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Agenda - 06/12/2006 CITY OF WOODBURN URBAN RENEWAL AGENCY JUNE 12,2006 -6:45 P.M. KATHRYN FIGLEY, MAYOR WALTER NICHOLS, COUNCILOR WARD 1 RICHARD BJELLAND, COUNCILOR WARD II PETER MCCALLUM, COUNCILOR WARD III JAMES COX, COUNCILOR WARD IV FRANK LONERGAN, COUNCILOR WARD V EUDA SIFUENTEZ, COUNCILOR WARD VI CITY HALL COUNCIL CHAMBERS - 270 MONTGOMERY STREET 1. CALL TO ORDER 2. ROLL CALL 3. CONSENT AGENDA A. Urban Renewal Agency minutes of December 12, 2005 Recommended Action: Approve the minutes. 1 4. GENERAL BUSINESS None. 5. PUBLIC HEARINGS A. Public Hearing to Consider the Woodburn Urban Renewal 3 Agency's 2006-07 Budget Recommended Action: Conduct public hearing, receive public comment, and instruct staff to draft a budget resolution based on the Budget Committee's recom- mendation, including allowable budget adjustments that do not change the tax levy requirement. 6. PUBLIC COMMENT 7. ADJOURNMENT June 12, 2006 Urban Renewal Agency Page i '. 3A URBAN RENEWAL AGENCY MEETING MINUTES DECEMBER 12, 2005 TAPE READING 0001 DATE. COUNCIL CHAMBERS, CITY HALL, CITY OF WOODBURN, COUNTY OF MARION, STATE OF OREGON, DECEMBER 12, 2005. CONVENED. The Urban Renewal Agency meeting convened at 6:45 p.m. with Chair Figley presiding. 0015 ROLL CALL. Chair Figley Present Member Bjelland Present Member Cox Present Member Lonergan Present Member McCallum Present Member Nichols Present Member Sifuentez Present Staff Present: City Administrator Brown, City Attorney Shields, Finance Director Gillespie, Public Works Manager Rohman, City Recorder Tennant 0029 CONSENT AGENDA. A) approve Urban Renewal Agency Minutes of September 12, 2005 MCCALLUM/NICHOLS... adopt the Consent Agenda as presented. The motion passed unanimously. 0060 AUDIT REPORT FOR FISCAL YEAR 2004-05. Finance Director Gillespie stated that this is the second year of this Agency's existence and the document is fairly straight forward. In addition to the financial statements, the report includes (1) the Auditor's opinions, and (2) the Management Discussion and Analysis which is an executive summary for the Agency. It was noted that the major transactions for fiscal year 2004-05 were the receipt of the tax increment funds and the repayment of funds to the City General Fund for monies advanced for urban renewal projects. He stated that GASB 34 places a lot of emphasis on net assets and as of June 30,2005, the net assets totaled $325,000 which is $30,000 more than last year. NICHOLS/MCCALLUM... accept the audit report for 2004-05 as presented. The motion passed unanimously. Page 1 - Urban Renewal Agency Minutes, December 12, 2005 1 ."". ".... ... URBAN RENEWAL AGENCY MEETING MINUTES DECEMBER 12, 2005 TAPE READING 0278 ADJOURNMENT. MCCALLUM/SlFUENTEZ... meeting be adjourned. The motion passed unanimously. The meeting adjourned at 6:53 p.rn.. APPROVED KATHRYN FIGLEY, CHAIR ATTEST Mary Tennant, Recorder City of Woodburn, Oregon Page 2 - Urban Renewal Agency Minutes, December 12, 2005 2 '...,'........ .... (, " ~."'i1~.. ~ . <<. .,., ~'[l\ H';;' . W():() DBU RN lu.;or,,"r.t~tl fB!l'} SA ~~ . . June 7, 2006 TO: Mayor and City Council through City Administrator FROM: Ben Gillespie, Finance Direct~r 8M SUBJECT: Public Hearing to Consider the Woodburn Urban Renewal Agency's 2006-07 Budget RECOMMENDATION: Upon completion of the hearing before the Board of the Woodburn Urban Renewal Agency, staff recommends that the Board authorize staff to draft a budget resolution based on the Budget Committee's recommendation, including allowable budget adjustments that do not change the tax levy requirement. BACKGROUND: On May 20, 2006, the Budget Committee concluded a hearing on the Woodburn Urban Renewal Agency's 2006-07 budget and unanimously recommended that the budget document be forwarded to the Board of the Urban Renewal Agency for the next phase of the budget process. As required by Oregon Budget Law, the notice of this hearing date, along with the financial summary, was published in The Woodburn Independent on June 7, 2006. The financial summary documents an Agency budget totaling $2,460,000. DISCUSSION: No changes to the Budget Committee's