05/01/1985 - Packet TIQ#RD BUDGET COMMITTEE
AGENDA FOR MAY 1, 1085 MEETING
/ DURHAM TREATMENT PLANT
7:00 p.m.
l. CALL TO ORDER AND ROI L CALL-
Wally Hoffman Nick Frezza
Ima Scott ____ Ju6y Christensen
Howard Duffy ____ Tom Brian ____
John Cook Jerry Edwards
Dale Evans Phil E6in
2. FOLLOW—UP:
n WCCLS levy
w Sales Tax/Property Tax Relief
o Travel & training
w Civic Center
3 . GENERAL DISCUSSION
4. BUDGET RECOMMENDATION TO CITY COUNCIL
5. May meeting? (5/22 re: Civic Center, WCCLS, County levy, Process)
Fall meeting? (Oct. re: Sales tax, CIP, Utility Rates, 3—year plan)
6. ADJOURNMENT
(0M91F)
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MEMORANDUM
CITY OF TIGARD, OREGON
TO: Budget Committee May 1' 1.985
FROM: Bob Jean' City Administrator \j
SUBJECT: Economic Impact of Metzger/Washington Square Annexation
At its April 29' 1985 meeting after review of available materials, the Council
stated its policy towards Metzger/Washington Square annexation: The City
should actively support such annexation. This memo should be considered a
prospective evaluation based on available information and my judgment of the
urban economics involved in annexing the Metzger/Washington Square community
to the City of Tigard . This memo should be considered preliminary and for
discussion only.
AREA OF' INTEREST: The City of Tigard has declared the Metzger/Washington
Square community as an Area of Interest in its Urban Planning Area Agreement
with Washington County . This has no special legal standing as to annexation,
only that Washington County has agreed to notify the City of any proposed land
use or related actions in the area. Beaverton and Portland have also declared
overlapping Areas of Interest within the community. Only Tigard has declared
the entire community area as an Area of Interent.
The community has expressed a desire to remain intact and address annexation
comprehensively rather than individually . The Boundary Commission has shown
an increased preference for Urban Service Plan studies an the basis for
deciding individual annexation requests. The City of Beaverton has recently
completed such a study. The City of Portland has am far focused its efforts
in East Multnomah County, but is again showing a Westside interest. Other
than our lower tax rate AND generml community orientation (Poet Office, School
District, Water District, Chamber of Commerce and proximity)' the City of
Tigard may be at some disadvantage before the Boundary Commission in any
contested hearings. An Urban Service Plan by Tigard should be developed.
ECONOMICS:' 'The Metzger community contains about 6,500 residents or about
2,600 households. TiQard'w average residence is about $72,000 assessed
value. Metzger' n average household is projected at $67'800. The residential
Metzger community assessed value is projected around $190 million. The
Washington 84uare/1-inooln Center area in projected at some $110 million. The
total Metzger/Washington Square community is assumed to be about $300 million.
If annexed to Tigard, the City' s Tax Base rate of 07f/1,000 would be
multiplied times the $300 million new assessed value and could add about
$260,000 to our current $800,000 Tax Base. Per capita revenues (Gas Tax,
^ Cigarette and Liquor Tax, State Revenue Sharing, but not counting Federal
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Revenue Sharing) would be about $35 times 6,580 for $227,500. Franchise fee
revenues are estimated at $175,000 per year. Annexation of the
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Metzger/Washington Square community would add about $662,500/year in community
revenues from which to provide basic urban services. Utility services have
been assumed constant in theme calculations. Assuming one police officer per
` 1,000 for Metzger and three-four officers for Washington Square, Core Level I
Police Services would cost about $358,000 - $400,000 per year. Library
services at Core Level apart from any WCCLS monies would run about $60'000.
Added Park services including Metzger Park would nwut $50,800 - $100'000.
Total added expenditures for basic muniripal services would be about $500,800
per year for the Metzger/Washington Square community.
Annexation of the Metzger/Washington Square community potentially represents
about a $1 1/3 revenue to $1 expenditure ratio' a positive budget situation
for Tigard. Annexation of just Metzger represents more of m breakeven
situation. Annexation of Washington Square alone represents about a two to
one favorable economic situation.
