those cities that collected some sort of TUF. Most were collected directly by the city. Many of these fees were specifically dedicated to either preservation or maintenance, and some were generally for use in the transportation system. Councilor Wylie said she liked the term Street Maintenance Fee. She didn't like the idea of charging based on number of trips, but she did understand that the City needed to maintain the streets. She suggested that if someone paid up front, they could get a discount (i.e. $2/mo, or $1.75/mo if paid for the full year at once). It was the Springfield way to be clear and up front. She didn't want it based on trips or mileage. Councilor Pishioneri suggested calling it the Transportation Maintenance Fee instead of Street Maintenance Fee, since it could also go towards sidewalks, crosswalks, and bike paths, which were all part of the transportation system. He agreed with Councilor Wylie's billing recommendation. Councilor Wylie felt Transportation Fee was more confusing. This fee was to maintain the streets. Councilor Woodrow said the biggest issues with this fee were communlity education and collection. Community education was the biggest issue, but not insurmountable. Part of the education was to let people know that even if they didn't use the streets directly, having a well-managed street preserved their property value along with everything else. If the education piece was the focus, while they figured out the collection piece, that would help alleviate concern. Mr. Duey said that was a good reason to put this off to FYI 3 or further. Councilor Moore asked for a cost comparison between the commercial and residential charge. Mr. Goodwin said when they originally brought this to Council several years ago, staff prepared some mock up schedules with typical charges. The fees were constructed to max out at about $750/month for large businesses such as Jerry's, Walmart, or Fred Meyer. A typical retail establishment was about $30-$100/month and fast food restaurants about $250/month. The calculations were the same as those City of Springfield Council Work Session Minutes April 18, 2011 Page 4 used for Transportation SDCs. For economic reasons, even the largest users would need to be capped to keep the fee under control. Mayor Lundberg said she had never been completely in favor of a utili needed with businesses. We were trying to move forward in a business new fee could be seen as negative. If the City collected this fee oursely flexible in how we allowed people to pay, such as cash, credit cards, of collecting the utility fee, she would like staff to look into collecting ou: fees so we weren't paying extra for billing services. Councilor Ralston said it might also encourage SUB to collect our util Mayor Lundberg said how the fee was collected and what we charged important issues to resolve. She asked if staff was getting the direction Mr. Duey discussed the General Obligation (GO) or Capital Bond. The in order to fund up front large capital projects. In-1995, the City issued Library improvements, building improvements, transportation improve Maintenance. In 2004, a $28.6M bond was issued to build the Justice ( also used revenue bonds over the last three or four years for stormwate taxing authority for revenue bonds, but instead were paid back from re, Bonds were unique because they authorized the City to levy additional must be approved by voters. The City was still paying on the 1995 issu bonds and the 1995 issue, would be paid off in 2015. Mr. Duey said the City needed to determine what they would want in t: just transportation,. or include other capital project needs in the City, su building a new library, City Hall improvements, etc. It would need to g four elections held during the year: March, May, September or Novem elections did not require a double majority, but the March or Septembe to put a bond on the ballot, they would pass a Resolution, draft the ball and hold an election. If the bond passed, the bonds would be sold. The passage of a resolution to the election was about 6 months. There was the community what they wanted in a bond issue. Once they determine they could line that up with the election date. y fee. A lot of discussion was friendly environment, and a ;s it would be important to be checks. If the City started stormwater and wastewater fee instead. commercial were very v needed. Yes. GO Bond was issuance of debt bonds for $12M and included ments; Police, Fire and enter and Jail. The City had and sanitary. There was no ienue already generated. GO tax to make the payment, and They were normally 20 year bond issue. It could either be h as moving a fire station, to the voters in one of the -.r. The May or November elections did. If Council chose t title, file with the County, -.ast amount of time from so the component of asking the community's interest, Mr. Duey said there were other bond issues available such as a Limited Tax Obligation Bond, which didn't require a vote, but