Committee Minutes

Minutes/Finance/Development Standby Committee
Tuesday, December 2, 2008 – 4:00 p.m.

1

The Finance/Development Standby Committee met on Tuesday, December 2, 2008 at 4:00 p.m. in Room A101 in City Hall with Committee Chair Christensen presiding. Present at roll call were: Christensen, Glassheim (via phone), McNamara, Gershman.

Chair Christensen called the meeting to order at 4:00p.m.

Matter of Municipal Parking System.

Greg Hoover, Urban Development Director, explained that there are 4 parts to the agenda item today, 1-business appeals to the 2009 parking assessments, 2-authorization to pursue collection of delinquent parking assessments, 3-approval of a budget amendment transferring $210,000 in excess sales tax revenue to the municipal parking budget, and 4-authorization to change the parking fee structure as presented in the attachments to the agenda.

1) Disposition of business appeals of 2009 parking assessments.

Hoover stated that included in the packet are appeals from some downtown businesses related to the notice that they received informing them of their proposed 2009 parking assessment. He explained the use of the parking assessment fees and that the fee is assessed to businesses in the downtown and not to building owners. He continued by explaining the process used to classify the businesses into categories as defined in code and then the formula that is applied to determine the number of spaces that should be charged based the square footage of the business. He added that businesses that provide some off-street spaces on their property are credited for those against the total number that the formula stipulates for their business and they are only charged for the difference. The committee reviewed each appeal individually.

a) Dietz Business Promotions – submitted a letter stating that they believe they should not be charged for any spaces as ample parking available in building lot. Business is classified as a professional office, required to provide 1 space per 300 sq. ft. of office space. Currently charged for 1.63 spaces as per formula. No change recommended.

b) Wells Fargo – letter submitted on their behalf from landlord, 5,300 sq. ft. and includes 12 off-street parking on landlord owned lot. Business is classified as a bank, required to provide 20.6 spaces per formula. Will amend to include credit for 12 off-street spaces and revise billing to be for 8.6 units.

c) Greater Grand Forks Community Service and Restitution Program – tenant of H&H Properties (Deaconness Building). Had been classified in past as Professional Office, but was changed this year to Municipal Administration, thereby increasing the number of spaces required. Staff recommends change in classification to Professional Office.

d) ND Commission on Legal Counsel for Indigents – submitted correspondence requesting reclassification and/or questioning ability to assess a state agency. David Obregon represented the agency before the committee and stated that they are a leaseholder of H&H Properties in the Deaconness building and as part of their lease have access to 6 spaces in landlord’s lot. Previously have been classified as a professional office, but were changed to Municipal Administration this year, thereby increasing the amount of spaces required. If was still classified as professional office, then would have requirement to provide 6.67 spaces, of which 6 satisfied by the landlord provision and should only be billed for 0.67 spaces. Obregon noted that he has filed for an opinion with the State Attorney General on whether the City has the ability to assess a state agency for this fee, but not sure when ruling will come. Hoover explained that there was a change in the term related to these charges and has caused confusion as some think they are special assessments and they are not, but are “fees” as have always been and will be bringing an ordinance change to Council in early 2009 with this change included. Staff recommends change back to Professional Office classification. Recommend the classification be changed to Professional Office, give credit for spaces provided in lease, and revise billing to 0.67 spaces.

