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City Council

Agenda

City Hall

225 Fifth Street

Springfield, Oregon 97477

541.726.3700

Online at www.springfield-or.gov

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June 8, 2020

_____________________________

5:30 p.m. Work Session

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City Manager:

Nancy Newton

City Recorder:

AJ Ripka 541.726.3700

Mayor Christine Lundberg

City Council

Sean VanGordon, Ward 1 Steve Moe, Ward 2 Sheri Moore, Ward 3 Leonard Stoehr, Ward 4 Marilee Woodrow, Ward 5 Joe Pishioneri, Ward 6

https://attendee.gotowebinar.com/register/4083158882888498957

Council Agenda

June 8, 2020

CALL TO ORDER

ROLL CALL - Mayor Lundberg ___, Councilors VanGordon___, Moe___, Moore____, Stoehr___,

Woodrow ___, and Pishioneri ___.

1. Budget Adjustment Discussion

[Nathan Bell] (60 Minutes)

ADJOURNMENT

_____________________________

6:30 p.m. Executive Session

(Estimated Time)

VIRTUAL MEETING ONLY

NON-PUBLIC MEETING

Pursuant to ORS 192.660(2)(d) and ORS 192.660(2)(f)

(Media can obtain virtual meeting details by

calling 541-726-4666 or email [email protected]

no later than 5:00 p.m. on the day of the meeting)

_____________________________

CALL TO ORDER

ROLL CALL - Mayor Lundberg ___, Councilors VanGordon___, Moe___, Moore____, Stoehr___,

Woodrow ___, and Pishioneri ___.

1. Labor Negotiations Between the City and Springfield Police Association (SPA)

[Chaim Hertz] (30 Minutes)

ADJOURNMENT

mailto:[email protected]

AGENDA ITEM SUMMARY Meeting Date: 6/8/2020 Meeting Type: Work Session Staff Contact/Dept.: Nathan Bell Staff Phone No: 541-726-2364 Estimated Time: 60 Minutes S P R I N G F I E L D C I T Y C O U N C I L

Council Goals: Provide Financially Responsible and Innovative Government Services

ITEM TITLE: BUDGET ADJUSTMENT DISCUSSION

ACTION REQUESTED:

Provide direction to staff on adjustments to the fiscal year 2021 budget scheduled for a public hearing and adoption on June 15, 2020 during Regular Session.

ISSUE STATEMENT:

In a work session on April 6th, 2020, staff asked for guidance on some proposed options for conducting the fiscal year 2021 (FY21) Budget Committee process in regards to the COVID-19 pandemic. It was discussed that the FY21 budget was completed prior to an understanding of the potential impacts of COVID-19 on the budget and that it was still premature to understand the full impacts on revenues and the required expenditure adjustments in a timeframe that would work for Budget Committee. It was generally agreed by Council that we would present the FY21 budget as completed to the Budget Committee with the plan to come back to Council in a work session at a later date to review revenue impacts and adjust expenditures accordingly.

ATTACHMENTS: Attachment 1: Covid-19 Revenue Impact Projections Attachment 2: General Fund Five-Year Forecast Attachment 3: Ambulance Fund Five-Year Forecast Attachment 4: General Fund Reduction Proposal Attachment 5: Budget Committee Agency Requests

DISCUSSION/ FINANCIAL IMPACT:

City staff has been monitoring the potential impact of Covid-19 on the revenue streams of the City’s funds and, in consultation with subject matter experts, has developed projections for the City’s General Fund significant revenue sources (Attachment 1). These projections include a best-case, mid-case, and worst-case scenario. In preparing the Executive Team (ET) for a conversation on potential reductions to the General Fund budget, a five-year forecast for the General Fund (Attachment 2) and Ambulance Fund (Attachment 3) was shared to provide a context for needed reductions. These forecasts incorporate the COVID-19 mid-case revenue impacts from Attachment 1. The Budget Team, in partnership with ET, has prepared a package of expenditure adjustments (Attachment 4) for your consideration to be incorporated in the budget adoption on June 15th, 2020. These adjustments will help offset the short-term revenue impacts of COVID-19 as well as place the City in a better position to weather the longer-term impacts of a COVID-19 recession. Staff has also included the Budget Committee agency requests (Attachment 5) for your consideration and final decision prior to the budget adoption.

General Fund Impacted Revenue Sources

Best Case

Description FY20 FY21 TOTAL

Transfer from Transient Room Tax Fund 200,000 274,000 474,000

Property Tax (Increase in Delinquency 1%) - 237,000 237,000

Planning Fees - 48,000 48,000

Interest Earnings - 250,000 250,000

TOTAL 200,000$ 809,000$ 1,009,000$

Mid Case



Property Tax (Increase in Delinquency 1.5%) - 357,000 357,000

Planning Fees - 140,000 140,000

Interest Earnings - 265,000 265,000

TOTAL 200,000$ 1,108,000$ 1,308,000$

Worst Case



Property Tax (Increase in Delinquency 2%) - 475,000 475,000

Planning Fees 20,000 337,000 357,000

Interest Earnings 75,000 275,000 350,000

TOTAL 295,000$ 1,505,000$ 1,800,000$

Projected impact COVID-19 may have on some of the key revenue sources in the General Fund

Attachment 1, Page 1 of 1

General Fund Five Year Forecast

Actual Actual Actual Estimated Actual FCST FCST FCST FCST FCST

FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25

Operating Revenue 35,936,676$ 37,128,696$ 38,081,005$ 39,764,622$ 39,267,799$ 41,075,306$ 41,994,773$ 42,940,219$ 43,917,194$