also didn't allow charging any taxes. With this type of bond, the City would get the money up front, but would have the resources already in place with the full pledge of the General Fund behind it. He didn't feel that was an option at this time. If Council chose, they could direct staff to start looking at the options. Councilor Pishioneri said the GO Bond made sense, but for needs only Safety buildings were not needed, but wanted. If citizens saw that the ( everything, but then only asking for what was needed, they might be m support that. The Library and Fire and Life ouncil was looking at )re supportive. He could Councilor Ralston asked how much they would ask for in a GO Bond. City of Springfield Council Work Session Minutes April 18, 2011 Page 5 Mr. Goodwin said if they issued a bond for $10-$12M, it would be for Councilor Ralston asked what happened in 2015 when the 1995 issue N Mr. Duey said it would just be paid off. There would be no additional f timed to overlap and pay off the existing bond. Councilor Wylie asked about the F&LS and Police levy. only. paid off. or debt. Some bonds were Mr. Duey said the Fire levy was just renewed and expired in 2016. The Police levy was a four-year levy and would come to the voters in November 2012. The current Police levy expired July 2013. Councilor Wylie was concerned about having a Police and Fire levy, , needed to be very careful. She asked what year we would go out for a Mr. Duey said it had not yet been determined. Mr. Duey said staff was bringing the update to existing fees and chaq He asked if Council wanted staff to also bring forward the ROW Fee recommend putting any of the others on the agenda for May 2. Staff r not to spend more staff time on collection and education of the Street FYI 3 implementation. Staff also needed direction on whether or not ( appropriate way to approach the backlog of transportation projects. If size of the bond based on a community conversation. There was no nE time. going out for a bond. They to a public hearing on May 2. May 2. He would not 3ed direction on whether or -.servation Fee for a possible zncil felt a GO Bond was the staff could put together the for a commitment at this Councilor Ralston would like to have the ROW Fee on the May 2 public hearing. Of the other two, the Street Maintenance Fees seemed most reliable. He explained. Councilor Woodrow supported putting the ROW Fee on for May 2. She also liked the Street Maintenance Fee. The cost of the bond or Street Maintenance Fee seemed to be about the same cost to citizens. Councilor Wylie agreed with Councilor Ralston. She wanted to make sure not to put too much on businesses regarding fees. It needed to be light-handed. She asked about an article in the paper about an increase for banner fees to $350, and if that was for the OPEN Banners. The fee was not for the OPEN banners, but was for the overhead Councilor Pishioneri said the Street Fee was to maintain streets where they were, and the GO Bond would provide funds to replace and fix infrastructure. They were not the same. Mr. Goodwin said the Street Maintenance Fee would raise the money needed to catch up with a lot of the backlog, but during the time it took to raise that money, the backlog would get worse. Councilor Pishioneri suggested staff work concurrently on both the Street Fee and the GO Bond until there was a better picture of the impact. City of Springfield Council Work Session Minutes April 18, 2011 Page 6 Mr. Goodwin said they hadn't looked at how the Maintenance Fee wou example, if they knew the Maintenance Fee was going into place, they of the bond. That analysis had not been done yet. work with the GO Bond. For .ild possibly reduce the size Councilor. VanGordon said he would like the 3% ROW to come forwa ild for the public hearing. He felt a long-term discussion was needed on the Street Fee and'GO Bond to find a policy to move away from the fuel tax. Our systems needed to be maintained, and a long-term discussion was needed to start that. Councilor Moore asked if the Street Maintenance Fee could be used to pay off a revenue bond. She would still like to. see some type of exemption process for low-income residents on that fee. Councilor Ralston felt that in the current economic times, it was better to implement the fee than to go out for a bond. He agreed with a bond, but felt timing was important and waiting until the other bond was paid off would be a better time. 1 Council acknowledged the importance of protecting the Fire and Life Mayor Lundberg said all three (ROW Fee, Street Maintenance Fee, consideration, and the Council would look to staff for proposals on Mr. Duey said staff would work on the ROW Fee for the public heari on the others over the summer. ADJOURNMENT The meeting was adjourned at approximately 6:55 p.m. Minutes Recorder - Amy Sowa Christine L. Mayor Attest: and Policy levies. GO Bond) were worthy of to best make it work. on May 2, and start working adberg Jr a4y,o WX__ Amy So a City Recorder