e) Rhombus Guys – classified as restaurant and based on formula required to provide 10.87 spaces, provide no off-street parking. Also, have second floor one bedroom living unit so would be required to provide additional spaces for that unit, bringing total required number of spaces to 11.92 spaces. Written notice of appeal was submitted in packet, as well as Arron Hendricks and Matt Winjum, owners of Rhombus Guys, were present to address the committee. They stated their concerns about having three charges related to parking that seem to make them pay for the same thing three times – special assessment for Corporate Center Ramp on tax statement, quarterly assessment, and then separate fee if want a designated spot. They expressed frustration when paid for spot and had someone not authorized parked in it, couldn’t get car removed. Hoover stated that situation was not handled correctly and should have gotten response from enforcement for that. Winjum stated that would not have a problem paying some fees if could understand the purpose and exactly what they were getting for their money and if knew had a space to park in. He added that most of the spaces in the ramp on the lower levels that would be convenient for customers to use are mostly reserved. The committee noted that perhaps that could be looked at, as the upper floors of the ramp are not utilized as fully as they could be. Gershman noted that there is usage by those attending events at the Empire Arts Center in the evenings. The group briefly reviewed the history of the parking fees and that they were put in place after the construction of the first ramp in the downtown and were intended to cover costs of maintenance and operations, but noted that the fees have not been sufficient to fully cover those costs for the past years. Average revenue from leased spaces is approximately $100,000 per year and $80,000 from assessed fees and that the average deficit over the last few years has been about $47,000 per year. The group discussed that the bonds for construction of the Central Ramp have been paid off and that the Corporate Center Ramp is due to be paid off in 2018. Recommend no change.

f) Howe & Seaworth – business is classified as a professional office, calculations by Urban Development show required 10.43 spaces, based on 3,128 sq.ft. Henry Howe submitted written appeal and also appeared to address the committee. Howe stated that there are 3 separate units within the building, portion rented to Bulie Law Firm (1,000 sq. ft.), portion to Howe & Seaworth (1,463 sq. ft.), and currently unrented portion that was coffee shop, but closed in 2004 and that building provides 7 off-street spaces, which should be sufficient to satisfy the requirements based on the formula. Hoover stated that they have already been in contact with Bulie and resolved the parking matter in relation to their portion of the space, but that had not received a response from Howe & Seaworth related to the square footage that they actually use within the building, therefore, had calculated based on net remaining space not used by Bulie, but based on information provided today by Howe, would not be any assessments for spaces as meet the requirement per the formula with those provided off-street. Recommendation for Howe & Seaworth to decrease from 10.43 spaces to 0.88 spaces based on revised square footage and provided off-street spaces; Revise billing for Bulie Law, tenant in same building to 0.33 units based on square footage and allocation of available off-street spaces with other tenants.

2) Authorization to pursue collection of delinquent parking assessments.

Hoover stated that a listing of businesses with parking assessments that are at least one quarter delinquent is included in the packet, that have not aggressively pursued collection of these fees in the past, but would like to see authorize to begin collection process on these. It was noted that there are some downtown businesses return their statements with note that they will not pay and since assess business and not the property can not special assess as with some other city fees. Any business requiring a City liquor license will be required to pay in full all taxes, fees, etc. to the city, both personal and business, prior to their license being issued for 2009, and could perhaps enforce that against other licenseholders, such as restaurants as well. It was noted that there is one restaurant on the list which is no longer in business, but the owner does have another restaurant that is still operating and check to see if can tie them personally to the bill and then perhaps collect. One business is no longer in the downtown, but is still in business in Grand Forks and can pursue action legally against them if Council approves, as well as same process against other existing businesses in downtown.

Group discussed that a couple of years ago the delinquent businesses did receive letter offering them an opportunity to come in and negotiate a payment plan to resolve their account, but only one business took opportunity and is currently making payments as agreed.

Consensus of the group was to send each delinquent business a letter giving them one last opportunity to work with the City prior to collection action commencing, with a 30 day time limit to respond, and if no response to proceed with any collection action available through the City Attorney. It was noted that the fees need to be uniformly enforced against all downtown businesses to keep it fair to those that do meet their responsibilities and pay the fees in a timely manner. The group would also like to see more correspondence with the businesses as they start becoming delinquent, maybe letters when 60 days delinquent. The business does receive quarterly billings and each notes the delinquency, but the businesses do not want to pay.

Hoover noted that part of the information he will be bringing in 2009 is a change in the manner of assessment for these fees, including a change to assess the property rather than the business, as then the landlord can determine the best way to pass on the fee if they wish to the tenants they have and in the event of non-payment, will have the ability to special assess on the tax statement to the property and that will address the collection issue in the future.