ExpendituresOperating Expenditures 35,255,098 35,530,578 37,183,039 39,118,740 40,247,121 42,341,719 43,339,282 45,034,316 46,301,440

Fiscal Transactions 947,604 437,123 436,006 1,609,152 2,019,780 1,749,681 1,763,702 1,778,143 1,793,018

Total Expenditures 36,202,702$ 35,967,701$ 37,619,045$ 40,727,892$ 42,266,901$ 44,091,399$ 45,102,984$ 46,812,459$ 48,094,458$

Change in Net Position (266,026)$ 1,160,995$ 461,960$ (963,270)$ (2,999,102)$ (3,016,094)$ (3,108,211)$ (3,872,241)$ (4,177,264)$

Beginning Cash 8,666,256 8,574,037 9,735,032 10,196,992 9,233,722 6,234,620 3,218,526 110,315 (3,761,925)

Ending Cash 8,400,230 9,735,032 10,196,992 9,233,722 6,234,620 3,218,526 110,315 (3,761,925) (7,939,190)

Reserves as % of Operating 24% 27% 27% 24% 15% 8% 0% -8% -17%


Ambulance Fund Five Year Forecast

Actual Actual Actual Estimated Actual FCST FCST FCST FCST FCST

FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25

Operating Revenue 6,030,814$ 5,440,704$ 6,219,367$ 6,408,855$ 4,721,970$ 5,752,482$ 5,856,499$ 5,965,053$ 6,072,417$

ExpendituresPersonnel Services 4,091,109 4,212,050 4,506,811 4,421,779 4,242,596 4,512,564 4,667,178 4,896,527 5,032,454

Materials & Services 1,912,503 1,872,406 2,035,920 2,458,270 2,405,780 2,465,925 2,527,573 2,590,762 2,655,531

Total Expenditures 6,003,612$ 6,084,456$ 6,542,731$ 6,880,049$ 6,648,376$ 6,978,489$ 7,194,751$ 7,487,289$ 7,687,985$

Change in Net Position 27,202$ (643,752)$ (323,364)$ (471,195)$ (1,926,406)$ (1,226,007)$ (1,338,252)$ (1,522,236)$ (1,615,568)$

Beginning Cash 2,327,796 2,354,998 1,711,246 1,387,882 916,687 (1,009,719) (2,235,726) (3,573,978) (5,096,215)

Ending Cash 2,354,998 1,711,246 1,387,882 916,687 (1,009,719) (2,235,726) (3,573,978) (5,096,215) (6,711,783)

Reserves as % of Operating 39% 28% 21% 13% -15% -32% -50% -68% -87%


General Fund Reduction Scenario

Description

Department

Proposed

Executive

Team

Proposed

City Manager's Office (target $46,586)

- Shift personnel costs to SEDA Glenwood & SEDA Downtown Funds 46,585$ 46,585$

DPW (OPS) (target $33,206)

- Leave building maintenance worker position vacant. Vacancy results in $55k

savings. Proposed use of remaining savings to support contractual services.33,000 55,000

Finance (target $73,056)

- Eliminate AP Tech position and bring Administrative Assistant from .7 FTE to 1.0

FTE 69,000 69,000

- Restructure City's procurement program. Reclassify Procurement Manager (C44/9)

to a Management Analyst (C41/9). No first year savings, with a savings of $30,400

in subsequent years. 30,400 30,400

SUBTOTAL 99,400

Fire (target $366,543)

- Unfund, but don’t eliminate the FTE, for Fire Instructor Position 128,000 128,000 - Eliminate the Ambulance Billing Supervisor and shift an equal portion of dispatch

fees to Ambulance Fund. 121,000 121,000

SUBTOTAL 249,000

Information Technology (target $60,093)

- Eliminate Information Security Management Analyst 110,712 110,712

- Upgrade programmer analyst to manager (44,205) (44,205)

- Add back-up software materials & services (45,000) (45,000)

SUBTOTAL 21,507

Library (target $51,675)

- Reduce materials & services for Library collections 51,675 20,000

Police (target $477,702)

- Community Service Officer 2 Position - permanent reduction 104,647

- Records Specialist Position - permanent reduction 93,400

- Vacancy management - sworn police officers (approx. 2 FTEs) 279,655

- Body Worn Cameras Program 350,000 350,000

SUBTOTAL 827,702

TOTAL 841,492$

Other:

- No wage increase (1.5%) for Executive Team 12,000

- All travel must be approved by the City Manager with business justification TBD

- Only replace mission critical positions TBD

- Delay equipment replacement that is not absolutely necessary TBD


Outside Agency Requests for Funding

Agency Description of Request Amount ($)

Emerald Art Center Building maintenance and improvements $12,000

Lane County Human Services Commission

Range of options that include increase of

base contribution and specific agency

programs

$25,557 - $172,795

Square One Villages / Cultivate Purchase of land for affordable housing $60,000

*Materials submitted by each agency are included for review.


May 1, 2020

“Art is as natural as sunshine and as vital as nourishment.” --MaryAnn F. Kohl

My name is Sarah Bloom Kinser and I serve as the Board President for the Emerald Art Center since 20xx. The Emerald Art Center is a place where beginning and established artists join together to create and showcase their art in a historic building in downtown Springfield. It is a place for community to view local and national art shows as well as attend classes and other events.

