Loading...
HomeMy WebLinkAboutagenda.council.worksession.20150420 CITY COUNCIL WORK SESSION April 20, 2015 5:00 PM, City Council Chambers MEETING AGENDA I. Council Goal Update II. Wheeler RETT Revenue Historical Analysis Traffic Lights Quarter: 2nd Quarter Date Scored: February 27, 2015 COA Leadership Team 2014-2015 TOP TEN GOALS Goals in Good Shape 3. GOAL POSTPONED: Re-do of the Malls: a. Design – use of the malls, how much outdoor dining, utilities, brick pavers, drainage, features, furniture, lighting, water ditches, etc. b. Public Outreach c. Construction and timing Champion: Jeff Woods 5. Propose creative additions to the economic fabric of the community by May 1st, including (a) new or enhanced uses on the North Mill property and a redefinition of the SCI zone; and (b) the development of a framework for an “uphill economy”. Champion: Chris Bendon, Don Taylor, Barry Crook & Karen Harrington 6. Create a financial plan for Wheeler RETT revenues, determine the available funding level for a Community Investment Fund, and decide on a methodology for a community discussion and decision about re-purposing and extending the Wheeler RETT. Champion: Randy Ready, Steve Barwick, Jim True & Don Taylor 8. Achieve direction from city council on a solution for the loss of downtown Police and municipal office spaces. Champion: Scott Miller, Randy, Barry, Don, Alissa, Richard Mitzi and Ashley, Randy Ready and Steve Barwick 9. By July 1, 2015 identify carbon reduction opportunities in transportation and lay out a pathway that infuses appropriate and forward thinking technologies into the Aspen community. Champion: Ashley Perl, David Hornbacher 10. Engage the community in the creation of a resiliency plan that identifies Aspen's climate related vulnerabilities and establishes a plan for reducing those risks and monitoring progress. The resiliency plan will focus on energy, water, recreation, ecosystems, health, and infrastructure. Champion: Ashley Perl, CJ Oliver, Dave Hornbacher and Karen Harrington P1 I. Goals Needing Attention 1. By May 1st, perform an assessment of city streets against best practices that prioritizes pedestrian access and safety and emphasizes the overall enjoyment and well-being for residents and guests, then create a list of tools and concepts that can be used as “test projects” to illustrate what a “walkable city” might look like. Champion: Scott Miller & Chris Bendon, Randy, Jeff, Mitzi, Richard Barry and Karen 2. In conjunction with Pitkin County and the APCHA Board of Directors, complete a review of the Housing Guidelines by the end of May 2015 as they pertain to the following areas: a. Asset/Income Limits – what counts as income, what is discounted as “not really disposable income” b. Ability to qualify for more bedrooms than you can currently – so you can “grow in place” as your family grows c. AirBNB – short-term rentals as an option for deed-restricted owners/renters d. Product mix – what are we building and for whom? Champion: Barry Crook, Jim True & Don Taylor 4. Develop policies and procedures by March 1st that would reduce the duration and intensity of construction impacts in residential areas and the downtown. Champion: Scott Miller, Chris Bendon, C.J. Oliver 7. Complete a review of HHS funding that identifies the purpose of the city’s involvement in funding of HHS services, how we will participate in that funding effort, and the amount and source of the city contribution. Champion: Steve Barwick, Don Taylor, Barry Crook & Karen Harrington P2 I. Rethink the Street P 3 I . Perform an assessment of city streets against best practices that prioritizes pedestrian access and safety and emphasizes the overall enjoyment and well-being for residents and guests, then create a list of tools and concepts that can be used as “test projects” to illustrate what a “walkable city” might look like. P 4 I . A group of City staff has worked together as a team on the this project as part of the Innovation Academy program. Team includes: Austin Weiss, Travis Elliott, Lynn Rumbaugh, Steve Cronin, Ian MacAyeal, Karen Harrington, Barry Crook, Justin Barker, Brian Stevens, Trish Aragon, Tyler Christoff, Chris Bendon and Mitzi Rapkin P 5 I . Work to date includes: Branding of project Outreach on street Webpage Interactive map where users can locate difficult and successful areas of downtown Identification by team of specific downtown areas