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HomeMy WebLinkAbout06/16/1986 Meeting M I NUT E S e City Council Work Session Eugene Community Conference Center Souza Room June 16, 1986 5:30 p.m. PRESENT: Brian Obie, Mayor; Richard Hansen, Cynthia Wooten, Debra Ehrman, Roger Rutan, Ruth Bascom, Emily Schue, Freeman Holmer, Jeff Miller, councilors; Barb Bellamy, Abe Farkas, Greg Byrne, Scott Lue11, Jerry Gill, Warren Wong, Dave Whitlow, staff; Ann Bennett, Downtown Commission; Mike Gleason, City Manager; Jim Boyd~ The Register- Guard. The meeting was called to order by the Mayor at 5:30 p.m. 1. DOWNTOWN COMMISSION PARKING PROGRAM RECOMMENDATIONS Mayor Obie introduced Mr. Farkas~ who distributed a memorandum dated June 9, 1986, entitled "Downtown Commission Parking Program Recommendations." e Attached was a packet of information entitled "Downtown Parking Program-- Financial Background for Fiscal Year 1987, prepared by the Eugene Development Department. II Mr. Farkas defined the ultimate objective of the recommendations as provision for financial stability of the parking program and allowance for current and future parking needs. The program does not have resources to build a new parking structure if 8th and Wi11amette is developed. Mr. Byrne explained that the Downtown Parking Program is much more than a free parking program. It includes four City-owned parking garages as well as surface lots all designated as development sites. The free parking program is only a small part of the total. The Parking Fund in the budget is com- posed of several different funds. These are enterprise funds which operate on their own revenues with the exception of the debt services, and each is responsible for providing several or all of the primary functions listed on the chart. Each fund differs in the type of facility and the functions engaged in. Mr. Byrne outlined three purposes for the presentation: 1) refamiliarization with the information; 2) to raise the council's con- fidence level in the numbers provided; and 3) to present the recommendations of the Downtown Commission. By presenting the detail on Enterprise Fund 529 (Surface Lots) and Enterprise Fund 522 (Parcade Garage), Mr. Byrne hoped to explain the least and most complex management issues to the council. Mr. Luell referred the council to Enterprise Fund 529 (Surface Lots) and reviewed the Fund Resources and Requirements and Department Expenditure e Surrma ry . He responded to Mr. Hansen's question by saying that all meters accounted in the attached revenue are within the Downtown Development Di stri ct. MINUTES--City Council Work Session June 16, 1986 Page 1 In response to Ms. Bascom's question, Mr. Luell said that the lots west of e The Bon Marche are owned by the Urban Renewal Agency and the City of Eugene, and are included in the surface lots. Ms. Ehrman asked about the City's lease of The Bon Marche and Sears lots. Mr. Obie replied that the fund leases the land from private owners. Then the City leases the land to the Downtown Development Commission. Ms. Ehrman asked what would happen if we didn't lease these lots and whether The Bon and Sears would provide the lots free anyway. Mr. Luel' said that they would probably be turned over to Diamond Parking to become pay lots. Mr. Byrne added that both The Bon and Sears lots will be removed from the system this coming year and the manage- ment could return to the businesses. The Downtown Commission recommended their return as a part of a policy decision to provide equitable treatment of all businesses. Mr. Hansen asked whether, once these lots go out of the system, the busi- nesses would be charged the same percentage of the tax as other businesses. Mr. Luell said that because they are now part of the free program they are exempt from the ad valorem tax. When the lots are returned to the busi- nesses, they will no longer be exempt, and the business will be liable for the ad valorem tax on that parking portion. The percentage of gross sales for each business is equal--currently $2.50 per $l,OOO--and proposed at $3.50 per $1,000; the ad valorem portion of the tax is frozen. Mr. Byrne reported that two surface lots have debt service at 12th and Oak, and southwest of The Bon Marche; the rest of the surface lots are owned outright by the City. e Mr. Luell reviewed the Replacement Reserve account of $95,000. This repre- sents replacement of 1,250 spaces at $8,500 each. This does not replace The Bon or the Sears spaces, because the City does not own them. The Replacement Reserve is a new item in the budget. Mr. Luell defined the industry standard for replacement of a parking space as $7,000 to $12,000 each. Mr. Obie disagreed, citing a $3,500 to $5,000 range. Mr. Byrne explained that a parking garage with elevators and rest rooms causes the cost to rise and that the $8,500 figure is based on experience. Mr. Hansen agreed that the $8,500 figure was reasonable. Mr. Obie asked if a long-range plan was attached to the reserve fund, and Mr. Byrne said yes, that if there were no reserve, the City has no negotiating strength when a major business wants to move into the downtown area. Mr. Obie asked who made the policy decision for a reserve fund, and Mr. Byrne said that