With a vision to build “a community engaging in and celebrating the arts, experiencing the joys of creative expression and communication,” the Emerald Art Center is a 501(c)3 non-profit organization that has been serving the community since 1957. Our organization has been housed in a 100-year-old building on Main Street in Springfield since 2001.

The organization is financed through generous donors; associate and supporting memberships; and workshops and lectures. I am speaking tonight to ask for the City of Springfield’s help in continuing this amazing work. We have recently been made aware of two critical needs in our facility. The first involves faulty electrical inverters. We are required by code to have working inverters that will supply power to our exit signs in the case of a power outage. We have established these inverters are not working and have received an estimate in the amount of $5,500 -$9000 to replace the broken electronics and bring the building back up to code. In addition, we have identified a window with a broken seal that is creating water leakage. We were informed that when a broken seal is discovered the other windows, most often, will also have broken seals. This repair will need to be completed in order for us to maintain our commitment to our renters to keep the building in good repair. The estimated costs of fixing the seals on the windows is $6,500-$6,800.

I am speaking to you tonight, as a representative of the Emerald Art Center, to ask for the City’s assistance in allocating the funding needed in the 2020-2021 budget to support our continued efforts in bringing important, life-changing opportunities and culture to the City of Springfield and surrounding areas. Ideally, we are requesting $12,000 for use in replacing the Emerald Art Center’s broken electrical inverters and for resealing the windows to prevent water and mold damage from occurring.

We appreciate the council’s time and consideration. Thank you.


68 WEST ‘Q’ STREET SPRINGFIELD, OR 97477

PHONE (541) 747-6638 FAX (541) 747-7157

C.C.B. #8699

PROPOSAL

Date: May 5, 2020

Submitted to: Emerald Art Center

Attention: Sarah Kinser

Address: 500 Main Street

City, State, Zip: Springfield, OR 97477

Phone: (541) 510-4405

_____________________________________________________________

We hereby submit an estimate to:

Perform the following lighting upgrade:

1) Replace 3 – 2’x4’ 3L surface fixtures with new LED

2) Replace 2 – 1’x4’ cloud fixture with new LED

3) Replace 9 – 6”x4’ edge mounted fixture with new LED

4) Replace 4 – exit signs with new battery-backed exits

5) Remove lighting inverter and provide bypass wiring

6) Furnish a permit.

Exclusions: None

We propose to furnish material and labor for the sum of: $9,087.00

Nine Thousand Eighty Seven Dollars and No/100’s

Payment to be made as follows: Due Upon Receipt of Invoice

Authorized Signature:________________________

This proposal may be withdrawn if not accepted within 30 days of the

Proposal date.

ACCEPTANCE OF PROPOSAL

The above prices, specifications and conditions are satisfactory and are

hereby accepted. You are authorized to do the work specified. Payment will

be made as outlined above. No material will be purchased or work performed

until a signed and dated Proposal has been returned.

Signature:_________________________ Date:__________________ Attachment 5, Page 3 of 26

EstimateDate

3/2/2020

Estimate #

200

Name / Address

Next Generation Property Management

Brinker's LLCPO Box 10026Eugene, OR 97440CCB# 210329

Project

500 Main St Suite D

50% Deposit is required to begin work. This is an estimate only, and not a contract for work. Total

Description Qty Rate Total

PERMITS AND FEES includes application prep and encroachment permits, admin fees,additional fees for safety plan and signs.Boom lift will be blocking sidewalk during business hours, and willrequire city permits to close sidewalk for pedestrian/public safety,whichrequires a safety plan and signs, barricades etc.

1 968.50 968.50

EQUIPMENT: Boom lift - up to 2 days Includesmobilization/delivery

1 1,541.80 1,541.80

LABOR & MATERIALS: work on exterior window to address leakincluding, caulking, and install trim as needed. Includes labor forsafety coordinator and 2 carpentryworkers.

1 3,324.76 3,324.76

$5,835.06


Monya,

The cost to complete your project is $3500.00 and includes:

1. Permanently disconnect the existing emergency power source located adjacent to the electrical panel to allow for its removal. Removal to be completed by others.

2. Installation of emergency battery backup power for the following existing fluorescent light fixtures. Each fixture converted to battery backup will also be converted to LED tubes, the fluorescent lamps will be removed.

a. One first floor light fixture mounted close to the elevator door.

b. One first floor wall mounted light fixture at the west stair entry.

c. One first floor wall mounted light fixture at the east stair entry.

d. One mezzanine level light fixture mounted close to the elevator door.

e. Two mezzanine level light fixtures in the north stairway, one on the way up and one on the way down.

f. One second floor light fixture mounted close to the elevator door.

g. Three second floor light fixtures in the main hallway.

3. Replace six existing exit signs with combination exit signs and egress lights (red signs with two heads). One at main entry, one at west entry first floor, one at elevator, two at west entry second floor and one at east stairs.

Thank you for the opportunity. Let me know if you have any questions or would like to get the project scheduled,

Jeff Lozar

Livewire Electric, Inc.

