HomeMy WebLinkAboutagenda.council.worksession.20081021THE CITY nF ASPEN
2008 CITIZEN BUDGET TASK FORCE
FINAL REPORT TO THE ASPEN CITY COUNCIL
October 21, 2008
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Citizen Budget Task Force, Final Report to Aspen City Council
Citizen Budget Task Force
Final Report to City Council
Table of Contents
I. Executive Summary, Page 4
II. Subcommittee Reports
a. Housing, Page 8
b. Taxation and Finance, Page 11
III. Transportation and Parking, Page 13
IV. Appendices
a. Task Force By-Laws and Membership Roster, Page 16
b. Housing Subcommittee, Page 19
i. Goal Statement, Page 19
ii. City of Aspen Resolution 69-2008 -adopting Housing
"°-' Subcommittee initial recommendation set, and supporting Housing
Subcommittee Recommendation Set, Page 22
iii. Housing Subcommittee, Second Recommendation Set to City
Council, Page 28
iv. Recommendations Related to Housing Audits, Page 32
c. Taxation and Finance Subcommittee,
i. Goal Statement, Page 33
ii. Final Observations and Recommendations, Incurring Debt to
Finance Affordable Housing, Page 34
d. Transportation Subcommittee
i. Goal Statement, Page 36
ii. Transportation Development Plan Recommendation, Page 37
iii. Bus Rapid Transit Recommendation, Page 39
Citizen Budget Task Force, Final Report to Aspen City Council
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I. EXECUTIVE SUMMARY
Backaround:
In January 2008 the Aspen City Council commissioned a Citizen Budget Task Force
(CBTF) with the purpose of evaluating and providing recommendations on major budget
policy issues of the City of Aspen.
The idea of commissioning a Citizen Task force to evaluate issues of budget policy was
originally analyzed by Dr. Bill Rivenbark of the School of Government of the University
of North Carolina in his September 2007 report to City Council on the City's Financial
Condition which can be found on the City's web site at the following link:
http:l/www.aspenpitkin.com/pdfs/depts/45/RivenbarkReport.pdf
The City Council, having requested Dr. Rivenbark's analysis, agreed to the formation of
such a group for a specified time frame, and initial development work to recruit potential
members began in November of 2007. Task Force membership was developed through
a combination of recruitment and advertising. All individuals who applied for
membership to the CBTF were appointed by the City Council. The CBTF was officially
appointed on January 22"d, 2008; upon City Council approval of the task force bylaws
and initial membership (see Appendix A).
Through the winter and into the spring of 2008, the Task Force, with assistance from
Mayor Ireland, various City staff, and the Task Force Facilitator, developed a work plan
for reviewing major budget policy issues. By March, the Task force had identified
subject areas and formed subcommittees to begin issue evaluation work. These subject
areas included: Transportation
Housing
Community Development
Information Technology
Tax and Finance
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Citizen Budget Task Force, Final Report to Aspen City Council
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A summary of Task Force membership, its schedule, and a listing of supporting
documents and recommended approach to its work can be found at the following link on
the City of Aspen's web page.
http:/Jwww.aspenpitkin.com/depts/45/BudgetTaskForce.cfm
Analysis and Findings:
By May 2008 the Task Force had narrowed its focus to three subject areas for in depth
study, and had identified specific issues for evaluation within each subject area:
Transportation: RFTA's Bus Rapid Transit proposal (the Subcommittee later added an
evaluation and recommendation of the City's proposed Transit Development Plan
process to its work plan).
Housing: Optimizing use of current housing resources, evaluating spending efficiency of
housing funds for operations and development.
Tax and Finance: Evaluate the City's plans and capacity for using debt to finance
affordable housing.
Through its subcommittees the Task Force developed a series of recommendations for
the City Council to consider. To date some of these recommendations have been
adopted by the Council, while others have been reviewed by City staff and are in the
evaluation process. These, along with all remaining recommendations are included in
the body of this report, summarized in Section II under Subcommittee Reports and
detailed in the appendices provided in Section III of this report:
Recommendations:
Task Force Recommendations are summarized here by Subcommittee.
Housing Subcommittee:
• Housing Subcommittee Recommendations on Housing resource efficiency.
Adopted by City Council as Resolution #69-2008.
• Housing Subcommittee Recommendations Set #2:
o Financial Audit of Burlingame Project accounting by McMahan and
Associates. Completed July 2008.
o Performance Audit of Burlingame Project by Alvarez and Marsal.
Completed July 2008.
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Citizen Budget Task Force, Final Report to Aspen City Council
Both audits can be reviewed at the following link:
http://www.aspenpitkin.com/pdfs/misc/Burlingame/Burlingame_investigatio
n.pdf
o Numerous other recommendations detailed in the following Housing
subcommittee report under Section II and detailed in this report as
Appendix C.
Tax and Finance Subcommittee:
Adopt an objective methodology for evaluating the proposed subsidy element of
all future affordable housing development projects
• As an element of project planning develop specific subsidy target levels for all
affordable housing projects and benchmark project progress against this subsidy
target through the entire project development process.
Only seek to borrow funds for major capital projects through bond issues or other
debt instruments once a detailed project plan is in place and has been
communicated to the public. Such a detailed plan should include estimates for
all cost components, with documented underlying assumptions for all variables
influencing cost.
Transportation Subcommittee:
• RFTA should address marketing shortcomings in its BRT proposal to provide
detailed factual information documenting the need for the requested
improvements in the BRT plan, focusing on the benefits to current and future
customers and a clear explanation of the status quo vs. BRT scenario as
supported by the facts.
The City of Aspen, CDOT and RFTA must work together more effectively in
finding systemic solutions to traffic and transportation issues involving the
entrance to Aspen including consideration of traffic flow improvements including
more effective use of HOV vehicles, addressing parking demand and capacity,
continuing to evaluate alternative transportation solutions as long term options,
including rail, and finally the entrance itself.
The Task Force recommends the City Council approve the staff recommendation
for a Transportation Demand Planning (TDP) study related to transportation
needs within the City of Aspen.
• The Task force recommends the Council create a Citizen's Transportation
Advisory Committee for the purpose of evaluating TDP study results and
Citizen Budget Task Force, Final Report to Aspen City Council
providing citizen input on all transportation, entrance and parking policy issue as
they relate to service level and budgetary impacts.
The Task Force also considered generally the potential benefit of a standing Citizen
Budget and Finance Committee and while it reached no consensus for recommendation
as to form, wished to forward this question to the City Council for further consideration.
The following section provides summary findings and recommendations from each of
the three noted subcommittees, Housing, Taxation and Finance, and Transportation.
Citizen Budget Task Force, Final Report to Aspen City Council
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II. Subcommittee Reports
A. Housing Subcommittee
October, 2008
Committee: Ward Hauenstein, Chair, Danny Aronson, Jim DeFrancia, Don Davidson,
Jenny Brown Elliot, Alan Fletcher, Marcia Goshorn, Pete Louras, Howie Mallory
The Housing Subcommittee (HS) was formed in February, 2008, as a
subcommittee of the Citizens Budget Task Force (CBTF), to study and provide
recommendations to the City on its affordable housing program. At the City's request,
the initial focus of the HS was the Burlingame project (BG), and later attention was
turned to wider issues of the affordable housing program. Our goal was to assist the
City by providing recommendations to improve their development and oversight of
affordable housing so that we can create the most number of units, at a reasonable
price in the shortest amount of time.
To prepare for our work, the City provided considerable
background information, including audited financial statements, budgets, goals,
organization charts and many other useful documents. These can be found at the City
of Aspen website by clicking on the "Citizens Budget Task Force" icon. In addition to the
information provided by the City, the HS requested additional information specifically
related to BG and the affordable housing program in general. City Staff was very helpful
providing the information we needed, and preparing special analyses and summaries
when the information was not readily available.
Early in our review of the BG project, two discoveries quickly influenced the
direction of our work and subsequent recommendations to the City. First, it was
revealed that the City had prepared a "brochure" for voter education in preparation for a
ballot measure in May, 2005, that contained inaccurate or incomplete financial
information. When the "Total Cost" and "Total Subsidy" numbers in the brochure were
compared with the amounts provided in the reconciliation noted above, it became
apparent the brochure understated the total cost of the BG project, as well as the
related publicly funded subsidy. Later inquiry revealed that the brochure only contained '"°
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Citizen Budget Task Force, Final Report to Aspen City Council
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the construction cost estimate to build the BG structures, and did not include the cost of
land, infrastructure, soft costs or mitigation expenses. This discovery further supported
our conclusion that the City lacked appropriate policies and procedures for large, multi-
yearcapital projects, and also lacked internal controls to guard against public
dissemination of inaccurate financial information.