Motion by Glassheim, second by McNamara, to authorize one final offer to resolve delinquent balances with a 30 day timeline to respond, and then to proceed with collection action through the City Attorney. Aye: All. Motion Carried.

3) Approval of a budget amendment transferring $210,000 in excess sales tax revenue to the municipal parking budget.

Hoover explained that the parking system over the last several years has had more expenses than revenue, with the deficit running an average of $47,000 per year. In the past 5 years there have not been any adjustments to reserved parking rates, delinquent fees and capital needs have continued to arise. He continued that at present a consultant has been working on a capital improvement plan with potential costs for the short term, within two years, of $435,500 to $527,000; mid-term, three to five years, of approx $93,000 to $100,000; and long-term from $460,000 to $510,000. Hoover stated that a detailed plan will be coming to committee in the first part of 2009 for review and discussion and we have not had a capital plan or funding reserve for the parking system in the past.

Hoover continued that deficit to be funded is an accumulation over several years and that administration has not been as mindful of the deficit in this fund as maybe should have been in getting it resolved in a prior year, but want to make the necessary adjustment now and then put plan in place so does not occur again. Christensen stated that funds can not be deficit budgeted and requested explanation as to how deficit could build over years if that was being done properly. The group discussed that has shown in the budget that revenue is less than expenditure and have been transfers from other funds to cover losses.

The Committee requested a detailed report of the fund for the last three years for review prior to making a decision on the amendment including a plan to better track this so that it does not occur again in the future.

4) Authorization to change the parking fee structure as included in report.

Hoover stated that a review of the parking system and usage of ramps and reserved space fees was conducted and was brought to committee in September with decision deferred at that time. He stated that the report had included a proposed increase in reserved fees of $5 per space for 2009, however due to feedback is now proposing to make the adjustment over two years with a $2.50 increase in 2009 and $2.50 increase in 2010. In addition, the plan includes the leasing of the top 2 floors of the Central Ramp to Central High School at a rate of $10 per space for a 10-hour period from 7:00 a.m. to 4:00 p.m. Monday through Friday, with the School District taking on responsibility for enforcement of those levels during that time.

Christensen stated that as part of the plan is in favor of seeing more spaces on the lower levels left open for customer use rather than all reserved. Gershman suggested that we look into indexing the rates as we have with the other licenses so that there is not the need to make a big catch-up jump every few years and if had been doing that probably wouldn’t see the deficit situation that we currently have either.

Hoover stated that also need to keep in mind the upcoming capital needs of the parking system and the report that will be forthcoming after the first of the year.

Christensen reiterated that he would like to take a look at the budgets on a line by line basis for the last three years to get a handle on where the deficits are coming from and that with the elimination of the guard expense of $20,000 will have that to go towards the deficit for the next year. Hoover added that are also looking at other ways to make cuts within the budget to try and get to a level that can be covered by the revenues and still provide quality service to users.

Christensen stated that he would also like to see a more diligent focus on ticketing and perhaps need a CSO or designated person so people know that we are serious about the time limits on parking. Glassheim offered that in Bismarck they are at 90 minutes in the downtown and group thought that might be a good compromise between the current 2 hour and reducing to 1 hour which does not meet needs of some businesses.

Hoover clarified that for the future would like the appeals to come to administration and then to Committee/Council for final resolution if needed; to proceed with final notice for payment and then collection action on delinquent accounts; for future will handle accounts administratively and proceed with collection action if necessary; and to bring to Committee/Council a comprehensive plan for the parking system including capital needs in early 2009. He did note that in regards to the budget amendment, will need action on that before the end of the year.

Motion by Glassheim, second by McNamara, to approve the transfer of $210,000 in excess sales tax to the Municipal Parking System, pending report to be provided at Committee of the Whole on December 8, 2008. Aye: All. Motion Carried.

Meeting adjourned at 5:20 p.m.

Respectfully submitted,



Sherie Lundmark
Admin Spec Sr