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City Council Packet - 04/25/2005 Agenda Item No. 44. 1 For Agenda of June 14, 2005 COUNCIL MINUTES SPECIAL TIGARD CITY COUNCIL MEETING APRIL 25, 2005 ■ Mayor Dirksen called the meeting to order at 5:30 p.m. ■ Council Present: Mayor Dirksen; Councilors Harding (arrived at 5:35 p.m., Sherwood, Wilson, and Woodruff. 1. DISCUSSION (Continued from April 19, 2005) - STRATEGIC FINANCE PLAN ISSUE PAPERS Interim City Manager Prosser and Interim Finance Director Imdieke reviewed this agenda item with the City Council, which was continued from the April 19, 2005, City Council meeting. Interim Finance Director Imdieke advised that after hearing comments from the City Council last Tuesday night, he organized the issues into four major categories (charts are on file in the City Recorder's office): 1. Feedback Requested 2. Items Implemented/Completed 3. Work in Progress 4. Long-Term Issues Interim City Manager Prosser advised that the Executive Staff had started preparing information on this item in August/September 2004; some of the issues are included in the budget and others have been completed. There are some issues remaining for which staff still needs some City Council direction. Interim Finance Director Imdieke reviewed with City Council those items where feedback is requested. Councilor Harding arrived at 5:35 p.m. The following items were discussed: ■ Increased legal costs and annexation issues - Interim Finance Director Imdieke noted that City Council had looked at this item before and it might be time to look again at in-house legal services. Interim City Manager Prosser suggested this item could be reviewed, if desired, during the presentation of the COUNCIL MINUTES -APRIL 25, 2005 page 1 budget. The proposed budget assumes that the contract arrangement is to be continued. The budget figures include not only the City Attorney costs for the Ramis, Crew firm but it also includes contract costs for the labor attorney. Interim City Manager Prosser noted it would be highly unlikely that the City would be able to find an in-house attorney that would have both specialties. In response to a question from Councilor Woodruff, Mayor Dirksen and Interim City Manager Prosser advised the Charter specifies that the City Attorney reports to the City Council. There was discussion about having staff prepare cost information for in-house v. contractual attorney services. Mayor Dirksen noted there are issues to consider - the City has a variety of legal needs and it is likely that some legal work would need to be contracted out if in-house legal services are established. Examples of some issues that need legal expertise include: labor, governance, and land use. Legal fees associated with lawsuits are often covered by the City's insurance carrier. Interim Finance Director Imdieke asked if the City Council had any preference for the type of expertise that would be provided by in-house legal counsel. Mayor Dirksen suggested expertise in governance procedures and land use. Interim City Manager Prosser advised staff will prepare information for review by the Budget Committee on in-house v. contracted legal services. In response to Councilor Wilson, Interim City Manager Prosser explained the request for an increase in legal fees is based on feedback from departments as they estimate what their legal needs might be for the next budget year. Initially, one item of concern pertained to increased costs associated with Ballot Measure 37, which has not impacted legal fees so far. Interim Finance Director Imdieke noted some major areas for additional legal support included the Comprehensive Plan Update and some land use questions associated with urban renewal. ■ Solid Waste Management/Recycling/Code Enforcement - Interim Finance Director Imdieke noted interest was expressed to have additional attention paid to Code Enforcement along with some Metro mandates relating to business recycling. Perhaps it's time to add a staff person to address solid waste and environmental issues. The two haulers franchised to do business in Tigard have expressed some degree of support for COUNCIL MINUTES -APRIL 25, 2005 page 2 raising the franchise fee from 3 percent to 5 percent. The haulers would like to have some kind of commitment from the City that there would be educational recycling efforts that tied in with what the haulers are doing. It is hoped that the City would be successful in receiving some grant dollars from Metro for educational programs. The $156,000 to be requested for this item would be generated by a 2 percent increase in the franchise fee in solid waste. There was discussion on Metro's mandatory programs and the unknowns of how Metro would enforce. Interim City Manager Prosser advised that Tigard's position is that it does not support a mandatory program. Tigard supports an outreach approach to work with businesses. The recovery (through recycling) goal is 62% and businesses are currently at 59% (regionally) and based on this, Councilor Harding commented that a full-time recycling coordinator would not be justified. Interim City Manager Prosser noted that Tigard's commercial recovery rate is lower than the regional rate of 59%. Councilor Harding noted there is some recycling (shredded documents) that are not being taken into account. Interim Finance Director Imdieke said that the region has taken the "low hanging fruit" to attain the 59%; it will become more difficult to get to the next level of tonnage, which is why an "organics" program is being considered with some experimental programs involving restaurants in the City of Portland. Curbside recycling has been successful for residential. Councilor Woodruff noted that recycling programs cost far more than the revenue received for the recycled materials. Councilor Woodruff advised he does not have concern with funding requests when a funding source has been identified. Interim City Manager Prosser noted that when the figures for this item were put together, it was not known that there would be a request for a solid waste rate increase. There was discussion about the timing of the increases in fees resulting in an increase in customer rates. Interim Finance Director Imdieke noted that if rates are raised, an increase in service should also occur. The rate review must be done by the City Council by June 30, 2005 ■ MSTIP Needs - Interim City Manager Prosser noted this was included for review by City Council at the time when it was COUNCIL MINUTES -APRIL 25, 2005 page 3 thought that another MSTIP levy would be proposed by the County. At this time, it appears that the County is slowing down this process and has asked cities to submit lists of projects. There are county-level discussions occurring and cities are expressing concerns that projects for cities are not appearing on the next MSTIP list. Councilor Harding confirmed that additional work needs to be done on the concerns with the MSTIP list; she said she has asked for the criteria used for project selection. Discussion followed about how projects had been identified and funded in the past. Interim City Manager Prosser advised that staff would prepare a memo noting Tigard's concerns about the MSTIP project selection process so Councilor Harding could take this with her to the next Washington County Coordinating Committee meeting. ■ Recreation Programs - Interim Finance Director Imdieke noted the amount requested was submitted by the Park and Recreation Advisory Board regarding a bond measure for some type of recreation center. After discussion, Council consensus was that this would be a low priority. There is potential for a regional center sponsored by the Salvation Army. Interim City Manager Prosser advised an issue paper would be brought to the Budget Committee to consider placing dollars in the budget to be available to match grant applications for recreation activities. ■ Right-of-Way Review - Interim City Manager Prosser noted this item pertained to right-of-way maintenance. Maintenance of right-of-way areas abutting private property is the responsibility of the property owners. There are examples (e.g. Durham Road) where property owners have frontage along two roads and the property owner is cut off from access by a wall. The larger dollar amount shown reflected the cost if the City Council decided right-of-way maintenance should be provided to properties along major arterials. The smaller amount represented an allocation to be set aside to provide grants to neighborhoods or individuals to help them maintain right-of-way property. These amounts were not included in the proposed budget. Mayor Dirksen said he would not be supportive of the larger number but would be interested in discussing a cooperative arrangement with citizens (smaller number). There will be an issue paper prepared for review by the Budget Committee. COUNCIL MINUTES -APRIL 25, 2005 page 4 Councilor Wilson noted this issue continues to be of concern in the community. He referred to areas in other cities where these right-of-way areas are maintained, which adds to property values. He said he would support further discussion about making "in-roads in this area." He suggested a small pilot project could be implemented. Mayor Dirksen noted he would also be interested in a pilot project on a road, such as Durham Road, to determine what costs might be. There was discussion about programs in other cities. Councilor Woodruff suggested this be reviewed with the neighborhood association near Durham Road. Councilor Harding suggested that contracting out for services for maintenance also be explored. Councilor Sherwood noted concerns for fairness since much of the right-of-way along Durham Road is being maintained by adjacent property owners and, essentially, the area that is not being maintained is next to Summerfield. ■ Parks and Open Space Acquisition - Interim Finance Director Imdieke advised that this item is directly tied to the need for some matching funds to be used with the SDC's. The issue paper suggests a bond measure for open spaces or property acquisition. Interim City Manager Prosser advised there will be an issue paper presented on this item during the budget process. Mayor Dirksen noted the priority on this item was" Y and he said he would like to see it moved to a "1." Interim City Manager Prosser and Interim Finance Director Imdieke reviewed some of the financing strategies recommended to address a ten-year Parks Master Plan. More up to date figures will be available during the budget process. ■ Environmental Program - Interim Finance Director Imdieke said this was in conjunction with the potential to do some natural resources planning and environmental awareness. The issue paper proposed dollars be made available to "purchase expertise." This will not be proposed in the budget, so if City Council wants staff to do something on this, City Council will need to give staff that direction. Councilor Harding she would like to see a total number that is being recommended to be spent on consultation fees. Interim Finance Director Imdieke suggested that he ask the department that prepared this issue paper prepare costs for the "total package." COUNCIL MINUTES -APRIL 25, 2005 page 5 Interim Finance Director Imdieke noted the Local Option Property Tax, Franchise Fee for Water & Sewer, Privilege Tax, and Telecommunications Registration Fee are all tied together. With regard to the Local Option Property Tax, eventually the City will be faced with a deficit and will need to look at some long-term alternative funding sources. Interim Finance Director Imdieke noted that many surrounding jurisdictions have placed a franchise fee on water and sewer to collect money for General Fund programs. The Privilege Tax and Telecommunications Registration Fee are questions the City Council will be asked to consider to determine whether they would prefer a fee approach or the local option levy. Mayor Dirksen noted that before considering new revenue sources, the City should make sure it is collecting payment for everything for which it is entitled. Mayor Dirksen said that franchise fees on water and sewer should be a first priority. He said he would prefer the Local Option Property Tax be dropped back to Priority 3 as this should be a last resort. Several Council members indicated they agreed with Mayor Dirksen. ■ Passport Agency - City Council agreed the staff should proceed with providing this service. ■ There was brief discussion on providing notary services. City Recorder Wheatley advised the City currently provides this service at no charge. Notaries are limited on the amount they can charge and this would not provide a significant amount of revenue. The City does not charge for notary services. ■ Councilor Woodruff cautioned about the fee approach as the City looks for additional revenue. Generally, fees can be charged without going to the voters; then, when it becomes necessary to ask voters to consider additional taxes, they may feel as if they have been "nickel and dimed" and are not willing to vote yes once they have a chance to vote. Mayor Dirksen noted the City should be very "up front" about any fees it does charge and let residents know why the City is charging a fee. Interim City Manager Prosser noted it is good to have a diversified revenue base. ■ Councilor Sherwood noted that the County might not place a WCCLS funding proposal before the voters in 2006. Interim City Manager Prosser noted the County is waiting to hear how COUNCIL MINUTES -APRIL 25, 2005 page 6 the annexation issues are dealt with by the State legislature before making the decision on the timing for a WCCLS levy. 2. ADJOURNMENT: 6:18 p.m. G7 DiE CatQ~c~ atherine Wheatley, City Recorder Attest: Mayor, City of Tigard Date: COUNCIL MINUTES -APRIL 25, 2005 page 7 TIGARD CITY COUNCIL SPECIAL MEETING APRIL 25, 2005 5:30 p.m. CITY OF TIGARD TIGARD LIBRARY 2"D FLOOR OREGON CONFERENCE ROOM 13500 SW HALL BLVD. TIGARD, OR 97223 PUBLIC NOTICE: Assistive Listening Devices are available for persons with impaired hearing and should be scheduled for Council meetings by noon on the Monday prior to the Council meeting. Please call 503-639-4171, ext. 2410 (voice) or 503-684-2772 (TDD - Telecommunications Devices for the Deaf). Upon request, the City will also endeavor to arrange for the following services: • Qualified sign language interpreters for persons with speech or hearing impairments; and • Qualified bilingual interpreters. Since these services must be scheduled with outside service providers, it is important to allow as much lead time as possible. Please notify the City of your need by 5:00 p.m. on the Thursday preceding the meeting by calling: 503-639-4171, ext. 2410 (voice) or 503- 684-2772 (TDD - Telecommunications Devices for the Deaf). SEE ATTACHED AGENDA COUNCIL AGENDA - APRIL 25, 2005 page 1 AGENDA TIGARD CITY COUNCIL SPECIAL MEETING - APRIL 25, 2005 - 5:30 PM TIGARD PUBLIC LIBRARY SECOND FLOOR CONFERENCE ROOM 13500 SW HALL BOULEVARD TIGARD, OREGON 5:30 PM ■ Call to Order - Mayor Dirksen ■ Roll Call 1. DISCUSSION (Continued from April 19, 2005) - STRATEGIC FINANCE PLAN ISSUE PAPERS • Staff Report: Finance Staff 2. ADJOURNMENT i 1admlcathyk:cat2005t050425.doc COUNCIL AGENDA - APRIL 25, 2005 page 2 City of Tigard, Oregon Affidavit of Notification CITY OF TIGARD OREGON In the Matter of the Notice for a Special Tigard City Council Meeting on April 25, 2005. STATE OF OREGON ) County of Washington ) ss. City of Tigard ) I, 04T 4 OZI;A1 E l HEAT being first duly sworn or affirmed oath (or affirmation), depose and say: That I notified the following people/organizations by fax of. • Notice for a Special Tigard City Council Meeting on April 25, 2005. A copy of said Notice being hereto attached and by reference made a part hereof, on the . day of z,6 , 20 S Barbara Sherman, Newsroom, Tigard Times (Fax No. 503-546-0724) Patrick Harrington, The Oregonian (Fax No. 503-968-6061) Editor, The Regal Courier (Fax No. 503-968-7397) Signature of Person who Perf ed Notification Subscribed and sworn (or affirmed) before me this C2 ~st day of ~Iprl / , 20 D~ . OFFICIAL SEAL GREER A GASTON NOTARY PUBLIC-OREGON 37302 MY COMMISSI ION EP RES OCT.010, 2007 Signature of Notary Public for Oregon i:tadmtcatny\council\meeting notlces\cc meeting noticestaffidavit of notification - special meeting - 050425.doc 04/20/2005 15:04 FAX 5036847297 City of Tigard goo]. • &~&~~~&~~~kSC&&SR&&xc~&xcxc~~ffifixc&& MULTI TX/RX REPORT ae TX/RX NO 4373 PCs. 1 TX/RX INCOMPLETE TRANSACTION OK [ 0615035460724 IT Newsroom [ 0915039686061 Oregonian [ 1115039687397 Regal Courier ERROR INFORMATION I . i CITY OF TIGARD i NOTICE OF SPECIAL COUNCIL MEETING APRIL 25, 2005 - 5:30-6:30 PM TIGARD PUBLIC LIBRARY SECOND FLOOR CONFERENCE ROOM 13500 SW HALL BOULEVARD TIGARD, OREGON Please forward to: Barbara Sherman , Newsroom, Tigard Times (Fax No. 503-546-0724) V/ Newsroom, The Oregonian (Fax No. 503-968-6061) Editor, The Regal Courier (Fax No. 503-968-7397) Notice is hereby that the Tigard City Council will hold a special meeting on April 25, 2005, at 5:30 p.m. at the Tigard Public Library Second Floor Conference Room, 13500 SW Hall Boulevard, Tigard, Oregon. The purpose of the meeting is to continue the discussion begun at the April 19, 2005, City Council meeting regarding the Strategic Finance Plan Issue Papers. For further information, please contact City Recorder Cathy Wheatley by calling 503-639-4171, Ext 2410. City. Recorder Date: L s . Post: Tigard City Hall Tigard Permit Center Tigard Public Library _..__°__..M....,,...,M. mndmo nouo~rnarci. 2005 epemal meating.doc .I ,l ,An CITY OF TIGARD NOTICE OF SPECIAL COUNCIL MEETING APRIL 25, 2005 - 5:30-6:30 PM TIGARD PUBLIC LIBRARY SECOND FLOOR CONFERENCE ROOM 13500 SW HALL BOULEVARD TIGARD, OREGON Please forward to: Barbara Sherman, Newsroom, Tigard Times (Fax No. 503-546-0724) Newsroom, The Oregonian (Fax No. 503-968-6061) Editor, The Regal Courier (Fax No. 503-968-7397) Notice is hereby that the Tigard City Council will hold a special meeting on April 25, 2005, at 5:30 p.m. at the Tigard Public Library Second Floor Conference Room, 13500 SW Hall Boulevard, Tigard, Oregon. The purpose of the meeting is to continue the discussion begun at the April 19, 2005, City Council meeting regarding the Strategic Finance Plan Issue Papers. For further information, please contact City Recorder Cathy Wheatley by calling 503-639-4171, Ext 2410. kD City Recorder Date: Post: Tigard City Hall . Tigard Permit Center Tigard Public Library lAadmMalhyMauncll\meeting notlceslcc meeting notices\march 1, 2005 special meeting.doc City of Tigard, Oregon , gm Affidavit of Posting CITY OF TIGARD OREGON In the Matter of the Notice for a Special Tigard City Council Meeting on April 25, 2005. STATE OF OREGON ) County of Washington ) ss. City of Tigard ) I, d!!-a,& being first duly sworn (or affirmed), by oath (or affirmation), depose and say: That I posted in ➢ Tigard City Hall, 13125 SW Hall Boulevard, Tigard, Oregon ➢ Tigard Public Library, 13500 SW Hall Boulevard, Tigard, Oregon ➢ Tigard Permit Center, 13125 SW Hall Boulevard, Tigard, Oregon A copy of the Notice for a Special Tigard City Council meeting to be held on April 25, 2005. A copy of said Notice being hereto attached and by reference made a part hereof, 11 on the day of r , 20a Signature of Person who Perfo d Posting Subscribed and sworn (or affirmed) before me this day of -Ap6f- / , 20 05 . OFFICIAL SEAL JILL wn BYARS Signature of Notary Public for Oregon F#NOTARY PUBLIC-OREGON 1793 MMISM.SION EOXPIR 3 ~_I NE 14, 2008 1: ledmtcathytcouncihmeeting noticestcc meeting not! a \efOduit of posting - 050425.doc CITY OF TIGARD NOTICE OF SPECIAL COUNCIL MEETING APRIL 25, 2005 - 5:30-6:30 PM TIGARD PUBLIC LIBRARY SECOND FLOOR CONFERENCE ROOM 13500 SW HALL BOULEVARD TIGARD, OREGON Please forward to: Barbara Sherman, Newsroom, Tigard Times (Fax No. 503-546-0724) Newsroom, The Oregonian (Fax No. 503-968-6061) Editor, The Regal Courier (Fax No. 503-968-7397) Notice is hereby that the Tigard City Council will hold a special meeting on April 25, 2005, at 5:30 p.m. at the Tigard Public Library Second Floor Conference Room, 13500 SW Hall Boulevard, Tigard, Oregon. The purpose of the meeting is to continue the discussion begun at the April 19, 2005, City Council meeting regarding the Strategic Finance Plan Issue Papers. For fixther information, please contact City Recorder Cathy Wheatley by calling 503-639-4171, Ext 2410. City Recorder I Date: 5 00 Post: Tigard City Hall Tigard Permit Center Tigard Public Library t:1admlcalhytc0undl1rneeting noticeslcc meeling nogceMmarch 1, 2005 special meeting.doc Feedback Requested Strategic Finance Plan Issues Funding Needs Method of Council Strategic Vision Rec. Potential Fund(s) Approval/ Goal Finance Plan Survey Page Priori Timin Issue Impact d Amount Implementation Candidate? Candidate? Issue? Number Increased Legal Council direction, 1 2004 Costs and General $50,000 Budget Amendment No Yes 9 Annexation Issues Solid Waste Negotiation with 5 2005 Mgt./Recycling/ General $156,000 Haulers & Council No Yes 47 Code Enforcement resolution Yes 2006 or $10 million to Countywide vote No Yes (Transp. 