Second, we requested a reconciliation of the actual project expenditures for BG
compared with the original budget. Such a document did not exist in the City's records,
and later it was determined that a comprehensive budget for the overall BG project also
did not exist. City staff prepared the reconciliation we requested, but could only provide
actual costs incurred to date and rough estimates of future expected expenditures to
complete the project. This was our first indication that the City lacked the financial,
budgetary and project management policies and procedures to properly manage large,
multi-year capital projects such as BG. This finding became the basis for many of our
later recommendations.
In connection with our work, the HS produced a number of documents containing
comprehensive recommendations to the City. We have attached these documents as
exhibits to this overall summary as follows:
1. Housing Subcommittee Report to Citizen Budget Task Force on Burlingame
and other Affordable Housing Projects -With approval from the CBTF, this document
was presented to City Council on June 30, 2008 in a lengthy work session.
2. Aspen City Council Resolution No. 69 - 08 -This resolution was unanimously
passed on July 28, 2008, and encompasses all of the recommendations made by the
HS of the CBTF.
The final drafts of the original 10 recommendations leading to this resolution are
provided in Section 111 of this report as Appendix 8.
While our work resulted in numerous, sometimes detailed, recommendations,
following we've highlight those that we believe are the most important for the citizens of
Aspen to be aware of:
1. Post-completion audits of BG: We recommended that the City undertake two
"audits" of the BG project and related staffing, structure, controls and policies in place
Citizen Budget Task Force, Final Report to Aspen City Council
for managing large, multi-year capital projects. These audits were completed in late ..~.,
July, 2008, and the final audit reports can be found on the City's website as noted in
Section I of this report.
2. Creation of Construction Experts Group (CEG): We recommended that the
City form a group of independent construction experts drawn from the local community
to advise the City as it compiles its plans to complete the BG project. This group would
provide their expertise and advice on construction methods, density considerations,
partnership possibilities, sizing of units and the development model to be employed.
3. Creation of committee to investigate incentives: We recommended that the
City consider employing financial "incentives" as a way to motivate affordable housing
residents to downsize, sell or bridge to free market housing. This committee is being
formed by the Aspen/Pitkin County Housing Authority under the name Housing
Frontiers Committee was scheduled to hold its first meeting on Wednesday, August 27,
2008.
4. Development of policies and procedures to ensure accuracy of voter
information and financial projections: We recommended that the City institute the
necessary internal controls to assure that financial information included in voter
information documents and press releases is accurate.
5. Analyzing the bonding capacity of the City's Affordable Housing Fund: We
recommended that the City undertake an analysis of its bonding capacity in light of the
recent downturn in the economy and resulting reduction in Real Estate Transfer Tax
(RETT) revenues.
6. Development of an implementation plan and timeline for the recommendations
from the two audit firms and the CBTF: We requested the City Council to direct staff to
create a comprehensive implementation plan and timeline for the many
recommendations that have been made by the two independent audit firms and the
CBTF.
.++.
Citizen Budget Task Force, Final Report to Aspen City Council
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B. Taxation and Finance Subcommittee
October, 2008
Committee: Don Davidson, Maurice Emmer, Michael Fox, Peter Fuchs, Tom Oken, and
Bill Pope
The Taxation and Finance Subcommittee (T&F) was formed in February,
2008, as a subcommittee of the Citizens Budget Task Force (CBTF). T&F adopted a
goals statement (see Section III, Appendix D) that was nothing if not ambitious. As the
limitations of time and resources sobered the subcommittee, the focus of T&F's work
narrowed to the following elements that are reflected in the goals statement:
• Evaluate considerations relating to the stability, volatility and elasticity of the tax
base and sources of current and future revenue streams.
• Evaluate approaches and methodologies for dealing with economic and business
cycles to provide a proactive basis for budgeting and financial decision making.
• Consider approaches for instituting effective cost controls especially with a view
to providing a cushion against unexpected negative developments (focus was
given to housing as described below).
• Consider approaches to the management of funds that are in excess or
inadequate funding positions and to the transfers between funds.
• Consider matters relating to the extension or not of sun setting sources of
revenues.
• Assess debt capacity, prudent borrowing levels and plans for issuing additional
debt obligations; consider alternative financing mix and scenarios
T&F also decided to coordinate its efforts closely with those of the Housing
Subcommittee (HS), as that subcommittee grappled with many non-financial
issues relating to housing, leaving insufficient time and resources to study the
financial aspects of housing alternatives. As T&F's work proceeded, it became
apparent that the financial issues relating to housing alternatives were similar in
many respects to those relating to revenue raising generally and to the financing
of major capital projects in particular. Accordingly, several of T&F's
Citizen Budget Task Force, Final Report to Aspen City Council
recommendations are framed in terms of financing housing initiatives but apply ,,,,,^
more broadly. , ,_,
To perform our work, the City provided considerable background
information, including audited financial statements, budgets, goals, organization charts
and many other useful documents. These can be found at the City of Aspen website by
clicking on the "Citizens Budget Task Force" icon. T&F also obtained interim analyses
that the City was preparing to understand the projected revenue sources and projected
costs, especially for housing. City Staff was very helpful providing the information we
needed, and preparing special analyses and summaries when the information was not
readily available.
T&F's observations and conclusions are contained in the summary found
in Section III, Appendix D on page 20 of this report.
Citizen Budget Task Force, Final Report to Aspen City Council
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C. Transportation Subcommittee
October 2008
Committee: Michael Kosnitzky, Torre, Lisa Baker, David Hyman, Tom Schwerin, Lex
Tarumianz
The Transportation Subcommittee (TSC) was formed in February of 2008,
as a subcommittee of the Citizens Budget Task Force (CBTF), to study and provide
recommendations to the City on transportation issues that affect Aspen. Transportation
was one of five areas of interest that were agreed upon by the CBTF. The other critical
issues identified were housing, tax and finance, community development, and
information technology. City staff recommended that the TSC focus our efforts on
RFTA's Bus Rapid Transit (BRT) initiative as it is one of the larger transportation
expenditures to affect the city of Aspen in several years.
Our research led to recommendations for both RFTA and the City of Aspen regarding
BRT and general transportation issues. The main finding was that BRT is a good next
step for RFTA and the City of Aspen but that both entities need to work together
towards solving Aspen's entrance and transportation problems. The transportation
issues need to be approached systematically rather than individually. Any effort,
including BRT or the Transportation Development Plan, will provide minimal impact
"° " unless researched and implemented with a whole systems approach.
The TSC had initial meetings with city staff including Barry Crook, Randy Ready, John
Kruger, and Steve Barwick. The TSC determined that although the BRT plan was
supported by Aspen's City Council and the Elected Officials Transportation Committee
(EOTC) that analysis and recommendations needed to be made on the effect of BRT to
Aspen, its residents, and visitors. Our initial work focused on possible benefits including
reduced congestion at the entrance to Aspen, more efficient commute times, improved
parking conditions in the commercial core, and improved air quality. Several detailed
reports from both CDOT and the City of Aspen were provided as initial documents for
research.
Citizen Budget Task Force, Final Report fo Aspen City Council
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With our initial introduction to BRT we found that RFTA had provided minimal ,,,,,
information to the public. From late March to early September the subcommittee was ,,,
caught in a process of asking for, waiting for, and discovering the need for more
information. RFTA was on a different timeline than the TSC as their goal was to have
many of their materials and reports completed by September in time to market the
initiative and to apply for federal grants. This discrepancy reduced the scope of work
that the group was able to accomplish.
At a work session with Aspen City Council in July it was noted that City Council had
already decided to endorse BRT and that our focus should be on other issues that
would affect the transportation budget. By the time this new direction was determined it
was too late to effectively propose many other recommendations. The TSC did spend
time reviewing the proposed update to the city's Transportation Development Plan
(TDP) which is a study of the bus transportation routes within the City of Aspen.
's The TSC regrets the fact that due to the process of reviewing
BRT we were unable to provide more detailed recommendations on the parking and
transportation budgets. The TSC does believe that BRT is a proper next step for RFTA
and Aspen but that the City and our leaders need to better understand that parking,
transportation, and the entrance are all a part of a larger system. Until we start making
decisions based on this greater "system" we will continue have congestion, poor air
quality, and negative conditions for our residents and visitors.
. .
In connection with our work, the TSC produced the following recommendations for the
City and RFTA.
• RFTA's BRT marketing efforts have been minimal for a plan and bond issue of
this magnitude. RFTA should immediately address in detail their stressed bus
capacity, inadequate maintenance facilities, and rider and employer benefits of
BRT in a comprehensive marketing campaign to inform voters.
