HomeMy WebLinkAboutagenda.council.worksession.202105031
AGENDA
CITY COUNCIL WORK SESSION
May 3, 2021
4:00 PM, City Council Chambers
130 S Galena Street, Aspen
WEBEX
www.webex.com
Enter Meeting Number 182 002 5187
Password provided 81611
Click "Join Meeting"
OR
Join by phone
Call: 1-408-418-9388
Meeting number (access code): 182 002 5187#
I.WORK SESSION
I.A.Wheeler Opera House Construction Update
I.B.WRETT Part 2 – Public Involvement Process Decisions
1
MEMORANDUM
TO:Mayor and City Council
FROM:Lisa Rigsby Peterson,Wheeler Opera House
Executive Director
Rob Schober, Asset Management
THROUGH:Diane Foster, Assistant City Manager
Scott Miller, Public Works Director
MEMO DATE: April 29, 2021
MEETING DATE: May 03, 2021
RE:Wheeler Tenant Rent Abatement Request
REQUEST OF COUNCIL:The two tenants of the Wheeler Opera House, Aspen Public
House and Valley Fine Art are requesting to be relieved from paying rent for the duration
of construction activities in the Mill Street right of way during the Wheeler Masonry
Restoration project. The projected timeline for construction impacts in front of their
businesses is removing the scaffolding in June 2021 and completion of work in the Hyman
Ave right of way July 2021.
SUMMARY AND BACKGROUND:In January 2021 Council agreed to rent relief for
both tenants through May 2021 due to the anticipated impacts of the masonry project
on the Wheeler Opera House.
DISCUSSION: Staff, on behalf of the tenants, are requesting rent relief through the
remainder of the project. The scaffolding along Mill Street in front of the businesses
is scheduled to be removed after a building wash in June. Due to their size and
weight, the largest stones being replaced on the building underneath the windows
along Mill Street are scheduled to be placed using a lift once the scaffolding has
come down throughout the month of July. This will complete the project impacts
along the Mill Street right of way.
FINANCIAL IMPACTS: If Council approves rent relief through July the impact to the
Arts Grant Program would be $29,344.38
2
1
MEMORANDUM
TO: City Council
FROM: Diane Foster, Assistant City Manager
THROUGH: Sara Ott, City Manager & Pete Strecker, Finance Director
MEETING DATE: May 3, 2021
RE: Part 2: Future RETT Revenue Allocation Discussion – Initial Council
Direction on Financial Modeling, Ballot Timing and Community
Outreach
REQUEST OF COUNCIL: This work session is part 2 of the Council’s discussion
regarding possible future allocations of real estate transfer tax (RETT) revenues. In the
work session, staff will present financial models utilizing the input Council provided during
Part 1 discussions, then staff will engage with Council around the timing of a ballot,
guiding principles for the project, and the community and stakeholder outreach process.
Staff requests the Council’s feedback on several policy questions outlined throughout this
memo. Specific questions for City Council are shown in blue.
To aid the Council’s discussion, staff will present topics in the following order, taking time
for discussion after each presentation.
I. Financial Models – led by Pete Strecker
II. Ballot Question Timing Considerations – led by Sara Ott
III. Guiding Principles – led by Diane Foster
IV. Community Engagement - led by Diane Foster
V. Confirm Council Direction & Next Steps – led by Sara Ott
SUMMARY AND BACKGROUND: The 0.5% real estate transfer tax was first adopted
by voters in 1979 and was uniquely pledged as financial support for the Wheeler Opera
House, plus an annual set aside of $100,000 for arts grants. Since this initial adoption,
the tax has been reaffirmed by voters twice, as the tax has a periodic sunset provision
every 20 years. To date, these renewals have been focused on extending the tax, and
have not considered adjusting the allowable uses for the tax. The 2016 extension vote
extended the RETT through December 31, 2039.
The current arts grant program provides $400K of annual funding to service providers
and institutions. $100K of this amount comes from RETT proceeds as noted in the initial
and renewal ballot language (attached). The remaining $300K comes from earned
revenue from Wheeler Opera House operations – activities such as leases to the gallery
and restaurant, concessions, and net ticket sale proceeds.