for test projects Introduction of project at ACRA breakfast Open City Hall question Research into design and programming solutions Outreach on Channel 82 P 6 I . Group slowed down to allow for more experiments and public input, which means goal extension from the original May date for completion. P 7 I . Two blackboards were left out on the street for long weekends in late March asking folks to comment on their thoughts about our streets and sidewalks. Among more than 250 comments were recorded including: more music, magicians, basketball courts, free shows, disco lights, hot tubs, better drivers, more trees, free wi -fi, 4-way stops at all intersections, more picnic tables, more boards like this one, more community activities, more flowers, no cars, ice cream trucks, more street performers, more recycling bins, phone chargers, heat lamps, more maps of town, free hot cocoa, flash mobs, outdoor work stations, free parking, more late night food, bike-only areas, bigger playgrounds, safer for pedestrians, food trucks, chess or checker boards, free shows P 8 I . Outreach by Wagner Park Teams went out on March 26 and April 2 with these posters and other materials to ask passers-by their thoughts about Aspen’s streets. Folks were asked to fill out a questionnaire and offer feedback on how to make Aspen more walkable.P 9 I . Questionnaire for outreach asked: Where are your favorite street corners and outdoor hangouts in the core and what do you like about them? How can we create more places like that ? •Most did not answer how to create more places like that •Favorite hangouts include: •Peaches corner Justice Snow’s corner •Fountain area The mall •Paradise corner Jimmy’s to the Brewery •Ice rink by CP Burger Wagner Park area P 1 0 I . Questionnaire for outreach asked: What are your least favorite places in the core and what's the problem with them? What do you think should be done to improve them? Crosswalks (cars don’t stop)Hopkins and Mill Streets Traffic around City Market Clark’s Market Crossing Durant near Rubey Park Alleys Residences to Ajax, Garfield & Hecht corner Hopkins and Galena (SE corner) P 1 1 I . Questionnaire for outreach asked: What other thoughts do you have to make Aspen streetscapes more inviting for lingering, visiting, walking, biking ? MORE bike lanes, lights, seating areas, fountains, public art, crossing signs, walking areas, spunk in core, green areas with grass, valets to park cars for tourists; better visuals to help tourists with parking, extend pedestrian malls, heated sidewalks, amphitheater on Aspen Mountain, close the streets more during the summer, less drivers P 1 2 I . Interactive Map http://cityofaspen.maps.arcgis.com/apps/View er/index.html?appid=a6bc580aedfa4b46b169 2f9d377f92e6 P 1 3 I . Facebook Page https://www.facebook.com/rethinkaspen/photo s/a.1426112014351671.1073741827.1426110 067685199/1428240824138790/?type=1 P 1 4 I . Next Steps: May: Street Corner Outreach Invite business ideas On-line presence Chalkboards June, July, August Open House, potentially with temporary installments Test Projects, potentially during Special Events, Farmer’s Market Possible Micro grants to invite designers/public/businesses to implement ideas Sept •Recommendations to Council P 1 5 I . P 1 6 I . Page 1 of 2 MEMORANDUM TO: Mayor and City Council FROM: Pete Strecker, Assistant Finance Director THRU: Randy Ready, Assistant City Manager MEETING DATE: April 20, 2015 RE: 0.5% Wheeler Real Estate Transfer Tax Discussion REQUEST OF COUNCIL: To help guide discussions around a future ballot question to voters on the extension and/or expanded use of the 0.5% Wheeler Real Estate Transfer Tax (WRETT), the focus of this memo, attachments and pending discussion is to receive: • feedback from Council on what additional information may be desired with regards to the historical revenues and uses of the 0.5% Wheeler Real Estate Transfer Tax; • feedback from Council on what forward-looking scenarios it may like to see, to help guide decisions about the amount of funding that needs to be dedicated to the Wheeler and the amount that may be available for other purposes; and • direction on the topics and questions for community feedback related to the WRETT renewal and possible repurposing. BACKGROUND: The current 0.5% Wheeler Real Estate Transfer Tax is scheduled to sunset December 31, 2019, and is approaching the end of the second of