23 3 2008 MSTIP Needs Road $20 million Improve ment 5 2005 to 2008 Recreation General $860,000 Budget Yes Yes Yes 43 Programs 3 2005 ROW Maintenance TBD $25,000 to Budget Yes Yes Yes 29 Needs $450,000 Parks & Open Council resolution & Yes 3 TBD Spaces Acquisition Parks CIP $3.59 million citywide vote Yes No (Protecti 25 on) 1 FY 2005-06 Environmental General $20,000 Council direction & Yes Yes Yes 5 Program Budget Feedback Requested Strategic Finance Plan Issues Revenue Options Method of Council Strategic Vision Rec. Potential Fund(s) Approval/ Goal Finance Plan Survey Page Priori Timing Issue Impacted Amount Implementation Candidate? Candidate? Issue? Number 1 2006 Local Option General TBD Citywide Vote Yes Yes 55 Property Tax General, 3 2005 Franchise Fee- Water, & $441,000 per Council ordinance No Yes 78 Water & Sewer Sanitary Sewer year & resolution 3 TBD Privilege Tax General $647,000 Council ordinance No Yes 80 & resolution 3 2005 Telecommunications General Unknown Council ordinance No Yes 83 Registration Fee & resolution 5 2005 Passport Agency General TBD Council resolution No Yes 87 2005, with 2 money MSTIP Revenue Various $3 million to County approval No Yes 76 distributed $5 million in 2007 Items Implemented/Completed Strategic Finance Plan Issues Funding Needs/Revenue Options Method of Council Strategic Vision Rec. Potential Fund(s) Approval/ Goal Finance Plan Survey Page Priori Timing Issue Impacted Amount Implementation Candidate? Candidate? Issue? Number 1 2004 Long Range General $40,000 Council resolution No No 57 Planning Fee 1 2005 Communication General $141,500 Council direction Yes No Yes 1 & Other plus Council ordinance 1 2004 Parks SDCs Parks CIP $5.6 million No No 60 & resolution Work In-Progress Strategic Finance Plan Issues Funding Needs Method of Council Strategic Vision Rec. Potential Fund(s) Approval/ Goal Finance Plan Survey Page Priori Timing Issue Impacted Amount Implementation Candidate? Candidate? Issue? Number 1 2005 Downtown General plus TBD Council resolution & Yes Yes Yes 3 Improvements others citywide vote 2 2005 Comprehensive. General $225,000 Council Goal & Yes Yes Yes 15 Plan Update Budget 2 TBD Library General $105,000 Council resolution No Yes 17 Operational Hours and funding Enhanced Council direction or 3 2005-06 Neighborhood Various TBD resolution Yes Yes Yes 19 Program - CAP 3 2005 to Water Supply Water, $80 million to IWB Approval & Yes Yes 31 2006 Source Water CIP $90 million Council resolution 4 TBD Economic TBD TBD Council direction Yes Yes Yes 35 Development 4 2005 Urban Growth General $250,000 to IGA with County No Yes 37 Boundary $450,000 General Fund $1.5 million in 1 2006 Projections General FY 2008-09 Council direction Yes Yes 7 Overall 2005 Employee Benefit Various TBD Union negotiations & No Yes 51 Issue Costs Council Action i In-Progress Work Strategic Finance Plan Issues Revenue Options Method of Council Strategic Vision aPriorij Potential Fund(s) Approval/ Goal Finance Plan Survey Page Timing Issue Impacted Amount Implementation Candidate? Candidate? Issue? Number CWS Split of Sanitary Sanitary and Sewer & Unknown Negotiations with 1 2005 Stormwater Storm reduction CWS No Yes 53 Revenues Sewer 1 2005 ROW Fee Review Various TBD Council resolution No Yes 62 Telecommunications $325,000 to 1 2005 Regulation General $1.37 million TBD No Yes 66 reduction 2005 to Transportation Council ordinance & 1 2006 Financing Other TBD resolution. Possible Yes Yes 68 citywide vote. 1 TBD Urban Renewal Various TBD Council resolution and Yes Yes 70 Citywide vote lWB ou approval ti No Yes 72 1 2005 Water Utility Rates Water TBD C Council resolution 1 2005 Other User Fees General TBD Council resolution No Yes 59 Street Maintenance Street 1 2005 Fee Review Maint. Fee TBD Staff report to Council No No 64 Long-Term Issues Strategic Finance Plan Issues Funding Needs Method of Council Strategic Vision Rec. Potential Fund(s) Approval/ Goal Finance Plan Survey Page Priori Timing Issue Impacted Amount Implementation Candidate? Candidate? Issue? Number Senior Center General $450,000 plus 5 2007 CDBG Grant (Facilities) $450,000 grant Council direction No Yes 45 Match 5 2005 to 2008 New Police Facility Facilities $150,000 plus Citywide vote No Yes 39 $10,000,000 4 2005 to 2009 Centralizing City Various $500,000 to Council direction & No Yes 33 Information $1,000,000 Budget 2005 Public Facilities Facilities, 3 through Capital Projects - Water, $3.41 million CIP & Budget No Yes 27 2010. PW, Records, Sanitary, Police Storm 3 2005 Enhanced Training Various TBD Council direction & No Yes 21 Budget 5 2005 to 2009 Records Program Various $187,000 Budget No Yes, 41 c • Long-Term Issues Strategic Finance Plan Issues Revenue Options Method of Council Strategic Vision Rec. Potential Fund(s) Approval/ Goal Finance Plan Survey Page Priori Timing Issue Impacted Amount Implementation Candidate? Candidate? Issue? Number 1 2006 WCCLS Levy General TBD Countywide vote No Yes 74 3 2005 Water Revenue Water CIP $8.84 million Council resolution No Yes 85 Bond AGENDA ITEM # T FOR AGENDA OF April 19, 2005 CITY OF TIGARD, OREGON con-E-1-Alu.P ~ -hu _ COUNCIL AGENDA ITEM SUMMARY U . o1S v J ISSUE/AGENDA TITLE Wor ho - Strate is Finance Plan Issue Paper(s) Discussion PREPARED BY: Tom Imdieke DEPT HEAD OK CITY MGR OK ISSUE BEFORE THE COUNCIL The City prepared its first Strategic Finance Plan in 2003. The City Council now has the opportunity to update the plan and direct staff to make any appropriate changes as determined by the Council. STAFF RECOMMENDATION Update the Strategic Finance Plan with the appropriate changes as determined by the City Council. INFORMATION SUMMARY The City prepared its first Strategic Finance Plan in 2003. It is time to update that plan to reflect current conditions and issues. As we did in 2003, Executive Staff first brainstormed a list of issues that they feel are current or will soon be faced by the City. Executive Staff then organized that list into rough order of priority. Finally, staff wrote brief (1 to 2 pages) issue papers on each issue to present to Council. Those issue papers were distributed earlier to the City Council for their review. Council may choose to include all of the attached issues in the final Strategic Finance Plan or it may drop any issues that it feels appropriate and add any issues it feels are missing from this packet. Finally, Council will be asked to discuss the final list of issues, to assign priorities and timelines, and to provide direction to staff on how the Council wishes staff to proceed on these issues. OTHER ALTERNATIVES CONSIDERED N/A VISION TASK FORCE GOAL AND ACTION COMMITTEE STRATEGY The Strategic Finance Plan can act as a tool in developing strategies and funding for implementation of projects to address goals as outline in the Vision Statement. ATTACHMENT LIST Copies of the draft 2005 Strategic Finance Plan Issue Papers. FISCAL NOTES N/A MEMORANDUM TO: Mayor Craig Dirksen Tigard City Council and Councilor-Elect [IV FROM: Craig. Prosse , inance Director RE: Draft Strategic Finance Plan DATE: December 14, 2004 Attached to this memo is a draft of the 2005 Strategic Finance Plan for your review and consideration. The City prepared its first Strategic Finance Plan in 2003. It is time to update that plan to reflect current conditions and issues. As we did in 2003, Executive Staff first brainstormed a list of issues that they feel are current or will soon be faced by the City. Executive Staff then organized that list into rough order of priority. Finally, staff wrote brief (1 to 2 page) issue papers on each issue to present to Council. The attached packet contains these issue papers. Council will have at least two opportunities to review and discuss these issues. The first opportunity will come on January 18 at the annual Goal-setting session. At that time, Council may choose to bring some of the issues forward from the attached packet to be considered as possible Council goals for 2005. The second opportunity will come at a second meeting to discuss the Strategic Finance Plan itself. Staff is suggesting that this second meeting occur at the Council workshop meeting of February 15, 2005. At these meetings, Council may choose to include all of the attached issues in its Goals or in its Strategic Finance Plan. It may also drop any issues that it feels appropriate and add any issues it feels are missing from this packet.. Finally, Council will be' asked to discuss the final list of issues, to assign priorities and timelines, and to provide direction to staff on how the Council wishes staff to proceed. on these issues. Most of this discussion will take place at the Strategic Finance Plan meeting. The packet starts with summary tables that also serve as a Table of Contents. The summary tables provide a one-stop look at all issues. They also contain three columns that require particular attention by Council: ■ Recommended Priority - this column shows the priority of each issue as determined by Executive Staff. During the Council review of the Strategic Finance Plan, Council will be asked to confirm or modify these priorities. Priorities are listed from 1 (high) to 5 (low). ■ 'Council Goal Candidate? -This column identifies issue papers which Council may want to bring forward during the annual Goal-setting session on January 18 for possible inclusion in the Council Goals for 2005. • Strategic Finance Plan Candidate? - This column identifies issues which Council may want to consider in the final Strategic Finance Plan for 2005. This packet of materials is being furnished to you today so that you have an opportunity to review these issues prior to the Goal-setting session on January 18. cc: Bill Monahan, City Manager Executive Staff Strategic Finance Plan Issues Executive Staff Priorities Revenue Options Method of Council Strategic Vision Rec. Potential Fund(s) Approval/ Goal Finance Plan Survey Page Priori Timing Issue Impacted Amount Implementation Candidate? Candidate? Issue? Number 1 2005 CWS Split of Sanitary Unknown Negotiations with No Yes 53 sanitary and Sewer & reduction CWS Stormwater ✓ Storm Sewer Revenues 1 2006 Local Option General TBD Citywide Vote Yes Yes 55 Property 1 2004 Long Range General $40,000 Council resolution No No 57 -Plahnin Fee 1 2005 Oth~User Fees General TBD Council resolution No Yes 59 d i s 1 2004 Parks SDCs Parks CIP $5.6 million Council ordinance No No 60 & resolution 1 2005 ROW Fee Review Various TBD Council resolution No Yes 62 1 2005 Street Maintenance Street TBD Staff report to No No 64 Fee Review Maintenance Council Fee 1 2005 Telecommunication General $325,000 to TBD No Yes 66 s Regulation $1.37 million reduction Strategic Finance Plan Issues Executive Staff Priorities Funding Needs Method of Council Strategic Vision Rec. Potential Fund(s) Approval/ Goal Finance Plan Survey Page Priori Timing Issue Impacted Amount Implementation Candidate? Candidate? Issue? Number 1 2005 Communication General $141,500 Council direction Yes No Yes 1 t- Cjy~ ther plus 1 2005 Downtown General plus TBD Council resolution Yes Yes Yes 3 Improvements others & citywide vote 1 FY 2005- Environmental General $20,000 Council direction & Yes Yes Yes 5 06 Program ,<W.d i-~ -rpj Budget 1 2006 General Fund Sek General $1.5 million in Council direction Yes Yes 7 Projections On FY 2008-09 1 2004 Increased Legal General $50,000 Council direction, No Yes 9 Costs and + r, , ,e Budget Annexation Issues Ln A Amendment 1 2004 Measure 37 G neral TBD Staff No Yes 11 implementation & Budget 1 2005 Value Added.. vwious TBD Council direction & Yes Yes 13 Interest L S "rBud et 2 2005 Comprehensive. General $225,000 Council Goal & Yes Yes Yes 15 Plan Update ni Budget 2 TBD Library Operationa General 05,000 Council resolution No Yes 17 Hours G Al and funding - :J I Method of Council Strategic Vision Rec. Potential Fund(s) Approval/ Goal Finance Plan Survey Page Priori Timing Issue Impacted Amount Implementation Candidate? Candidate? Issue? Number 3 2005-06 Enhanced - V6ious TBD Council direction or Yes Yes Yes 19 Neighborhood b''t p resolution . 60"A Program - CAP c~ 3 2005 Enhanced Training Various TBD --Council direction & No Yes 21 Budget 3 2006 or MSTIP Nee Road' $10 million to Countywide vote No Yes Yes 23 2008~S _ $20 million (Transp. Improveme nt 3 TBD rks & Open Parks C~P $3.59 million Council resolution Yes No Yes 25 Spaces Ac uisition u^ ` & citywide vote Protection 3 2005 Public Facilities Facilities, $3.41 million CIP & Budget No Yes 27 throug Capital Projects - W ter, 2010 PW, Records, anitary, Police ~►w'" Storm 3 2005 OW Maintenance TB (,$25,000 to Budget Yes Yes Yes 29 Zeds "5"`k 8~C.c(. .$450 000 3 2005 to ater Supply Water, Water $80 million to lWB Approval & Yes Yes 31 2006 ource z P $90 million Council resolution 4 2005 to Centralizing City,- Variou $500,000 to Council direction & No Yes 33 2009 Information - jl. IS a 1,000 000 Budget 4 TBD Economic BD TBD Council direction Yes Yes Yes 35 Development I Method of Council Strategic Vision Rec. Potential Fund(s) Approval/ Goal Finance Plan Survey Page Priori Timing Issue Impacted Amount Im lamentation Candidate? Candidate? Issue? Number 4 2005 Urban Growth vw' General $250,000 to IGA with County No Yes 37 Boundary i CP - $450,000 5 2005 to New Police Facility Facilities $150,000 Citywide vote No Yes 39 2008 'O nl , j ~ plus C;Xps 0- _$10,000,000 5 2005 to Records Program Various $187,000 Budget No Yes 41 2009 q-- 1 m a. S 5 2005 to Recreation era/ G3 860,000 Budget Yes Yes Yes 43 2008 Programs ~a' (C I~ L _ y"t 5 2007 Senior Center General $450,000 Council direction No Yes 45 CDBG Grant f~v atch (Fa ilities) plus cu.-,e t 450,000 Sa-~ rant 5 2005 Solid Waste General $156,000 Negotiation with No Yes 47 Mgt./Recycling/ 3°'a i --Haulers & Council Code Enforcement lN~ r resolution 5 2005 Youth Programs General $100,000 per Council Resolution Yes Yes 49 Grant year & Budget Overall 2005 Employee Be: Various TBD Union negotiations No Yes 51 Issue osts & Council Action i S - V Method of Council Strategic Vision Rec. Potential Fund(s) Approval/ Goal Finance Plan Survey Page Priori Timing Issue Impacted Amount Implementation Candidate? Candidate? Issue? Number 1 2005 to Transportation Other TBD Council ordinance Yes Yes 68 2006 Financing & resolution. Possible citywide CO ti. -S vote. 1 TBD Urban Renewal Various TBD Council resolution Yes Yes 70 T-, 'C and Cit ide vote 1 2005 WWer Utility Rates Water TBD IWB approval & No Yes 72 'Y\-Pk rock L.r" - c. 3 Council resolution 1 2006 WCCLS Levy General TBD Countywide vote No Yes 74 2 2005, with MSTIP Revenue Various $3 million to County approval No Yes 76 money $5 million distributed ~ _ in 2007 G~ wur lU L~ 3 2005 Franchise Fee- General, $441,000 per Council ordinance No Yes 78 Water & Sewer Water, & year & resolution " 5~t&t ►v.~~(~# 1~ Sanitary Sewer TBD pnvile a Tax -General $647,000 Council ordinance No Yes 80 i > . 0& resolution 2005 Telecommunications General Unknown Council ordinance No Yes 83 e istration Fee & resolution 2005 erfte ue Bo Water CIP $8.84 million Council resolution No Yes 85 2005 Passport Age cy General TBD Council resolution No Yes 87 Funding Needs Communication Issue Summary Definition: The City uses a variety of tools and methods to inform, educate, and get input from citizens. The goal is communication that is consistent, accurate, timely and responsive to citizen's needs, interests and community goals. In addition, two-way communication includes closure and feedback to ensure the information shared is understood. The methods the City uses to communicate with citizens include: written tools such as Cityscape, the web page, press releases, TVTV (cable TV) productions brochures, flyers, reports, community connectors, e-mail, displays, surveys and bill stuffers. In most cases, the majority of the cost for these items is the staff time needed to develop the material. Printing costs for brochures, flyers and bill stuffers is often an insignificant part of a project cost, which may or may not be funded with general fund dollars. The exceptions are the webpage, cable TV productions, and the Cityscape. One FTE is dedicated to the webpage at an approximate cost of $81,500. Printing and mailing nine issues of the Cityscape each year costs approximately $60,000, excluding staff time. These are both funded with general fund dollars. Another tool is cable television. The City televises two City Council meetings per month and the monthly Focus on Tigard program. TVTV provides the crew for the City Council meetings at no cost'to the City. City employees produce/direct and appear in the Focus program as part of regular work assignments. Face to face communication with citizens at meetings, public hearings and over the counter is still an important communication tool but the, cost of those meetings is assumed as part of doing business. Revenue Required/Revenue Potential: Webpage support costs about $81,500 per year. Nine issues of Cityscape cost $60,000 excluding staff time required to write and publish Cityscape. All other costs are embedded in other projects and department budgets. Work Completed to date: The Tigard Beyond Tomorrow survey conducted in the summer of. 2004 asked respondents what the most effective means for communication are. Mailed notices and the Cityscape were the most popular at over 28% with the website being second at 17.5%. The newspaper was third at around 15%. In 2000 the website was named by only 6% of the respondents. Implementation Action Required: As a cost saving measure the City Council cut back from twelve to nine Cityscape newsletters last budget year. Since the Cityscape 1 remains a popular communication tool, it is worth investigating less costly alternatives that might allow additional issues to be printed at the same or less cost. In addition, the Council should discuss the communication tools available and determine if new ones should be added and less effective methods used less frequently. Timing: At the Council goal setting in January, staff will have information available on possible cost effective alternatives to expand the distribution of the Cityscape and other communication tools. For example, it might be more cost effective to print the Cityscape on newsprint, contract with the School District to print the newsletter, or encourage more readers to access the Cityscape on-line to reduce postage costs. If the Council provides direction on other communication priorities at the goal setting session, staff will investigate cost effective alternatives to include in the proposed budget. Advantages: ■ Using a variety of communication tools helps to ensure citizens have access to information and decision makers. The information gained in the recent Tigard Beyond Tomorrow vision survey can be used as a starting point to evaluate the effectiveness of the communication tools currently in use. Disadvantages: ■ The costs for producing communication tools are generally paid for with General Fund dollars, and costs such as printing and postage continue to increase. Recommendation: Gather information on alternatives that would reduce or maintain the cost of producing various communication tools as information for Council's January goal setting. Council Priority/Discussion: y 2 Funding Needs Downtown Improvements Issue Summary Definition: The Tigard community is going through an effort to shape the future of Tigard's downtown. Over the next several months the Downtown Improvement Task Force will develop, with the input of the entire community, the future direction for the downtown. The resulting plan will identify development patterns and capital improvements that are needed. How will these improvements be paid for? One option that will be considered by the Task Force and ultimately Council will be the creation of an urban renewal district to generate dedicated revenues to pay for needed .improvements Downtown Tigard. The Tigard Charter currently prohibits any renewal districts without an approving vote of the people. Revenue Required/Revenue Potential: To be determined. The Downtown Improvement Plan, which is scheduled for completion in June 2005, will identify needs and revenues. Work Completed to date: The Downtown Task Force. was appointed by Council in 2004. The City was awarded a Transportation and Growth Management Grant ($129,000) to complete the Downtown Improvement Plan by June 2005. The project is on schedule. Implementation Action Required: Adoption of Downtown Improvement Plan. City Charter prohibits the formation of any urban renewal district without an affirmative citywide vote. Council could refer one of two measures to the people: 1. An amendment of City Charter to remove the requirement for a citywide vote, or 2. Approval of one or more urban renewal districts. Timing: 2005 to 2006 Advantages: ■ The Downtown Improvement Plan will set the standard for the future of the downtown. Creation of a dedicated funding source that increases with growth in assessed values in the urban renewal district .and that can be used to pay for needed improvements. ■ Public improvements paid for by urban renewal or other methods will spur private investment that will further increase values in the district, and will accommodate job and housing growth. ■ Once the urban renewal plan is accomplished and all costs are paid for, the assessed value is returned to the general tax roles and helps pay for citywide services. 