• RFTA should focus on the benefits to current and future bus riders in their
marketing campaign. This should include the release of RFTA's mentioned
transportation demand analysis report.
• RFTA should provide a clear explanation of the status quo vs. BRT scenario that
is detailed in the BBC report if this chart is to be used in their marketing efforts. '~
Citizen Budget Task Force, Final Report to Aspen City Council
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The City of Aspen, CDOT, and RFTA must start to work together in finding a
~... systemic solution to the traffic and transportation issues involving the entrance to
Aspen. Issues that need to be addressed include but are not limited to:
- The entrance to Aspen solution.
- Alternative transportation options including rail.
- Opportunities to improve traffic flow with better preference for HOV vehicles
including the study of a dedicated HOV/bus lane.
- Further study on long term parking demand and capacity in the City of Aspen
The City of Aspen Budget Task Force recommends that the City Council approve
the request for the TDP study. The committee also recommends the creation of
a Citizens Transportation Advisory Committee. This Committee should not be
limited to making recommendations on TDP but should be utilized to study all of
Aspen's transportation, entrance, and parking issues.
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Citizen Budget Task Force, Final Report to Aspen City Council
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III. Appendices
A. By-Laws and Membership List
City of Aspen
Citizen Budget and Finance Task Force, 2008
Task Force By-Laws
Article I: Name: City of Aspen Citizen Budget and Finance Task Force.
Article II: Purpose, Authority, Duties, and Termination
A. The purpose and authority of this citizen task force is to advise the Aspen City
Council about matters relating to the City's budget and fiscal policy. Specific
issues to be addressed shall be determined by a majority vote of the City
Council.
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B. The committee's purpose is advisory. The committee shall communicate its
advice to the City Council in the form of a written final report. This report will
summarize the task force's consensus on each issue that it is charged with
reviewing. The report will also provide an opportunity for minority written .~.,
advice should individuals or a group of task force members feel strongly .~
enough to provide such advice.
C. The authority and existence of the task force will terminate when consideration
of its recommendations has been completed by the City Council, or on August
30, 2008, whichever occurs first.
The City Council may determine to continue the existence of this task force by
amending these bylaws.
Article III: Membership:
A. There will be a minimum of fifteen and a maximum of twenty-five members on
the task force. Members shall be appointed by the City Council. Task force
members shall serve at the pleasure of the City Council.
B. Vacancies are filled by application and approval by the City Council.
C. Upon failure of any member to attend three consecutive meetings, the task
force may recommend that the governing body terminate that appointment and
declare the position vacant.
Article IV. Officers and Staffing ,,,,,~
Citizen Budget Task Force, Final Report to Aspen City Council
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A. Task Force Officers. The officers consist of a chair and vice chair who shall be
elected by the membership and who shall serve at the pleasure of the
membership for the task force's term.
B. Chair. The chair shall have general supervisory and directional powers over the
committee. The chair shall preside at all committee meetings and set the
committee's agenda. The chair shall also be an ex-officio member of all
subcommittees and shall be the spokesperson for the committee, unless this
responsibility is delegated in writing.
C. Vice Chair. The vice chair shall execute all powers of the chair in the absence
of the chair.
D. Staff. The City of Aspen will provide staff support to the committee for
presentation of materials, facilitation, meeting notification, information
gathering, and clerical services to the extent that the budget permits. Staff
support shall be limited to support of the review of issues approved by the City
Council.
Article V. Organizational Procedures
A. The regular meeting of the task force shall be February 6~h, and the fourth
Wednesday of every month (February through August) during the task force's
term. The task force may hold additional meetings and subcommittee
meetings as necessary at a time and place designated by the chair.
B. Fifty-one percent of the voting membership of the task force shall constitute a
quorum.
C. These bylaws may be repealed or amended, or new bylaws may be adopted
by a majority vote of the governing body on its own initiative, or upon a
recommendation from the committee.
C. The parliamentary authority for this committee is Robert's Rules of Order
Revised, except where superseded by these bylaws or local, state, or federal
law. The Chair may waive the use of Robert Rules of Order if he or she
determines that the task force will function more effectively with a less formal
consensus process, however, the task force shall terminate its review of all
Council directed issues with a formal voter of acceptance or rejection of a
consensus advisory position.
Citizen Budget Task Force, Final Report to Aspen City Council
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MEMBERSHIP ROSTER
CITY OF ASPEN
CITIZEN BUDGET TASK FORCE -MEMBERSHIP
LIST
Last
Name First Name
Email
Aronson Danny
Baker Lisa
Davidson Don
De'Francia Jim
Emmer Maurice
Elliok Jenny
Fletcher Alan
Fox Michael
Fuchs Peter
daronson@asoehcountrvdav.org
lisarbaker@gmail.com
donsno4@comcast.net
idefra ncia@ LoweEnterorises.com
memmer@deloitte.com
jbelliot@asnermusic.org `
afletcher@aspenmusic.ora
mfox@aspenclub.com
ofuchs42@msn.com
Gordon Scott scottaordon@alpinebank.com
Gostdm Mania= marciagoshorri@hotmail.com +
Hauenstefn Ward ward@forwardcomputer.com
Hyman David davidhvman@comcast.net
Kaczynski Michael
Louras Peter petelouras@comcast.het
Malldry 'Howie hmallorv@cobahks.com
Marks Marilyn marilvn@asoenoffice.com
Oken Tom Como@CO.pitkin.co.us
Pope Bill pope.w@comcast.net
Ressler Dave resda@avhaseen.ora
Schwerin Tom tom.schwerin@amail.com
Tarumianz Lex lex.tarumianz@usbank.com
Tarver Charlie
Torre hitorre@aol.com
..+
Citizen Budget Task Force, Final Report to Aspen City Council
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B. Housing Subcommittee
Goal Statement
To provide a framework for public policy formulation that provides for public/private
funding of operationally self-supporting demand-based public/private partnerships that
compliment and build upon the existing housing infrastructure in a spirit of shared
community challenge.
• Public/Private
- Our task force feels strongly that the community is faced with a
monumental challenge that affects all facets of our governmental and
private sector employers -which is to maintain an adequate workforce
into the future
- At present, there exists a limited amount of individual and combined
resource capacity on the part of these employers to meet the challenge of
acquiring the few remaining parcels or properties in the upper Roaring
Fork Valley that are suitable for employee housing
- There has also been a highly competitive and potentially inflationary
environment created, as the larger employers (including the City) rush to
secure the limited opportunities
- The "survival of the quickest and the fittest" approach to allowing the
employers to seek individual solutions may lead to a disastrous inability of
the community to continue to support itself as certain employers fail in
their efforts
- We suggest that the City is in the unique position to be able to provide the
leadership and focus of control for acommunity-wide effort to assure that
adequate employee housing is available into the future
- In order to be successful, the public and private employer community will
need to work within a framework of a unified effort to plan for the total
workforce housing needs and to engage in a process of prioritization of
those needs to assure that the Aspen community can be sustained in the
long term
- The City, through its taxing and appropriations authority, must plan now to
support these efforts and to be sure that it participates, as an employer, in
defining common objectives for an employee housing program that utilizes
community benefit metrics as the source for prioritization of employer's
needs
Self-Supporting
- The high barriers to entry into the local real estate market consume the
vast majority of capital and debt resources of the employer community
- In order for any housing opportunity to be long-term viable and
sustainable, such projects must be able to support themselves beyond the
initial subsidization that is provided
Citizen Budget Task Force, Final Report to Aspen City Council
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19 __
- Housing opportunities need to include not only the initial costs of ,,,,~
construction and occupancy, but also the on-going costs of maintenance,
taxation, utilities and transference of occupancy
- In addition, the community must consider the more broad impacts of
increased housing capacity on the community's infrastructure to support
the increased population with such services as schools, sewer, utilities,
transportation, and healthcare
- The addition of employee housing units may not contribute the same
proportionate amount of increased property tax income to the community,
as the increased amount of demand on services (compared to the primary
and second home-owners in the free market)
• Demand Based
- Ultimately, the pressure on the employee housing market emanates from
the employer community that is attempting to secure an adequate work-
force
- Once considered to be an "upper valley' problem, the pressure of the I-70
corridor growth is now further constricting housing inventory throughout
the region
- The laws of supply and demand are therefore accentuated as Aspen
employers attempt to compete in an even larger pool
- The current mitigation program further complicates the competitive
dynamics by creating an artificial demand for housing
- The basis for the mitigation requirements in effect competes with the more
natural and predictable demand that is created by local market forces ''""'"
(labor and housing costs) """`
- Mitigation requirements are currently tied to construction and growth in
physical capacity, which may or may not correlate to employee generation
- The current model for financing public employee housing, largely from
mitigation, does not effectively distribute the costs to the employers that
are generating the demand
- A demand-based model to plan for and finance employee housing would
focus on actual demand, rather than artificial demand, and would facilitate
a long term planning process
- All employers would be included, and not just those employers that are
submitting for construction approvals
- Inclusion and participation would be facilitated as a "cost of doing
business"
- Density levels and locations for housing, throughout the valley, would be
determined by actual need and not artificially enabled or constrained by
regulations
- Current constraints on location to satisfy the mitigation requirements may
not be realistic
Next Steps:
• The task force recognizes that a substantial amount of time and energy has been
committed by elected officials and staff to review and understand these issues -~
Citizen Budget Task Force, Final Report to Aspen City Council
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• Consequently, we would appreciate being able to present the preceding
definitions in the light of the collective understanding of the City, prior to moving
forward
• The ultimate recommendations of the task force will be in the form of a basic
framework of objectives, rather than with specific solutions
• The recommendations will also need to be in keeping with current City initiatives
and solutions being implemented -including the pending ballot question in
November
• The final framework, then, will be able to be applied to the various budget
"buckets" as a test to determine if the financial resources of the City, and its
appropriations, are in keeping with the basic framework of concepts being
proposed
• If accepted by the City, the framework would need to be applied to a long term
planning, prioritization and funding process that embodies the principals outlined
there-in
Citizen Budget Task Force, Final Report to Aspen City Council
21
Housing Subcommittee
ii. Resolution 69-2008 and Housing Subcommittee Initial
Recommendation Set
RESOLUTION NO. 69
Series of 2008
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ASPEN, COLORADO,
TO RECEIVE, ACCEPT AND ADOPT CERTAIN RECOMMENDATIONS OF THE AFFORDABLE
HOUSING SUBCOMMITTEE OF THE ASPEN CITIZEN BUDGET TASK FORCE.