3
2
At a Council work session on February 23, 2021 staff was directed to explore and present
opportunities to expand the application of future tax collections for other community
benefits. This direction reflects today’s reality that the dedicated Wheeler Opera House
fund balance has grown to more than $32M and represent a level that is essentially five
times the average annual expenditure authority.
On April 20, 2021, City Council reviewed the typical annual subsidy, including capital
expenditures, for supporting the Wheeler Opera House, and discussed the desire to
change the financial policy for the Wheeler Opera House Fund to increase the targeted
reserve level to approximately 200% ($7.6-$8.0M) of the operating subsidy.
DISCUSSION:
I. Financial Modeling
Staff has completed models based upon the fund balance thresholds discussed by
Council on April 20, 2021. The results of this modeling can be found in the attached slide
deck. Staff plans to present historical collections of the 0.5% real estate transfer tax over
the last decade; summarize the current 10-year planning horizon for the Wheeler Opera
House; and discuss the various models’ impact to the Wheeler Opera House projected
fund balance over time. After this presentation, staff requests the Council’s guidance on
the following questions.
Are there any financial models City Council would like to remove from consideration at
this time or does City Council have a preferred model?
What additional information does the Council need to determine what level of grants they
would like to do in the future?
Staff can return with more detailed/refined scenarios based on the model or models
selected by City Council.
Staff Recommendation: Staff is supportive of any of these models, as they all provide at
least $8M in the fund balance as the targeted reserve.
II. Ballot Question Timing
City Council conversation is requested to identify which election is the likely target election
for a ballot question. The upcoming opportunities are:
Election Date Deadline for submitting ballot language to County
November 2, 2021 Early September 2021
November 8, 2022 Early September 2022
March 7, 2023 (tentative) December 2022
Each election date has different considerations. Voter turnout is likely to be higher in
November 2022 due to gubernatorial and congressional elections on the same
4
3
ballot. March 2023 is a City Council election date for two council seats and the mayor.
The November 2021 election is likely to be very limited in issues – it may only be the
RETT question.
The longer time until a ballot question could allow more discussion among Council and
the community about which community benefits are priorities. However, this may not be
necessary with Council’s focus on guiding principles, financial modeling, and possible
limitations early in the process. Additionally, these other funding priorities can benefit
from the incremental increase in revenue streams sooner, that could be critical if funding
is increased to non-profit partners.
Also, the timing of the election will have different costs for the City. The operating cost for
an election is likely around $15,000, but will depend upon the number of questions from
different jurisdictions on the ballot.
Below is an example timetable for the most aggressive timeline of November 2021.
Timetable Apr May Jun Jul Aug Sept Oct Nov
Define financial parameters
Define community engagement process
Implement community engagement process
Feedback to City Council
City Council determines ballot language
Citizens vote
Does the Council have a preferred election date for a RETT question?
Staff Recommendation: Staff recommends targeting the November 2021 election to
advance community benefits more quickly with the voter support.
III. Guiding Principles and/or Guidelines
For the purposes of scoping the community engagement process, it is important to
communicate any underlying principles or other guidance the City Council may have.
Are there principles or guidelines for this process that a majority of City Council supports?
Do any of these principles or guidelines take priority over others? Examples below.
The examples below are for discussion purposes and are not prioritized or necessarily
recommended. Additionally, in some cases two examples of a possible guiding principle
are provided. The Council can also modify these principles or develop its’ own principles.
5
4
1. Take a conservative approach to ensuring the Wheeler’s needs are supported
2. Continue to support Wheeler; plan for a reasonable amount of unanticipated needs
3. City-owned arts facilities should not compete for funding with community non-profits
4. Funding for individual non-profits will not be specified in the ballot language
5. All residents should have an equal opportunity to provide input to this process
6. Statistically valid feedback should be collected from Aspen’s full time residents
7. The City’s grant program should be utilized for distribution of any additional dollars
designated for non-profit art organizations
8. Additional funding can be utilized for a broad range of community operating and
capital needs – and funding allocation will be determined each year by City Council,
with a recommendation of a Council-appointed committee, such as the revised
grants steering committee:
9. Additional funding can be utilized for a broad range of community operating and
capital needs to be identified on the ballot;
10. Increase the amount of arts and culture funding, and provide additional resources to
other community needs.