3 Disadvantages: ■ Urban renewal "locks up" growth in assessed values during the life of the urban renewal plan, thereby limiting growth in tax revenues for all overlapping taxing jurisdictions. ■ Urban renewal mechanics are complicated and difficult to explain to the public in an election setting. ■ Creation of an urban renewal district requires the active support of major property owners within the proposed district. Recommendation: ■ Complete the Downtown Improvement Plan by June 2005. ■ Explore urban renewal as an option to implement the Downtown Improvement Plan, ■ Work with property owners in the Tigard Central Business District to assess the level of interest and support for urban renewal. ■ . Develop a proposed timeline for resolution of this question. Council Priority/Discussion: 4 Funding Needs Environmental Program Issue Summary Definition: Much of what the City of Tigard provides as services and public processes revolve around environmental issues. The Visioning process, public comment, and mandated land use public hearings consistently encourage a higher level of environmental sensitivity, preservation of natural resources, and increased efforts by the City in this area. City issues as diverse as land use regulations, public purchasing, public property maintenance protocols, and volunteer projects all have a common thread of good environmental practices impacting them, and are an area where the City can improve in the delivery of service and public support. There is a clear expectation from the public that the City, as an organization, improve its environmental stewardship. Revenue required/Revenue potential: Unknown at this time. It is currently believed that much of the work the City is doing could be modified or reorganized at a low cost to improve environmental sensitivity. The City will probably need to add some level of technical expertise in staff or consultant support to supplement current capabilities. For financial planning purposes, a combination of existing expenses being re-organized and an additional $20,000 annually for environmental technical expertise is suggested. The $20,000 would pay for a pilot program, with the design of a larger program, if needed, to be based on the results of the initial effort. Ultimately, funding may be necessary for capital costs such as sensitive land purchases, rehabilitation activities on environmentally damaged public lands, conservation easements, etc. Work Completed to date: This concept has been discussed by senior staff but no action has been proposed or taken. Implementation Action Required: Implementation would be accomplished by a combination of Council direction, staff action, and budget implementation. A citywide . vote to support a funding measure may develop from this project. Timing: Implementing changes to existing programs and developing new program focus and structure could be accomplished in a six month period. Program aspects requiring budget approval could be developed as a part of the FY 2005-06 budget process and accomplished after July 1, 2005 Advantages: ■ Higher rate of protection for natural resources ■ Higher rate of environmental awareness affecting City issues. ■ Development of policy and regulation consistent with public expectations. ■ More public support ■ Less controversy and criticism 5 Disadvantages: ■ Potential for increased cost Recommendation: The Council should consider this proposal, and if supportive, direct staff to further develop the concept and an action plan for implementation. Council Priority/Discussion: 6 Funding Needs General Fund Projections Issue Summary. Definition: Every year, prior to beginning its annual budget process, the City develops a five-year forecast of revenues and expenditures for all major City funds. For the past several years, the forecast has shown a declining General Fund ending fund balance. This trend is the result of limited revenue growth, increased costs, and greater demand for public services. In the FY 2004-09 forecast, the General Fund balance was projected to go negative in FY 2007-08. The preliminary forecast for FY 2005-10 has just been completed. It continues to show a downward trend in General Fund balances. The date of the potential deficit has been pushed out to FY 2008-09. The City has been working for a number of years to-address this downward trend in General Fund balances. Revenue Required/Revenue Potential: The FY 2005-10 preliminary forecast shows that the General Fund balance could go negative by as much as $1.5 million dollars in FY 2008-09. Under the Oregon Constitution and laws, governmental agencies are prohibited from deficit spending, so corrective action must be taken to limit expenditures or increase revenues. Work Completed to date: The City has been preparing a five-year financial forecast every year since the 1980s. The most recent forecast will be presented to Council at its Goal Setting Session on January 18, 2005. In 2003, the City Council adopted its first Strategic Finance Plan; which has guided City actions since that time. Implementation Action Required: Council direction. Timing: The updated Strategic Finance Plan will be presented to Council on January 18, 2005. Implementation of the Plan will occur over several years. Advantages: ■ The Finance Plan allows the City to forecast projected needs and to develop proactive strategies to guide its financial future. Disadvantages: ■ None 7 Recommendation: Review, modify and adopt the 2005 Strategic Finance Plan to provide guidance to staff on future financial issues. Present and discuss the Strategic Finance Plan with the City's Budget Committee as part of the FY 2005-06 Bud\get process. Council Priority/Discussion: 8 Funding Needs Increased Legal Costs and Annexation Issues Issue Summary Definition: Annexation concerns in Tigard have created significant public comment. In particular, the residents of unincorporated Bull Mountain opposed and through the ballot box, rejected annexation to Tigard. The need to address the annexation question will not fade away. The City is shifting to a parcel-by-parcel approach to annexation, based on property owner petition, non-remonstrance agreements, and traditional annexation methods. The City will need to do a significant amount of work in planning for these annexations, and will also need to revise and update intergovernmental agreements relating to urban services. This effort will require significant legal assistance. Tigard's legal service budget is already tight, due to day to day activities. In addition, the recent passage of Measure 37 created additional legal challenges with related costs. Revenue Required/Revenue Potential: To adequately provide legal representation at a variety of levels, approximately $50,000 is needed for 2005. The legal services funds could go to: ■ Working with Washington County's Council to review, and if necessary, prepare revisions to urban services agreements; ■ Prepare findings and assist with staff reports for annexation land use decisions; ■ Defend annexation land use decisions at LUBA and the Court of Appeals; ■ Review the status of consent agreements and non-remonstrance agreements as they are used by Tigard and Washington County, and prepare any necessary revisions; ■ Assess the legality of existing consent and non-remonstrance agreements which apply to the unincorporated.area, and determine the legality of transferring consent and non-remonstrance agreements from the County to City; ■ Defend challenges to Tiigard's urban service agreements with Washington County; ■ Defend Tigard's position that a public facilities strategy is not warranted in unincorporated Washington County. There are no revenues associated with this issue other than the General Fund dollars which'could come after annexation of properties. These revenues.would be collected well after the legal expenses are incurred. Work Completed to date: The City Attorney worked on the annexation plan and the decisions made by Council in 2004, regarding annexation. No work has begun to address the issues noted above. 9 Implementation Action Required: Council needs to hold a policy discussion about annexation and the courses of action available. Based on that, a strategy can be developed. Timing: Expenditure of funds related to annexation could begin as soon as an appeal is filed of any annexation decision. Advantages: ■ There is an advantage to a proactive approach, to update up the urban services agreement and process. Disadvantages: ■ To be in a response mode only, the City would be defending against challenges without solidifying the City's position. Recommendation: Discuss with Council a strategy for utilizing legal resources, to proactively defend our entity agreements with Washington County. Council Priority/Discussion: 10 Funding Needs Measure 37 Issue Summary Definition: The voters of the state adopted Ballot Measure 37 in the November 2004 .election. This measure added new sections to ORS Chapter 197, which provide that local governments may pay compensation to property owners for reductions in property values, or may waive restrictions as an alternative of payment resulting from land use regulations that restrict uses of the property. Some property owners may believe that existing or future land use regulations as applied to their property both restrict use of the property and reduce the fair market value of the property and consequently may bring claims under Measure 37. Ballot Measure 37 explicitly allows local governments to develop procedures for assessing claims made under Measure 37. Revenue Required/Revenue Potential: Unknown at this point. No funding source is provided to recover costs of processing Measure 37, claims, nor are there funds identifies to pay any settlement of claims. In adopting the ordinance to implement Measure 37 claims procedures, the Council has discussed the possibility of requiring a deposit against claims processing costs which could be refundable in whole or in part. Work Completed to date: Working in conjunction with the City Attorney's office, an ordinance has been drafted and adopted to address Measure 37 claims. The Tigard Municipal Code has been amended by repealing the existing Chapter 1.20 and replacing it with a new Chapter 1.20. Implementation Action Required: The Tigard Municipal Code has been amended by repealing the existing Chapter 1.20 and replacing it with a new Chapter 1.20. Staff is currently developing administrative procedures to accept and process claims. Once a . claim is filed, the City has 180 days to approve or deny the claim. If the claim is approved, the City may choose to compensate the property owner for lost value or may choose to waive the regulation in question. Timing: December 2, 2004. Advantages: ■ Property owners may request compensation for reductions in property values, or may waive restrictions as an alternative to payment resulting from land use regulations that restrict uses of the property. ■ Some property owners may believe that existing or future land use regulations as applied to their property both restrict use of the property and reduce the fair market value of the property and consequently may bring claims under Measure 37. 11 Disadvantages: ■ May create additional costs for the City in processing and paying claims without providing a source of funds. ■ May create land uses within zones that are inconsistent with existing regulations or land use patterns. ■ Measure 37 is an unfunded mandate. Recommendation: Monitor impacts from Measure 37 and report to State Legislature. Council Priority/Discussion: 12 Funding Needs Value-Added Enhancements Issue Summary Definition: At their planning session in October, the City Council expressed interest in taking a "value-added" approach to City services. Under this approach, the City would look for the "little bit extra" that can be done to make City services. and projects better and that which help to create more livable and user-friendly community. Some value- added can be done at minimal cost simply by re-directing staff efforts. Some will require more attention and in some cases can add costs to projects and services. The Executive Staff has brain-stormed a list of ideas, which is attached to this issue paper. Those that can be done at no cost or minimal cost will be done. Those that will require additional resources to accomplish will be discussed as part of the FY 2005-06 Budget process. Revenue Required/Revenue Potential: To be determined. Work Completed to date: A brain-storm list of ideas has been developed. Implementation Action Required: Some items on the list can be implemented by staff with no further direction. Other items may require additional resources, changes in procedures, or negotiation with outside parties. Timing: Value-added ideas can be implemented immediately. Advantages: ■ Implements a stronger customer service and community livability approach to. City services. ■ Improves the character and quality of the community. ■ Improves citizen perception of Tigard as a place to live, work, and play. ■ Addresses some long-standing citizen issues. ■ May spur corresponding value-added approaches by citizens and businesses in maintenance of their own property and provision of their own services. Disadvantages: ■ In some cases, will add to the cost of City services and projects. ■ . May garner some citizen criticism for focusing on "nice-to-have" items rather than on "essentials." ■ May increase expectations of service levels, which could lead to additional requests for service. 13 Recommendation: Review the attached Value-Added Brain-Storm list to identify items to be implemented immediately. Council Priority/Discussion: 14 Funding Needs Comprehensive Plan Update Issue Summary Definition: Tigard's Comprehensive Plan was first drafted in 1982, with periodic revisions to specific chapters to maintain consistency with Statewide Planning Goals. The Comprehensive Plan is the community's plan: it allows citizens of Tigard to make choices on how land development and redevelopment should occur, and how it will be managed. From 1982, when the Plan was first created, to 2003, Tigard's population grew from 17,700 to 44,000. In the last several years, the City has been engaged in several major planning projects, ranging from the Washington Square Regional Center Implementation-Program, Transportation System Plan, natural resource and green spaces/natural resource management, Bull Mountain annexation, commuter rail/downtown redevelopment, Hwy 217 corridor planning, UGB expansion, and affordable housing. With these long term planning projects and the changes in the community, there is a need to take a look at the overall growth management approach to reflect the community's goals in a broader. context. Revenue Required/Revenue Potential: Consultant costs - as much as $75,000 per year for up to three years. The extent of consultant use will be determined by the role staff plays in the program and the level of detail and citizen involvement directed by Council. Work Completed to date: Between December 2002 and April 2004, the Planning Commission held five work sessions on the Comprehensive Plan Update work program. During this time, the Planning Commission reviewed the main elements of the plan update. The meetings resulted in the Planning Commission's preliminary recommendations for the Comprehensive Plan Update work program. One of the key issues in undertaking the Comprehensive Plan update is the allocation of staff resources. The major effort that is currently underway is the Downtown Improvement Plan. The Downtown Improvement Plan must be completed by June 2005 to meet federal grant requirements. Implementation Action Required: Council adoption of.a Goal during 2005 to initiate updating the Comprehensive Plan over the next 2 - 3 years. Staff will work with consultants and citizen task forces to gather input and develop recommendations. Council will adopt a new Comprehensive plan following this process. Updating the Comprehensive Plan to address key policy issues and community involvement will take two to three years. Implementation of the updated Plan could take another year. Council will have to formally amend the Comprehensive Plan and adopt implementing ordinances. 15 Timing: Establish Task Force in the Spring of 2005 and initiate update to be completed by 2008. Advantages: ■ The Current Comprehensive Plan is out of date and needs to be updated. ■ Changing needs of the community can be reflected in the plan update. ■ The Plan update coincides with efforts by the Parks and Recreation Advisory Board and the Downtown Task Force efforts. ■ Infrastructure needs could be tied to bonds and urban renewal initiatives by the Parks and Recreation Advisory Board and the Downtown Task Force. ■ A Comprehensive Plan update can address Vision Task Force Goals. Disadvantages: ■ No funding source identified • Staff resources will. be limited to update. No other initiatives can be started while this project is underway. Recommendation: Council's goal setting session is scheduled for January. The Comprehensive Plan update is an important goal that should be considered during goal setting. Goal setting could be used to begin consideration of a series of questions related to the Plan update, including the study area for the update, who should lead the update, public participation, time and resources committed to the update. These issues can be further discussed with the Planning Commission in February. The work session with the Planning Commission is tentatively scheduled for February15, 2005. That will be the opportunity for Council and the Commission to finalize the approach for the update of the Comprehensive Plan. The purpose of this agenda item is to start the discussion on the approach and scope of the program. Council Priority/Discussion: 16 Funding Needs Library Operational Hours Issue Summary Definition: A basic measure of library services available to the public is the number of hours per week that a library is open. In FY 2001-02, the Tigard Library was open 69 hours per week. Since that time, funding for library operations from the Washington County Cooperative Library Service (WCCLS) has been steadily cut back. In addition, the Tigard community authorized the building of a substantially larger facility with accompanying increases in operational costs. At the time of the bond measure, there was much discussion as part of the campaign about the need to authorize a countywide local option levy to help cover the increased operating costs of the new building. Voters have twice failed to pass a WCCLS local option property tax levy. City funding for the library has increased, but not enough to maintain the historical level of open hours. Thanks to temporary funding made available by Curtis Tigard and his late sister, Grace T. Houghton, the library has been open 54 hours per week during its first three months of operation. The 54 open hours have been maintained longer than anticipated due to savings from vacant positions, but hours will need to be reduced by the end of December. Once this temporary funding has been expended, it will either be necessary to find additional funding or to reduce library open hours below the current 54 hour level. Revenue Required/Revenue Potential: The additional revenue required to maintain the 54 open hours for the remainder of the fiscal year would be approximately $52,000. The revenue required over the next five fiscal years would be approximately $105,000 per year (in 2004 dollars) more than the base budget. Work Completed to date: A countywide levy for library operational funding was placed before the voters in November 2002 and again in May 2004. Each time the levy was unsuccessful. In addition, staff has worked very hard with WCCLS member libraries to review and modify the formula used by WCCLS to distribute funds to members. Some changes were made, but not to the full extent advocated by Tigard. Currently, the Library Board is examining the open hours question. At the October 12, 2004 City Council meeting, the Library Board discussed with the Council the dilemma/challenges facing the library in terms of operational hours. The Library Board will meet again with Council in January 2005 to further discuss available options. Implementation Action Required: Both short-term and long-term resolutions to open hours questions need to be explored. The long-term resolution to this issue is a stable funding source, for example, a local option levy for the City of Tigard or a local option WCCLS levy. 17 Timing: Temporary funding for the current 54 open hour level will shortly be expended. Without increased funding to maintain the current hours, open hours will need to be reduced in January. Advantages: ■ Increases access to programs, books, resources and other library services. • Introduces more people to services of new library, thereby increasing library use. ■ Promotes goodwill in the community. ■ Provides a gathering place and destination point for residents of all ages. Disadvantages: ■ Competition with other General Fund needs ■ Confusion for the public regarding the resources used to maintain open hours vs. funding used to build the new building ■ The number of open hours is part of the formula used to distribute WCCLS funding. A further reduction of open hours could reduce future WCCLS funding for the City of Tigard. Recommendation: ■ Provide additional funding to the library in order to maintain 54 open hours to the public for the remainder of FY 2004-05. ■ Develop additional revenue support to restore Sunday open hours in FY 2005- 06. ■ Develop a method to incrementally restore library open hours to the historical level of 69 hours. ■ Continue to explore a future local option levy for the City of Tigard. ■ Strongly support a future WCCLS levy. Council Priority/Discussion: 18 Funding Needs Enhanced Neighborhood Program/Community Assessment Program Issue Summary Definition: The City Council has expressed an interest in expanding the Community . Connector/Community Assessment Program (CAP) to create a neighborhood-based program that will give citizens and business owners opportunities to work as partners with the City to enhance the community's quality of life. The program would be designed to facilitate citizen involvement in the Community Emergency Response Team (CERT) program, Neighborhood Watch, land use and development issues, the Capital Improvement Program, neighborhood beautification, traffic and pedestrian safety and other activities. Revenue Required/Revenue Potential: To be determined. Revenue required for this program will cover staff costs for developing and implementing the program structure and for neighborhood grants - should Council choose to authorize grant opportunities. The program activities (CERT, Neighborhood Watch, land use neighborhood meetings, etc.) are already incorporated into various department work programs and should not necessitate much in additional funds. There are no revenue sources identified for this program although the availability of grant funds will be explored. Work Completed to date: The City Council discussed the concept at the October 19, 2004 workshop meeting and agreed that staff should work with the Committee for Citizen Involvement (CCI) to develop the concept further. The CCI has discussed the concept at three meetings and the members are enthusiastic about moving forward. The CCI is gathering input from the community about how to define the neighborhood areas and how the program might be structured. Implementation Action Required: The CCI will review the input from a December 7, .2004 community meeting and develop a recommendation for Council consideration in April 2005. Timing: Moving forward in the development and implementation of the program in winter and early spring will facilitate inclusion of any program costs in the FY 2005-06 budget. Advantages: ■ Provide an organized way for citizens to get more involved in existing programs. ■ Identify new ways for citizens to participate as partners with the City. ■ Enhance the community quality of life. 19 Disadvantages: ■ No stable revenue source identified for any costs that may be associated with the program. Recommendation: Proceed with the development of the program and recommendation to Council on an implementation.plan. Council Priority/Discussion: 20. ~v s rb Funding Needs Enhanced Training Issue Summary Definition: Since FY1999-2000, the approximate total funds allocated citywide for the education and training of all City employees has decreased 28%. During this same time period, the total number of City of Tigard employees has increased by 5% (2.2% within the General Fund). The current funding is inadequate to provide specialized and professional development training and education of a caliber needed to maintain quality service delivery, improve efficiencies, incorporate innovation, maintain competencies, and retain high quality employees. The American Society of Training and Development reports that organizations with above average training and development budgets outperform competitors and achieve a higher