two twenty-year terms that were adopted by Aspen voters. Given that no future real estate transfer taxes can be created in Colorado under the Tax Payer Bill of Rights (TABOR), it will be necessary to go back to the voters to ask whether the tax should be extended. Coupled with this WRETT extension question, Council has recently discussed the prospect of asking voters to repurpose a portion of the tax proceeds. The information accompanying this memo is intended to further the process of these two efforts. The three attachments to this cover memorandum include: (1) a historical summary of the revenues and uses of the WRETT during the current twenty year term; (2) a one-page summary of facts pertaining to the WRETT; and (3) two hypothetical models of future WRETT revenues and projected Wheeler expenditures to help frame possible scenarios to consider. Future scenarios can be generated based on Council direction; the two provided today are not intended to be an exhaustive set. P17 II. Page 2 of 2 CURRENT ISSUES AND NEXT STEPS: The only direction that staff is requesting from Council at this April 20 work session is response to the three questions outlined above. Further direction on the following issues will be requested at future work sessions leading up to WRETT renewal and possible repurposing ballot questions: • Determination of the portion of the WRETT proceeds to be dedicated to the Wheeler and the portion that may be available for repurposing • Specific use(s) to be proposed for any repurposed funds • The term of renewal for the WRETT • The term for any proposed repurposing • The logistics of funding any new uses (i.e., should the amount of repurposed funds be determined prospectively or retroactively each year once the actual amount of available funding is known?) • Scheduling of the ballot questions in advance of the current December 2019 WRETT term expiration P18 II. MEMORANDUM TO: City Council FROM: Pete Strecker THRU: Randy Ready MEETING DATE: April 20, 2015 RE: 0.5% Real Estate Transfer Tax Background Aspen’s 0.5% Real Estate Transfer Tax (RETT) is one of two RETTs applied on the sale of property within City limits, and was first adopted in 1979 for the purpose of “renovation, reconstruction and maintenance of the Wheeler Opera House … and for the purpose of supporting the visual and performing arts”. This initial voter-approved tax, scheduled to sunset twenty years after its initial adoption date, was extended for a second twenty-year term by voters, commencing January 1, 2000 and ending December 31, 2019. Aspen is one of twelve communities that have real estate transfer taxes applied to the sale of property. Due to the passage of the Tax Payer Bill of Rights (TABOR) in 1992, no new real estate transfer taxes can be adopted into law in Colorado. While no new taxes can be created, there has been some precedent for expanding purposes. Community RETT Rate Breckenridge 1.0% Frisco 1.0% Gypsum 1.0% Minturn 1.0% Snowmass Village 1.0% Vail 1.0% Winter Park 1.0% Aspen 0.5% and 1.0% Avon 2.0% Crested Butte 3.0% Telluride 3.0% Ophir 4.0% Volatility in Collections Highlighted by the recent collapse of the real estate market during the Great Recession, the inherent unpredictability of real estate transfer tax collections often results in communities applying RETT resources to non-recurring expenditures such as land acquisitions for parks and open space, transportation fleet purchases, or other capital outlay needs. It is less typical for this type of tax revenue to be relied upon for general operating expenses, as it has been for the Wheeler Opera House. Looking at Aspen’s experience specifically, despite average annual increases in collections for the past P19 II. fifteen-year period being roughly $71,000, yearly changes in Aspen’s 0.5% RETT collections are wildly sporadic – as great as 53% increases and as low as 42% declines. Given this swing in annual variances, caution needs to be exercised when dividing out resources, if such a decision is made. $0 $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 $7,000,000 Annual 0.5% Real Estate Transfer Tax Revenue 23% -3% -5% 11% 43% 53% 19% -16% -42% 4% 5% -16% 24% -10% 44% -60% -40% -20% 0% 20% 40% 60% Annual Change in 0.5% RETT Revenue P20 II. Wheeler Use of the 0.5% RETT Excluding capital outlay, the Wheeler Opera House has required an operational subsidy of roughly two-thirds 1 its total annual operating budget since the 0.5% RETT was extended by voters; the remaining operating need was provided for by production revenue and leased space rental income. During this same fifteen year period, the 0.5% RETT has generated roughly $53 million in annual income, or $28.9 million more than annual operational needs. 