11. Additional funding can be utilized for a broad range of community operating and
capital needs. Possible areas could include:
• Arts & Culture
• Childcare
• Housing
• Health and Human Services
• Stormwater Infrastructure
• Transportation/Entrance to Aspen
Next Steps
• Electrification of City of Aspen fleet
vehicles
• Other environmental topics
• Tourism
• Cozy Point Infrastructure
• Advance other initiative
Further, individual councilmembers have expressed an interest increasing the RETT
allocation to the City’s arts and culture grant program. Staff would benefit from a
conversation about how the grant funding fits into the guiding principles, such as is it the
first priority after the Wheeler’s needs and if the Council has any expectations around the
arts grant funding.
How does the funding of arts grants fit into the guiding principles?
6
5
Staff Recommendation: Staff is supportive of clear principles that guide staff and the
community discussion around grants.
IV. Community Outreach Process
Staff recommends virtual community outreach due to the mobility of residents and
ongoing COVID limitations.
Two approaches have been identified to garner opinions on the community benefits that
are most desirable from future RETT revenues. They are:
1. Propose open ended questions to the community through virtual open houses, an
advisory group, and/or Aspen Community Voice to seek priorities for funding. Staff
would return to Council with this feedback and seek direction on what to include or
not include in the ballot question; or
2. Staff develop 3-4 possible ballot scenarios for the community and the City Council
to review, amend, and narrow down to a preferred ballot question. Using this
process, staff would present several ballot questions to the Council for initial
review. After Council’s review, and possible direction to remove/amend certain
options, staff would obtain community feedback through virtual open houses,
stakeholder groups, and Aspen Community Voice. The results of this feedback
would be presented to Council for further narrowing and decision-making.
Regardless of the approach, staff will evaluate whether to recommend engaging a third
party to complete statistically valid surveying to aid the Council through the process.
Staff Recommendation: Either approach can work well, however, staff anticipates option
#2 will create clarity more quickly within the community and City Council.
Further, staff recommends that Council not entertain appeals from individual entities or
advocacy groups for funding, and direct these conversations into the stakeholder
conversations.
Does the Council concur with the staff recommendation to draft possible ballot language
options earlier in the process to share with the community and Council for discussion,
amendment, and narrowing?
Additionally, does the Council wish to establish any expectations for management of
funding requests or advocacy for specific community benefits? Does the Council wish to
designate a citizen task force to synthesize the community’s feedback or have staff
complete this step?
V. Next Steps
Staff will confirm the Council’s direction, and establish the timing for the next Council
update.
7
6
1979 Ballot Language
"VOTE FOR OR AGAINST THE FOLLOWING"
Shall the City of Aspen impose a Real Estate Transfer Tax on
transfers of real property located within the City, which tax. shall be in the amount of one-half of one percent (1/2 of 1%) of the considerat ion received for the transfer and the proceeds of which tax will be used only for the purpose of renovation, reconstruction and maintenance of the Wheeler Opera House and for the purpose of supporting the visual and performing arts.
1. For
2. Against
Note: The City Council was explicit during discussions with the community for placing
this ballot question about $100K cap of RETT for arts grants. This cap has been
maintained to be consistent with that promise from the 1979 discussions.