total shareholder return. Revenue Required/Revenue Potential: To be determined. Work Completed to date: Departments prepare Training Plans annually at the same time they develop their budget requests. These plans, however, reflect the recent levels of funding rather than actual needs. Implementation Action Required: ■ Discussion by the Budget Committee during consideration of the FY 2005-06 Budget. ■ Development of departmental Training Plans that reflect actual needs as well as anticipated funding levels ■ Development of departmental training budgets that enhance training opportunities. ■ Development of a coordinated approach to assure best use of training dollars. Timing: This issue could be addressed as early as FY 2005 06 or at such other time as determined by the Budget Committee. During 2005, City Administration will work with all departments to formulate a philosophy of planning for, using, and reporting on the use of training dollars. Advantages: ■ Enhanced job skills and knowledge, better job performance ■ Improved team and organizational performance ■ Addresses retraining and retooling needs ■ Improved morale ■ Better trained staff reduce errors and misjudgments that can lead to litigation and dissatisfied customers ■ Improved service delivery ■ Increased efficiencies through better trained staff 21 ■ Ability of the City to attract higher quality candidates for employment ■ Greater opportunities for internal staff to prepare for promotional opportunities ■ Support of the City's Succession Planning efforts to prepare internal candidates for future leadership roles Disadvantages: ■ Positive results not sufficiently quantifiable or measurable for some ■ Training viewed as "extra" or "luxury" expenditures ■ Citizens are more critical of most public sector expenditure related to staffing and training. Recommendation: Adequate funding for staff training should be restored based on department needs, justification, and relevance of the enhanced training/education to improved services, efficiency, job performance, and professional development. Departments should prepare training proposals aimed at creating a smarter workforce by improving job knowledge/skills and work performance, increasing service delivery and operational efficiencies, and enhancing career development where appropriate. Council Priority/Discussion: 2 2 Funding Needs MSTIP Needs Issue Summary Definition: The County Mayor Streets Transportation Improvement Program (MSTIP) has been highly successful since its inception. MSTIP 3 projects are almost all initiated or completed, MSTIP 3b (the interim program) is already underway, and the MSTIP Transportation Capital Program (using the permanent portion of the serial levy for MSTIP) covering the six-year period from 2007 through 2012 is in the initial stages of being developed. The transportation-related needs countywide far outstrip the funding sources available through the existing MSTIP program. A new program (most likely called. MSTIP 4) will be needed to address some of the high-priority projects in both the County and the cities and continue the success of the program for the next decade. That program will have to be submitted to the voters for approval. Revenue Required/Revenue Potential: The City of Tigard would most likely receive a proportionate share of a future MSTIP 4. The MSTIP program has traditionally looked at geographic equity as one of the goals in the distribution of funding. The program typically focuses on collectors and arterials identified in the County Transportation Plan and does not normally include state facilities. There have been exceptions, with the Hall Boulevard/99W intersection improvement project being the prime example. Based on MSTIP 3, Tigard can expect several projects within the City to be included with an aggregate amount of $10 to $20 million. Work Completed to date: The Washington County Board of Commissioners has begun a public outreach effort to make known the multitude of transportation-related needs countywide. This includes major transportation projects in the cities and within the unincorporated County. The goal of this public outreach is to determine what, if anything, the residents of the County are willing to pay to implement some of these highly important projects. The Transportation Capital Program will provide from $3 to $5 million dollars to fund a project within the City jurisdiction. The effort to see what the voters would desire to fund beyond that should be in full swing by mid-year 2005. Implementation Action Required: An MSTIP 4 would require a countywide vote for implementation. A ballot measure could come at any May or November election, but has the best chance for passage in a general election (November of an even numbered year) where the double majority requirement is not in effect. Timing: An MSTIP 4 measure would most likely go before the voters in 2006 at the earliest. The next option would most likely be 2008. 23 Advantages: ■ A new MSTIP 4 program to address major projects countywide would continue the success of the MSTIP program and allow the County and the cities in the County to move forward with significant improvements to the countywide system. ■ The City of Tigard can implement some high-priority projects through this program. Projects within the City could improve intra-city circulation and provide facilities to accommodate alternate modes of transportation. Disadvantages: ■ The voters have indicated that they have limitations on what they can afford, regardless of the existing needs. The MSTIP program may face the same challenges faced by bond measures in any election year. ■ Funding through MSTIP for countywide. projects may contribute to the perception that the County is meeting its needs through its own resources and does not need additional help. Funding through the. state or federal government may be diverted to other counties because of that perception. Recommendation: The City should participate actively in the County's public outreach process and remain engaged through the formulation of a future MSTIP 4. The City should also be, prepared to submit projects for consideration that enhance intra-city circulation and are clearly identified as having a high priority with the voters in the City. Council Priority/Discussion: 24 Funding Needs Parks & Open Space Acquisition Issue Summary Definition: The City can issue bonds to finance Parks and Open Spaces purchases. General Obligation bonds require a citywide vote to authorize a special debt service property tax levy. The City could also issue other types of bonds, which do not require voter approval, but would have to identify a source of revenue to be pledged to annual debt service payments. The City currently does not have such a source of revenue. In 1999, the City adopted a 10-year Park System Master Plan. This Park System Master Plan was the result of a comprehensive, collaborative effort between the citizens of Tigard, Tigard staff, and consultants. Tigard's Park System Master Plan is a comprehensive needs assessment and long range plan for meeting the community's parks and recreation needs over a ten-year period. The Plan identifies many projects totaling over $21,000,000. The Plan examines the impacts of the community's growing demand for services, the effects of related planning efforts, the implications of . demographic changes, and the contributions made by the park system in providing relief from high density urban development. Further, the Plan sets forth a Capital Improvement Program (CIP) which functions as a framework plan or tentative list of projects for a ten-year period. The CIP is reviewed and updated annually to reflect the changing needs of the community and changes in available funding for financing park capital projects. Decisions regarding the actual expenditure of funds for individual park capital projects are incorporated into the City's annual budget process. In 2004, the City's Parks and Recreation Advisory Board (PRAB) conducted a survey to gauge public interest and willingness to financially support a range of parks and recreation issues. Currently there is support for both additional parks land, as well as additional open space acquisitions. Acquiring additional open space land ranked the most popular project in the survey with 49% of the respondents stating they. would financially support it. The current, proposed 5-year parks CIP (FY 05-06 - FY 09-10) totals $4,235,929. Currently, there are limited funds available for non-SDC eligible projects. Also, there are times when the combination of SDC funds and grant funds do not entirely fund a project. In these cases, projects may not be able to be accomplished because of the limited non-SDC funds. Approximately $400,000 in non-SDC eligible projects is currently unfunded unless the City appropriates General Fund revenue to these projects (Northview Park, Jack Park, Summerlake Park, Englewood Park, and Fanno Creek Park). Revenue Required/Revenue Potential: The revenue required to accomplish the open space and greenway purchases identified for the next 5-years (FY 0405 thru FY 08-09) 25 is approximately $6.1 million. SDC generated revenue, based on recent changes to the SDC rates are anticipated to be $7.9 million over the same five year period. The new Parks SDC methodology adopts a ratio of 41 % SDC and 59% non-SDC revenue for purchase of open space and greenway properties. Thus the non-SDC component, if met by a potential bond sale, would need to be $3.59 million to accomplish the five year plan. A general obligation bond sale of $4 million financed over 10 years would require a property tax levy of approximately $0.13 per $1,000 of assessed valuation to pay annual debt service. Work Completed to date: The PRAB has conducted the survey, and discussed implementation plans. It is anticipated that the PRAB will return to the Council with an action plan including this issue early in 2005. In addition a group a citizens has approached Council and suggested this issue be put on the ballot. Implementation Action Required: A general obligation bond measure must be approved by Council and placed on the ballot for approval by Tigard residents. Timing: To be determined Advantages: ■ A bond measure would provide the funds necessary to supplement SDC . funds for the acquisition and development of parks and open spaces ■ Easily understandable (known funding source, familiar to voters) ■ A bond measure would provide the funds necessary to pay for those projects which are non-SDC eligible. Disadvantages: ■ Tigard residents have been asked to increase taxes on several occasions over the past several years. Specifically, the successful passage of the new Library Bond and the School District Bond. ■ Although additional bond funds would be advantageous, the projections show limited funding for parks operations and maintenance. The City may not be able to adequately maintain new facilities. Recommendation: Accept the recommendations of the PRAB, due in early 2005. It is anticipated that this recommendation will suggest a bond sale for land acquisition. Open space purchases can be made with minor impacts to the operating budget, whereas park development costs and subsequent additional operational costs will impact the. annual budget. Council Priority/Discussion: 26 Funding Needs Public Facilities: Public Works, Records, Police Issue Summary Definition: The City owns and operates several buildings, including City Hall, the Permit Center, the Police Department, the Library, the Niche, the Senior Center, the Public Works Administration Building and annex, and Canterbury Water facility. In addition, the City operates the Water Building, which is owned by the Tigard Water District. The City does not have a dedicated source of funding to provide for the maintenance, repair or expansion of these facilities. The City has traditionally set aside General Funds in anticipation of future building needs. The City has recently addressed capital needs of the Library and City operations in City Hall and the Permit Center. It is prudent, however, to start building renewal and replacement reserves for these facilities. In addition, the City may have an opportunity through the remodel of the current Public Works Building after Public Works moves to the Water Building to address records and police evidence storage needs through the use of this building. Finally, there will be a need within the next five to ten years to address space and facility needs of the Police Department (last addressed in 1999.) Revenue Required/Revenue Potential: Projects identified to date include: • FY05-06 Projects o Water Building Renovations - $800,000 o PD Underground Storage Tank Upgrade - $20,000 o Police & records Storage Remodel - $149,425 o Senior Center Seismic Upgrade Design - $20,000 • FY06-07 Projects o Miscellaneous City Facility Projects - $200,000 • FY 07-08 Projects o Miscellaneous City Facility Projects - $200,000 o Senior Center Remodel - $950,000 o Senior Center Seismic Upgrade - $100,000 o RFID Technology (Library) - $750,000 • FY 08-09 Projects o Miscellaneous City Facility Projects - $200,000 o Demolition of Surplus PW Facilities - $200,000 • FY 09-10 Projects o None listed at this time 27 In addition to identified projects, there is a need for contingency funds for needs that may arise during the planning period. General use facilities and facilities used by General Fund departments (City Hall, Police Department, Permit Center, and Library) are generally supported by General Fund transfers to the Facility Fund. The major exception to this rule is for new construction of major facilities such as the Library. Where appropriate, the City transfers money from enterprise funds or dedicated sources (such as Water, Sanitary Sewer, Buildings) to pay for space needs of staff supporting those operations. Work Completed to date: A seismic study of city facilities was performed in 2000 to identify the seismic upgrade needs of City facilities. A consultant is currently identifying current. and future space needs for the Public Works Department. This work. will result in recommending and designing needed improvements to the Water Building and assessing the need for future uses of the Ash St. sites currently used by Public Works. Implementation Action Required: Projects will be identified and approved in the City's Capital Improvement Plan. Annual funding is provided through approval of the City Budget. Timing: It is anticipated that the projects identified will be implemented according to the budget approval of the fiscal years indicated if necessary funding is available. Advantages- a Provides for greater security of facilities ■ Meets the long term growth needs of the City ■ Provides for a safe and effective work environment for staff and the public • Improved use of facilities to provide better customer service ■ Provides for more meeting rooms for public use Disadvantages: ■ No dedicated funding source. Capital funding need must compete with operating funding needs. ■ Delaying projects would result in increased cost of projects and increased safety and or security risks Recommendation: ■ Develop a capital plan for all City facilities, including identifying renewal and replacement and upgrade needs. ■ Develop policies and a plan for funding renewal and replacement needs during the annual budget process. This may include specific identification of a reserve amounts within the Facility Fund for specific City facilities. • Present recommendations to the Budget Committee and the City Council for their review and approval. Council Priority/Discussion: 28 Funding Needs ROW (Rights-of-Way) Maintenance Needs Issue Summary Definition: Rights-of-way (ROW) maintenance includes landscape and general maintenance activities for those areas between the pavement or sidewalk areas (where they exist) and the street rights-of-way line. Current City ordinances place the responsibility for this maintenance on the adjacent property owner. The City Council has been approached by several property owners over the last few years requesting that the city adopt maintenance responsibility for certain rights-of-way. This is typically on arterials or collectors where the homes have frontage on an interior street system, but back up to a major street with a wall blocking access to the strip of land needing maintenance. Durham Road is a prime example of this dilemma. The discussion is currently focused on the City assuming responsibility of ROW maintenance on such arterials and collectors. Revenue Required/Revenue Potential: Depending on the level of service adopted, costs could range from $25,000 to $450,000 annually. Work Completed to date: The City Council has directed staff to provide a proposal to enhance the current level of service in the FY 05-06 budget process. The Transportation Financing Strategies Task Force has the added mission of evaluating potential new funding sources that could be established to provide a stable source of funding for ROW Maintenance. The Task Force will be meeting with City Council in early 2005 to receive direction in this regard. Implementation Action Required: Action on this item will be through the annual budget adoption process. The establishment of new funding sources for this effort would greatly enhance its adoption into the City's annual budget. Timing: Initial action on this item will be during the FY 05-06 budget adoption process. Advantages: ■ Beautify the city and entry points; ■ Removes unsightly areas; Property owners would be happy. Disadvantages: ■ Cost: spends already limited maintenance dollars on an aesthetic issue; ■ Potential for conflict - some property owners fulfilling their responsibility and others not. 29 Recommendation: Council should continue to study this issue through the FY 05-06 budget adoption process. Council Priority/Discussion: a 30 Funding Needs Water Supply Source Issue Summary Definition: Tigard's Vision document and Council Goals both identify securing a long term water supply as an essential objective of the City. In the 2004 Vision update process, this goal has been refined to include two additional directions, one being to accomplish this goal by 2007 and secondly, to secure an equity position in a source. Tigard is currently participating in three efforts to secure its long term water supply: securing a new long term contract to purchase water from the City of Portland, joining the Joint Water Commission (JWC) and expanding the Scoggins Dam / Henry Hagg Lake complex, and continued study of the Willamette Treatment plant. The Portland option, which would be a long term water sales contract, will not satisfy the Vision goal of obtaining an equity position in a water supply. The City of Portland is only interested in a long term water sales agreement, not in sharing equity in the source. A draft contract will be available for review in early 2005. This alternative will not provide substantial savings to water costs for Tigard citizens. The JWC proposal hinges on the ability to secure permits and approvals to modify Scoggins Dam. The JWC proposal would cost the City of Tigard between $91 and $93 million dollars over the next 40 years. The Willamette option includes continued monitoring of the technical performance of the treatment plant located in Wilsonville. In addition, this option will include the decision to request voter approval to pursue this source. Current economic analysis continues to suggest that the Willamette option is the least costly alternative for the citizens of Tigard. Only two of these projects are consistent with and addressed specifically in the City's visioning documents. Revenue Required/Revenue Potential: Tigard could be faced with making financial commitments with costs that best current estimates average to be approximately $80 to $90 million dollars over the next 20 to 40 years. To help put these numbers in perspective, a $5 dollar per month increase in each monthly water bill in the Tigard Water Service area would raise approximately $1 million dollars annually. Work Completed to date: Staff has been involved in a joint contract negotiation effort with Portland and eight other wholesale customers over the last year. This contract will be available for public review early in 2005. 