WHEREAS, on February 11, 2008, by resolution of the City Council of the City of Aspen,
Colorado, they did create a City of Aspen Citizen Budget Task Force, provide for a
schedule of meetings and request said Task Force to provide a final report of its findings
and recommendations by September 1, 2008,
WHEREAS, The Mayor has proposed and City Council endorsed the creation of a Citizen
Budget Task Force, to evaluate major issues of budgetary and financial policy, and
provide a set or findings and recommendations to the City Council, and
WHEREAS, on May 20, 2008, the Affordable Housing Subcommittee of the Citizens
Budget Task Force met with the City Council and made 10 recommendations to them:
Employer Sponsored Analysis of Current and Expected Housing Demand/Supply
and Proposals for Public/Private Partnerships
Council response: Council wanted to wait and see if the City & County survey efforts that
are currently in progress yielded a sufficient amount of information before commissioning
additional survey efforts. If employers other than City/County were to organize their own
survey efforts, the City would support those efforts in concept (but not with funding) and
would be happy to share information with employers. The employer survey is nearly
complete and should be released soon.
2. Post-Completion Review of Burlingame Phase 1
Council response: Council agreed to this recommendation and commissioned two such
independent investigative audits: (1) a Performance Audit with the firm of Alvarez &
Morsel whose scope of services was agreed to by the Subcommittee members, and (2) a
Financial Review of the staff reconciliation of Burlingame costs by the City's external
auditors, McMahan and Associates.
3. Reconsider Burlingame 2 and 3 Assumptions and to have an objective third
party industry expert consultant estimate the costs for Burlingame Phases 2&3
Council response: Council agreed that the Construction Experts Group (CEG) the City
Manager had convened would serve this purpose, and that they would consider ~
construction methods, partnership possibilities, density changes in terms of sizing of the `~.rf'
Citizen Budget Task Force, Final Report to Aspen City Council
_ _ __ _ _ _ _. _ _ _ --- -- --- J 22
units and the number of units to be built, and more economical finishes to units. This
group continues to meet.
4. Create a specialized Task Force to develop potential optional financial
incentive programs to allow existing AH residents to downsize, self, bridge to
free-market, etc. Explore providing loan support programs for bridging to free
market ownership for AH and free-market renters.
Council response: Council has tabled this recommendation for now, but previously
expressed support for this kind of analysis to be undertaken. This is part of a series of long
term recommendations to be considered by the Housing Authority citizen board, and
they have agreed to convene a group of locals to work on these issues.
5. Establish Independent Compliance Advisory Board to advise housing executives
on compliance matters, and monitor compliance complaints.
Council response: Council referred this recommendation to the Aspen Pitkin County
Housing Authority Board for their review and recommendations.
6. Establish Outsourced 24 hour Help Line for Compliance.
Council response: Council referred this recommendation to the Aspen Pitkin County
Housing Authority Board for their review and recommendations.
7. Outsource Eligibility Testing to Specialized Firm.
Council response: Council referred this recommendation to the Aspen Pitkin County
Housing Authority Board for their review and recommendations.
'~ 8. Legal Review of All Contracts for Maximizing City Rights.
Council response: Council referred this recommendation to the Aspen Pitkin County
Housing Authority Board for their review and recommendations.
9. Establish Public Policy Review Committee whose Purpose is to advise on major Capital
Spending prior to legal commitments.
Council response: This recommendation has been tabled by the Task Force for the time
being.
10. Update City Procurement/RFP system.
Council response: Council agreed to this recommendation. Recommendations are
expected from the auditors on this subject.
WHEREAS, on June 30, 2008, the Affordable Housing Subcommittee of the Citizens
Budget Task Force met with the City Council and presented a series of
recommendation in two areas:
1) Development Related:
a) study and incorporate BG development options by CEG as to: construction
methods, public/private partnerships that lessen public subsidies, density increases
in terms of both sizing of units and number of units, more economical finishes that
utilizes the City's buying power or allows for owner purchased upgrades
b) preparation of a detailed plan and a comprehensive budget for BG 2/3 using
recommendations from CEG
Citizen Budget Task Force, Final Report to Aspen City Council
-----
~ 23 __
2) Financial and Management Control Systems: ~
a) financial and management systems review of BG Ranch to include validating the
dollars in the city's reconciliation spreadsheet, testing a sample of payments to "~'~
contractor, review of internal controls surrounding multi-year capital projects, and
make recommendations for improvements in the processes used to prepare
construction budgets and forecasts
b) performance audit of processes and procedures used for overall construction
management administration
c) direct Staff to recommend for immediate implementation the recommendations from those
audits
d) review of BG Phase 2/3 budget by independent industry professional prior to contract
for value engineering options
e) City Manager to provide a plan and a timeline for implementation of all
recommendations, Council to approve that plan and get regular updates on
progress and report to Community at least quarterly
f) assessment of projects needs, resources, skill sets to ensure staffing capability and
experience for necessary oversight of all future AH projects
g) Council to direct staff to develop and implement a routine, semiannual reporting
procedure for Council and the public on progress on large capital projects against
the initial budget including revenues
h) implement process to ensure accuracy of voter information and reasonableness of
financial projections
ij engage independent consultant for risk assessment and systems assessment of above
prior to execution of BG 2/3 contracts
jj Analyze the bonding capacity proposals of the Director of Finance regarding: (1 j
Housing Fund's ability to absorb any proposed subsidy for any AH project, (2) ~
capacity of the City to service any debt for BG 2/3, BMC West and any other
proposed AH project, and (3) Council to make final recommendations with full
awareness of, and publicity to voters of, relationship to reasonably anticipated
future funding needs and capacity for BG and other projects as well as other major
capital improvements.
k) Council establish a written policy and guidelines for AH subsidies for current and
future AH projects. This policy to acknowledge a connection between subsidy
levels and financial capacity of a AH project and possible overall impact on City's
financial condition.
Council resoonse: Council agreed to these recommendations pending the completion of
the independent auditor's recommendations (Alvarez and Marsel) before fully committing
to the details. They are in agreement with the principles that drive the purpose of those
audits and anticipate accepting the audit recommendations.
WHEREAS, it is the belief of the Affordable Housing Subcommittee of the Citizens
Budget Task Force that these recommendations are crucial to preparing for a
bond issue for future Affordable Housing development proposals and that they
should be implemented as soon as possible. That the upcoming bond election is
not simply a "Burlingame Issue" but involves the future of the Affordable Housing
program and the best use of the funds available. That the development of a
Citizen Budget Task Force, Final Report to Aspen City Council
_-- -- - __..._ _ 24
realistic timeline for the steps delineated in the recommendations and rigorous
execution plan of same will increase community confidence and support of
Burlingame and the Affordable Housing program.