2016 Ballot Language
8
Real Estate Transfer Tax
Expanded Use Discussion
Diane Foster – Asst. City Manager
Pete Strecker – Finance Director
9
Agenda for Today’s Discussion
I.Financial Models – led by Pete Strecker
II.Ballot Question Timing Considerations – led by Sara Ott
III.Guiding Principles – led by Diane Foster
IV.Community Engagement - led by Diane Foster
V.Confirm Council Direction & Next Steps – led by Sara Ott
10
Review of Previous
Meeting
Unanimous Support in Conservative Position (Elevate 25% Reserve)
Option 1: 100% of Annual Expenditures
Option 2: Capital Set-Aside + 100% Annual Operating Subsidy
Varying Models Requested Around “Speed” at Which Existing
Wheeler Opera House Fund Balance is Applied
Support for Check-In with Community No Later Than 6 to 8 Years
11
Historical 0.5% RETT
Collections
Year 0.5% RETT
Collections
2010 $3,351,364
2011 $2,801,692
2012 $3,465,397
2013 $3,119,174
2014 $4,496,239
2015 $5,392,273
2016 $3,342,440
2017 $5,184,461
2018 $4,633,568
2019 $4,420,027
2020 $9,482,264
$50M Solely to Wheeler Last 11 Years
•$4.5M Median Over Same Period
2020 Double “Average” Year
Inventory Reduced / Sales Pending
12
Forward Looking View
Inflows
Year RETT
Revenues
Non-RETT
Revenues
Total
Inflows
2021 $3,233,000 $1,756,730 $4,989,730
2022 $3,935,000 $1,903,970 $5,838,970
2023 $4,132,000 $2,093,170 $6,225,170
2024 $4,339,000 $2,300,130 $6,639,130
2025 $4,556,000 $2,349,460 $6,905,460
2026 $4,784,000 $2,373,280 $7,157,280
2027 $5,023,000 $2,427,960 $7,450,960
2028 $5,274,000 $2,160,980 $7,434,980
2029 $5,538,000 $2,217,740 $7,755,740
2030 $5,815,000 $2,273,320 $8,088,320
Estimated 10 Year Total:$68,485,740
Other Revenue
•2021-22 Still Softer
•2% Growth Thereafter
Loan Repayments:
•Water Fund ($280K)
•General Fund ($360K)*
13
Forward Looking View
Outflows
Year Operations
+ Transfers
Capital Total
Outflows
2021 $4,058,570 $2,286,000 $6,344,570
2022 $4,725,120 $528,600 $5,253,720
2023 $4,860,470 $500,000 $5,360,470
2024 $4,982,730 $500,000 $5,482,730
2025 $5,136,610 $1,571,800 $6,708,410
2026 $5,281,560 $500,000 $5,781,560
2027 $5,421,120 $2,173,720 $7,594,840
2028 $5,583,940 $500,000 $6,083,940
2029 $5,733,510 $500,000 $6,233,510
2030 $5,907,880 $500,000 $6,407,880
Estimated 10 Year Total:$61,251,630
Operating: 3% Growth
Capital: $500K Floor
Avg. Outflows: $6.1M
14
Volatility of RETT
Collections
$0
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
$7,000,000
$8,000,000
$9,000,000
$10,000,000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
0.5% RETT Collections Wheeler $1M Wheeler $2M
Set Amt to Wheeler = Stability
Other Uses = Uncertainty
15
Option 0: Status Quo
0.5% RETT to Wheeler
$32M • Yr 0
$33M • Yr 1
$34M • Yr 2
$35M • Yr 3
$35M • Yr 4
$37M • Yr 5
$36M • Yr 6
Fund Balance Continues to Grow
•No Additional Uses for Future Taxes
•Arts Grants Limited to $100K
•$39M Opening Balance by 2030 (Yr. 8)
16
Option 1: Repurpose
Future 0.5% RETT Over $2M
$32M • Yr 0
$31M • Yr 1
$30M • Yr 2
$28M • Yr 3
$26M • Yr 4
$24M • Yr 5
$21M • Yr 6
Apply Future Collections to
New Community Benefits
Slower Draw Down of Funds
•$16M Opening Balance in Yr. 8
17
Option 2: Repurpose
Future 0.5% RETT Over $1M
$32M • Yr 0
$30M • Yr 1
$28M • Yr 2
$25M • Yr 3
$22M • Yr 4
$19M • Yr 5
$15M • Yr 6
Apply Future Collections to
New Community Benefits
Slower Draw Down of Funds
•Est. $8M Fund Balance in Yr. 8
18
Option 3: Repurpose
100% Future 0.5% RETT
$32M • Yr 0
$29M • Yr 1
$26M • Yr 2
$22M • Yr 3
$18M • Yr 4
$14M • Yr 5
$8M • Yr 6
Apply Future Collections to
New Community Benefits
•Arts Grants Could be Increased
•Other Community Needs As Well
Rapid Draw Down of Fund Balance
•Likely Desire to Set Floor at $8M
19
$2,286,000$528,600$500,000$500,000$1,571,800$500,000$2,173,720$500,000$500,000$500,000$0