31 In 2004, the City of Tigard has also become a member of the Joint Water Commission, which will provide the City with the ability to pursue equity ownership in future capacity improvement projects the JWC undertakes. Staff continues to monitor the performance of the Willamette treatment plant, as well as participate in the efforts of the Willamette River Water Coalilition, (WRWC), an' organization to which Tigard belongs. The WRWC is currently undertaking a public education project'targeting member populations about current information relating to water quality issues affecting the Willamette. Implementation Action Required: The Intergovernmental Water Board will initially produce a recommendation to the City Council. Following that, the City Council will need to indicate its approval. If the City elects to sign a long term supply contract with Portland, the cost of this decision will be bome completely by water rate payers. If the City decides to pursue the JWC or Willamette options, a substantial portion of the capital costs can be assigned to SDC revenues. This will allow for lower water bills. In both of these scenarios, capital costs would be financed by revenue bonds. Council would approve issuance of the Water Revenue Bonds by resolution. Timing: The City will be able to begin the review of the potential Portland contract early in 2005. The City's current contract with Portland expires in 2007. Neighboring cities and water districts are also discussing the possibility of a vote on the Willamette issue. This vote could happen as soon as November, 2005. Decisions to commit major capital in the JWC will need to be made in 2006. Advantages: The advantages of securing a permanent supply source are many: control, financial stability, adequate future supply, and quality control top the list. Disadvantages: Cost. Because the Tigard Water Service Area is so.late in securing its source the costs are high, and Tigard will not have the benefit of time to spread costs over a long period. Recommendation: Staff should continue to update Council on options and costs, with a future recommendation to authorize issuance of one or more water revenue bond to purchase some portion of future supply as options finalize. Council Priority/Discussion: 32 Funding Needs Centralizing City Information Issue Summary Definition: The City, like many organizations, maintains a variety of computer systems that rely on a 'variety of databases. The primary computer systems are Hanson (public works information and data), Tidemark (planning and engineering information and data), and Springbrook (finance and utility billing information and data). In addition to the "big three" systems, the City also has a variety of smaller systems such as FullCourt (municipal court information and data) and in-house databases. Most, if not all, of these systems require overlapping data and yet they do not talk to one another and data cannot be shared or easily transferred. Organizations have discovered that organization-wide single-provider systems, systems that can access unified databases, or systems that can share separate databases provide greater organizational efficiency, reduce duplication of data and effort, and increase data accuracy. All of these benefits also reduce costs or limit future cost increases. The City has been considering different options for improved management of its databases and computer systems. At this time, the City is considering retaining existing computer systems, but modifying and standardizing aspects of those systems to facilitate sharing of information. The first phase of this project would require hiring a consulting team to interview staff, analyze the current system, analyze future information needs of the City, and develop an implementation plan and cost for the project. Revenue Required/Revenue Potential: Full implementation of a sharing protocol could cost as much as $500,000 to $1,000,000. Work Completed to date: The City has discussed this project internally and with the City's Budget Committee in FY 2004-05. The City has also been making annual contributions to a Computer Systems reserve in the Central Services Fund since 2000. By the end of FY 2004-05 (assuming no budgetary transfers) this reserve will hold $900,000. Implementation Action Required: Hire a consultant to begin phase one of this project to define City needs and options and to develop final recommendations for improved database management. Timing: The planning phase should start in FY 2005-06. It would be a three to four year project. Funding will be the major factor on the timing of completing this project. 33 Advantages: One centralized and standardized location of city information for unified access by staff and citizens. ■ All current city system would stay in place and continue to serve each department as it has in the past. ■ Any. new system would easily integrate into the centralized collection point. ■ Having information in one location would enable staff and citizens to combine and analyze all information in an easy to use format. Disadvantages: ■ Implementation cost would be high., but once implemented on-going cost would be minimal. Recommendation: Fund money for the first phase of this project. Council Priority/Discussion: 34 Funding Needs Economic Development Issue Summary Definition: The economy in Oregon has been a major focus of concern over the last few years. Several cities in the Portland Metropolitan area have economic development programs, and some of those cities have had notable successes in attracting businesses. The City's Visioning program has identified the need for an economic development program. The Downtown Task Force has also targeted economic development as being essential to the success of the downtown. Economic development programs in cities can take a variety of forms. A common form is urban renewal. This report contains a separate issue paper on urban renewal. Other forms of economic development activity include economic improvement districts, business recruiting, business assistance, tax abatements, and various other incentive programs. The City of Tigard is currently researching possible use of urban renewal in the downtown area and/or Washington Square. Washington County is considering formation of an urban renewal district along the commuter rail line. Three years ago, Tigard and downtown business interests attempted to form an Economic Improvement District/Business Improvement District in the downtown area. That effort failed due to insufficient support by downtown property owners. Revenue Required/Revenue Potential: Unknown. Until a specific economic development program is identified it is not possible to determine potential costs or funding sources. Work Completed to Date: The City has joined the Regional Partners for Economic .Development and the Westside Economic Alliance. The Visioning Task Force has identified the need for establishing an economic development program as part of its 2004 update. The Downtown Task Force has identified the need for an economic development program for the downtown. Council has received updates from the regional Partners for Economic Development. Implementation Action Required: Council discussion and direction on the preferred form of an economic development program. Timing: To be determined. 35 Advantages: ■ Improved business climate in Tigard. ■ Greater employment opportunities in Tigard. ■ Increased business development which adds to the City's assessed valuation and property tax revenues. ■ To the extent that economic development brings new businesses to Tigard, this may create opportunities to address redevelopment and infrastructure needs in specific areas. Disadvantages: Economic development growth, if not handled properly, could lead to increased population growth that worsens congestion and aggravates citizens' concerns over density and traffic.- Recommendation: ■ Schedule a discussion at a Council workshop'to discuss the pros and cons of economic development programs and the form(s) of efforts that work best for Tigard. ■ Work with business and commercial/industrial property owners in the City to assess the level of interest in' and support for a City economic development program. Council Priority/Discussion: 36 Funding Needs Urban Growth Boundary Issue Summary Definition: Metro expanded the Urban Growth Boundary west of Tigard by adding planning areas 63 & 64.. Since these two areas are adjacent to Tigard's Urban Services area on Bull Mountain, Tigard has been identified as being the logical provider of urban services for these two areas. Prior to completing the Urban Growth Boundary expansion to bring these two areas inside the boundary, it is necessary to develop concept plans for the two areas. Concept plans must address the statewide planning goals and guidelines as well as Metro's Functional Plan criteria. The concept plans could be developed by Washington County because these areas lie within the unincorporated area, or they could be developed by Tigard as the logical provider of urban services. Concept planning.is a time-consuming and expensive process. Regardless of which jurisdiction is determined to develop the plans, a major issue will be how to pay the costs of the plan development. Costs could either be paid out of general revenues of the jurisdiction, fees could be developed and charged to land-owners and developers, or a reimbursement district in some form could be developed to assess property owners. It is not yet know how long it would take to develop the concept plans Revenue Required/Revenue Potential: $250,000 - $400,000 Work Completed to Date: Council has discussed preliminary approach to addressing planning and urbanization needs. Implementation Action Required: The City and the County need to meet to determine which jurisdiction will be responsible for development of the concept plans. Once that is determined, the City and County will need to develop an Intergovernmental Agreement to guide the development of the plans. Ultimately, the City and County will need to amend the Urban Services Agreement between the City and the County to formally designate Tigard as the ultimate service provider for these areas. Once the responsibility for the development of the concept plan is assigned, the two jurisdictions will need to agree on a way to pay the costs of plan development. Is a fee-based approach is chosen, Washington County will need to adopt the fee because the area is outside the City limits. Timing: To be determined. If the City is designated as the lead planning agency it will be necessary to determine the best project approach. The City is planning to update its Comprehensive Plan. If this update were to include an update of the Comprehensive 37 Plan for Bull Mountain, it would be most effective to include the development of these concept plans into the larger project. It is not yet known, however, whether the City's Comprehensive Plan update project will include unincorporated Bull Mountain. Advantages: ■ The City is the logical long term service provider to these areas. ■ The City would be able to shape the future growth of these areas in a manner that serves not only the planning areas but the larger community as well. ■ Effort could be cost-neutral if the proper funding mechanism is chosen. Disadvantages: Will require extensive staff resources to complete. ■ Annexation will ultimately be required to serve the area. ■ Could lead to illogical City limits boundary until remainder of Bull Mountain annexed. Recommendation: Initiate discussions with the Washington County Board of Commissioners on the best approach to address the future urbanization of these two areas. Council Priority/Discussion: 38 Funding Needs New Police Facility Issue Summary Definition: If growth in Police staffing trends continues over the next several years, the City will have a need to.build a new or expanded Police facility. The current Police facility was expanded in 1999, adding 3,000 square feet of space. At that time, the expanded facility was projected to be sufficient for police Department needs until 2007 to 2009. Since FY 1999-00, the City has added four positions to the Police Department. The Department recently moved its traffic unit and community service officers into one of the modular buildings behind City Hall to create more work space within its main offices. In addition, the department rents_three off-site storage units for records and evidence storage. In the current financial forecast, the department is projecting the need for 18 to 24 new positions by 2010. The Department currently has 76 authorized positions. If projections are accurate, by 2010, the department will have 94 to 100 authorized positions. The City is also developing a Downtown Plan at this time. This Plan will lay out a vision for the redevelopment of the downtown area of Tigard. This Plan may create an opportunity to explore the creation of a joint Police/Fire facility within the civic center portion of the redevelopment area. Such a combined facility would not only.create a substantial public investment within the redevelopment area, but it could also provide the opportunity for. greater cooperation and coordination between police and fire operations. If a new facility is built, police would vacate the space they currently occupy. It is not yet clear what uses might be made of this facility, though it is possible that the City will develop needs for additional office space in the future. Revenue Required/Revenue Potential: The cost of a new facility cannot be determined until the facility and possible location have been identified. Initial space planning could cost as much as $150,000 and would have to be paid out of the City's General Fund. Construction of a new facility would most likely be paid for by a General Obligation Bond authorized by voters. It might also be possible to use tax increment funding if an urban renewal area is created in the downtown area, but funding from this source would be limited in the early years of an urban renewal district. Work Completed to date: None on a new police facility. 39 The Downtown Plan is currently being developed. Implementation Action Required: Funds for a space and facility plan will need to be provided to develop a proposal that identifies costs and design. If the City chooses to seek General Obligation Bond approval from voters, Council would need to refer a measure for an election. Such a measure would be subject to the double-majority provisions of the Oregon Constitution. It may only be voted on at one of the following elections: 1. May, subject to double-majority requirement 2. November of an odd-numbered year, subject to double majority requirement 3. November of even numbered year, subject to simple majority. Timing: The department projects the need for a new facility soon after 2008. Advantages: • Provision of adequate work space for public safety personnel. • Reduction of funds currently spent on rental space. ■ Possible enhanced coordination between police and fire operations. Potential contribution to Downtown redevelopment efforts. Disadvantages: • Cost. ■ Need to ask voters for additional property tax revenues to support bonds. • Need to develop alternative use for existing police facility. Recommendation: Council should discuss this issue during consideration of the Five Year Capital Improvement Plan (CIP) and the.FY 2005-06 budget process. If there is interest in proceeding, staff should be directed to develop a more complete timeline, including a recommendation for start of a space and facility plan. Council Priority/Discussion: 40 Funding Needs Records Program Issue Summary Definition: The City's records management program supports City departments, compliance with public records law, and the Vision Task Force communication goal by providing easy and efficient access to city records. Public records include all print, electronic (including e-mail), audio (including voice mail), and video records. Under Oregon Law and Administrative Rules, all records are assigned retention periods. These periods range from zero time to permanent. Records staff work with departments to ensure that they comply with Public.Records laws, gather records for long-term storage, retrieve records from storage as needed, microfilm permanent records, and destroy records that have passed their assigned retention period. City records are stored at the Water Department's Canterbury Yard and rented storage space. The City pays $28,260 per year for rented storage space for general City and Police records. In addition to managing public records, Records Program staff also responds to requests from the public for City records. Often these requests include potential litigation. It is crucial that these requests be handled promptly and professionally. Finally, Records staff also engages a number of special projects throughout the year. Most importantly, Records staff needs to work with other City staff to train them on Public Records requirements and compliance with law and proper treatment of public records. Handling of electronic records in particular requires ongoing attention and training, due in part to the transitory nature of the media. Another special project that is currently underway is the building of a Measure 37 database of land use-related ordinances and resolutions from the incorporation of the City in 1961, and scanning these documents into a PDF format so that they are easily retrievable by staff and the public. This database will contain over 1,000 ordinances and resolutions. As City budgets have tightened over the past several years, Records program staffing has been reduced. The City Records Program is now operating at a minimal level. The City is rapidly approaching the point at which it will need to address storage needs because available space is filing up. Options include rental of additional storage space, conversion of an existing City building into a Records Center, and implementation of new records technology, such as optical scanning. Revenue Required/Revenue Potential: The additional costs associated with the records program include: 41 ■ Renovating the Public Works building for storage, approximately $150,000. (This estimate is based on the square footage costs of the remodeling of.City Hall. Actual costs could be higher if structural strengthening of the building is required, which is likely), ■ Adding .5 FTE, $26,650, and ■ Software upgrades $10,500. Work Completed to date: The building renovation and software upgrades have been included in the financial forecast. Additional consideration is being given to the timing of adding a .5 FTE to assist in the records program. Implementation Action Required: Approval of the building renovation and software upgrades through the budget process. Timing: Any items approved in the budget will be acted on after July 2005. ■ The building renovation priority and timing will be determined by the CIP process. ■ The Clerk's Index software installation could take place in the first quarter of the 2005-06 fiscal year. The upgrade to ImageFlow would be in 2008-09 fiscal year. Advantages: ■ By remodeling the Public Works operations facility, Police and City records will be able to store records and evidence in one location consequently reducing overall operating costs and working more efficiently. ■ The electronic document management system will increase the ease of searching for records and reduce retrieval times. The system is accessible for managing scanned images and electronic documents. ■ The .5 FTE will be assigned project work. Types of projects include: updating training on e-mail, computer use, and records policy; creating a catalog for the contents of financial reports; coordinating storage and cataloging of City photographs; and update the City's records manual. ■ Reduction of legal exposure resulting form the loss or unavailability of City records or the retention of Records beyond their expiration date. Disadvantages: ■ Limited availability of funding. Recommendation: ■ Approve capital funds for renovating the current Public Works operation's building to accommodate storage of City records and Police evidence in FY 2005-06. ■ Add staffing as funding allows. ■ Purchase Clerk's Index electronic document management system software module in FY 2005-06. ■ Purchase Clerk's Index Image Flow upgrade in FY 2008-09. Council Priority/Discussion: 42 Funding Needs Recreation Programs Issue Summary Definition: The City's Vision Document "Tigard Beyond Tomorrow", the Park and Recreation Advisory Board (PRAB), and the recently conducted Parks and Recreation Needs Assessment Survey results continue to stress the need for the City to provide recreation programs in Tigard. Provider options considered ranged from joining the Tualatin Hills Park and Recreation District, creating a city Recreation Division, or creating a new local park and recreation district to serve Tigard. The survey revealed that 57% of respondents favored creating a Recreation Division, and when asked a follow up question 48% were willing to pay for it. In addition, 52% of the respondents were willing to pay for the construction of a Community Recreation Center to provide additional recreational opportunities such as children's programs, classes, summer playground program, camps, special events, middle school programs, teen programs, performing arts, and adult programs such as sports leagues and classes. The PRAB's top priority is the creation of a City Recreation Division to offer recreation programs, and the construction of a Community Recreation Center. Revenue Required/Revenue Potential: Ultimately, an in-house program provided by the City of Tigard could cost upwards of $860,000 for personnel, materials and supplies, and capital outlay. The City could move towards a full program by adding services over time. Initial offerings may be eligible for grant funding. A Community Recreation Center could cost up to $6.75 million. Operating costs for a Center are unknown until a facility is designed. Work Completed to date: The PRAB has conducted a survey to assess the public's willingness to provide financial support for the provision of recreation programs. Approximately 57% of respondents favored the creation of a City Recreation Division, with 48% of the respondents further stating they were willing to pay for it. As an interim step Staff will propose granting small recreation grants in the upcoming FY 05-06 budget. Implementation Action Required: Council direction and Budget appropriation. Funding could come from the General Fund, the Council could place a measure before the voters to approve a local tax levy, or Council could place the establishment of a park and recreation district before voters. A bond measure would be necessary to construct a $6.75 million Community Recreation Center. 