WHEREAS, the Affordable Housing Subcommittee of the Citizens Budget Task
Force declares that:
^ Burlingame Ranch is Aspen's unique, high potential Affordable Housing resource
^ Burlingame has been approved on two occasions by vote of Aspen citizens
^ City Council is committed to Burlingame II and III
^ Funding for Burlingame Phases II and III requires a bond issue or other forms of
multi-year financing as the RETT based fund is significantly depleted
^ Passage of a bond issue requires broad based citizen support
^ The present confusion as to actual vs. projected costs as presented in the 2005
brochure has weakened public trust
^ Therefore the Citizen Budget Task Force recommends that prior to sending a
proposal fora Burlingame phase II bond issue to the voters, the City Council accept
and commit to implementing these recommendations.
We the City Council do therefore, receive, accept and adopt these
recommendations as noted and do express our gratitude for the work of the
Affordable Housing Subcommittee of the Citizen Budget Task Force.
INTRODUCED, READ AND ADOPTED by the City Council of the City of Aspen on the 28th
day of July, 2008.
Michael C Ireland, Mayor
Citizen Budget Task Force, Final Report to Aspen City Council
25
Housing Subcommittee -Initial Recommendation Set .,,,,,
. ~;
Recommendation #1: Employer Sponsored Comprehensive Study of
Supply/Demand, Goals, Future Needs
Recommendation #2: --Post Completion Financial/Process Review of
Burlingame 1.
o Learn from Burlingame 1 experience.
o Enhance Voter confidence in Spending/Reporting
o Develop Reporting Template for Burlingame 2, 3.
o How?-Likely use current CPA audit firm with extension of engagement
scope.
o When?-begin ASAP, with results expected in August, 2008.
Recommendation #3:- Expert Construction/Design Task Force for Burlingame
2, 3 Review
o Expert Citizen Task Force to undertake short term brainstorming of
Burlingame 2, 3 opportunities to better leverage limited resources.
o Consider technology, modular construction, density, standardization,
category mix, business model, floor plans, finishes, etc.
o Size the cost/benefits, complexity, and time requirements on each option
o Output to be array of options with comparison of roughly estimated
benefits, costs, complexity and time to implement. (Likely NOT a
recommendation. Council would drive further more detailed analysis for
any options of interest.)
Recommendation #4: Specialized Task Force on Housing Incentives
Develop potential optional financial incentive programs to allow existing
AH residents to downsize, sell, bridge to free-market, etc. Explore providing loan
support programs for bridging to free market ownership for AH and free-market
renters.
Housing Subcommittee to initiate with help of expert citizens with
specialized background. Plan to initiate work soon, and bring Council ideas in
late summer. (Has taken secondary priority to Burlingame work.)
Recommendation. #5: Establish Independent Compliance Advisory Board
..,~
Citizen Budget Task Force, Final Report to Aspen City Council
__
-_ _ __
Establish small independent board to advise housing executives on
compliance matters, and monitor compliance complaints. Adds additional free
resources and builds community confidence in the system.
Recommendation. #:6 Establish Outsouroed 24 hour Help Line for Compliance
Establish outsourced service for accepting anonymous compliance
inquires and complaints. Board in Rec. #5 above would help monitor
follow up.
Recommendation #7: Outsource Eligibility Testing to Specialized Firm
Recommendation #8: Legal Review of All Contracts for Maximizing City Rights
Recommendation. # 9: Establish Public Policy Review Committee
Purpose to advise on major Capital Spending prior to legal commitments
Recommendation #10: Update City ProcuremenURFP system
Citizen Budget Task Force, Final Report to Aspen City Council
27
iii. Housing Subcommittee -Second Report and Recommendation Set .~,,
Housing Subcommittee Report to Citizen Budget Task Force on
Burlingame and other Affordable Housing Projects
BASIC ASSUMPTIONS
• Burlingame Ranch is Aspen's unique, high potential Affordable Housing
Resource
• Burlingame has been approved on two occasions by vote of Aspen
Citizens
• City Council is committed to Burlingame II and III
• Funding for Burlingame Phases II and III requires a bond issue or other forms of
multi-year financing as the RETT based fund is significantly depleted.
• Passage of a bond issue requires broad based citizen support
• The present confusion as to actual vs. projected costs as presented in the 2005
brochure has weakened public trust.
BACKGROUND
Given the variances between projections and actual costs for Burlingame I, it is
important to correct the inefficiencies in the management systems prior to proceeding
with Burlingame Phases II and III. An independent audit, for a full accounting of
Burlingame I, has been approved by City Council, as recommended by the Citizen
Budget Task Force.
A "Construction Experts" Group convened by the City manager has initiated a review of
plans for Burlingame Phases II and III. Total subsidies for Burlingame I -III were
publicized in the Spring 2005 brochure at $14.7 million but appear now to exceed $85
million. To help streamline and create more efficiencies, a new set of
management control systems and performance expectations is needed.
Per City Eden report, Burlingame Phase I subsidy totals $30.2 million, which is
approximately 60% of the $50.9 million total Phase I cost. The average per unit subsidy
was $331,567 or 59% of the $559,184 unit cost.
RECOMMENDATIONS
Until the actions listed below are adopted the Citizen Budget Task Force believes there
is risk that a bond issue vote may fail. Restoring public trust is necessary. Therefore the
Citizen Budget Task Force recommends that prior to sending a proposal for a
Burlingame phase II bond issue to the voters, the City Council commit to taking and
completing the following recommendations.
DEVELOPMENT RELATED
1. Study and incorporate Burlingame Development Options by Contractors Group for
Phases 11-III as well as future Affordable Housing projects
A. Construction Methods .,~
~r
Citizen Budget Task Force, Final Report to Aspen City Council
__
_ _ __ 1 28
B. Public private partnership development opportunities to lessen public subsidies
°~~~ C. Density increases
1) Sizing of units
2) Number of units
D. More economical finishes
1) Utilizes City's buying power to negotiate better pricing.
2) Develop programs for owner purchased upgrades.
(Possible allowance budgets)
E. Preparation of a detailed plan and a comprehensive budget for
Burlingame Phases II-III using recommendations from Contractors
Group
FINANCIAL AND MANAGEMENT CONTROL SYSTEMS
1. Engage the City's independent audit firm to perform a financial and management
systems review of the Burlingame Ranch Project. The scope of this work will
include validating the dollar amounts included in the City's Burlingame Ranch
Project Reconciliation, testing a sample of payments made to the construction
contractor, review of the City's internal control systems surrounding multi-year
capital projects, and making recommendations for improvement in the processes
used to prepare construction budgets and forecasts (Audit completed July 2008).
2. Engage an independent consulting firm to perform a performance audit of the
processes and procedures used for the City's overall construction management
administration. The scope of this work will include interviews with stakeholders,
review of project management skills, and review of policies and procedures used
for project plan development, procurement, contract development, cost
management and risk management (Audit completed July 2008).
3. City Council to direct Staff to recommend for immediate implementation of
process and control recommendations taking into account the Post Completion
Audit of Burlingame Phase I.
4. Review of Burlingame Phase II -III budget by independent industry professional
prior to contract execution for value engineering options.
5. City Council to request City Manager to provide a plan and proposed timeline for
the implementation of the recommendations here and recommendations resulting
from the two audits specified in "Development Related" points 1 and 2 above.
City Council to approve a specific plan and City Manager to regularly update the
City Council at specified intervals, and City Council to report to community at
least quarterly on progress until all recommendations are implemented.
6. Assessment of all future AH project needs, resources, skill sets, to ensure staffing
_ capabilities and experience for necessary oversight of proposed projects.
Citizen Budget Task Force, Final Report to Aspen City Council
29
7. City Council to direct Staff to develop and implement a routine semiannual ,,,,~
reporting procedure for informing City Council and the public of progress on large
capital projects (multiyear and single year) against the initial budget. Reports to
include updates of revenue stream occurring in the For Sale projections.
8. Development and implementation of processes to ensure accuracy of voter
information and reasonableness of all financial projections issued by the city.
9. Engage independent consultant for risk assessment and systems assessment
after implementation of above suggestions and prior to execution of Burlingame
Contracts.
10. City Council to analyze the bonding capacity proposals as presented by the
Director of Finance regarding:
A. The Affordable Housing fund's (including RETT) ability to absorb any
proposed subsidy for AH projects
B. The capacity of the City to service any related bond financing for Burlingame
II-III, BMC West and other proposed AH projects.
C. City Council to make final recommendations with full awareness of and
publicity to voters of relationship to reasonably anticipated future funding
needs and capacity for Burlingame and other affordable housing projects as
well as other major capital improvements generally.
11. The Citizen Budget Task Force recommends that City Council establish a
written policy and guidelines for Affordable Housing subsidies for current and
future Affordable Housing projects. Said policy to acknowledge a connection
between subsidy levels and financial capacity of an Affordable Housing
project and possible overall impact on City of Aspen financial condition.