Office: 541-344-4928

Cell: 541-521-7810


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MEMORANDUM

TO: Springfield City Council/Springfield Budget Committee FROM: Steven Manela, Human Services Division Manager DATE: May 29, 2020 SUBJECT: Human Services Commission Budget Request Given the continued needs of vulnerable Springfield residents we are requesting your consideration of increasing the base general fund contribution by $25,557, increasing the City budgeted amount from $135,252 to $160,809. We will use the $25,557 to cover the cost of providing a level of contracted services for Springfield residents given increases in expenses. As in the past, we are thankful to also receive a contribution of federal Community Development Block Grant. The HSC Fund supports the work of nonprofit organizations in Lane County and leverages local government’s investments to give hope and opportunity to the most vulnerable in our region. The City of Springfield’s financial support has made a great difference. Thank you for your generosity in supporting the HSC and helping the most vulnerable in Lane County meet their basic survival needs. Non-profit organizations in Lane County are seeing an increased demand for services. The high rate of unemployment and increase in poverty given the Covid-19 crisis leaves Springfield families with fewer resources to address their most basic needs—food, heat, and shelter, to assist them with becoming more self-reliant and to protect them from domestic violence and child abuse. The Human Services Commission works in the heart of the community to discern where the needs are greatest and which strategies will make the most impact. Our staff is in the field daily, listening and learning about the rising needs identifying the most effective strategies in partnership with nonprofit organizations that will help to sustain households. The HSC leverages the City of Springfield’s dollars with federal, state, and private resources and on-the-ground community expertise, relationships, and strategies to make the most impact with your contribution. At the core of the HSC is our belief that timing can be everything. Your city’s contribution helped transform lives; from saving a family from homelessness, to keeping an adolescent in school, to alleviating a toddler’s hunger pangs, or providing safe harbor to those fleeing domestic violence. With your partnership, The Human Service Fund granted $10 million this past year to nonprofits organizations that are critical to our community. Your support significantly impacted the ability of these organizations to address the urgent needs of a community in crisis. In FY19, HSC helped more than 50,000 people access critical services.


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In addition to the request for sustaining general funds, additional requests were received by Springfield-based service agencies that totaled $172,795. Your consideration of a portion of these requests with additional CDBG funds would be welcomed.

Program Current Contract Holder Ongoing One Time Total Parent Education - In Home Outreach Relief Nursery $8,255 $15,000 $23,255 Community Service Center Catholic Community Svcs. $38,000 $21,540 $59,540 Senior Meal Delivery Lane Council of Gov. $40,000 $0 $40,000 Homeless Outreach TBD $50,000 $0 $50,000

Total $136,255 $36,540 $172,795 Program Current Contract Holder Maintain Expand Total Parent Education - In Home Outreach Relief Nursery $8,255 $15,000 $23,255 Community Service Center Catholic Community Svcs. $38,000 $21,540 $59,540 Senior Meal Delivery Lane Council of Gov. $0 $40,000 $40,000 Homeless Outreach TBD $0 $50,000 $50,000

Total $46,255 $126,540 $172,795


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FY 20-21 Anti-Poverty Safety Net Services Request from the Human Services Commission (HSC)

SUPPORT FOR SPRINGFIELD- HUMAN SERVICES The purpose of the Human Services Fund is to provide public support for public and private community-based human-service programs through an orderly process that is responsive to changing community needs. During the last quarter of 2019, the Human Services Commission convened panel discussions of the providers who currently hold the contracts to provide anti-poverty services in Springfield, Eugene, and rural Lane County. The important substance of those panel discussions was an overview of the need in Springfield, Eugene, rural Lane County and what they are seeing on the ground. The following budget request is for identified Springfield projects only. These requests were developed pre-COVID and represent the existing service needs prior to the pandemic. Some needs have increased in urgency due to the pandemic, such as maintaining the number of people served by programs and food security. This budget request is presented in sections, with each requested item as a stand-alone funding option. These may be funded in entirety, or selected a-la-cart as desired. They are listed here in order of priority. Two Percent Increase A 2% overall increase in subcontracted program totals is requested to keep up with inflation and the increased program costs to deliver services on par with historic service levels. Human Services Commission funds have been flat-funded for many years, representing regressive funding that is unsustainable and will result in less people being served by anti-poverty and homelessness programs in the future. Lane County and the City of Eugene have already committed their portion of a 2% increase in contracted program totals, per the percent of poverty by jurisdiction (see table below). The 2% increase distribution is based on the percentage of poverty within Lane County. Of the 68,710 Lane County individuals in poverty, 12,848 are living within the jurisdiction of Springfield, or 18.7%. The 2% increases totaled $136,677 of which 18.7% is $25,557. Poverty populations are historically used to determine need and utilization of HSD programs. Using poverty population is more equitable than the amount of funding a jurisdiction contributes to the HSC which is not connected to use or need.

Percent of Poverty by Jurisdiction Quickfacts US Census Population Estimates July 1, 2019

2% Increase by Jurisdiction

Poverty Population (total people)

Poverty %

Springfield $25,557 12,848 18.7% Eugene $73,238 36,818 53.6% Lane County $37,882 19,044 27.7% TOTAL $136,677 68,710 100%


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Program-Specific Requests Below are budget requests specific to programs that serve Springfield residents. “Ongoing” costs represent personnel costs or costs that should be anticipated to be ongoing in future contracts, as they represent ongoing program costs. Costs listed as “Maintain” are costs that ensure historic service levels are maintained (i.e. the cost to serve the number of people historically served by each program, given inflation and rising program costs). “One-Time” costs are direct service costs that can be implemented on a year by year basis. Costs listed as “Expand” create expanded direct services or new services not previously funded by the HSC. In addition to the 2% adjustment in non-profit contract payments, Lane County budgeted $90,000 for program support outside of the cities of Eugene and Springfield, and the City of Eugene allocated an additional $45,000. Program Current Contract Holder Ongoing One Time Total