43 Timing: Timing is dependent upon Council direction and available funding. Advantages: ■ Delivery of a service being requested by the public and the PRAB. • More activities for local youth. ■ Greater community focus and identity. Disadvantages: ■ Additional cost to the General Fund. Recommendation: Approve the concept of funding limited recreational grants as an interim step and await the upcoming Park and Recreation Advisory Board's future recommendation on the provision of recreation programs in the City of Tigard. Council Priority/Discussion: 44 Funding Needs Senior Center CDBG Grant Match Issue Summary Definition: The Tigard Senior Center Building is owned by the City with the senior services (meals, classes, programs and activities) being provided by contract with Loaves and Fishes. The building was originally built with CDBG monies and upgraded once again through CDBG monies. The City provides ongoing building maintenance services, however, there is no dedicated funding source to enlarge the building and update the kitchen equipment to meet the growing service demands of today as well as the coming of age of the baby boomer population. Tigard currently has the highest population of 60+ and 75+ seniors of any area in the County. Nationwide we see a trend of life expectancy increasing from the average of 77 years of age in 2000 to 82 as the average age in 2050. Tiigard's population of 65 and older is over 10% today with the baby boomers making up another 22% of our population base. The need to expand and upgrade the building is here today and will grow exponentially'in the next ten years. Revenue Required/Revenue Potential: Based on the encouragement of City Council in November 2003 to prepare the building for the current and coming needs of the aging population in Tigard, Loaves and Fishes and the City approached the Community Development Block Grant program and applied for a $450,000 grant in 2004. This grant application was accepted and the City and Loaves and Fishes have five years to prepare the project plans and drawings and present these to CDBG for final approval. The CDBG funding program requires a full match from the jurisdiction obtaining the grant; thus the City with assistance from Loaves and Fishes must provide $450,000 in cash and in-kind services as a match. In addition, operating costs (electrical, gas, water, etc.) will increase, causing the need for a larger contribution of City resources. Work Completed to date: The City has successfully applied for CDBG funding and the project must be completed within the next five years (no later than FY 2008-09) or the grant approval will lapse. Loaves and Fishes have met with their Site Committee, an architect and the local Senior Center staff to begin providing general parameters for the project. The first priority,for the expansion is to provide meals and address social isolation for the community's seniors, both at the Center and in the home. The second priority is to continue the significant multi-cultural outreach to seniors and their families to create a sense of community and to teach English as a Second Language to enhance the quality of life for Tigard's growing multi-cultural population. Implementation Action Required: The City staff and Loaves and Fishes will: ■ Finalize space and equipment needs for the Senior Center; • Provide effective dialog opportunities with the community to garner input on the project priorities and outcomes; 45 ■ Develop project construction plans and specs that are adequate for both the City and Loaves and Fishes needs; ■ Obtain City. Council approval to submit the project plans to CDBG for funding; ■ Obtain City Council approval for budget funding of the grant match; and ■ Build the project. Timing: The CDBG grant must be applied for and the construction completed within the next five years. The plan is to apply for the final grant approval for the 07-08 fiscal year. Advantages: ■ Provides larger and updated meal and program space for Tigard's senior and multi-cultural services. ■ Maintains services which can be provided at the existing facility while the targeted population continues to grow. Provides meal processing which will remain safe and sanitary as the size of the service increases. Disadvantages: Delayed expansion will reduce the services provided to seniors and multi-cultural outreach in our community at a time when both of these populations are growing in Tigard. ■ No dedicated fund source. Recommendation: In order to provide services to meet the growing aging population needs, providing a match for CDBG funding appears to be the best option available with the City's funds being matched. Council PrioritylDiscussion: 46 Funding Needs Solid Waste Management/Recycling/Code Enforcement Issue Summary Definition: The City's Vision Task Force recently updated a goal in the area of growth and growth management. The updated goal states that "growth will be managed to protect the character and livability of established areas, protect the natural environment and provide open space throughout the community.". Solid waste management plays a critical role in not only maintaining the livability of City neighborhoods but protecting the natural environment as well. Making sure that our neighborhoods are free from debris and garbage generated from households and businesses is a very important part of this. In addition, increasing the recycling of materials from the waste stream is and will continue to be a critical part of protecting our natural environment and reaching this region's goal of 62% waste recovery by 2005. The level of effort that is currently possible is limited because of lack of resources and staffing. An expanded effort that would include greater visibility, program development, expanded efforts in local public education, and pilot projects that could enhance solid waste management and recycling throughout the City. The Solid Waste and Recycling program is currently the responsibility of the City's Financial Operations Manager who also has responsibility for the management of utility billing, payroll, general ledger, purchasing, budgeting, and financial forecasting. The City has a Code Enforcement Officer, but her time is committed to responding to citizen complaints and land use type of code enforcement issues and she does not currently deal with solid waste issues. Revenue Required/Revenue Potential: The franchise fee,on solid waste is currently at 3% of gross revenues. This generates approximately $234,000 to the City's General Fund or $78,000 for every 1 Many of the surrounding jurisdictions have a higher franchise fee assessed on solid waste and, in some cases, those additional revenues are dedicated to sustaining livability and solid waste management in their community. The City of Beaverton is an example where this has happened. An increase in the franchise fee to 5% would produce an additional $156,000 per year. Work Completed to date: None Implementation Action Required: Identification of additional resources needed to address solid waste enforcement needs, solid waste management and recycling needs and revise solid waste collection and disposal fees, if necessary, as part of the rate review process. Also, work with the two City franchised haulers on gaining their support for this effort. 47 Timing: Spring - Summer 2005 Advantages: ■ Enhanced neighborhood livability and code enforcement. ■ Improved recycling in Tigard. ■ Better management and stewardship of the area's natural environment. Disadvantages: ■ Raising the franchise fee could increase the amount charged by local haulers for the collection and disposal of solid waste. Recommendation: Consider increasing the franchise fee on solid waste with the increased revenue being dedicated to solid waste management, including recycling and code enforcement. Begin working with the City's two solid waste haulers for support and concurrence with this expanded program. Council Priority/Discussion: 48 Funding Needs Youth Programs Issue Summary Definition: Youth Forum - This group of adults representing the City, Tigard-Tualatin School District, Youth Service/Program providers, businesses, the faith community and Youth Advisory Council has been meeting since February 2004 to facilitate expanding programs and activities for youth in the community. Youth Advisory Council: This group of middle and high school students has been meeting bi-monthly since June 2003. Their mission is to "empower, involve and connect the lives of Tigard's youth." The City program is based on the Search Institute Assets concept. The Search Institute is an organization based in Minnesota which has developed a list of 40 assets necessary to the success of youth. In support'of the Search Institutes Assets, the Youth Council plans and coordinates a wide range of activities and events to involve Tigard's youth. In addition, they are charged with providing support to other youth activities such as the Skate Park Task Force, and serving as a communication connection for the youth in the community. Revenue Required/Revenue Potential: Currently a few hours of staff time each month is required for the Youth Forum to support the monthly meetings. Some staff support is also required to support the Youth Advisory Council meetings and chaperone activities/events. Staff time is currently incorporated into work assignments. The Federal Drug Free Communities Program offers a grant - $100,000 each year for 5 years - to support youth activities and programs that provide positive alternatives to drug and alcohol use. Tigard-Tualatin School District and City staff are working with the Youth Forum to apply for the grant in March 2005. If successful, the funds could be used in part to support the Youth Forum and Youth Advisory Council activities. Work Completed to date: Tigard Turns the Tide is an existing 501c3 non-profit that exists primarily to sponsor the Alcohol Free Grad Night Party. The Youth Forum group has been working with the Tigard Turns the Tide Board members to revise their bylaws to reflect a community partnership whose purpose would expand to provide positive programs and activities for youth. Implementation Action Required: Once the Tigard Turns the Tide Bylaws are .completed (scheduled for December), the Youth Forum and Tigard Turns the Tide groups will merge into one non-profit entity called Tigard Turns the Tide. That group will submit the request in March for the Drug Free Communities Grant. 49 Timing: If the grant request is awarded, funds will be available for the 2005-06 fiscal year. Advantages: ■ New source of funds for youth programs ■ Multi=year funding Disadvantages: ■ Short term. Only for five years although under the current program application could be made for the next 5 year cycle. Recommendation: Submit the request of the Drug Free Community Grant in March 2005. Council Priority/Discussion: 50 Funding Needs Employee Benefits.(Insurance) Issue Summary Definition: Over the last few years, no issue has polarized employers and employees more than health care. The City of Tigard has gone to arbitration twice in three years over the issues of health insurance. Rising costs have necessitated that the City require workers to shoulder an ever-escalating portion of the costs, as have most other agencies and businesses. A Kaiser Family Foundation survey shows that monthly premiums for employer-sponsored health insurance rose 13.9% over a recent twelve month period - the third consecutive year of double digit increases and the highest premium spike since 1990. The City is committed to offering high quality health care, and has also implemented plan changes, increased deductibles and co-payments, and offered health screenings to address issues. It is a problem that isn't going to.disappear anytime soon, and the City needs to adequately fund health insurance while at the same time continue to explore cost efficiencies. Revenue Required/Revenue Potential: The City experienced a 16% increase this last plan year to its glue Cross Blue Shield coverage and a 11 % increase for Kaiser insurance. It is anticipated that double digit increases are here to stay for the long term, and the next plan year may see national trends of 20-23% adjustments. Budgeting should take this into account. Work Completed to date: The City has worked extensively with its Health Plan Committee. to review and assess options relative to health insurance for its workers. Human Resources has brought in experts in the health insurance field for consultation, worked with regional human resource representatives, and expended a growing amount of staff time and resources with the City's insurance representatives (CCIS) to insure that the most cost effective options are utilized. Implementation Action Required: Impact or interest based bargaining will be necessary in some cases with existing labor units depending on next plan year increases, and Council action will be needed to set the terms for non-represented personnel. Timing: New rates for the City of Tigard for the plan year starting August 2005 will not be known until April/May of 2005. If rates exceed re-opener clauses in existing labor contracts, negotiations will begin at that time. 51 Advantages: ■ Adequate funding for health insurance will enable the City to maintain a competitive, equitable position as it relates to health benefits in 2005-2006 ■ Better opportunities to attract and retain staff ■ More positive level of morale ■ Competitiveness with other public sector employers ■ Funding meets requirements of labor contracts as specified by contribution agreements. Disadvantages: ■ If there is inadequate funding and premiums become too high for workers to bear, some employee$ may drop out of insurance coverage altogether. When healthy employees drop out, the resulting adverse selection (leaving employees with greater health issues) brings even higher premiums. Employees without health insurance can face financial ruin, resulting in even more sicker employees working for the City. ■ Inadequate funding will bring additional labor strife, decreased morale Workers will feel a greater pinch in their pocketbooks ■ Tigard may fall behind in comparability to other regional public sector organizations in terms of contributions and benefits ■ Recruitment and retention may be negatively effected ■ Potential violations of previously agreed upon insurance contribution rates in collective bargaining agreements. Recommendation: The City should continue to explore options to control health care costs while continuing to provide adequate levels of insurance for employees. Council Priority/Discussion: 52 Revenue Options Clean Water Services Split of Sanitary and Stormwater Revenues Issue Summary Definition: Under an Intergovernmental Agreement (IGA) with Clean Water Services (CWS), not only are specific service provider responsibilities outlined with regard to the maintenance and operation of the sanitary and stormwater systems, but the process for establishing service rates as well as connection fees are also outlined. Revenues are shared between CWS and cities based on formulas. Tigard sanitary revenues are deposited in the Sanitary Sewer Fund, which has a very healthy fund balance. Storm sewer revenues are placed in the Storm Sewer Fund which has a much smaller fund balance. Rates for both sanitary and stormwater are established by resolution each year by the Board of Directors of CWS (the Washington County Commission). At that time, CWS also certifies what portion of the service rates and/or connection fees are retained by the cities which participate in the IGAs. A few years ago, CWS obtained authority to establish a revenue bond component of the revenue apportionment between the cities and CWS. CWS has established a revenue bond debt service component of the rate. This has, in effect, reduced the cities' portion of total service charges. In addition to the changes to the revenue split resulting from debt service rate component, CWS has begun discussions with participating cities on changing the basic methodology for apportioning revenues between CWS and the cities. Initial discussions have steered towards establishing a cost-based method of revenue apportionment. In other words, revenues would be split based upon size of systems maintained and serviced by each individual city versus a set percentage split of revenues. Revenue Required/Revenue Potential: Unknown at this time. The City could possibly see reduced sanitary and stormwater revenues it retains. Work Completed to date: CWS has established a review committee made up of finance staff from the cities and CWS staff. Implementation Action Required: Staff will brief Council as the direction of the review becomes clear. Ultimately, any changes to the IGA will require approval of both the CWS Board of Directors and the City Council. Timing: Discussions will continue over the next year or two. 53 Advantages: • A revised cost-sharing formula could relate more directly to services provided. Disadvantages: ■ Tigard may lose revenues to the Sanitary Sewer and Storm Sewer Funds. Recommendation: ■ The City needs to maintain an active presence in all CWS discussions regarding any proposed changes in methodology of revenue apportionment. ■ Staff should periodically brief Council on the status of rate sharing directions. ■ 'Public Works and Engineering staff should review sanitary sewer plans to determine if projected fund balances are sufficient to meet anticipated needs or if excess revenues are anticipated. Council Priority/Discussion: 54 Revenue Options Tigard Local Option Property Tax Levy Issue Summary Definition: A Local Option Property Tax Levy is allowed under the Oregon. Constitution (Measure 50) to increase the local property tax rate to pay for needed services. It cannot exceed a period longer than 5 years, after which, it must be re-approved by voters. It can be used for any purpose (i.e. General Fund support) or it can be dedicated to specific services (i.e. Library, Parks, Police, etc.) Revenue Required/Revenue Potential: It is not yet known how much the City would require from a Local Option Property Tax Levy. That is dependent upon what combination (if any) of additional revenues or cuts in expenditures the Council wishes to pursue. A tax rate of 26¢/$1,000 of assessed valuation will raise just over $1,000,000 per year. Work Completed to date: No work on a Local Option Property Tax Levy has been done to date. Departments have preliminarily forecasted funding needs for the five-year period from 2005 to 2010, but those forecasts have not yet been finalized nor reviewed by the Budget Committee. Implementation Action Required: A Local Option Property Tax Levy must be approved by Council and placed on the ballot for approval by Tigard voters. It may only be voted on at one of the following elections: 4. May, subject to double-majority requirement 5. November of an odd-numbered year, subject to double majority requirement 6. November of even numbered year, subject to simple. majority. Timing: If a Local.Option Levy is approved by voters in May 2006, the first revenues would be received by the City in November 2006. If the. Levy is approved by voters in November 2006, the first revenues would be received by the City in November 2007. Advantages: ■ Broad based revenue source ■ Easily understandable (traditional funding source, familiar to voters) ■ Stable ■ If approved as a rate per $1,000, it will grow with growth in assessed values ■ Well-established collection mechanism in place Disadvantages: • Short term solution - it expires after 5 years, and then must be renewed by voters. 55 ■ Oregon voters have been limiting property taxes for the last 15 years. Tigard voters may not choose to increase their property taxes. ■ Competition on the ballot from other jurisdictions requesting voters to approve funding measures. ■ Competition and confusion with WCCLS.measure likely to be on the ballot in .2006.- s Most property tax measures on the ballot in November 2004 were not approved by voters - including the county public safety levy. Recommendation: Continue to research and explore options with the goal of placing this issue before voters. Council Priority/Discussion: 56 Revenue Options Long Range Planning Fees Issue Summary Definition: In July 2003, Council discussed the potential of instituting an application fee that would support long range planning activities. The City lacks resources to entirely fund this sort of project within the time frame the community expects. The fee would help offset the cost of completing specialized planning studies or projects. Long range planning studies vary in the amount of complexity and costs associated with any particular study or project. Where staff expertise exists and scheduling allows, City staff is assigned to complete particular projects. Other studies and projects require additional resources due to the complexity or intensity of the project or study. Revenue Required/Revenue Potential: At its May 18, 2004 Council worksession, Council directed staff to proceed with developing a long range planning fee that would be in addition to existing planning fees. Basically, a "surcharge" would be paid at the time of submittal of specific land use applications. The proposed long range planning fee is anticipated to generate approximately $40,000 per year. Given the fact that the fees are based on permit activity, the actual revenue would fluctuate from year to year. The goal is to have the resources to complete such long range planning projects as the City determines are necessary through the budgetary process. Work Completed to date: Council is scheduled to take action on the proposed fee increase on December 14, 2004 Implementation Action Required: Council approval. Timing: December 2004.. Advantages: ■ Development pays for the costs of completing long range planning studies. • General Fund support of long range planning activities would be reduced. Disadvantages: • Land use fees increase. ■ Development-related fees could be higher in Tigard than in surrounding jurisdictions. ■ Development-related fees supporting Long Range Planning activities are not common. 57 r Recommendation: Council Priority/Discussion: 58 Revenue Options Other User Fees Issue Summary Definition: The City of Tigard charges a variety of fees for specific services. Council has directed that whenever possible, users should pay directly for those specific services they use so that the general tax payer does not have to pay for services he or she does not use. The City has centralized all user fees into the Master Fee resolution. City Code requires that all fees be reviewed annually. The Master Fee resolution is updated in June of each year. Revenue Required/Revenue Potential: At this time, the revenue potential is unknown. Over the past two to three years, the City has been aggressively reviewing and updating all fees and charges to ensure that they are current. Fees may need to be adjusted to keep them current, but it is unlikely that any large increases will be necessary. The revenue potential from this item is therefore likely to be small. Work Completed to date: The Master Fee resolution was last reviewed in June of 2004. The resolution was updated at that time. There have been a couple of small adjustments since then. Implementation Action Required: Adoption of a new resolution by Council. Timing: June 2005 Advantages: ■ The City maintains cost recovery ratios. ■ Only those who use the services covered by individual fees incur the cost. ■ Small, annual increases are easier for citizens to incorporate into their personal financial planning rather than larger increases occurring at multi-year intervals. Disadvantages: Citizens may feel that they are being °nickled-and-dimed.