CONCLUSIONS
The desire of the Citizen Budget Task Force is to help facilitate a favorable climate so
that Burlingame and future Affordable Housing projects can succeed. A complete review
of all items in the development plan including business model, density, modular
construction, category mix, unit sizing, complexity, etc. is essential to assure that all AH
projects deliver the greatest number of quality housing units, at the lowest cost, as
quickly as possible. We believe that these recommendations are crucial prior to
preparing for a bond issue for future Affordable Housing development proposals- not
just Burlingame II & III and should be implemented as soon as possible.
The bond proposal is not a "Burlingame Issue", but involves the future of the Affordable
Housing program and the best use of the funds available. We encourage the
development of a realistic timeline for these fundamental steps as delineated in our
recommendations. Thorough study and rigorous execution plans will increase
community confidence and support of Burlingame and the Affordable Housing program.
After reviewing much data and meeting with City staff, the Housing Subcommittee feels
that the establishment of rigorous planning procedures, budgetary controls, proper ,,,~
~~
Citizen Budget Task Force, Final Report to Aspen City Council
30
review and independent project management, will benefit not just Burlingame, but all
future AH projects.
The implementation of the above recommendations should solidly put the City of Aspen
in a position to fund and build Burlingame II and III as well as other future AH projects.
Citizen Budget Task Force, Final Report to Aspen City Council
_~ 31 ~_
iv. Recommendations Related to Housing Audits for
Consideration by Full Task Force
Prepared by: Housing Subcommittee Ad-Hoc Committee for Review of
Housing Finance and Performance Management Audit Results
1. That the Task Force hereby reinforces its original Financial
Management and Control Systems recommendations adopted by the
City Council as part of Resolution 69, Series of 2008, and urges the
Council and City Manager to promptly develop a plan for
implementing the recommendations received from Alvarez and
Marsal's Performance Audit, and from the McMahon and Associates
Financial Audit.
2. That the City of Aspen promptly hire a program management firm for
Burlingame Phase II-III ad for the BMC West development (if and
when it is initiated), and other large scale housing projects (of a size
and scope to be determined by Council) as described in the Alvarez
and Marsal Performance Audit report submitted to the City on July
28, 2008.
,...,
3. That a special investigation into allegations of intentional
malfeasance related to the 2005 Burlingame project brochure is
unwarranted, and that the City of Aspen should focus its efforts on
improving program management systems and processes.
ADOPTED 7/30/2008 by the Full Citizen Budget Task Force
Citizen Budget Task Force, Final Report to Aspen City Council
_- --I 32
C. Taxation and Finance (T8~F) Subcommittee
Citizen Budget Task Force
Taxation and Finance Subcommittee
Goal Statement-March 2008
Assess the long term financial health of the City and its capacity to effectively deal with
current known as well as future potential financial needs and challenges, including an
economic downturn. Develop positions and/or recommendations on at least the
following issues.
- The stability, volatility and elasticity of the tax base and sources of current and
future revenue streams. Include considerations of taxing policies and capacity and
possible mix of future tax revenues. Also consider the economic and social implications
of tax policies on Aspen residents.
-Approaches and methodologies for evaluating and dealing with various
economic business cycles to provide a proactive basis for budgeting and financial
decision making. Review underlying assumptions supporting long range projections and
the process for developing those assumptions.
-Approaches for instituting effective cost controls especially with a view to
providing a cushion against unexpected negative developments.
-Identification of opportunities for eliminating or reducing existing programs or
activities
- Approaches for evaluating the relative allocation of City financial resources
among competing needs and programs.
-Assessment of programs or funds that are sun-setting as well as funds that may
be over or under funded relative to their goals and the needs of the City
- Investment policies and practices to insure that the City is receiving the highest
return consistent with legal requirements and appropriate levels of risk.
-Assessment of debt capacity, prudent borrowing levels and plans for issuing
additional debt obligations. Also consider alternative financing mix and scenarios. (Note
that we will rely on the recommendations of the Housing Subcommittee with regard to
need for City investment in new housing which will be the major driver of financing
requirements for the foreseeable future.)
Citizen Budget Task Force, Final Report to Aspen City Council
33
ii. Taxation and Finance Subcommittee Final Observations and
Recommendations. Incurring Debt to Finance Affordable Housing,
September, 2008
I. During the tenure of the Task Force the City has considered several iterations of a
possible bond issue to finance additional affordable housing. The principal activity of the
Taxation and Finance Subcommittee of the Task Force has been to analyze some of the
iterations and to develop some recommendations for the City whenever it considers proposing a
bond issue to finance affordable housing. Many aspects of such recommendations also apply
to other major capital projects for which a bond issue is considered.
II. Recommendations
A. City Council should approve and adopt an objective subsidy methodology to be applied
to all affordable housing projects so that there is a consistent philosophy and a standard
against which to evaluate the subsidy implications of any specific project.
B. City Council should determine the specific subsidy amount as to any specific project and
bond proposal, taking into account the above mentioned subsidy methodology, as it is
the subsidy that drives the amount requiring financing by the City.
C. It would only be prudent to recommend approval for a bond issue once the City has
prepared a complete proposal for the expenditure of the bond proceeds. It is not
advisable to seek authority to borrow money without a clear definition of how the money
will be disbursed and spent. The City should prepare a detailed plan for the use of the
bond proceeds.
D. Assuming recommendations A.-C. are satisfied, the Task Force further recommends:
1 The Task Force agrees that if the City is confident that the rate of inflation in
overall project costs is likely to exceed substantially the rate of interest paid on
the debt, then, as a matter of economics, the issuance of debt to build affordable
housing should be seriously considered. The Task Force is not aware of any
analysis supporting that conclusion. If this is a premise for the issuance of debt,
the City should prepare such an analysis for the voters.
2 There is a difference between the question of overall strategy (will the current
long term growth pattern in real estate prices and transaction volumes continue
in comparison with currently available interest rates) and the question of when to
enter the market within a cycle. Both aspects should be addressed in any formal
study or analysis conducted on this issue by the City.
3 The City also should consider the policy objective of building more affordable
housing sooner to achieve City economic, improvement and other legitimate
objectives as an additional reason for recommending a bond issue. The City
should make such a case to the voters if this is an important reason for seeking
the bond issue.
4 The City should analyze any bond issue in light of its other existing and
anticipated borrowing, considering whether the City's overall debt level and
profile are consistent with maintaining a high rating. The City should craft any
bond issue to minimize the risk of having to resort to sources other than the
Citizen Budget Task Force, Final Report to Aspen City Council
34
housing fund revenues (e.g., by using very conservative projections of the
anticipated revenue source).
The City seems to have considered a bond issue that can be serviced exclusively
from one particular special revenue fund, the Housing Development fund, which
receives the majority of its revenues from Real Estate Transfer Tax (RETT)
receipts. The City also seems to have considered issuing such bonds in a form
that is backed by the full faith and credit of the City in order to reduce the interest
rate. If bonds are issued in such a form there can be consequences other than
merely achieving a lower interest rate. For example, there would be a risk of
having to increase property or perhaps other taxes unless the housing fund
revenues are sufficient to cover the debt service. As a further example, issuance
of such a bond could limit the City's capacity to issue further debt for other
purposes. Perhaps other bond terms, possibly unfavorable, might also be
affected. The City should consider carefully all effects of extending the full faith
and credit of the City and weight such effects against the value of any expected
savings of debt service costs.
Citizen Budget Task Force, Final Report to Aspen City Council
35
E. Transportation Subcommittee ,,,.,
i. Goal Statement, March 2008:
To provide a recommendation to the City of Aspen on the feasibility and funding
possibilities for the RFTA- Bus Rapid Transit (BRT) Plan by:
1. Analyzing the current and forecasted transportation demand.
• Review of historical, current, and future demand for both individual vehicles and
bus passengers.
• Coordinate population growth numbers and work force needs for the city with the
Housing Subcommittee.
2. Determining the effectiveness of BRT in maintaining/ reducing 1993 traffic levels.
• Report on BRT ability to increase capacity and convert new RFTA users.
• Understand and report on the benefits to the individuals that participate in BRT.
3. Determining the financial commitment for the City of Aspen and funding possibilities
or proposing that other alternatives should be reviewed.
• Analyze the proposed long range plan/ budget.
• Determine the City of Aspen's financial commitment for the program.
• Review funding alternatives including revenues, taxes, and financing.