Parent Education - In Home Outreach Relief Nursery

$8,255 $15,000 $23,255

Community Service Center Catholic Community Services $38,000 $21,540 $59,540 Senior Meal Delivery

Lane Council of Governments $40,000 $0 $40,000

Homeless Outreach

TBD

$50,000 $0 $50,000 $136,255 $36,540 $172,795

Program Current Contract Holder Maintain Expand Total Parent Education - In Home

Outreach Relief Nursery

$8,255 $15,000 $23,255 Community Service Center Catholic Community Services $38,000 $21,540 $59,540 Senior Meal Delivery

Lane Council of Governments $0 $40,000 $40,000

Homeless Outreach

TBD

$0 $50,000 $50,000 $46,255 $126,540 $172,795 Parent Education- In-Home Outreach- $8,255 ongoing, $15,000 one-time. Total: $23,255 This program prevents child abuse in Springfield through bilingual parent education and home visiting. The current contract holder is Relief Nursery. Ten Springfield families are served annually. There is very high demand for this service in Springfield. With increasing programmatic costs, $8,255 is needed to maintain historic/current level of service to maintain existing capacity to serve 10 families annually. An additional $15,000 ongoing program cost would double program capacity in Springfield and serve an additional 10-15 Springfield families. This would be achieved through an additional staff person ($46,000/annual cost to be split proportionally between Cities of Eugene and Springfield). The additional staff person hire relies on the City of Eugene approving this addition as well, as the new 1 FTE would be split between serving families in Springfield and Eugene. The cost represented here only includes Springfield’s share of the FTE.

Springfield Community Service Center– ongoing $38,000, one-time $21,540. Total: $59,540. The Springfield Community Service Center (current contract holder Catholic Community Services) provides basic needs assistance including shower passes, ID assistance, transportation, referrals for specialized services and food to 5,000 Springfield residents annually. The highest demand services include shower passes, bus passes, and assistance securing government identification. The ongoing cost of


3

$38,000 is requested to replenish a front desk staff person (this was previously funded by a grant that expired). Front desk staff time has been reduced due to program cuts. Subsequently, with less front desk staff to help people as they enter for assistance, there can be 80 minute wait times to get a food box. Long wait times correlate to reduced inquiries for other services as people are exhausted by the time they speak to a staff person. This represents a 67% lost opportunity to refer people to other services for which they are eligible. Clients also make several trips to the same Community Service Center to get their needs met. $21,540 are requested for one-time client assistance funds for highest demand services which would include: $1,200 shower passes, $15,000 bus passes, $5,340 identification assistance.

Senior Meal Delivery - $40,000 ongoing The Meals on Wheels program (operated by Lane Council of Governments in partnership with FOOD for Lane County) serves nutritious meals to 170 Springfield seniors annually. There is high demand to add another meal route in Springfield which would serve 25 new daily participants. The staff, meal preparation, and mileage cost to add another route is $40,000 ongoing. This cost should be anticipated as an ongoing cost due to the start-up costs to develop the route, hire staff, and integrate food preparation and route into ongoing Meals on Wheels program. Note, this request was received pre-COVID. Meal delivery and access to emergency food has increased in demand since COVID.

Homeless Outreach - $50,000 ongoing (1 FTE focused on homeless outreach in Springfield) This Homeless Outreach position would provide direct assistance and service navigation to unsheltered Springfield residents and coordinate efforts with public safety, parks, and other Springfield property owners. $50,000 ongoing to add a Springfield Outreach Worker to a team being supported by Lane County and the City of Eugene. Lane County and the City of Eugene have begun implementing homeless street outreach and want to ensure Springfield residents are incorporated into an overall regional strategy to reach people not currently connected to services.


5/1/20 From: Dylan Lamar, Director, Cultivate, Inc. Dan Bryant, Executive Director, SquareOne Villages To: City of Springfield Budget Committee Request for Funds: Permanently-Affordable Homeownership Opportunities Dear Committee Members, Cultivate is a for-profit architecture and development company working in collaboration with SquareOne Villages, a local 501c3 non-profit. We are currently pursuing a “Co-op Revillaging” pilot project to create new permanently-affordable homeownership opportunities on regular low-density residential lots. The pilot project is to be located on a lot near 10th and C Street where we plan to build a new shared house and ADU providing six such homeownership opportunities. By designing the homes for shared use and shared cooperative ownership, total costs per household are lowered to approximately $91,000 including land costs. To achieve permanent affordability requires a total subsidy of approximately $24,000 per household. This subsidy will facilitate the land purchase on behalf of a community land trust (SquareOne) and achieve permanent affordability by 60% AMI households. Construction financing will be provided by local community members acting as social investors, earning below-market-rate interest. Current funding sources include:

a. ~$443,000 construction loan by private social investors b. ~$80,000 from SquareOne Villages (with support from Meyer Memorial Trust) c. ~$4,000 down payments by each of 6 homeowners ($24,000 total)

(SHOP down payment assistance is not available for new construction.)

We are requesting $60,000 from the City of Springfield Budget Committee as an interest-free loan to support the land purchase on behalf of the community land trust. The loan would be due if the property is ever sold or converted to market-rate use. Erin Fifield, Community Development Analyst, informs us that the City may be able to borrow funding from HUD to be reimbursed through next year’s CDBG cycle.