1 For comparison purposes, a 2014 report by the National Center for Arts Research ( NCAR Report Volume 2 ) found that small and medium sized performing arts centers throughout the country tend to cover an average of 41-43% of their operating expenses with earned income. The remainder of the operating expenses and nearly all capital expenses are funded by philanthropic contributions and direct government subsidies. 61% 63% 63% 64% 67% 68% 64% 67% 71% 73% 73% 76% 69% 70% 67% 40% 45% 50% 55% 60% 65% 70% 75% 80% Operating Subsidy Need from 0.5% RETT Subsidy Needed from RETT Annual Average $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 0.5% RETT Revenue (Line) and Operational Subsidy Provided by RETT (Bars) ($1,000's) P21 II. In addition to the operating subsidy, RETT r building and other equipment needs. Beyond improvement expenses, there have been (or are immin were/are supported by RETT funding, including: the basement remodel (2011), the balcony and A/V booth remodel (2013) and box office, lobby, back of house and roof Finally, an additional $1.5 million in grants to loc as well as $17.2 million deposited into the Wheeler Opera House Fund RETT r esources have provided for $10.2 million in capital improvements for the Beyond scheduled replacement of equipment and other more “routine” building improvement expenses, there have been (or are imminently scheduled to occur) three significant remodel efforts including: the basement remodel (2011), the balcony and A/V booth remodel (2013) and box office, lobby, back of house and roof renovations (2015). to loc al non-profit art organizations has occurred during the last fifteen years million deposited into the Wheeler Opera House Fund balance. capital improvements for the scheduled replacement of equipment and other more “routine” building ently scheduled to occur) three significant remodel efforts that including: the basement remodel (2011), the balcony and A/V booth remodel has occurred during the last fifteen years , P22 II. FIVE THINGS TO KNOW ABOUT THE 0.5% WHEELER OPERA HOUSE REAL ESTATE TRANSFER TAX (RETT): 1. A RETT IS NOT AN ANNUAL TAX. A real estate transfer tax is not a recurring tax that is payable by Aspen residents or visitors. Rather, it is an amount paid to the City, only if an individual or entity purchases property within the Aspen city limits. The tax is paid at the time of purchase. 2. THE 0.5% WHEELER RETT IS APPROVED THROUGH 2019. Aspen City Council first adopted the 0.5% RETT dedicated to the Wheeler (Ordinance 20 - Series 1979) for a twenty-year term. Voters approved an extension in May 1997, and adopted a second twenty-year term, commencing January 1, 2000 and ending December 31, 2019. (The City does have an affordable housing RETT but that was approved separately.) 3. NO NEW RETTS CAN BE ADOPTED IN COLORADO. There are eleven other communities in Colorado that impose a real estate transfer tax, most are resort communities. Given voter adoption of the Taxpayers Bill of Rights (TABOR) in 1992, it is unlawful to create or pass any new real estate transfer taxes. It is possible for a RETT to expire, extend and/or expand. If an existing RETT expires, a community cannot bring it back at a later date. 4. WHEELER OPERATIONS CURRENTLY DEPEND ON THE RETT. The purpose of the 0.5% Wheeler RETT has been, and continues to be, “to provide for the maintenance of the Wheeler Opera House; and, subordinate thereto, to provide for the support of the visual and performing arts…” Over the first fifteen years of the current twenty-year term (1999-present), all capital improvements to the building, equipment purchases and nearly two-thirds of operational funding for the Wheeler Opera House has been funded from RETT resources. 