Citizen Budget Task Force, Final Report to Aspen City Council
I 36
Transportation Subcommittee
ii. TDP Recommendation
To: Aspen Citizens Budget Task Force
From: City of Aspen Budget Task Force
Date: August 5, 2008
Re: Recommendation to City Council on TDP and Citizens Transportation
Advisory Committee
Local Transit Analysis
• City Council is seeking an updated comprehensive transit study
City Staff has recognized the need for such an analysis and has proposed that a
Transit Development Plan (TDP) be initiated and completed in time for planned
spring 2009 transportation open houses. A TDP is a planning tool that assesses
capital, operational and financial needs as well as short and long term service
options. The study specifically analyzes city transit routes and does not address
parking and alternative transportation. The cost of the TDP is estimated at
$60,000. The scope includes the following:
o Reviewing existing transit services and examining alternatives
o Projecting available revenues
o Estimating transit needs and demand
o Coordinating/consolidating existing services
o Designing/developing new services
• The most recent TDP for Aspen was completed in 2001.
• City Staff has proposed the creation of a citizen advisory committee (which could
include members of the current transportation subcommittee).
The Case for TDP
TDP is timely given the changes in funding pools recently established by the City.
Accounting changes have resulted in the transition of the parking budget from a
subsidized fund to an enterprise fund. This change is to take place in 2009. The city's
transportation department and budget will transfer to a subsidized fund. A use tax,
which taxes all building materials brought into Aspen from other locations, was initiated
in January of this year and has generated a healthy flow of funds. It should be noted
that the use tax, while a substantial amount year-to date, is an unstable source of
revenue and other, more stable sources of revenue need to be explored. This changing
funding environment provides an opportunity to analyze Aspen's transit system.
Citizen Budget Task Force, Final Report to Aspen Cifiy Council
37
The issues facing Aspen's transportation and parking networks are complex. By ~,
incorporating the efforts of City Staff and an expert who has previously analyzed ,~;
Aspen's transit system as part of the 2001 TDP, Council can ensure that the network
will be reviewed in a comprehensive manner. We recommend that the committee that is
organized to assist with the TDP process also be charged with reviewing and advising
on all parking and transportation issues and initiatives.
This should include but not be limited to the Transportation Demand Management Plan
(TDM) and the Entrance to Aspen. The TDM addresses alternative transportation,
parking, and other items such as employer subsidy for bus passes.
Recommendation
The City of Aspen Budget Task Force recommends that the City Council approve the
request for the TDP study. The committee also recommends the creation of a Citizens
Transportation Advisory Committee. This Committee should not be limited to making
recommendations on TDP but should be utilized to study all of Aspen's transportation,
entrance, and parking issues.
'""~
Citizen Budget Task Force, Final Report to Aspen City Council
__ _ 38
_ __ _ _ __
Transportation Subcommittee
iii. Recommendation on Bus-Rapid Transit
To: City of Aspen Budget Task Force (CBTF)
From: Transportation Subcommittee
Date: September 9, 2008
Re: Report on RFTA Bus Rapid Transit (BRT) Program
Overview and Executive Summary
The transportation subcommittee, with the help of city staff, determined that the most pressing
issue facing Aspen's citizens and the City Council was the BRT initiative proposed by RFTA.
BRT will allow for RFTA expansion via investments in both additional infrastructure and
services. The key issues for the subcommittee were to determine whether there is enough
demand to justify the proposed tax increase and whether RFTA has the financial and
managerial ability to implement the system. Because Aspen residents are being asked to fund
approximately 35% of this system-wide expansion, and precise benefits to Aspen had not been
detailed, the transportation subcommittee requested that RFTA staff "make their case" For BRT.
The subcommittee reviewed the following issues regarding BRT:
• Proposed funding scenarios of the scaled BRT plan.
• Historical and projected traffic counts and bus passenger information relating to
congestion at the entrance to Aspen.
• RFTA's current and projected financial state and their ability to handle the proposed debt
increase.
• RFTA's long range planning structure and management ability to implement BRT.
It should be noted that RFTA's reasoning for the implementation for BRT is focused on capacity.
With increases in fuel costs and traffic congestion in several areas of the Highway 82 corridor,
RFTA is seeing rapid growth in regional bus riders. Their bus storage and maintenance
facilities are also at maximum capacity. Addressing this problem with more buses does not
provide a solution. RFTA explained that they need a "smarter" plan that includes the upgrades
included in BRT. These upgrades will not only increase capacity but will also provide efficiency
measures to improve service levels for existing riders and possibly attract converts.
The Transportation Subcommittee did further research on BRT in an attempt to better
understand the direct benefits for the residents and visitors of Aspen. Based on current and
near term projections on traffic at the entrance to Aspen we believe that BRT is the logical next
step for RFTA and Aspen.
BRT-Funding
Citizen Budgef Task Force, Final Report to Aspen City Council
_I 39 L
- RFTA is proposing a phased BRT funding plan. The first phase goes to vote in
November of 2008. Via referendum, RFTA is seeking to raise approximately $61 M (total
raised less the debt service) for upgrading and expanding its infrastructure and service.
Funding is sought as follows:
Bonding authority allowing RFTA to raise $44.5 M. Of this, approximately
$4.6M will go towards debt service and issuance fees. The remaining $39.94M
will be used for infrastructure investment. (RFTA is conservatively assuming an
interest rate of 6.0%. A pro forma has also been created using 5.15%).
Sales tax increase of 0.4% will be requested of the members of the
Transportation District. This funding will target service improvements. RFTA is
also hoping to secure new members for the district through several Garfield
County communities.
Federal Funds will supplement the bond issue and sales tax increase. RFTA
states that a grant from Very Small Starts funding is contingent upon community
approval of funding. The application for Very Small Starts is being prepared and
will be submitted in September.
- The RFTA measure envisions two capital funding scenarios; one with Federal
Transit Administration grant funds and one without. The capital investment plan with an
assumed $21.3M in Federal funding is as follows:
o BRT Phase I Capital Costs
New vehicles (15) $9.4 M
Technological improvements
(ITS, Real Time Information, Auto fare collection) $5.5
Transit priority improvements at congested intersections
(Signal upgrades, bus bypass lanes) $6.8
BRT station improvements
(Improved platforms, shelters, signage) $28.8
Maintenance facility expansion 10.7
Total ($$ in year of expenditure) $61.2 M
The planned BRT operating improvements would not be affected if Federal
funding isn't received; however, the total capital investment would be reduced
from $61.2M to $39.94M. The only major capital improvements that would occur
without the federal funding would be renovations to the Glenwood and Aspen
maintenance facilities. The investment in BRT stations and parking facility
improvements would decline from $28.8M to $6.2M.
As voter approval and local funds are required for acceptance into the Very Small Starts
program RFTA is moving forward with a ballot initiative this November authorizing the
Bonding and sales/use tax increases. Given the upcoming presidential election and
possible changes in transportation policy, RFTA management is poised to take
Citizen Budget Task Force, Final Report to Aspen City Council
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advantage of any funds which may be accessed in the short to medium term. It should
be noted that there is no guarantee that RFTA will be awarded federal funding.
- The City of Aspen will fund approximately 35.5% of the funds raised via sales tax.
BRT- The Case for BRT in Aspen
Reducing congestion to improve traffic flow at the entrance to Aspen.
The subcommittee determined that the biggest positive impact that BRT could have for Aspen
would be reduced congestion at the entrance to town. If BRT is able to maintain or reduce
current traffic levels, Aspen would benefit from a better air quality, reduced strain on parking
capacity, and improved travel times for employees, residents and visitors. Information provided
by RFTA is not focused specifically on the benefits to Aspen. RFTA is creating a travel
demand model to provide detailed statistics on trip travel times on all RFTA and proposed BRT
routes as well as capacity projections for future years. RFTA CEO Dan Blankenship has helped
with the compilation of some of the following information. Other sources of information have
included CDOT and City of Aspen staff and reports.
- With rapidly increasing fuel prices and the creation of the dedicated bus lanes (a
prerequisite for CDOT funding of the new Maroon Creek Bridge) at the entrance to
Aspen, RFTA ridership is at maximum capacity during peak periods. Anecdotal
evidence is suggesting that many rush hour buses are operating at "standing room only'
as they cross the Castle Creek Bridge.
- The Entrance to Aspen FEIS Report (February 2007) prepared by CDOT states traffic
volumes are projected to grow from the 2005 levels of approximately 24,200 vehicles per
day in the winter and 28,700 in the summer to roughly 36,400 vehicles per day during
the winter and 42,000 vehicles per day in the summer by 2015. This is based on a "No
Action" alternative, which is a rather strict assumption.
- Below we have attempted to forecast traffic for 2015 using the conservative 2.5% growth
rate and a base year of 2005. We believe these assumptions are reasonable and that
BRT will have a positive impact in reducing traffic.