Cultivate, Inc. | 55 W 27th Avenue, Eugene, Oregon 97405 | www.cultivateplace.com 1Attachment 5, Page 11 of 26

We will also be pursuing a waiver of permitting and SDC fees as well as a 10-year property tax exemption to help lower monthly costs for homeowners, allowing us to achieve affordability by 60% AMI households. Attached is a Project Description with further information. Thank you very much for your consideration. Sincerely,

Dylan Lamar Dan Bryant Director, Cultivate, Inc. Executive Director, SquareOne Villages

Cultivate, Inc. | 55 W 27th Avenue, Eugene, Oregon 97405 | www.cultivateplace.com 2Attachment 5, Page 12 of 26

The Co-op Revillaging ProjectC Street Pilot Project

A collaboration of

PROJECT DESCRIPTION 4/16/20


A New Pathway to Affordable HomeownershipWith home prices now excluding the majority of Eugene-Springfield’s population from homeownership, transformativesolutions to the housing crisis are called for. The Co-op Revillaging Project offers a housing development model creatingnew homeownership opportunities on typical residential lots, which remain permanently affordable. This is madepossible through cooperation: intentionally-designed shared homes containing suites for multiple owners, and ashared ownership structure. The homes are owned through a limited-equity housing cooperative, and the land issecured by ownership through a community land trust. A one-time investment by local social investors paired withmodest subsidies (~$24,000 per household) enable permanent affordability by households earning 60% of the areamedian income.

Through a spirit of cooperation, the Co-op Revillaging Project reestablishes a widely-accessible pathway towardhomeownership and ensures these opportunities remain permanently available in the community. And unlike thesuburban homeownership model of the 20th century, this model can serve a diversity of housing types and help facilitatea transition toward sustainable, socially-cohesive and walkable neighborhoods.

Shared ADU

Shared HouseCooperation for Homeownership Opportunity

Shared Housing Cost-SharingSocial Connections

Co-op/Land Trust Shared Ownership StructurePermanent Affordability

Social Investors Local, Low-Interest FinancingLocal Profits Support Replicability

Community Grants One-time Land PurchaseExtends Affordability & Scalability


Revillaging Exclusionary NeighborhoodsAs we face our nation’s housing crisis, communities are struggling to accommodate a growing population with increasingly smallerhousehold sizes, in neighborhoods zoned exclusively for low-density, single-family housing. Housing advocates are calling for morehousing diversity and more walkable neighborhoods. As a result, duplexes, accessory dwelling units (ADU’s) and other “missingmiddle” housing types are being re-legalized across many communities.

However, the construction of additional housing on existing single-family lots will tend to create only new rental housing, andactually increase the cost-barrier to property ownership. As rental rates and property values rise, increasing housing density in a“business-as-usual” scenario suggests a trend toward growing economic inequality between renters and owners. As werethink the exclusionary single-family neighborhood, how can we reestablish the widely-accessible homeownership opportunity itonce offered and counter current trends toward inequality?

The technical solutions are clear: we need more abundant and more diverse housing options, and we need ownership and financingoptions that facilitate multiple owners per lot, such as condos and co-ops. Our challenge is to demonstrate how these solutions canactually offer better neighborhoods for everyone. It requires acknowledging the exclusionary, car-dependent nature of low-densityzoning regulations, and reimagining ourneighborhoods instead more likesustainable villages where an abundanceand diversity of people hold ownership oftheir homes, and can enjoy parks, plazas,shops and cafes within walking distance oftheir home. This is actually not so hard toimagine because one hundred years ago thiswould have described most neighborhoods inAmerica. You might call this then, a“revillaging”.

While such a revillaging is a decades-longendeavor, the housing model of such a vision isoverdue for arrival.

Anthony Holdsworth


C Street Pilot ProjectThe C Street Pilot Project is planned for a vacant residential lot on C Street in downtown Springfield, currently owned by a projectinvestor. The lot will host a new shared house and ADU, designed with one-bedroom suites for up to six co-op owners. Thedesign maximizes construction efficiency and energy efficiency, targeting “net zero energy” performance. With Cultivate, Inc. actingas architect-developer, a small number of social investors will provide construction financing of approximately $440,000, and alicensed contractor will oversee construction. Construction ideally begins Summer 2020, depending on impacts of the pandemic.

SquareOne Villages, acting as the community land trust, is pursuing $60,000 in grant funding to purchase the land, andapproximately $40,000 to cover the costs of the program creation. Other subsidies, such as downpayment assistance provided bythe City of Springfield and a temporary property tax exemption will also be pursued to achieve affordability for householdsearning 60% of the area median income.

Social InvestorsProject-Specific LLC

Home Builder Co-opHomeowners

CommunityGrants

Cultivate, Inc.Architect-DeveloperBenefit Corporation

SquareOne VillagesCommunity Land Trust

501c3 Non-Profit

New Housing Cooperative

Land Trust

Development Structure


After construction the limited-equity housing cooperative will be established, and purchase the property through a co-op specificmortgage. Shared Capital Cooperative offers such mortgages at ~6.25% interest. The co-op will hold ownership of the homes andmaintain a ground lease with SquareOne.

Aspiring homeowners will be selected by SquareOne Villages, and with a share purchase (downpayment) of up to $14,000become new co-op shareholders. Downpayment assistance from the City of Springfield offers interest-free loans for up to 50% ofthis downpayment, which don’t require repayment until the share is sold. The co-op homeowners will self-manage their housing,and have total monthly payments of approximately $730 including utilities. SquareOne, acting as the land trust, will be available toprovide support to the co-op over time.