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
$14,000,000
$16,000,000
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Capital Set Aside Operating Reserve Capital Spend
Year 6
Option 4: Capital Set-Aside
Yr.Capital
Set Aside
Operating
Reserve
Total
Balance
2021 $10M $4M $14M
2022 $4M $5M $9M
2030 $2M $6M $8M
Year 0
Year 8
20
Summary
Status Quo Option 1 Option 2 Option 3 Option 4
100% To
Wheeler $2M / Yr $1M / Yr $0M / Yr Capital Set
Aside
No New
Uses
Expanded
Uses
Expanded
Uses
Expanded
Uses
Expanded
Uses
$36M $21M $15M $8M $9M
$39M $18M $8M N/A $8M
In Options 1, 2 & 3 = Projected Balances Shown (Not Reserve Floor)
In Option 4 = Reserve Floor Shown
Year 6
Year 8
21
Policy Question:
Are there any options City Council would
like to remove from consideration?
OR
Does City Council have a preferred
financial model?
22
Policy Question:
What financial information does the
Council need to determine what
level of grants they would like to do
in the future?
23
Policy Question: Does the Council have a
preferred election date for a RETT question?
Election Date Deadline for Ballot
Language to County
November 2, 2021 Early September 2021
November 8, 2022 Early September 2022
March 7, 2023 December 2022
24
Policy Questions:
1. Are there principles or guidelines for
this process that a majority of City
Council supports?
2. Do any of these principles or
guidelines take priority over others?
25
1. Take a conservative approach to ensuring the Wheeler’s needs are supported
2. Continue to support Wheeler; plan for a reasonable amount of unanticipated needs
3. City-owned arts facilities should not compete for funding with community non-profits
4. Funding for individual non-profits will not be specified in the ballot language
5. All residents should have an equal opportunity to provide input to this process
6. Statistically valid feedback should be collected from Aspen’s full time residents
7. The City’s grant program should be utilized for distribution of any additional dollars
designated for non-profit art organizations
8. Additional funding can be utilized for a broad range of community operating and
capital needs – and funding allocation will be determined each year by City Council,
with a recommendation of a Council-appointed committee, such as the revised
grants steering committee:
9. Additional funding can be utilized for a broad range of community operating and
capital needs to be identified on the ballot;
10.Increase the amount of arts and culture funding, and provide additional resources to
other community needs.
11.Additional funding can be utilized for a broad range of community operating and
capital needs. Possible areas could include:(see next slide)
26
Other possible areas of need
Arts & Culture
Childcare
Housing
Health and Human Services
Stormwater Infrastructure
Transportation/Entrance to
Aspen Next Steps
Electrification of City of
Aspen fleet vehicles
Other environmental topics
Tourism
Cozy Point Infrastructure
Advance other initiative
27
Policy Question:
How does the funding of arts grants fit
into the guiding principles?
28
Policy Question:
Does the Council concur with the staff
recommendation to draft possible ballot
language options earlier in the process to
share with the community and Council for
discussion, amendment, and narrowing?
29
Policy Question:
Additionally, does the Council wish to
establish any expectations for
management of funding requests or
advocacy for specific community benefits?
30
Policy Question:
Does the Council wish to designate a
citizen task force to synthesize the
community’s feedback or have staff
complete this step?
31
Confirm Council Direction
&
Next Steps
32