Actaai t D,a ` ~ t~sd i,~ie T s;e to As
Annual Daiy
Avers a Winter Daily
Avers a Summer Daily
Avere e
2005 23,900 24,900 28,700
2015 30,594 31,872 36,736
Assume annual increase of 2.50%
Years 10
Citizen Budget Task Force, Final Report to Aspen City Council
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Dan Blankenship provided information on bus and vehicle trips in and out of Aspen. A
comparison of 1998 vs. 2008 monthly bus rider numbers estimates an increased ridership of
22% in January, 11% in February, and 33% in June.
- An annual comparison of annual Highway 82 corridor RFTA ridership was approximately
27% higher in 2007 than in1997. This statistic validates an estimated increase of 2.5%
annually. The 27% increase includes the period between 2000-2003 where RFTA
passenger trips at the entrance to Aspen actually decreased by 11 %. The estimated
increase in RFTA passengers mirrors the estimated (2.5% annual) increase in car traffic
at the entrance to Aspen. Blankenship estimates that even "if Citv and Skier Shuttle
approximately 325,000 annual vehicle trips across the Castle Creek Bridae by 2017."
The FEIS highlights that the peak travel periods are expanding in duration and will continue
to do so through 2015. The Entrance to Aspen Reevaluation, completed in 2007, states that
based on this forecast, the highway will be unable to handle traffic demand during the
afternoon peak hours, operating at an extremely congested Level of Service (LOS F, see
footnotes at end of report) for 16 hours a day. Wdhout mitigation of increasing traffic
congestion, the LOS on State Highway 82 can be expected to further deteriorate well below
acceptable levels forlonger periods of time.
- The City of Aspen and CDOT have implemented several transportation demand
management initiatives including paid parking, increased in-town transit services,
carpool program, HOV lanes, employee education and other efforts that are directly
linked to curbing vehicle trips and have successfully kept traffic at the same levels as
1994. Increased service by RFTA has been a major factor in reducing vehicle trips at
the entrance to Aspen. RFTA's ridership for regional trips has increased by 2 million
riders since 1995, reflecting an 80% increase.
- The Local and Regional Travel Patterns Study (2004), which relied on data from the
State Demographer, provides the following additional information:
o Population in the Roaring Fork region is projected to grow by 98% between 2000
and 2025, and the number of employees working in the region is expected to
grow by 80%.
o The largest number of jobs will continue to be based in Pitkin County and the
population growth will largely occur in Garfield County, promising increases in
up-valley commuting.
o Because the corridor has developed largely along SH 82, and an extensive grid
roadway network and other parallel arterials are absent (unlike in urban areas),
traffic growth on SH 82 has been, and is anticipated to continue to be,
proportional to population and job growth.
o RFTA has currently reached the ceiling in terms of its capacity to serve additional
passengers, especially during the peak travel hours. Additionally, RFTA's fleet
has exceeded the capacity of its maintenance facilities by approximately 15%.
- Auto travel times from down valley locations to Aspen are projected to increase, based ...,
on data from CDOT's Reevaluation and the Local and Regional Travel Patterns Study.
Citizen Budget Task Force, Final Report to Aspen City Council
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If the proposed BRT transit priority measures (including signal upgrades and bus bypass
lanes) are implemented at key intersections, the average bus delay is projected to
decrease by over 25 percent from current conditions in both the AM and PM peak
directions. In 2017 the average intersection delay at the locations identified for this
project is forecast to more than double in the AM peak direction and increase by over 90
percent in the PM peak direction. This increased delay will have a significant impact on
transit travel times and reliability. Assuming implementation of BRT transit priority
measures, the time savings for transit at congested intersections is projected to be even
greater, with the delay reduction for transit forecast to be 65 percent in the AM peak
direction and over 30 percent in the PM peak direction.
- Additionally, electronic payment (or automated fare collection) systems that are included
in the Phase I BRT project, have the potential of significantly reducing the dwell times for
transit vehicles at bus stops.
- Although RFTA is still working on its demand model, RFTA estimates that if BRT is
adopted, by mid-year 2013 the transit capacity will be doubled compared to existing
capacity. This translates to approximately 1,000 to 1,100 passengers per hour during
peak periods. RFTA believes that a doubling of capacity is an "important gauge" of the
proposed BRT system's ability to accommodate additional passenger demand.
According to RFTA, if BRT is not implemented, RFTA will do its best to accommodate
additional passenger demand, but existing transit capacity during peak hours is virtually
maxed out.
- RFTA has stated, and it is common sense, that by adding more buses, more commuter
passenger vehicles can be removed from SH 82. This will reduce overall vehicle
emissions and demand for the limited parking available in Aspen.
BRT-RFTA Financial Report
RFTA's financial condition is healthy and they have a record of solid management. RFTA has
the experience and skill to implement the BRT plan, generate the necessary funds and cover
debt service and operating expenses in the future. RFTA and David Evans and Associates
hired Ford Fricke and BBC Research and Consulting to prepare a financial plan for BRT. BBC
reviewed RFTA's financial forecast for reasonableness and found "no critical findings". RFTA
has created financial models to address varying funding scenarios. The most conservative
forecast, with sales tax revenues increasing 3% annually and without I-70 corridor communities
participating, provides solvency through 2021. (The forecasting document with several
scenarios and the BBC report are provided as an attachment to this report.)
- 2007 revenues exceeded budget by $632,578 and expenses came in at $785,129
under budget. The ending fund balance was within 2% of 2007 projections.
Citizen Budget Task Force, Final Report to Aspen City Council
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- Assuming an annual 4% sales tax increase and future participation of Garfield
County communities, RFTA becomes solvent through 2025. The projections in all
forecasting scenarios assume a reduced base amount of $1.5M instead of the
historical $2.5M in grants over afive-year period. It also assumes a conservative 5%
increase in service costs that track off of operating expenses and only a 5% increase
in fare revenues.
The forecast assumptions in the BBC report were reviewed and are reasonable. These
assumptions are comparable to RFTA's initial assumptions.
Bond Counsel
RFTA awarded their bond counsel bid to Kutak Rock. LLP. They are the leading bond
counsel in Colorado and in the top ten in the US. Kutak Rock assisted in the formation
of RFTA and through several elections and they specialize in transportation financing.
Kutak has worked for several major metropolitan transportation districts including
Atlanta, Los Angeles, Miami and New York City. RFTA has enlisted Piper Jaffrav as
their financial advisor and RBC Capital is the underwriter of the bond issue.
BRT- Long Range Plan Management Capabilities
RFTA management is meeting regularly and has enlisted David Evans and Associates
to work with them on their Project Management Plan for the BRT implementation. This
strategic planning tool should be released in the first week of September. David Evans
is the lead consulting firm on the project and is working with other consultants including
BBC, IBI Group, Parsons, PBS&J and Otak.
All capital and service improvements that encompass BRT are scheduled to be
completed by 2013. During the project development and preliminary engineering stage
RFTA is planning on hiring both a full time engineer and a procurement specialist. RFTA
is also ready to hire a project manager to oversee all major construction projects that are
a part of the plan. RFTA has significant experience in both construction and information
technology projects. They completed the construction of 19 miles of the Rio Grande trail
two years ahead of schedule.
RFTA has increased management staff in the last few years and their current structure
should be capable of providing the majority of the support for the increased operations
required by BRT. RFTA is carefully and systematically providing planning and is
prepared to add support in needed areas through the BRT process.
Recommendations
The Transportation Subcommittee concluded that the case for BRT is sound. We do believe
that the following recommendations should be reviewed and considered by the City of Aspen
and RFTA concerning BRT, regional transportation issues, and the entrance to Aspen.
Citizen Budget Task Force, Final Report to Aspen City Council
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• RFTA's BRT marketing efforts have been minimal for a plan and bond issue of this
magnitude. RFTA should immediately address in detail their stressed bus capacity,
inadequate maintenance facilities, and rider and employer benefits of BRT in a
comprehensive marketing campaign to inform voters.
• RFTA should focus on the benefits to current and future bus riders in their marketing
campaign. This should include the release of RFTA's mentioned transportation demand
analysis report.
• RFTA should provide a clear explanation of the status quo vs. BRT scenario that is
detailed in the BBC report if this chart is to be used in their marketing efforts.
• The City of Aspen, CDOT, and RFTA must start to work together in finding a systemic
solution to the traffic and transportation issues involving the entrance to Aspen. Issues
that need to be addressed include but are not limited to:
The entrance to Aspen solution.
Alternative transportation options including rail.
Opportunities to improve traffic flow with better preference for HOV vehicles including the
study of a dedicated HOV/bus lane.
Further study on long term parking demand and capacity in the City of Aspen
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