Because the mortgage will not fully cover the project costs, a portion of the social investors’ construction loan will be maintained asa second-position mezzanine loan with the co-op, with a projected return of ~6-8% paid over 8-10 years. This return includes theconstruction loan period, and terms will be finalized with the investors before construction (see also the Pro Forma in the Appendix).After the investors are repaid, the cashflow surplus will contribute to a co-op funding pool managed by SquareOne, helping tofinance downpayments by future owners—addressing an important need since co-op share loans are currently unavailable inOregon. The fund may also be used to help seed future co-op housing developments. Over time, co-op owners will accrue equity ata limited rate (~3-5%), which will keep the share purchase price permanently affordable to new buyers. This arrangement ismaintained in perpetuity through the land trust.

If the C Street property was simply developed as market-rate housing, it would be more lucrative for investors and require nosubsidy. And barring further action that would be the likely outcome. This pilot project instead creates multiple affordablehomeownership opportunities on a single lot, and with a one-time community-wide investment, ensures these opportunitiesremain permanently available in the community.

May this pilot project establish a cooperative pathwaytoward a more equitable and sustainable future forour neighborhoods.

Housing Co-op Costs

Initial Share Price $14,000 with up to 50% of this supported by(Downpayment) Springfield Homeownership Program

Resale Formula Initial share price + 3-5% interest per year

Monthly Payment ~$730 including utilities, loan payments,and other operating costs


SHARED HOUSE1650 SF

SHAREDADU

790 SF

NEIGHBORING HOUSE

Site Plan

FU

TU

RE

ST

OR

AG

E

GARDEN

TRASH

PORCH

LAUNDRY

PO

RC

H

SCALE 1/16" = 1'-0"

NORTH

120'-2"

ALLEY

45

'-0

"

STREET

The development site enjoys a walkable location, just a few minutes from downtown Springfield. Due to the small-footprint homesample greenspace remains available as well as four off-street parking spaces. Area for a future storage shed is planned which caninclude bicycle parking, household storage, and a garden shed. As a housing cooperative, the homes are owned and managedcooperatively. The land is held through a ground lease with the land trust, SquareOne Villages, who is available to provideadministrative support to the co-op over time.

SWALE

© 2020 Cultivate, Inc. 6Attachment 5, Page 18 of 26

StreetscapeA simple, well-composed design supports a shoestring construction budget without sacrificing durable materials or energy-efficiency.Front porches provide casual settings for a chat with a neighbor, and great spots to enjoy a warm spring day.


Floorplan | Shared House4 Bedrooms, 4 Bathrooms, 1 Full KitchenTotal Area 1650 SF

upper floor

main floorscale 1/8" = 1'-0"

upper floor

The house is designed to be shared by four co-op owners (with a maximumof five unrelated occupants per City regulation). Each bedroom area enjoys abathroom and living space with a kitchenette, improving options for privacyamong the shared household.

BATHCL

LAUNDRY

UP

LR

COVEREDPORCH

DN DN

BR

CL

QUEEN

QUEEN

WHSTACKED

W/D

FR

FRLR

BR

CL

BATH

FOYERMA

IL

BATHCL

KIT

BR

CL

QUEEN

QUEEN

FR

FR

LR

BR

CL

BATH

16'-0" 8'-1"

24

'-0"

6'-0

"

14'-10"

13'-0"

8'-10"

7'-9

"2

'-0

"

5'-8"

5'-1

"

12

'-7"

LR


upper floormain floorscale 1/8" = 1'-0"

2 Bedrooms, 2 Bathrooms, 1 Full KitchenTotal Area 790 SF

Floorplan | Shared ADU

DN

QUEEN

FR

LR

BR

CL

BATH

CL

FUTURESTORAGE

UPCOVERED

PORCH

QUEEN

WH

FR

LR

BR

CL

BATH

CL

KIT

16'-0"

24

'-0"

7'-9"

8'-10" 5'-9"

12

'-6"

14'-9"

6'-0

"


Roof14" wood I-Joist @ 24" o.c.Blown-In InsulationAir Barrier: Taped SheathingRoofing

Wall2x8 @ 24" o.c.Blown-In InsulationAir Barrier: Taped SheathingRainscreen BattensSiding

WindowsTriple-Pane, Casements

Floor2x12 @ 24" o.c.Air Barrier: Taped SheathingBlown-In Insulation

Heating, Cooling, & VentilationMini-Split Heat PumpBathroom & Kitchen exhaust fans

Water HeatingHeat Pump Water Heater

Energy Performance (Estimated)Energy Demand = 4,300 kWh/yr per unitEUI = 19 kBTU/sf.yrNet Zero Solar PV Size = 3.9 kW per unit(Solar panels future install)

3:12

Building Sectionscale 1/4" = 1'-0"

Construction | Net Zero Energy

With well-insulated 2x8 walls, airtight construction, and triple-pane windows, the homesaim to be "net zero energy ready", with future rooftop solar panels able to generate asmuch energy as the homes use in a year. This also means very low energy bills. Simple,optimized construction practices keep this affordable. Durability is also a priority:standing-seam metal roofing and fiber-cement siding are anticipated. These details aresubject to change based on budgetary constraint.

