FY 2008 Comprehensive Annual Financial Report

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~) ,_ !;_ ~~ Local Economy Eugene is located in western Oregon, in the southern Willamette Valley, in close proximity to the Pacific Ocean and the Cascade Mountain Range. Citizens and visitors enjoy the mild climate, recreation and fitness opportunities, and the diverse cultural .events it has to offer. Interstate 5 connects Eugene to the Portland metropolitan area and Washington state to the north, and California to the south. State highways provide access east to the Cascade Mountains and the recreational opportunities of eastern Oregon, and to the picturesque coastal towns, state parks and public beaches to the west. Eugene's municipal airport is serviced by four air carriers, linking Eugene to Seattle, Portland, Denver, Salt Lake City, Phoenix, Las Vegas, Los Angeles, and San Francisco Eugene is the largest city in Lane County and the second largest city in Oregon, representing 45% of the county's, and 4% of the state's population. The Eugene economy typically follows the trend of the Oregon economy. Growth in employment in FY08 kept pace with growth in the labor force, both at 0.3% from the prior year while the unemployment rate for city residents remained stable at 4.7% as of June 30, 2008. This was about 0.7% below the County and State unemployment levels and 0.2% below the national unemployment rate. The City of Eugene's unemployment rate is typically less than the State and County rates. Annual Average Unemployment As a Percent of Labor Force 9.00 8.00 7.00 % 6.00 5.00 4.00 3.00 FY91 FY92 FY93 FY94 FY95 FY96 FY97 FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 t City of Eugene ---x-- Lane County --*--State of Oregon ---F--- U.S. Source: U.S. Dept. of Labor, Bureau of Labor Statistics The two pillars providing stability in Eugene's economy are its large public sector base and steady population in- migration. County, State and Federal government agencies are centered in Eugene, as well as the University of Oregon and Lane Community College. The public sector industry does not grow rapidly during periods of economic expansion, but also does not contract as fast when other parts of the economy are sluggish. In-migration is a second stabilizing driver to the local economy. Multiple characteristics play a role in encouraging new residents. The University of Oregon, excellent access to a wide range of recreational opportunities, attractive environmental amenities, mature and diverse arts and cultural offerings, and relative lower cost of living all play a role in encouraging a steady flow of new residents. California represents the largest source of new residents to the area due to Eugene's proximity to that state. The steady influx of new residents has helped the economy diversify away from lumber and wood manufacturing. An increased share of employment is in non-manufacturing sectors, such as professional and business services, financial activities, and education and health services Although the local unemployment rate has declined since its peak in 2003, the closing of Hynix, the largest private employer in Eugene, earlier this year, coupled with the fallout from the severe decline in the financial markets has contributed to the unemployment rate gradually rising to 5.3% in July and predicted to grow to 5.9% in August . Enrollment at the University of Oregon has remained stable at about 20,400 for several years. The University is a major center for academic and research activity. Its presence has contributed to the level of education in Eugene being well above the national average. In FY08, 40.7% of the City's population had been awarded a Bachelor's degree or higher. Eugene has become a hub for scientific research and educational support industries in Oregon. 3 - - _~. ~- - x - ~~``. x; ~: ~ •• o ~ k-- x " '^• ~~- ,~ ~ ' •..- ~•~_ -i