Recommended Budget are proposed. FINANCIAL IMPACT: The proposed budget is consistent with the budget policies adopted by the Budget Committee in January 2006. Agenda Item Review: City Administrato . City Attorney Finane 3 .. URBAN RENEWAL DEPARTMENT: URBAN RENEWAL DIVISION: DEBT SERVICE FUND: DEBT SERVICE PROGRAM DESCRIPTION This program repays the Urban Renewal Agency's debt obligations. Statute requires that urban renewal funds be expended to support debt service. Revenues derived from property tax increment support the fund. Urban renewal agencies do not have permanent tax rates; they obtain funding through tax increment financing. Tax increment financing allocates revenues to an agency based on the amount of the urban renewal area's excess or "incremental" value, the amount of assessed value above a base value that was frozen at a specific point in time. Woodburn's Urban Renewal frozen base value is based on the 2001 tax year. Proceeds for 2006-07, the fourth year's allocation of tax increment for the Urban Renewal Agency, are estimated at $444,000. Debt obligations for 2006-07 are established in two ways: by contractual arrangement with the City of Woodburn, for charges associated with audit, legal, and consulting services and for the Front Street project; and for debt service of a $1,850,000, ten-year, obligation entered into with Bank of America during 2005-06. PROGRAM FINANCIAL SUMMARY Object Class 2003-04 2004-05 2005-06 2005.06 2006.07 2006.07 Change Change Expended Expended Amended Yr End Est Baseline Recom'd ($) (%) Debt Service 0 285,947 1,297,500 659,000 1,823,500 1,823,500 526,000 40.54% Equity 0 0 73,738 0 636,500 636,500 562,762 763.10% TOTAL EXPENDITURE 0 285,947 1,371,238 659,000 2,460,000 2,460,000 1,088,762 79.40% RECO~ENDEDBUDGET The recommended budget of $2,460,000 for 2006-07 represents an increase of $526,000 (79.4%) over the revised budget for 2005-06. The Debt Service Budget of$1,823,500 increases 40.54 percent over 2005-06 and reflects budgeting for Phases II and III of the Front Street widening and renovation project ($1,584,000). This budget also supports the cost of servicing the debt incurred in 2005-06 to borrow funds to pay for renewal projects ($233,000) and reimburses the City for special administrative, legal, and auditing services supporting the urban renewal program ($6500). Equity of $636,500 is a 763.1 percent increase over 2005-06 and includes a $294,500 contingency and a reserve for bond indebtedness of $342,000. This reserve represents 150 percent of the maximum debt service amount, and is required pursuant the Agency's agreement with Bank of America. Contingencies represent the amount of funding on hand after 2006-07 obligations are met. This amount will be reduced in future years, as additional debt, related to new projects and programs, is incurred. POLICY ITEMS (Recommended) 3 Urban Renewal 4 '... ~ $803,000 in Debt Service improves Front Street from Cleveland to Hardcastle streets (Phase II), including under-grounding utility lines, streetscape, and renovating curbs, gutters, and sidewalk. Phase II costs were originally estimated at $640,000. Cost increases and inflation have raised that estimate to $730,000 in 2006-08 and shifted funding reliance on monies that were to be expended in Phase III. The recommended amount of $803,000 provides for a 10 percent contingency for unforeseen circumstances and inflationary increases. ~ $781,000 in Debt Service improves Front Street from Hardcastle to the high school (Phase III), including undergrounding utility lines, renovating and widening the roadway, installing curbs gutter and sidewalk, and lighting and streetscaping. Phase III costs were originally estimated at $800,000. Increased need for funding during Phase II reduces that amount to $710,000. The recommended amount of $781 ,000 provides for a 10 percent contingency for unforeseen circumstances and inflationary increases. ~ $6,500 in Debt Service maintains the Urban Renewal Agency's share of the cost of a citywide audit ($2,500), and consulting services associated with project planning and financing (2,500) and specialized legal services ($1,500). 4 Urban Renewal 5 .