° ■ Annual fee adjustments may contribute to the perception that government is always asking for more money. Recommendation: Keep City fees current through annual reviews and small adjustments as justified by costs. Council Priority/Discussion: 59 Revenue Options Parks SDC Issue Summary. Definition: Systems Development Charges (SDCs) are the fees that developers pay to cities and counties to offset the impacts of their project on the community. By definition, SDC revenues can only be spent on capacity increasing capital improvements. SDCs cannot be used to mitigate existing deficiencies capital systems. Tigard has been collecting Parks SDCs for many years, and this revenue is the primary funding source for the Parks capital improvement program. The City of Tigard Parks SDC methodology and fee schedule was updated in 2004 to reflect changes instate law and to increase cost recovery. The anticipated effective date of this update is January 1, 2005. Revenue Required/Revenue Potential: Under the old methodology (prior to Jan 1, 2005) the City anticipated collecting $2.3 million in Parks SDCs over the next five years. Under the new methodology the City anticipates collecting $7.9 million over.the same time period. The new methodology also specifies projects upon which SDC revenues can be spent, and to what extent SDC revenues can be used. Work Completed to date: City has completed the legally mandated process and on December 14, 2004 the Council will consider adopting a new methodology and rate schedule effective January 1, 2005. Implementation Action Required: Council adoption following public notice and hearing. Timing: December 14, 2004, effective January 1, 2005 Advantages: ■ Increase of $5.6 million in revenues over the next five years. ■ A logical and defensible methodology. ■ New development will pay an appropriate share to maintain the existing parks to population ratio. Disadvantages: The increase does not address the funding of non-SDC eligible projects. Currently, the City has only limited funds to support non-SDC eligible projects. Recommendation: Council should approve the new Parks SDC study and fee schedule. 60 Council Priority/Discussion. 61 Revenue Options Rights-of-Way (ROW) Fee Review Issue Summary Definition: A Rights-of-Way Management Study finalized in May 2003 concluded that the City was not recouping all of its direct and indirect costs associated with the management of the use of the rights-of-way. In addition, not all users of the rights-of- way obtain permits, and franchise utilities with blanket permits are not required to pay permit fees. The refusal of certain franchise utilities to renew their franchise agreements requires that an adequate fee structure be in place to ensure that all direct and indirect costs are recouped. Furthermore, studies have shown that the damage done to streets as a result of utility cuts are much more extensive than previously thought and should be factored into the permit and fee process. The City needs to focus attention on management of rights-of-way and review of fees charged to ensure that direct and indirect costs are recouped to the maximum extent feasible. This review also needs to consider whether permits and fees from in-house utilities such as water, wastewater, and storm water should also be required. Revenue Required/Revenue Potential: The fee review has the potential to significantly increase revenue, especially if franchise and in-house utilities pay fees as part of the permit process. Work Completed to date: As a result of the Rights-of-Way Management Study recommendations, Council created a ROW Administrator position to review the fee structure among other duties. The recruitment to fill this position is underway and should 'be completed by January 2005. It is anticipated that the person selected to fill this position would review the current procedures, make recommendations for changes, and oversee implementation of approved changes. Much of the work is anticipated to occur during calendar year 2005. Implementation Action Required: Some of the changes may require Council action through resolution or ordinance. The Telecommunications ordinance is currently being reviewed to broaden its application to include all utilities. Some of the changes resulting from this review may be incorporated through amendments to that ordinance. Timing: The ROW fee review will be performed during calendar year 2005. Changes to the fee structure to recoup direct and indirect costs could be implemented as soon as possible during this review process. Advantages: 62 ■ Revising the fee structure to recoup direct and indirect costs would ensure that the City's costs are recovered and that the long-term damage to streets is addressed as part of that review. ■ The fee review is timely in. that those franchise utilities that do not renew their agreements can be managed just like any other applicant for permits and be charged what is required to compensate the City for its direct and indirect costs. New revenue from in-house utility fees charged to dedicated funds can better balance the City's fiscal situation. ■ Charging fees to all utilities, whether in-house or not, is more equitable than the current practice. Disadvantages: ■ The City's Water, Sanitary Sewer, and Storm Sewer funds would have to expend more for fees that are not currently charged. ■ Rates for City utilities may have to be increased to help pay for the additional permit costs, which could raise concerns among Tigard citizens. Recommendation: The ROW fees should be reviewed with the intent of recouping direct and indirect costs to the maximum extent feasible, and the in-house utilities' rights-of-way activities should be subject to the permit process with full fees charged as part of that process. Council Priority/Discussion: 63 Revenue Options Street Maintenance Fee Review Issue Summary Definition: The Street Maintenance Fee was established by Ordinance No.03-10 as a new source of revenue to meet street maintenance requirements. The rates, set by Resolution No 04-12, were established based on a 5-year corrective and preventative maintenance plan for addressing the City's $4 million street maintenance backlog and ensuring timely maintenance of the street infrastructure. Ordinance No. 03-10 requires the Finance Director to review the revenue after the first full year following implementation to determine if the revenue is meeting the projected amount. In addition, the ordinance requires the program to be reviewed after three years and the rates re-established based on the average annual cost of an updated five year maintenance plan. Adjustments to the fee would be made at that time taking into consideration overruns, underruns, and any additional funds for street maintenance received from the State through legislation. Revenue Required/Revenue Potential: The rates were set to generate approximately $800,000 annually. Work Completed to date: The fee collections began April 2004. A review of the revenue collected will be performed after April 2005. There is an opportunity at that time to establish a new rate based on an updated five year maintenance plan. Implementation Action Required: The Finance Director will report his findings to City Council. No other action is required at that time, unless adjustment of the rates is deemed necessary. Any adjustment to the rates would have to be performed by Council resolution. Timing: The Finance Director will review the revenue received after April 2005 and report the findings to City Council. Any adjustment to the rates, if determined by Council to be desirable or necessary, would be after that report. A three-year review will occur in 2007. Advantages: ■ Provides an opportunity to possibly lower the rates if the revenues are on target and the receipts from the State through legislation are factored in. ■ Would be a positive sign to the residents of Tigard that the City is keeping the fees charged as low as possible. Disadvantages: 64 ■ The streets were last rated in 1999 and should be re-rated before the five-year maintenance plan is updated. There would be no opportunity to update the street information if the rates are to-be revised by mid-2005. Recommendation: That the rates be adjusted only if the revenues are not reaching the projected amounts. Adjustment of the rates after the three-year period stated in the ordinance would allow for the pavement management information to be updated and the costs for the projects averaged out over a longer period before rate adjustments are contemplated. Council Priority/Discussion: V 65 Revenue Options Telecommunications Regulation Issue Summary Definition: The City of Tigard,. like most cities in the US, regulates access of telecommunications companies and other private utilities to public rights. of way through franchise agreements and City Code provisions. The telecommunications industry has changed dramatically over the past 15 to 20 years, with the break-up of Ma Bell, the deregulation of the Baby Bells, the advent of cellular technology, and the advent of new technology such as Voice-Over-Internet- Providers (VoIP). Some of the new providers are subject to right of way regulation and some are not. The telecommunications industry in general, and traditional telecommunications providers (Qwest and Verizon) in particular, have been resisting (and in some cases, actively challenging) local authority to regulate access to public rights of way. In June 2001, Qwest brought suit against the City of Portland. This suit is working its way through the federal court system. If Qwest is successful in its suit, Tigard could lose future franchise fees paid by telecommunications companies, and may also be required to pay back franchise fees collected for a specified period of time. Revenue Required/Revenue Potential: Tigard collects about $325,000 per year in telecommunications franchise fees. Since July 1, 2001 though June 30, 2005, the City will collect about $1.37 million. Work Completed to date: City staff have been actively monitoring Qwest vs Portland. In addition, the City of Tigard is on the steering committee of a joint audit of Qwest and Verizon franchise fees conducted by 70 Oregon cities. Finally, staff is reviewing the City's Telecommunications Code for possible changes to broaden its application to all franchised utilities and to ensure compliance with current interpretations of the federal Telecommunications Act of 1996. Implementation Action Required: It is not yet clear what actions the City of Tigard may need to take. It will need to maintain close coordination with the League of Oregon Cities, other Oregon cities, state legislators, and the Oregon congressional delegation as these issues are brought up in various forums. Timing: This issue has been developing since 2001 and is continuing. It is likely.that it will take several years for this issue to reach conclusion. Recommendation: The City should continue to actively monitor this issue as it develops. In addition, the City Council should make its concerns known to state legislators and the Oregon Congressional delegation. 66 Council Priority/Discussion: 67 Revenue Options Transportation Financing Issue Summary Definition: One of the Council Goals for calendar year 2004 is to aggressively pursue solutions to congestion on state, county and City facilities that lie within the City limits. Many of the projects needed to improve circulation within the City are under state or county jurisdiction. The Council goal is to pursue implementation of these projects regardless of jurisdiction. A list of high priority projects was presented to Council at its meeting on March 16, 2004. Many of the projects involve intersections on Highway 99W. In addition, there was a long list of projects considered for the Transportation Bond measure in the year 2000. Although the bond measure failed, the transportation improvement needs remain. Additional sources of funding must be developed to address some of the more urgent transportation projects to alleviate congestion, provide better intra-city traffic circulation, provide facilities for alternative modes of transportation, and accommodate the current and future traffic volumes. Revenue Required/Revenue Potential: To be determined. The Transportation Financing Strategies Task Force was reconstituted to evaluate new potential funding sources that could be established to address high-priority transportation projects. In early 2005, the Task Force will meet with Council to discuss potential projects and . receive direction on the high-priority projects that need new funding sources for implementation. The intent is to focus the efforts of the Task Force on the areas that Council deem as highly important and better match the proposed funding with the appropriate projects. Work Completed to date: The Task Force has met three times and will continue meeting regularly to discuss potential funding sources. The Task Force will meet with City Council in early 2005 after Council goal setting has been completed. The intent is for Council to provide direction on the high-priority projects that need to be matched with funding sources for implementation. Implementation Action Required: The Task Force will report to City Council periodically on the progress of the Task Force effort. Any proposed new funding sources will be discussed with City Council at a workshop session. New funding sources classified as fees or non-property tax may require an ordinance and resolution. A bond measure to accelerate implementation of numerous projects would require a public process for development of a list and a vote of approval by the Tigard citizens. Timing: The Task Force will evaluate new funding sources with the intention of making an initial recommendation to Council by mid-2005 at the earliest. A bond measure, if proposed, would most likely be scheduled for the general election in 2006 at the earliest. 68 Advantages: ■ New funding sources would address high-priority projects that need to be constructed to meet current and future traffic volumes. ■ Sidewalk improvements and rights-of-way maintenance can be programmed annually once funding sources are identified. The sidewalk projects can enhance safe access to schools and transit stops from the residential neighborhoods. Rights-of-way maintenance on collectors and arterials can spruce up the City's image and minimize the fire hazards by keeping brush cut during the summer months. Disadvantages: ■ The voters have indicated that they have limitations on what they can afford, regardless of the existing needs. Any bond measure would face stiff competition in just about any scheduled election. ■ Adding a new fee or tax in these or any other economic times is not going to be popular and may be referred to the voters for approval. Recommendation: That the Task Force receive direction from Council, continue to evaluate potential new funding sources for recommendation' to Council, and make periodic reports to Council on Task Force progress. Council Priority/Discussion: 69' Revenue Options Urban Renewal Issue Summary Definition: Creation of one or more urban renewal districts to generate dedicated revenues to pay for needed improvements in the Washington Square Regional Center, . Downtown Tigard, and/or Commuter Rail Line. The Tigard Charter currently prohibits any renewal districts without an approving vote of the people. Revenue Required/Revenue Potential: To be determined. The Washington Square Regional Center Plan identifies substantial improvements needed in that area, with costs to match. These costs can only be partially covered by existing revenues and fund sources. The Downtown Plan is still in the development stage so public improvements needed to support the plan are unknown at this time. Work Completed to date: Council has received three informational briefings on the mechanics of urban renewal and urban renewal financing. Council has approved the Washington Square Regional Center Plan and the Washington Square Regional Center implementation study, which identify needed improvements and potential costs. Washington County is actively pursuing funding for the Commuter Rail Line and is exploring urban renewal as a means of providing funding for a portion of the improvements identified in the Regional Center Plan, particularly in the area of commuter rail stations, of which Tigard will have two. The Downtown Task Force has been meeting with interested parties and stakeholders to develop a vision for the downtown. A concept plan is under development and will be considered by Council in June 2005. Once the plan is adopted implementation will take another 12 to 24 months to complete. Urban renewal is a potential funding tool to implement the Plan. Implementation Action Required: City Charter prohibits the formation of any urban renewal district without an affirmative citywide vote. Council could refer one of two measures to the people: 3. An amendment of City Charter to remove the requirement for a citywide vote, or 4. Approval of one or more urban renewal districts. Timing: To be determined 70 Advantages: ■ Creation of a dedicated funding source that grows with growth in assessed values in the urban renewal district and that can be used to pay for needed improvements. ■ Public improvements paid for by urban renewal will spur private investment that will further increase values in the district, and will accommodate job and housing growth ■ Once the urban renewal plan is accomplished and all costs are paid for, the assessed value is returned to the general tax roles and help pay for citywide service. Disadvantages: ■ Urban renewal "locks up" growth in assessed values during the life of the urban renewal plan, thereby limiting growth in tax revenues for all overlapping taxing jurisdictions. ■ Urban renewal mechanics are complicated and difficult to explain to the public in an election setting. ■ Creation of an urban renewal district requires the active support of major property owners within the proposed district. Recommendation: ■ Continue to explore urban renewal as an option for Tigard ■ Work with property owners in the Washington Square Regional Center and the Downtown Task Force, and with Washington County to assess the level of interest and support for urban renewal. ■ Develop a proposed timeline for resolution of this question. Council Priority/Discussion: 71 Revenue Options Water Utility Rates Issue Summary Definition: The Water Fund is an enterprise fund, which by definition used in accounting principles and guidelines, operates as a business enterprise. In the case of the City's Water Fund, the primary source of revenue is water sales. The City operates the fund on the financial principle that the costs associated with the delivery of water shall be borne by the user. Thus, water rates become the mechanism through which the revenue to operate the water system is derived. Tigard uses a rate-making financial model to evaluate future costs, both operational and capital, and design water rates to accommodate these costs. The City Council last reviewed rates in 2000, when a 3-year rate plan was approved. It is anticipated a new rate plan will need to be approved in 2005. Revenue Required/Revenue Potential: Revenues generated by water sales are anticipated to be $6 million dollars in FY 04-05. This number can be impacted by weather; cool wet summers reduce water sales thus affecting rates. Work Completed to date: The water rate model is updated annually as the budget is approved. Implementation Action Required: Water rates are set by resolution of the City Council. It is anticipated that the IWB will forward a recommendation to the City Council and that the City Council could approve any water rate changes as a part of the master rates and charges resolution adopted annually in June. Water rates are generally effective October 1 through September 30th. Timing: Staff will be preparing a water rate recommendation to be presented to the Intergovernmental Water Board (IWB) in the Spring of 2005. Advantages: ■ Maintains relationship between rates paid by the customer and actual costs; ■ Avoids large rate increases by dealing with. changes in smaller increments; ■ Facilitates good credit rating for the City when debt instruments are sold; ■ Keeps water issues in the ratepayers minds. Disadvantages: • Rate increases are rarely popular and increase costs to citizens. 72 Recommendation: Accept the recommendation from the IWB when presented and consider adoption.of any new rate schedule as a part of the annual rates and charges review in June of 2005. Council Priority/Discussion: 73 Revenue Options WCCLS Local Option Levy Issue Summary Definition: WCCLS Levy: A Countywide Local Option Property Tax Levy for library services is allowed under the Oregon Constitution (Measure 50) to increase the local property tax rate for needed services. It cannot exceed a period longer than 5 years, after which, it must be re-approved by voters. Revenue Required/Revenue Potential: It is projected that the tax rate of this levy will. be approximately .26/$1,000 of assessed valuation. This would raise approximately. $9,500,000 per year. Tigard's share of this amount will be determined according to the WCCLS funding formula. Work Completed to date: A countywide levy for library operational funding was placed before voters in November of 2002 and again in May 2004. The measure failed in 2002 by approximately 600 votes and failed in 2004 for lack of a double majority. A needs analysis for the levy was completed in 2002, as was a phone survey. A citizens group was formed in 2002 and again in 2004 to provide information to the voters of Washington County concerning the benefits of the levy. Significant background information has been compiled concerning this issue. implementation Action Required: A WCCLS Local Option Property Tax Levy must be approved by the County Board of Commissioners and placed on the ballot for approval by Washington County voters. It may only be voted on at one of the following elections: 1. May of any year, subject to double-majority requirement 2. November of an odd-numbered year, subject to double-majority requirement 3. November of an even numbered year (general election), subject to simple majority. 