COMMUNITY- RESIDENTIAL & COMMERCIAL = TOTAL ASSESSED VALUE
Tigard $620 $300 $ 020 million
(65%) (35%) (100%)
Sub-Total $810 $300 $1'110 million
(73%) (27%) (100%)
Washington
$810 $410 i1'220 million
� (66YC) (34%) (100%)
Since commercial/industrial properties contribute more than they consume in
urban services and since residential properties contribute less than they
consume in nervine costs, a higher ratio of commercial /industrial to
residential assessed values is economically favorable. Tigard has m favorable
ratio of residential to commercial/industrial at 65:35. Bemverton' o current
ratio of 75:25 is a healthy well-balanced ratio.
Annexation of Metzger only would place Tigard at a 73:27 ratio -' - healthy,
but ntill with a tax shift from commercial/industrial. to residential
properties. Annexation of Washington Square and Metzger would maintain our
current favorable ratio around 60:34. Unless Tigard annexes Metzger/
Washington Square and offsets the proportionately greater residential to
commercial/industrial growth in our current plan' the reoi6ential tax burden
will increase disproportionately to commercial/industrial tax shares.
Annexation of the Metzger/Washington Square community is feasible
and economically workable as Par as basic services are concerned. Direct
costs on a marginal cost basis from Tigard are cheaper for the
Metzger/Washington Square community than the full coot qF starting their own
city.
Capital improvement costs are largely unknown but appear manageable from gas
tax and utility revenue shares if scheduled on a 5-10 year basis. Long-term
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economics seem advantageous for both Tigard and the Metzger/Washington Square
community. A Win-Win situation.
(BJ:pl/2682A)
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MEMORANDUM
CITY OF TIGARD, OREGON
T0- Bob Jean' City Administrator April 30, 1.985
FROM- Liz Newton, Associate Planner
SUBJECT- CPO # 4 meeting on the Metzger area
On April 23, 1905' a CPD # 4 meeting was held at the Metzger Park Community
Center in Metzger Park. The stated purpose of the meeting was to allow
representatives of Washington County and the cities of Beaverton' Portland,
and Tigard to make presentations regarding annexation of the Metzger community
into one of the cities.
Approximately 175 Metzger area residents attended the meeting. Reid Iford'
current chairman of the CPO conducted the meeting, introduced the speakers and
identified members of the audience to auk questions. Reid' after opening the
meeting, indicated that a representative of each jurisdiction would be given
10 minutes for a presentation.
Brent Curtis spoke first on behalf of Washington County . He addressed the
lack of street improvements in the area in light of the County' s critical
financial situation, pointed out that the $400'008 in county taxes collected
from the Metzger Community was a small percentage of the County's total
expenditures. In addition, Brent mentioned the Metzger area traffic study and
the Ash Creek drainage study.
Larry Cole representing Beaverton followed Brent. The Mayor elaborated on the
City' s organizational structure and his experience in City government at
length. In addition, he outlined the services the City could provide.
I represented the City of 'Tigard. I started by introducing Mayor Cook, Bill
Monahan, and Councilor Brian. I referenced the City's Urban Planning Area
Agreement and the City' s interest in the entire Metzger Community. I
indicated that the City of Tigard felt that the impacts in terms of changing
service providers and increased taxes would be felt least by the Metzger
residents if they annexed to Tigard. I illustrated that point by explaining
the attached handout which was passed out to everyone in the audience. I
ended my presentation by pointing out the urban service providers that would
deliver the services if the Metzger Community annexed to Tigard. I
illustrated my points using a large chart.
Frmnoie Royce from the City of Portland spoke next. She discussed the City' s
approach to annexation in general terms explaining that the City would do an
urban services study for the area to determine if it would be cost effective
for the City and the Metzger residents for the Metzger Community to annex to
Portland.
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Ron Roberto General. Manager of Washington Square was the lmxt speaker. He
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indicated that the presentations had just confused him and wanted information
about the benefits of annexation into the cities.
During the question period, the issue of incorporation was raised. Ron
Roberto indicated to me personally that he did not want to wee the community
consider incorporation.
One member of the audience raised a concern that if the community annexed into
Portland' the citizens may be "ignored" and not obtain any benefits. He cited
Multnomah as an example.
At then end of the meeting' a vote was taken. Approximately 40 people voted
to drop the issue, that is, take no further action. Approximately 63 people
voted to ask the cities to provide more information. I will be working with
the CPO and surrounding cities to prepare a uniform request for data.
All in all I feel that the information presented by the City of Tigard was
well received and I have had numerous calls sit-ice the meeting requesting more
information and clarification of the information presented.