the Downtown Commission made the decision. Mr. Obie agreed that the Replacement Reserve is a good policy, but that it is a fundamental decision that a fund be created to build new parking structures. Mr. Lue'l agreed that this is a new policy. Mr. Holmer asked why the ending working capital in the fund is down $15,000. Mr. Luell said that the decrease is because of the Replacement Reserve account. In response to Mr. Holmer's question about line 61512 (Building and Land Rental) on page 2, Mr. Luel' cited the lease of the Eugene Hotel lot, and Mr. Byrne added that as the Eugene Development Department budget goes up, the Parks and Recreation Department will go down because of the shift of program responsibilities. e MINUTES--City Council Work Session June 16, 1986 Page 2 - -------- --- -- --- -- Mr. Holmer also asked about the numbers involved with the lease of The Bon e lot. Mr. Luell said that the lease costs $12,000. Mr. Byrne explained the lease arrangement with the Eugene Hotel, which brings revenue over and above costs. Mr. Gleason said that the agreement is cash positive in the budget. Mr. Ehrman asked about automation increase. Mr. Luell and Mr. Gleason explained the rationale. Mr. Hansen asked for the rationale in assuming responsibility for the Eugene Hotel lot, and both Mr. Luell and Mr. Gleason responded. Ms. Bascom clarified that if the replacement reserve was not $95,000, then the working capital would increase instead of decrease. Ms. Ehrman asked about Item 61739 on page 3 (Contractual Services), and Mr. Luell explained that the City no longer contracts for the enforcement services. Mr. Byrne summarized that the Enterprise Fund 529 has a very low debt ser- vice~ that the bulk of the surface lots are on development sites, and that the Replacement Reserve account is a new fund which provides for future needs. Mr. Luell introduced the information about the Parcade garage by explaining that the Parcade management is the most complex and incorporates all of the functions served by the Enterprise Fund 522. Mr. Holmer asked if the figures included the City rental of space, and e Mr. Gleason said that this has been a low-budget lease, which will be upgraded and show up as income. Mr. Byrne explained that the Parcade only has 180 free spaces available (40 percent), while the rest are permit or fee parking spaces. The public perceives that the facility is 100 percent free parking. The commercial spaces are all leased and $195,000 represents a 100 percent rental at marketable rates. Ms. Wooten asked if the City had responded to the letter from Leah Jacobs regarding the lease agreement with the new tenant in the building. Mr. Byrne said that the other patrons were polled about the proposed tenant mix, and Ms. Jacobs was of the minority opinion; the other tenants approved. Mr. Rutan asked about the debt service of $274,000. Mr. Wong replied that this represents the check written for principal and interest. As Mr. Luell reviewed the Fund Resources and Requirements and Department Expenditure Summary, discussion was held. Ms. Wooten asked what security was provided in the Parcade. Mr. Luell said that 20 hours per day for both the Parcade and the Overpark are provided. There will be a change in FY87, in that instead of a normal security contract, the contractor will provide main- tenance and security at $6 per hour. The public employees provide tenant improvements, plumbing, electrical, mechanical, and maintenance services. Mr. Gleason provided the rationale for the employees required for the build- ing. He also explained that Parks and Recreation job classifications are more appropriate for maintenance work than Public Works. In response to Mayor Obie's question, Mr. Gleason explained personnel transfer accounts. e MINUTES--City Council Work Session June 16, 1986 Page 3 Mr. Byrne summarized that someone else is paying the debt service on the e Parcade; that the commercial space actually subsidizes the parking function; and that the Parcade is the healthiest of the enterprise funds. He concluded that the Parcade is a good facility which is easy to maintain. Mr. Rutan asked if the tax on general improvements would go into the General Fund if there were no tax allocation budget. Mr. Gleason said that the tax in the state of Oregon is a rate-based tax, and any increase in value of the increment districts would decrease the rate. Mr. Rutan asked, then, if tax allocation moneys could be used for other things, and Mr. Byrne said no, it would be lost revenue. Mr. Hansen asked what management personnel was funded under the Eugene Devel- opment Department for the parking program. Mr. Byrne replied that it pays for Mr. Luell, part of Jerry Gill, the clerks, property manager, and PIC people involved. Mr. Miller asked if there were any way of looking at all the personnel involved in the parking program, and if there were other ways of doing what we do now. Mr. Byrne displayed a chart of full-time employees for parking programs. The chart indicated the FTE amounts for each department: EDD, 2.1 FTE; Public Works, 4.38 FTE; and Parks, 2.0 FTE. This does not include central manage- ment personnel. Mr. Gleason pointed out that the parking program involves 250,000 square feet of