7'-9"

18

'-1"

7'-1"

1'-8

"


Appendix

Pro Forma


Pro Forma 4/16/2020

Development Process

Property Cost (60,000) $ Approximate

New ConstructionTotal Gross Floor Area 2373 SF

Shared Four-Bedroom House 1605 SF Max 5 unrelated occupantsShared Two-Bedroom ADU 768 SF

# Co-op Owning Households Served 6Targetted Affordability Households earning 60% of Area Median Income

Project CostsHard Costs (390,000) $

Site Improvements (5,000) $ Driveway, Stormwater swale, etcNew Construction (385,000) $ Contractor's Estimate

Cost/SF (162) $ /SF

Soft Costs (95,000) $Permit & SDC's (42,000) $ Springfield & SUB (incl ADU waiver)Legal (10,000) $Development Cultivate, Inc. (15,000) $ Deferred

SquareOne Villages (20,000) $ DeferredDesign Cultivate, Inc. (7,000) $ DeferredEngineering (1,000) $

Total Improvements Cost (485,000) $Total Project Cost (545,000) $ (90,833) $ /household

(230) $ /SF[continued next page]

1. Land Owner/Developer/Investors fund construction.2. Land Trust purchases land with grant money; Limited Equity Co-op established; Homeowners purchase shares, and purchaseproperty with mortgage, and 2nd-position debt to Investors.3. Co-op Owners' monthly payments include payment to Developer/Investors over fixed term, ~10 years.4. After Investors are repaid, excess cashflow contributes to Co-op Funding Pool held by Land Trust.


FundingConstruction Funds: Social Investors 443,000 $Deferred Fees Property Value 60,000 $ Paid from Grant

Develop./Design Fees 42,000 $ Paid from GrantProject Funding 545,000 $ Property Purchase & Co-op Creation

Grant: Land Trust Land Purchase 60,000 $Grant: Program Creation 40,000 $Mortgage Loan 296,000 $ Available Loan Amount

Appraisal Value 370,000 $Loan-to-Value 80%Interest Rate 6.25%Term, years 30Closing Costs 3.5% (10,360) $

Homeowner Downpayments 42,000 $ Co-op Share PurchasesPer Co-op Homeowner 7,000 $

Springfield Ownership Program 42,000 $ Downpayment Loan: $7K match per householdSocial Investors Mezzanine Loan 75,360 $ Secured by Property Lien (2nd position to Mortgage)

Co-op Homeowner PaymentsTotal Payments 51,870 $ /year 720 $ /month.hhld (60% AMI Households)Operating Expenses, EstimatedUtilities (Water, Sewer, Electricity) (3,600) $ /yearTrash Service (600) $ /yearGround Lease (4,000) $ /year (56) $ per month per householdDebt: Mortgage (21,870) $ /yearDebt: Investors, 10 yrs (then Funding Pool) (17,000) $ /yearProperty Taxes - $ /year Exemption, 10 yearsInsurance (800) $ /yearCo-op Operations & Maintenance (2,000) $ /year (28) $ per month per householdCo-op Replacement Reserves 3.9% (2,000) $ /year (28) $ per month per householdTotal Expenses (51,870) $ /year

[continued next page]


Affordability MetricsQualifying Households 60% Area-Median-Income provides permenant affordability measuresTotal Cost per Household 90,833 $ includes land costsCost per Bedroom 90,833 $Total Grant/Subsidy Required 145,600 $ includes Grant, Property Tax Exemption, & City Downpayment Ass'tSubsidy per Household 24,267 $Subsidy per Bedroom 24,267 $

Social Investors LoanTargetted 6-8% return. Fixed payments and term to be confirmed at contract signing.

Total Loan $443,000Dylan Lamar (Developer) $50,000 does not include deferred fees

Social Investor 1 $120,000 currently identified

Social Investor 2 $273,000 not yet identified

Projected Cashflow & ReturnYear 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

Cashflow (443,000) $ 376,140 $ 17,000 $ 17,000 $ 17,000 $ 17,000 $ 17,000 $ 17,000 $ 17,000 $ 17,000 $ 17,000 $Return (IRR) 0.2% 2.7% 4.6% 6.2% 7.4% 8.4%

Influence of Return on Monthly PaymentsFixed Annual Payment to Investors $17,000 $16,000 $15,000 $14,000 $13,000IRR @ Year 8 6.2% 5.4% 4.6% 3.7% 2.8%IRR @ Year 10 8.4% 7.7% 6.9% 6.0% 5.2%Co-op Owner Monthly Payment $720 $707 $693 $679 $665

Co-op Funding Pool

Cashflow Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20Capital Contribution 17,000 $ 17,000 $ 17,000 $ 17,000 $ 17,000 $ 17,000 $ 17,000 $ 17,000 $ 17,000 $ 17,000 $Cumulative Total 17,000 $ 34,000 $ 51,000 $ 68,000 $ 85,000 $ 102,000 $ 119,000 $ 136,000 $ 153,000 $ 170,000 $

After Social Investors are repaid, surplus capital accrues in a funding pool managed by SquareOne to help finance new buyers and/or new developments.

Note: This proforma prepared by manager does not take into account or make any provision for any change in local or general economic conditions, or increases inredevelopment costs or the affects of any delays in commencing the redevelopment process or decreases in rental rates. By executing this agreement, each memberacknowledges that manager is not making any warranties or guaranties or any representation with respect to any of the projections set forth in this proforma. Proformas aresubject to uncertainty and variation and therefore are not represented as results that will actually be achieved. This proforma is not intended as inducement for any memberto enter into this agreement or become a member of the company.


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