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MEMORANDUM
CrTY OF TIGARD' OREGON
T0- Budget Committee April 22, 1985
FROM: Bob Jean, City Administrator U
SUBJECT': FY 1085-86 Policy Implications r FY 1006-87
By using all existing resources to keep current City services at Core Level I
through FY 1005-86 without an operating levy, we are also deciding the shape
of next years FY 1986-07 budget. This is neither gond or bad Financial
policy, but needs to be clearly known along with neveral remaining unknowns:
o Federal Revenue Sharing . . . eliminated by FY 1986-87?
o WCCLS Library Levy . . . . . . . . 1 year or 3 yearm. . . .
$2.2 or $2.4 million. . . . . . . voter approval?
u Civic Center capital and operating costs?
o State Sales Tax/Property and Income Tax Relief?
The February financial information looked like we would be facing about a
$300,800 nhnrtfall now for FY 1985-86. We gut a reprieve due to increased
franchise fee revenues and the County gas tax increase. Only the most
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short-sighted however, would nay that the February projections amounted to
"cries of wolf" . The wolf is mtill at the door. The reprieve in FY 1985-86
merely allows us to hold off our growing financial crisis for one more year.
We seem to be deciding to begin FY 1986-87 with a minimum $112 million
deficit. The real issue facing um remains the need for, passage of a new Tax
Base in May, 1986.
The following tables show the service leoel and financial options affecting a
new Tax Base decision:
GENERAL FUND FY 1985-86 FY 1086-87 FY 1086-87 FY 1980-87
TS _lJEVEL-I '-L{3/EL'-I LEVEL II LEVEL -III
Beginning Balance $ .5 -O- -0- -0-
Current IncomeLt.1 .3
($Million)
DEFICIT(**) -0- $ 800,000 $1,000,000 $1,200,000
CURRENT TAX BASEL*
I JAOO,_QOO 48 QOO 848 000 49
NEW TAX BASE? $800,000 $1,648,000 $1,848,000 $2,048,000
TAX BASE RATE $ .87 $ 1.60 $ 1.68 $ 1.86
Tax Base/HH/year $05 $115. $129. $143 .
(*) Current income includes the current tax base.
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Total Budget Needs less Beginning Balance and Current Income renourses.
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1985-06 Policy Implications Memo
Page 2
April 22, 1985
Assuming no inflation and no growth in service demand' the minimum deficit for
FY 1986-87 is the $1/2 million covered this year from Beginning Fund Balance.
Increases in FY 1986-87 revenues from taxes, fees and charges and increased
shared population—based revenues are likely to be offset by the loss of
Federal Revenue Sharing. Most likely in m 5% inflation and 5% population
growth, meaning a 10% General Fund budget impact driving the current
Recommended $2.8 million up to $3 . 1 million next year. While reasonable on a
per household basis, it still presents m sizeable change to the voter. And
the longer we put it off, the wider the gap and the more difficult to close.
(BJ:pl/2681A)
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MEMORANDUM
CITY OF TIGARD, OREGON
TO: Honorable Mayor and City Council April 22, 1985
FROM: Bob Jean, City Administrator
SUBJECT: Economic Impact of Metzger/Wash, gton Square Annexation
This memo should be considered a prospective evaluation based on available
information and my judgment of the urban economics involved in annexing the
Metzger/Washington Square community to the City of Tigard. This memo should
be considered preliminary and for discussion only.
AREA OF INTEREST: The City of Tigard has declared the Metzger/Washington
Square community as an Area of Interest in its Urban Planning Area Agreement
with Washington County. This has no special legal standing as to annexation,
only that Washington County has agreed to notify the City of any proposed land
use or related actions in the area. Beaverton and Portland have also declared
overlapping Areas of Interest within the community. Only Tigard has declared
the entire community area as an Area of Interest.
The community has expressed a desire to remain intact and address annexation
comprehensively rather than individually. The Boundary Commission has shown
an increased preference for Urban Service Plan studies as the basis for
deciding individual annexation requests. The City of Beaverton has recently
completed such a study. The City of Portland has so far focused its efforts
in East Multnomah County, but is again showing a Westside interest. Other
than our lower tax rate AND general community orientation (Post Office, School
District, Water District, Chamber of Commerce and proximity), the City of
Tigard may be at some disadvantage before the Boundary Commission in any
contested hearings.
ECONOMICS: The Metzger community contains about 6,500 residents or about
2,600 households. Tigard' s average residence is about $72,000 assessed
value. Metzger' s average household is projected at $67,000. The residential
Metzger community assessed value is projected around $174 million. The
Washington Square/Lincoln Center area is projected at some $456 million. The
total Metzger/Washington Square community is assumed to be about $630 million.