structure, including enforcement, maintenance, and leasing arrangements. Analyses have been done and there is no substantial gain in radically changing the management model of the parking structures. e Mr. Obie disagreed that the numbers were reasonable; he believed $120,000 Central Services expenditures from a $829,000 budget was high. Mr. Gleason explained that most of the structure is being given away free and the pro- posal suggests that the parking spaces be leased at a reasonable amount. Mr. Hansen asked if a bidding process was used to make sure the department is competitive. Mr. Byrne said that yes, the bid contract is cost-effective. Ms. Ehrman asked if the City could get out of the management of the parking structures altogether. Mr. Gleason said this was possible, but would not rid the City of all the responsibilities. Mr. Rutan suggested that the council ask two questions: 1 . To what degree does the City have responsibility for providing public parking, free or not? 2. To what degree does the City need to be aggressively seeking and subsidizing (through parking) commercial tenants in the downtown area? Ms. Wooten agreed that the questions were needed, but also believed that within three to five years the circumstances would change; that the city was in a growing-up period and that the subsidy would need to continue until the city grows up. Mr. Byrne added that the code in the downtown zoning district does not require businesses to provide on-site parking; the code assumes the e parking will be provided publicly. Mr. Rutan suggested that the council MINUTES--City Council Work Session June 16~ 1986 Page 4 identify what it wants to accomplish and propose guidelines and policies e before a decision is made. Mr. Miller suggested that a way to test the direction the program is going is needed as well. Ms. Schue reminded the council that a public policy is in place that cannot be backed away from; the City is obligated to provide public parking with or without fees. Mr. Hansen wanted to look at the policy because when developers are found for 8th and Wi11amette and 11th and Willamette, the choice parking spaces will be gone and will need to be replaced. Ms. Wooten agreed with Ms. Schue and said that although there may be management options available, the City cannot back out on its obligation to provide downtown parking. She believed that the public can be educated to park in structures instead of surface lots, and pay to do so. Ms. Ehrman reported that this kind of transition is being studied by a community group which has proposed changing the unlimited free parking available now. Mr. Byrne outlined three areas to which the parking program must be finan- cially committed: l. Support of existing surface lots and structures; 2. Provide reserves for major repairs; and 3. Provide for future development if the policy is to stay in the parking business. e The FY87 budget, with or without the proposed dollar increase, will not fully fund these three areas; and, without the dollar increase, will not maintain the status quo for supporting existing property. Mr. Byrne outlined how the two-hour free proposal followed by a 50~-per-hour fee would improve the financial stability of the program. The tax system would remain the same. Mr. Byrne introduced Ann Bennett, who thanked the council for its interest and effort on behalf of the downtown parking program. She cited the Parking Policy Group, the Downtown Commission, and their Budget Subcommittee as the authors of the recommendations before the council. Ms. Bennett defined the primary goal as business development downtown. She emphasized the Replace- ment Reserve accounts were critical to the objectives of the parking recom- mendations. The Downtown Commission continues to shift as many functions to the private sector as possible. She identified the key political issue as being the shift from a tax-supported parking system to a user fee system which will stabilize and accommodate future development. The ranking policy group was ready to bring the user fee system forward; however, the merchants lobbied against the system. Their recommendation to the Downtown Commission was to pay the extra dollar per thousand and wait two years. The issue could be addressed at the end of the two years or when either the 11th and Willamette or the 8th and Wi11amette surface lots were ready for development. The Downtown Commission is asking the council for approval of the dollar increase. Mr. Luell announced the public hearing on July 28, 1986, and distributed a memorandum dated October 30, 1985, entitled IIDowntown Parking Program e Redesign. II MINUTES--City Council Work Session June 16, 1986 Page 5 Ms. Wooten introduced a request from the 20-30 Active Club that the City e negotiate the cost of police services for the 4th of July Fireworks Display at Autzen Stadium. They would like to give the City $500 cash and 50 percent of the gate over $5,000, up to $3,500. The issue was delayed for consideration until the City Council meeting. The work session was adjourned at 7:15 p.m. Respectfully submitted, ~~ Micheal Gleaso City Manager (Recorded by Judy Jernberg) JJ:vr/MINS5 e e MINUTES--City Council Work Session June 16, 1986 Page 6