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CITY OF EUGENE INTER - DEPARTMENTAL MEMORANDUM CITY ATTORNEY - CIVIL DEPARTMENT To: Johnny Medlin Date: June 6, 1994 PWM Subject: Child Care, Inc. Proposal You ask several questions regarding the potential transfer of the Thomason Lane property to a non - profit corporation, Child Care, Inc. The questions and answer follow. The answers are based on our understanding that there are two parcels of property which were purchased with park bond proceeds, parcels which are no longer needed for park use. In addition, we understand that the property is vacant, and that there are no federal or state strings attached to the property. If our understanding of these facts is incorrect, the answers below may change. You first ask whether the Council can sell or give the property to a non - profit at reduced rate or without cost, even though it was purchased with park bond proceeds. We conclude that the Council has that authority. The 1979 ballot measure authorized the issuance of general obligation bonds "for expanding the city's park and recreational facilities and preserving the Southhills ridgeline and for acquiring land necessary for those purposes." Proceeds from bonds must be applied to the purposes for which the bonds are issued. In this case, proceeds of the park bonds were used for the purchase of the subject property. The question with which we are confronted now is whether the City is obligated to continue indefinitely use of the property for the purposes specified in the bond. We can find no legal requirement that sets an endless limitation on the use of the land for park purposes. Here, the circumstances have changed since the property was originally purchased with park bond proceeds for park purposes. The requirement of using bond proceeds for park purposes (the purposes for which the bonds were issued) has been satisfied. We understand, however, that the City has no need for this land for park purposes. Under these circumstances, we can find no legal basis for imposing a continued restriction on the City's use of this property. Therefore, we believe the City may follow its normal procedures for disposing of property as if the property had not been purchased with bond proceeds. You also ask whether the City can lease the property to a non - profit corporation at a reduced rental rate or whether the City can give the property to a non - profit corporation. Once again, we conclude that the City Council has that authority. Sections 2.860 to 2.874 of the Eugene Code provide the procedures for disposing of City owned real property. The term "disposal" includes both the sale and lease of real property (section 2.860). We previously have issued opinions regarding the process that the City must follow in disposing of real property. Several alternatives exist, including the City Manager declaring the property surplus (and subsequent procedures following that declaration), as well as a separate process whereby the City