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08/05/1996 - Joint Meeting CRA & DDBJOINT MEETING COMMUNITY REDEVELOPMENT AGENCY AND DOWNTOWN DEVELOPMENT BOARD CITY OF CLEARWATER August 5, 1996 Present: Rita Garvey Karen Seel J. B. Johnson Robert Clark Ed Hooper Elise Winters David Stone Buzz David Glen Warren Ron Ricardo Roger Woodruff Judi Hackett Elizabeth M. Deptula Pamela K. Akin Cynthia E. Goudeau Gwen Legters Chair/CRA Trustee CRA Vice Chair/Trustee CRA Trustee CRA Trustee CRA Trustee DDB Chair DDB Vice Chair DDB Member DDB Member DDB Member DDB Member DDB Consultant City Manager City Attorney City Clerk Board Reporter   Absent: Dwight Matheny DDB Member   CRA Chair Garvey called the meeting to order at 5:31 p.m. at City Hall. To provide continuity for research, items are in agenda order although not necessarily discussed in that order. Minutes Approval -- June 3, 1996 The minutes were corrected to reflect that DDB Member Woodruff was present and voted in favor of DDB Member Stone’s motions on page 3. DDB Member Woodruff moved to approve the minutes as corrected. The motion was duly seconded and carried unanimously. 3. New Business -- Common Budget Objectives for 1996-97: Staffing, Office Use and Use of DDB Transfer of Dollars to CRA Mayor Garvey stated the purpose of tonight’s meeting is to determine whether it is possible to reconstitute the DDB (Downtown Development Board) to include the CRA (Community Redevelopment Agency) and develop a common budget. Toward this end, it is hoped to identify committed versus discretionary funds budgeted for both agencies. Discussion ensued regarding the proposed CRA operating budget for FY 1996/97. City Manager Deptula said it reflects a significant reduction in tax increment revenues from Pinellas County and the City of Clearwater. The current budget proposal is predicated on continuing to pay the debt service on the Park Street garage, pending the result of current litigation. Ms. Deptula highlighted CRA budget revenues and expenditures. She said $89,911 from CRA savings budgeted as prior years working capital is revenue required to be recognized to pay next year’s operating expenditures. One year’s operating revenues will not be sufficient to provide for one year’s expenditures. She reviewed economic development expenditures, stating salaries are not included in the budget. In response to a question, Ms. Deptula said line items reimbursing the parking fund for Saturday downtown and Harborview Center parking are commitments. She indicated $10,000 budgeted for advertising and $10,000 for professional services are discretionary. Another expense that may be discretionary is the cost of returning to the DDB the $23,540 in revenue the CRA received from the DDB. While this issue will be brought up for discussion, she felt the $43,540 sum of those three figures to be the only discretionary dollars in the CRA budget. Ms. Deptula reviewed required debt service payments, noting a jump in the debt service is due to the structure of the parking garage bond financing. Reimbursement to the General Fund of $50,000 is for half the Assistant City Manager’s salary for serving as CRA administrator. The CRA also pays the cost of bringing the Jolley Trolley into downtown, Garden Avenue parking fund and the Checker’s, Inc. parking subsidy. These are required expenditures that make the CRA fund almost $90,000 short of meeting its one-year operating expenses. Ms. Deptula noted an item not in the budget is allocation of about $62,000 for two additional staff members for the Development Director. The CRA will discuss with the DDB the possibility of the DDB picking up a portion of those costs. A question was raised regarding if the decline in revenues was due to a decline in tax assessments. The City Manager indicated it was. In response to a question, she explained the requirement for $156,935 in additional debt service funds. Clearwater Finance Director Margaret Simmons explained debt service repayment schedules. She said $53,000, or 20 percent, of tax increment revenues are required to be put into the debt service fund. The $156,935 is additional debt service payment requirement. In the past, excess money was contributed into the debt service for future needs. That has been used, and the full amount of the debt service must be funded out of operating funds. If bonds for the garage are called, this $200,000 requirement would be eliminated. A question was raised regarding CRA assets and liabilities. Ms. Simmons stated one of the two CRA funds is zeroed out each year and any excess funds are sent to debt service reserve or to fund redevelopment projects. The City Manager explained the CRA set aside money from selling the Bilgore property to the City, because the CRA had been aware of the potential situation with the parking garage. That money was set aside in a special CIP project from which the $89,911 is being drawn to fund next year’s expenses. No other cash