'Timing: If the WCCLS Local Option Levy is approved by county voters in May 2006, the first revenues would be received by the County in November 2006. If the Levy is approved by the voters in November 2006, the first revenues would be received by the County in November 2007. Advantages: ■ Easily understandable ■ Will restore cuts to library service countywide. ■ Well-established collection mechanism in place ■ Broad-based revenue source Disadvantages: 74 ■ Short term solution-it expires after 5 years, and then must be renewed by the voters ■ Competition on the ballot from other jurisdictions requesting voters to approve funding measures ■ Competition and confusion with a Tigard local option levy if it is on the same ballot ■ Most property tax measures on the ballot in November 2004 were not approved by voters - including the county public safety levy Recommendation: Continue to research and explore options with the goal of supporting this issue when it is placed before voters in May or November 2006. Council Priority/Discussion: 75 Revenue Options MSTIP Funding Issue Summary Definition: Measure 50 rolled Washington County's serial levy for the Major Streets Transportation Improvement Program (MSTIP) into the County's permanent property tax rate. The County Board of Commissioners is considering adoption of a six-year program (2007 through 2012) of transportation projects using the MSTIP portion of the County's permanent property tax rate. The projects to be selected to be part of this MSTIP Transportation Capital Program must improve collectors and arterials identified in the County's transportation plan. Geographic equity would be a consideration in the project selection. Through this program, the City has the opportunity to submit priority City projects that qualify for implementation using MSTIP dollars. Revenue Required/Revenue Potential: The County estimates approximately $23 million net annual revenue resulting in approximately $140 million over the six-year period. The target allocation for the City out of this six-year total is $5,287,000. However, because the inflation factor is estimated as twice the amount of interest earned, the actual amount available in the out years of the program is anticipated to be significantly less than in the first year of implementation. The issues are still being worked out, but the funding that could be available for projects that benefit the City would range between $3 and $5 million depending upon the schedule for implementation. Work Completed to'date: Through Resolution No. 04-82, City Council approved three projects to be submitted for consideration as part of the County's Transportation Capital Program. Because the timing for implementation of the projects is highly uncertain at this point, only one or two of the projects may actually receive sufficient funding for implementation. In addition, the County staff has indicated that they want to handle projects from beginning to end. Tigard and other cities want to initiate design and rights- of-way acquisition but need construction dollars for implementation. This issue needs to be resolved. Discussions will continue during the next month or two on resolving these issues. Implementation Action Required: The Washington County Coordinating Committee consisting of city and County elected officials would recommend a list of projects for adoption by the County Board of Commissioners. The project list and the sequence of implementation adopted.by the Board would commit the available dollars for that six- year program. Timing: The County's Transportation Advisory Committee will be meeting during the next two months to resolve the various issues and submit a recommendation to the 76 County Coordinating Committee. The Coordinating Committee will likewise be discussing the program with the intention of submitting a recommendation to the County Board early in 2005. The program dollars will be for the six-year period beginning in 2007 and ending in 2012. Advantages: Provides an opportunity for the City to have one or more high-priority projects constructed using MSTIP dollars. . ■ Commitment of the MSTIP portion of the County's permanent property tax rate to a long-term program would set the stage for a large future MSTIP 4 program to address some of the major transportation needs within the cities and unincorporated Washington County. Disadvantages: ■ If the projects are limited to those that are not yet programmed for implementation, some of the significant projects of current interest would not be eligible for consideration. ■ The six-year period begins in 2007. Some projects may not be scheduled until late in that period. Some of the projects in Tigard cannot wait that long for implementation. ■ The City would not have control over the project details once the County adopts the project for implementation. Although City input would be considered, the County would have the final say on the project-related decisions. Recommendation: There is no real downside to this situation. The MSTIP portion of the County's permanent property tax rate provides an opportunity for the City to have one or more significant projects funded and implemented through the County's Transportation Capital Program. Staff recommends that the City participate actively in this process, in cooperation with the staff from other cities and the County, to reach a consensus on the project list and on the scheduling for implementation. Council Priority/Discussion: 77 Revenue Options Franchise Fees - Water and Sewer Issue Summary Definition: The City charges private utility companies a fee for use of public rights-of- way to string their wires, or lay pipes and conduit. The fee is calculated as a percentage of the utility's gross revenues collected within the City of Tigard. The City currently charges the electric utility 3.5%, the natural gas utility 5%, and telecommunications companies 5%. The City does not charge its water and sewer utilities any fee, though many cities do. Franchise fees for private utilities cannot be raised outside of the franchise agreement. The franchises with PGE and Qwest do not provide for any mechanism to increase the franchise fee during the life of the agreements. Verizon does not have a current franchise agreement and has declined to negotiate a new agreement pending decision of the Qwest vs. Portland case challenging local franchise authority. If the City wished to pursue increased fees for private utilities with a current agreement, it would need to adopt a privilege tax, which is discussed in another paper. The City could institute franchise fees on its own public utilities at any time. Revenue Required/Revenue Potential: Charging the City's in-house utility operations a franchise fee would raise the following amounts for the General Fund: Water $307,000 Sanitary Sewer $77,800 Storm Sewer IN ..200 Total $441,000 The additional charges to the water utility could be recovered through a water rate increase. Rates for sanitary sewer and storm sewer are set by CWS and revenues are shared back to the City. Rates would not be increased to recover this cost, and so a franchise fee would reduce revenues to fund sanitary and storm sewer operations. Work Completed to date: Staff have surveyed other cities to see how many charge franchise fees to their own utilities. No other work has been done on water or sewer franchise fees. Implementation Action Required: Council resolution or ordinance. Timing: To be determined. If the decision is made to charge water operations a franchise fee, this should be coordinated with the annual water rate review currently underway. 78 Advantages: ■ Builds off an existing collection that is in place and well established ■ Broad based - it affects a wide variety of payers (though utility bills) ■ Relatively stable revenue source Disadvantages: ■ Increased fees will be passed on to water utility customers in the form of a rate increase, thereby increasing their bills Recommendation: ■ Explore options for charging a franchise fee of no more than 5% on public utilities (water, sanitary sewer, and storm sewer.) If options are feasible, consider instituting water and sewer franchise fees. Council Priority/Discussion: 79 Revenue Options Privilege Tax Issue Summary Definition: Oregon Revised Statutes allow cities to adopt and levy a "Privilege Tax" on utilities. This is a tax on the gross revenues of electric or natural gas utilities or on local exchange access revenues of "incumbent local exchange carriers, ILECs" (in Tigard's case, this means Qwest and Verizon) for the "privilege" of using public rights of way for the delivery of their services. A privilege tax and a franchise fee are very similar. The only real difference is that a franchise fee is dependent upon the existence of a formal agreement (a franchise) between the utility and the City. Privilege tax rates are also limited by state statute; franchise fee rates are not (though some utilities would argue otherwise.) A.privilege tax could be structured in a variety of ways. The method that has been considered by staff establishes the privilege tax and then makes provision for a credit for the amount of franchise fee paid (if any). This establishes the back-up authority of the privilege tax, but only collects an incremental amount over and above the existing franchise fee. If the franchise is not renewed for any reason, then the full amount of the privilege tax would be collected. Tigard has two telecommunications companies with expired franchises: Verizon and Electric Lightwave. Both companies have declined to negotiate new franchises, but are continuing to make franchise fee payments as if their expired franchises were still in effect. Privilege taxes are calculated based on the total gross revenues of electric and natural gas utilities and competitive local exchange carriers telecommunications companies generated within a local jurisdiction and are limited by State law to no more than 5%. State law limits privilege taxes on ILEC telecommunications companies to no more than 7% of local exchange access revenues only. (revenues from the, majority of services - such as call waiting, call forwarding, long distance, internet access, etc. - are excluded form the revenue base. Cable television is franchised 80 Franchise rates for franchised utilities are: Electric & Natural Gas Telecommunications PGE 3.5% of gross Qwest 5.0% of local revenues exchange access Northwest 5.0% of gross Venzon 5.0% of local Natural revenues exchange access Cypress 5.0% of gross Communications revenues Electric 5.0% of gross Li htwave revenues IDT Corp. 5.0% of gross revenues MCI WorldCom 5.0% of gross revenues Metro Media 5.0% of gross Fiber Network revenues New Access 5.0% of gross Communications revenues OnFiber 5.0% of gross Communications revenues Time-Warner 5.0% of gross Telecom revenues XO 5.0% of gross Communications revenues Revenue Required/Revenue Potential: If a privilege taxis adopted at the levels authorized in State law and it is structured to be net of franchise fees paid, it would generate the following revenue amounts: PGE $550,000 Northwest Natural $0 Qwest $5,400 Verizon $92,500 CLECs $0 Total $647,900 Work Completed to date: An issue paper was presented to the Tigard Budget Committee in May 2004. The Budget Committee's response was mixed. There was little enthusiasm for this tax, but there was also a willingness to keep it on the table for discussion. Implementation Action Required: A privilege tax could be adopted by ordinance. 81 Timing: There is no specific timeline for this issue. It could be considered at any time that the Council feels appropriate. From a process standpoint, if Council indicated a willingness to move ahead with this revenue source, it would'be necessary to draft an ordinance. From that point, it would be advisable to circulate the ordinance to all franchisees and any other utilities affected by the proposal for review and comment. Council would need to hold at least one public hearing on the proposal. It could take several months to go through this process. Advantages: ■ The tax would produce a significant amount of revenue that would be available to the General Fund. ■ The tax is broad based. ■ The tax is not overly dependent upon economic activity and will help to diversify the City's revenue sources. ■ The tax is not dependent upon the existence of a franchise agreement and protects the revenue stream should a franchisee not renew its agreement and continue to operate in Tigard. ■ The telecommunications industry is aggressively challenging local government rights to regulate and control their rights of way nationally. Franchise fees could be severely curtailed or eliminated by legislative or congressional action. Disadvantages: ■ A privilege tax in excess of current franchise fees will. be passed on to utility customers, thereby increasing their bills ■ Under state law, the incremental increase would be itemized on customer bills ■ Telecommunications companies are challenging local franchise authority nationally and in Oregon. Adopting a privilege tax could add to this push. Recommendation: Proceed with development of a privilege tax proposal. Council Priority/Discussion: 82 Revenue Options Telecommunications Registration Fee Issue Summary Definition: A telecommunications registration fee is an annual fee charged to telecommunications companies operating within a city. The two traditional methods of obtaining revenues from telecommunications companies to support city operations and rights of way are franchise fees and privilege taxes. Franchise fees are based on a franchise agreement between the city and the company. Privilege taxes are imposed unilaterally based on the city's taxing authority. Other than their underlying authority, franchise fees and privilege taxes are calculated and operate in much the same way. Under state law, franchise fees and privilege taxes for "incumbent local exchange carriers" (ILECs - basically Qwest and Verizon) can only be levied on local exchange access (basically, dial tone charges). By state law, all other revenues (including revenues from charges such as call waiting, call forwarding, long distance, etc.) are excluded from the revenue base used to calculate franchise fee and privilege taxes. (By contrast, franchise fees and privilege taxes for electric and natural gas utilities are based on total revenues.) The traditional method of assessing fees/levying taxes on telecommunication carriers has several problems: 1. The limited revenue base (local exchange access vs. total revenues) as compared to other utilities using the public rights of way. 2. The growth of competitors to ILECs has heightened concerns about the different methodology on calculating franchise fees (local exchange access vs. total revenues.) 3. The growth of cellular service, which is not franchised by the City, is taking customers away from traditional telephone service. 4. The entry of non-traditional telecommunications providers into local markets has created a situation in which it is difficult to keep track of which providers are operating within a city. The City of Eugene addressed these problems by adopting a 2% telecommunications registration fee on non-franchised services. This registration fee was challenged in court, but ultimately upheld. Other cities in Oregon are now looking at adopting telecommunications registration fees. 83 In addition, the City of Portland has recently explored the possibility of imposing a tax on cellular phone companies. Reaction to this proposal has been mixed, but negative over all. The cellular telecommunications companies are strongly opposed. Revenue Required/Revenue Potential: Unknown. Because telecommunications franchise fees are based on only a small portion of traditional telecommunications providers' total revenues, it is difficult to determine the total revenue potential for Tigard. Work Completed to date: None Implementation Action Required: This would require an amendment to the Tigard Municipal Code to establish the fee, and then an amendment to the Master Fee Resolution. Timing: It would take 4. or 5 months to develop this proposal and to take it through the public review process. Cities anticipate that telecommunications companies will be actively lobbying the legislature to pre-empt local telecommunications registration fees. Advantages: ■ This fee could produce a significant amount of revenue for the City. ■ This fee would tend to level the playing field between telecommunications providers in terms of. the fees paid to the City. ■ This fee would equalize the treatment of all utilities with facilities in the public rights of way. ■ Registration and. payment of a fee would provide the City with valuable information about telecommunications providers operating within the City. ■ Adoption of a registration fee would help to protect the City should telecommunications companies successively lobby the legislature to further limit or eliminate local franchise fees or privilege taxes. Disadvantages: ■ This proposal would generate strong opposition from telecommunications providers. ■ This proposal may increase chances that the legislature would act to. pre-empt authority for local telecommunications registration fees. ■ Telecommunications providers may pass this charge on to customers as a separate line item on the customers' bills and thereby increase costs to local customers. Recommendation: Several other cities are actively considering a telecommunications registration fee, and the legislature will convene in January. The City should monitor statewide activity on this issue to see if other cities are successful. The City should make a determination sometime in the summer of 2005 whether or not to proceed with this proposal. Council Priority/Discussion: 84 Revenue Options Water Revenue Bond Issue Summary Definition: A water revenue bond is a type of bond backed by future water revenues (as compared to a general obligation bond which pledges property taxes as repayment). Tigard is considering this type of bond to finance capital improvements and possibly the up-front or "buy in" costs the City would incur to secure a long term water supply. Tigard's Water operation is currently debt free. The Citywill be considering the' use of water revenue bonds to finance all or a portion of the upcoming water reservoir/pump station/transmission piping project package, named the 550 ft. Service Zone Water Supply System Improvements. The City is also considering obtaining an equity position in a water source. While the source and cost have yet to be determined, financing this project is anticipated to be by revenue bonds. This is consistent with the concept that users should pay their proportional share of projects. Use of a bond that is collected based on property value can produce situations of inequity between property owners, and should be avoided for this reason. In summary, Tigard could be looking to issue revenue bonds within the next two years. Future decisions on a water source could necessitate multiple revenue bond sales. Both of these projects are consistent with, and addressed specifically, in the City's visioning documents. Revenue Required/Revenue Potential: The 550 ft. Service Zone projects are currently estimated to cost $8.84 million dollars. The buy-in cost of a new source of water is unknown and will depend upon the source selected and negotiations with the holders of those water rights. Work Completed to date: The City has currently done two things in anticipation of these expenses: the Council has kept water rates current for the last three fiscal years, and the City has retained a consultant to develop a water financial planning and rate model to better evaluate options and scenarios. This'rate model will also be important in the issuance of water revenue bonds. Implementation Action Required: The Intergovernmental Water Board will initially produce a recommendation to the City Council. Following that, the City Council may authorize the issuance of revenue bonds by resolution. Timing: Bond could be issued as early as 2005. 85 Advantages: ■ Revenue bonds are excellent funding mechanisms for utility capital improvements for three reasons: • They do not compete with other public funding based on general revenues and they do not require voter approval, • They extend the concept of "cost of service" principles in which a user of a utility pays a proportional share of the cost to provide that specific service, and • They spread the cost of an improvement to future users of that improvement (intergenerational equity). ■ Revenue bond repayment periods are generally also shorter than the useful life of the project they fund. ■ Current costs of borrowing money are very favorable. Disadvantages: • Not using bonding of some type puts City utilities into the business model of pay cash as you go which is not viable where such large amounts of capital are needed. ■ Revenue bonds carry a higher interest rate than general obligation bonds, because their repayment is based on the financial stability of the system and not on an unlimited power to tax. Recommendation: Staff will continue to update Council on options and costs, with a future. recommendation probably being to authorize issuance of one or more water revenue bond issuances. Council Priority/Discussion: 86 Revenue Options Passport Application Acceptance Issue Summary Definition: The City of Tigard can become a passport application acceptance agency. Some surrounding cities, such as the City of Beaverton, provide this as a customer service to citizens. Finance staff would accept the application at the City Hall front counter and forward the application to the U.S. Department of State for actual issuance. The City of Beaverton reports that it receives over 5,000 applications per year. The City of Beaverton also has established limited hours of operation (12:30 p.m. until 4:00 p.m.) in order to more effectively manage the program and still provide good customer service. Limited hours are also being considered for implementation in Tigard's case as well. Revenue Required/Revenue Potential: The application fee is $30 and is levied in addition to the $55 passport fee. The passport agency retains the application fee as reimbursement for providing the service. As envisioned, no additional staffing needs are anticipated unless the number of applications received and processed would generate more than enough revenue to warrant some part-time assistance. The City of Beaverton has estimated passport revenues to their City will be over $160,000 in'FY 2004-05. Work Completed to date: Preliminary review of the passport acceptance program has been completed and initial plans, if the program is approved, call for implementation by July, 2005. Implementation Action Required: Update of the fee schedule to include the fee for accepting passport applications and staff training. Timing: Implement by July, 2005 or sooner. Advantages: ■ A passport application acceptance agency in Tigard will be a benefit to citizens. ■ Tigard residents as well as other individuals visiting City Hall will have this as an additional customer service provided by the City. ■ This function would produce additional revenue at minimal cost. Disadvantages: ■ None k~ 87 Recommendation: Continue to investigate the possibility of the City of Tigard becoming a passport application agency once the Finance Department has moved into the remodeled City Hall. Target July, 2005 or sooner for implementation. b Council Priority%Discussion: 88