Council considers business decisions.

Byline: Edward Russo The Register-Guard

The Eugene City Council will get down to business this evening, acting on proposals to allow tax breaks for firms, and whether to expand the city's hazardous-chemical reporting program.

City Hall observers say the decisions will be among the most important for the council since the start of the year, when it was joined by two new members and Mayor Kitty Piercy.

Councilors are to decide whether to ask the state to reinstitute the city's enterprise zone property tax break program for firms that create new jobs. They also are scheduled to act on a proposal that would require more businesses to participate in the city's toxics-right-to-know program. On the toxics law, some councilors said they want to study the issue more before possibly expanding the list of covered businesses.

"Right here and now I am not prepared to expand the program that I still have questions about,' said newly elected Councilor Chris Pryor. "I support knowing what goes on in the environment around us, but I want to do that in as thoughtful a way as possible."

The two topics promise to illustrate the views councilors have on economic development. And an even split on the council could pull Piercy into her first important tie-breaking vote.

"The meeting is the most significant of the year in relation to business and economic development,' said Terry Connolly, director of government affairs for the Eugene Area Chamber of Commerce.

Job creation has become a priority around City Hall in the wake of the 2001-02 recession, and the subsequent move of some Eugene firms to Springfield, which offers enterprise zone tax breaks.

Eugene councilors are considering whether to resurrect the city's enterprise zone, a designated area in which manufacturing firms that build or expand plants and add jobs can get three or five years of property tax breaks on their investments.

The debate probably will center on how generous to make the breaks, rather than whether to offer them at all.

The city had an enterprise zone in west and north Eugene until 1997, when officials let the program lapse.

Jim Borg, whose manufacturing firm, Oregon Precision Industries, was waived from $20,935 worth of property taxes when it doubled its work force during five years in the late 1990s, said he hopes the council will ask the state for permission to reinstate the zone.

Borg said his firm probably won't expand anytime soon, but other companies could benefit.

"It's forgiving a tax temporarily in exchange for growth," said Borg, whose firm now pays about $31,000 a year in property taxes. "It's more of an incentive to help a company grow. I'd say it's more of a carrot than a nugget of ore. And it allowed us to grow more quickly than we would have been able to do otherwise."

But some residents and city councilors want to tighten the rules for enterprise zones, which operate under state guidelines. State law says cities and counties can add conditions to the granting of tax breaks as long as the changes are "reasonably related to the public purpose of providing opportunities for groups of persons to obtain employment."

Councilors will choose between a proposal developed last year by a committee appointed by then-Mayor Jim Torrey, and a less generous approach offered by Councilor Bonny Bettman.

Under the mayor's committee proposal, the designated area for the enterprise zone would include so called greenfields, vacant land on the city's edges. Firms that build in existing industrial parks, on redeveloped land, or on polluted sites, called brownfields, would get 100 percent tax exemptions for three or five years. Firms that select greenfields would get 66 percent of property taxes waived. However, they could get up to all taxes waived if they meet yet-to-be-drafted standards regarding wages, benefits, training, job retention and other regulations. The council and city staff, most likely with community input, would develop the standards.

The alternative idea, backed by Bettman, would entirely exclude greenfields from the tax-break zone, and firms that meet the less-restrictive state standards only would get a 75 percent tax break. Firms that meet the presumably tougher community standards for job creation could get up to 100 percent of their taxes waived.

Bettman, who will ask councilors to adopt the alternative idea this evening, said the mayor's committee recommendation is "a blunt and costly instrument based on outdated economic development assumptions."

Bettman said her proposal "is a more surgically focused instrument which ensures that our limited resources will support local businesses, create living wage jobs, redevelop brownfields, and maximize the use of industrial land already available" in the urban growth boundary.

Council President George Poling said he favors the approach of the mayor's committee, as does City Manager Dennis Taylor, because it is less restrictive than Bettman's alternative.

"We should make the process as simple and straight to the point as possible," Poling said.

During their later meeting, councilors are scheduled to take up a proposed expansion in the city's hazardous chemical reporting program.

Eugene's toxics-right-to-know law, passed by voters in 1996, established the only city-mandated toxics reporting system in the nation.

Now, 40 manufacturers must report details of their chemical use and pay fees to the city, which catalogs and publishes the data. An additional 33 smaller manufacturers do not report chemical use, but they must pay fees to help run the $100,000-a-year program.

Expanding the program would add dry cleaners, gas stations, auto body shops and seven other types of nonmanufacturing businesses that use toxic chemicals, about 170 in all. Some might have to report chemical use, and all would have to pay fees.

The proposal is an attempt to spread the cost of the program among more businesses in order to reduce the annual fees that the city charges many small manufacturers.

The fees were affected by a $2,000 cap imposed by the state Legislature at the request of some Eugene companies. The cap had the effect of lowering the fees for big firms and raising them for smaller manufacturers. That's unfair to small firms, says the city's Toxics Advisory Board. For instance, firms with up to 63 employees pay $30.94 per employee, up to a $2,000 total. But a 500-employee manufacturer only pays $4 a worker, up to a $2,000 total.

During a Feb. 14 public hearing on the topic, environmentalists favored expanding the list of reporting business so the public can have more information about chemical exposures.

Business people who would fall under the program's rules generally opposed the move.

So do firms already in the program, said Dave Hauser, president of the Eugene Area Chamber of Commerce.

"The affected businesses would rather live with the current fees than expand the program to others in an effort to reduce their fees," he wrote to councilors last Thursday. "The proposed solution is worse than the problem it purports to fix."

Some councilors indicated a reluctance to approve the expansion as it is written.

Councilor David Kelly, a toxics-right-to-know supporter, noted that the expansion only would lower small manufacturers' fees by about $5 per employee. He noted that the city is trying to get the Legislature to repeal the $2,000 cap.

Toxics-right-to-know supporters "made some very good points that some businesses left out of the (reporting) program have a lot in common with the businesses in the program," Kelly said.

But other firms proposed to be added "may lend themselves to a different type of reporting," he said.

`So when I start to feel that level of subtlety in the pieces, then I want to say, `Let's sit down in a work session, tease this out and figure out what make sense and what pieces need further study.' '

CITY COUNCIL

Meets today to discuss enterprise zone, toxics law

When/where: City Hall, 777 Pearl St. Enterprise zone debate expected to begin at about 6:35 p.m. in McNutt Room during work session. Toxics law discussion part of regular session that begins at 7:30 p.m. in Council Chamber.

On TV: Live and in rebroadcasts on Metrovision Channel 21