If annexed to Tigard, the City' s Tax Base rate of 87¢/1,000 would be
multiplied times the $630 million new assessed value and could add about
$548, 100 to our current $800,000 Tax Base. Per capita revenues (Gas Tax,
Cigarette and Liquor Tax, State Revenue Sharing, but not counting Federal
Revenue Sharing) would be about $35 times 6,500 for $227,500. Franchise fee
revenues are estimated at $175,000 per year. Annexation of the
Metzger/Washington Square community would add about $950,000/year in community
revenues from which to provide basic urban services. Utility services have
been assumed constant in these calculations. Assuming one police officer per
1,000 for Metzger and three-four officers for Washington Square, Core Level I
Police Services would cost about $350,000 - $400,000 per year. Library
services at Core Level apart from any WCCLS monies would add about $50,000.
Added Park services including Metzger Park would run $50,000 - $100,000,
Total added costs of basic municipal service would be about $500,000 per year
for the Metzger/Washington Square community .
Annexation of the Metzger/Washington Square community potentially represents
about a 2:1 positive budget situation for Tigard. Annexation of just Metzger
represents more of a 1: 1 or breakeven situation. Annexation of Washington
Square alone represents about a 4:1 favorable ratio.
COMMUNITY: RESIDENTIAL & COMMERCIAL = TOTAL ASSESSED VALUE
Tigard $620 $300 $ 920 million
(65%) (35%) (100%)
Metzger 1174 -0- $ 174
Sub-Total $794 $300 $1,094 million
(72%) (28%) (100%)
Washington
Square -0- 456 456
$794 $756 $1,550 million
(51%) (49%) (100%)
Since commercial/industrial properties contribute more than they consume in
urban services and since residential properties contribute less than they
consume in service costs, a higher ratio of commercial /industrial to
residential assessed values is economically favorable. Tigard has a favorable
ratio of residential to commercial/industrial at 65:35. Beaverton' s current
ratio of 75:25 is a healthy well-balanced ratio.
Annexation of Metzger only would place Tigard at a 72:28 ratio - - healthy,
but still with a tax shift from commercial/industrial to residential
properties. Annexation of Washington Square and Metzger would result in a
very favorable ratio of 51:49, and a sizeable reduction in the residential tax
burden. Unless Tigard annexes Metzger/Washington Square and offsets the
proportionately greater residential to commercial/industrial growth,
residential taxes will increase disproportionately to commercial/industrial
tax shares.
SUMMARY: Annexation of the Metzger/Washington Square community is feasible
and economically workable as far as basic services are concerned.
Capital improvement costs are largely unknown but appear manageable from gas
tax and utility revenue shares if scheduled on a 5-10 year basis. Long-term
economics seem advantageous for Tigard and the Metzger/Washington Square
community.
(BJ:pl/2682A)
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MEMORANDUM
CITY OF TIQARD, OREGON
~ TD- Honorable Mayor, City Council and Budget Committee April 17' 1985
FROM: Bob Jean, City Administrator i
SUBJECT: TRAINING COSTS
As a guideline' you asked un to target at 1/2% of Personnel Services for
Training and Training-related Travel. The following shows that break-out. At
Core Level I' I feel that the 1/2% in at minimum but acceptable. A Level II
figure of 1% is more realistic for ongoing needs. At Level III at 2% factor
is not out of line in my judgment. I believe the Budget as Proposed meets
your 1/2% guideline and no further adjustment is needed.
Ordinary Training Training & TOTAL
Travel Travel Education Training &
Train Travel.
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POLICE $500 $799 -O- $739
LIBRARY 50 60 550 610
FINANCE & SERVICES 650 1875 2110 8185
MUNICIPAL COURT 300 150 450
C.D.-Admin 520 280 700 980
C.D.-Planning 144 196 240 436
C.D.-Building -0- 200 1100 1300
C.D.-Engineering 500 300 1600 1900
L.D.-Oper tions 800 1000 1800
Sub-Total 2404 3950 7460 $11400
% of Pero. Serv. .395%
City Admin.-General 10U 1125 650 1775
Sub-Total 2504 5726 8600 3638
$14825
% of Perm. Serv. .476%
^ ' gity Counci 500 -O- 2125 2125
Total 3004 5725 10725 $16450
% of Pers. Serx. .545%
(0806p)