5. THE WHEELER WOULD NEED TO MAKE CHANGES ABSENT THE RETT . In 2014, the 0.5% RETT provided for roughly $2.25 million in subsidized productions, capital improvement and operational costs, and community arts grants. Because of this subsidy, ticket prices have remained relatively inexpensive for the Wheeler’s diverse programming which caters to a wide variety of ages and income levels. Assuming no renewal of the 0.5% RETT for Wheeler purposes, without changes to current operations, the existing balance in the Wheeler Opera House Fund would be exhausted roughly twelve years. P23 II. P24 II. 1 The following scenarios are intended to generate discussion around the 0.5% WRETT revenue that voters may potentially want to consider for expanded purposes beyond the Wheeler Opera House. The initial scenarios shown are not intended to be an exhaustive list of options, but rather a starting point, and are in no way reflective of staff’s recommendation. Hypothetical Models Currently, the an annual operational subsidy need for the Wheeler Opera House from the 0.5% RETT is roughly two- thirds of total operational cost; any excess revenue above and beyond the operational subsidy has either provided for capital outlay and improvement projects, or has accumulated in fund balance. The current balance in the Wheeler Opera House Fund as of the end of 2014 is $29.4 million. There will ultimately be a number of options to consider when looking forward to the level of RETT resources needed for the Wheeler Opera House. How those options look will be determined in the coming months, and will require input from multiple parties with various perspectives. But to provide some context for future discussions, the following graphical information outlines a hypothetical view to the current two-thirds subsidy level into the future, and how that may relate to 0.5% RETT revenue. Scenario 1 : Under this hypothetical scenario – assuming continuation of the two-thirds operating subsidy need, continuation of the $100,000 in arts grants, and a linear annual increase in RETT revenue of $71,000, the amount of additional RETT revenue for re-purposing would be roughly $2.0 million in 2017, increasing to $2.5M by 2039. Given that capital outlay is excluded in the previous chart, adding a perspective on the Wheeler Opera House fund balance into the future seemed necessary. Assuming regular annual capital expenditures of $150,000 (inflated at 3% annually) and interest earnings (1.5% return beginning 2017), plus one large future remodel of $10,000,000 in 2031, it appears that the fund balance would remain positive during the next twenty years. $0 $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 $7,000,000 Straightline Average Revenue Growth ($71K/Yr) $2M Operating Subsidy in 2015 + 2% Escalator $100K RETT Grants Current Operations Grants Excess / Capital RETT Revenue P25 II. 2 Scenario 2 : Under this hypothetical scenario – assuming continuation of the two-thirds operating subsidy need, continuation of the $100,000 in arts grants, and a linear annual increase in RETT revenue of $71,000, plus expanded programming subsidy needs by 10% beginning in 2020 (in conjunction with construction of a new venue), the amount of additional RETT revenue for re-purposing would be roughly $2.1 million, fluctuating slightly over the forecast period. $10,000,000 $15,000,000 $20,000,000 $25,000,000 $30,000,000 $35,000,000 $40,000,000 Capital Expenditures $150,000/yr + 2% Escalator Interest Earnings of 0.5% in 2015, 1% in 2016, 1.5% Thereafter $10M Remodel In 2031 (20 years) fund balance $0.00 $1,000,000.00 $2,000,000.00 $3,000,000.00 $4,000,000.00 $5,000,000.00 $6,000,000.00 $7,000,000.00 Straightline Average Revenue Growth ($71K/Yr) $2M Operating Subsidy in 2015 + 2% Escalator 10% Operating Increase in 2020 (New Facility)+ 2% Escalator $100K RETT Grants Current Operations Grants Excess / Capital Future Operations RETT Revenue P26 II. 3 In tandem with the additional subsidy need and expanded programming starting in 2020, consideration for constructing a new space has been considered for the balance in the Wheeler Opera House Fund in the following table. An additional 10% load on the $150,000 annual maintenance need was incorporated starting in 2020, to address the additional space. Under this hypothetical scenario, the solvency of the Fund does not appear valid unless a greater return on investment is achieved (closer to 2.5% beginning in 2017). $0 $5,000,000 $10,000,000 $15,000,000 $20,000,000 $25,000,000 $30,000,000 $35,000,000 Capital Expenditures $150,000/yr + 2% Escalator (10% Incr. in 2020) Interest Earnings of 0.5% in 2015, 1% in 2016, 1.5% Thereafter $15M Construction in 2020; $10M Remodel In 2031 (20 years) fund balance P27 II.