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SMITH Tammy D From: CUTSOGEORGE Sue L Sent: Friday, March 07, 2008 3:24 PM To: RISDAL Lacey L; SMITH Tammy D Cc: CARLSON Becky A Subject: FW: Rental Income Issue Lacey and Tammy, I've rebalanced fund 324 taking out the rental income and associated expenses, per the note below. If you want your very own copies, they're out on the fund balancing web site. Let me know if you have questions. Sue From: CARLSON Jim R Sent: Friday, March 07, 2008 3:20 PM To: COREY Kurt A; CARLSON Becky A; RAILE Dee Ann Cc: SVENDSEN Glen L; CUTSOGEORGE Sue L; MEDLIN Johnny R; RISDAL Lacey L; MURDOCH Kitty M Subject: Rental Income Issue I have made a decision for the purpose of fund balancing for the FY09 budget related to the expected rental income and property management expenses associated with recently acquired park properties. The properties are being acquired using POS Bonds and Parks SDCs. I believe PW and Finance now agree that no revenues or operating expenses should be shown in the POS Bonds Capital Projects fund. Sue is redoing the fund balancing for the POS Bonds fund to remove such entries. I think we also agree that eventually these properties will be General Fund assets and any revenue derived from them will be a General Fund revenue. There remain differences of opinion about when the properties become GF assets (now or when they are "put into service for their ultimate intended use"). There is also a difference of opinion about whether the revenue (net or gross) is a restricted or unrestricted revenue and therefore where we should account for it in the budget. For FY09, I am agreeing to put all of the rental revenue and property management expenses in the Parks SDC fund. PW should rebalance that fund. I think everyone agrees that these revenues and expenses are incidental to the main purposes of the City. However, through my necessarily brief investigation of this topic I have identified a number of similar situations (Garfield warehouses, Eugene Depot, Kaufman House, Raptor Center) and upcoming situations (Golden Gardens-including possible sale of a portion of the property to Lane County, possible purchase of properties with houses near Madison Middle School) and found that there is little consistency and unclear policy and procedures. I have asked Dee Ann and Sue to help identify issues related to these types of situations and I would like to continue the discussion of this to try to clarify the circumstances where these types of revenues go to a fund other than the general fund. I am asking that PW staff and Facilities staff also participate so that we have clearer expectations for the FY10 budget process. I think we should also discuss the best organizational home for these property management issues. I hope that we can have a full discussion of this after the FY09 budget has gone to print and we have more time to think through the issues.