reserves exist in the CRA fund because all have been set aside for capital projects, as required by law. The amount was indicated to be about $800,000, with investment earnings of $60,000. Other assets include half the Park Street Garage and the small building currently leased to the AIDS Coalition. A question was raised whether the $50,000 debt service requirement for administrative expense is for half the salary of the Assistant City Manager or the Development Director. Ms. Deptula responded they are one and the same; the new position will replace the old CRA Director position. As the new position will administer all City districts, the CRA is only being asked for half their salary, with the General Fund picking up the balance. Concern was expressed a time accounting will be needed to ensure the Development Director spends at least half the time on downtown matters. Ms. Deptula anticipated they will spend more than 70 to 80 percent, in the beginning. If positions are created for an executive assistant and a clerical assistant, it was thought the work of one could be dedicated to downtown. Background was requested on the Saturday downtown and Harborview Center parking expenditures. Ms. Deptula said, when downtown parking became free on Saturdays, and meters were removed from Harborview Center, a significant amount of revenue was lost. Reimbursement to the parking is committed as long as the fund exists and free parking continues. Discussion continued regarding committed versus discretionary funds in the CRA budget, the City’s commitment to bring the Jolley Trolley downtown, and ways of combining variable resources of the two agencies. Discussion ensued regarding a handout breaking down CRA administrative expenditures for office and travel. Ms. Deptula reiterated no salaries or benefits are included. Ms. Simmons responded to detailed questions to clarify debt service requirements, parking garage bonds and repayment. It was indicated the AIDS Coalition building has a year-to-year lease with renewals. Two CRA members felt the $46,320 administrative expenditure and $50,000 reimbursement to the General Fund for a CRA administrator should be added to Ms. Deptula’s $43,540 list of discretionary funds, bringing the total to $139,860. Ms. Simmons pointed out part of the administrative expense is obligated to a five-year lease for CRA office space, so that part of the $46,320 is committed. Discussion ensued regarding Downtown Development Board budget reports. DDB Member Ron Ricardo reviewed the statement of cash assets and liabilities as of June 30, 1996, noting the DDB’s total current assets, or cash equity, amounts to $101,326.77. Discussion ensued regarding a comparison of the projected 1996 annual and June budgets versus actual expenditures. The budget included a column reflecting any difference, or variance, of actual figures from what was projected. Mr. Ricardo highlighted revenue sources, reporting $237,813 in total tax revenues. It was indicated $84,381 carried over from the previous year was an unusually large amount, and should not be regarded as a continuing revenue source, as it resulted from a settlement with the Church of Scientology. Key line item expenditures, were explained and discussed. If all are met as projected, a balance of $16,731.00 would carry over to the next year. Primary expenses are advertising and media communications, event funding, and general administrative costs. While most of the expenditures are discretionary, it was indicated the City required annual audit and payments of fees to the Supervisor of Elections, Property Appraiser, Tax Collector and the CRA are legal commitments, amounting to about $47,622. A question was raised regarding which of the remaining line items may be considered discretionary, and which the DDB wished to retain as commitments, should the DDB and CRA reconstitute as one agency. General discussion ensued regarding joint budgeting considerations for staffing and office use. It was suggested efficiency could be improved by sharing administrative expenses, estimated at $96,320 in the CRA, and about $63,719 in the DDB. The actual staff expenses are for consultant, consultant expenses, secretary and payroll taxes. In response to questions, it was indicated DDB Consultant Judi Hackett is an independent contractor for whom the DDB pays no payroll taxes. According to City Attorney Akin, if CRA and DDB reconstitution takes place, the City could enter into such a contract for services. In response to questions, Ms. Hackett said current DDB office expenses include rent, photocopying, postage, and a small amount for long distance phone calls. A small space in the new Chamber of Commerce building has been set aside for two DDB personnel, but it was not felt this arrangement will be satisfactory in the long run. Ms. Deptula hoped to add space in the City Hall redesign for the Development Director and an Administrative Support Manager. The third position would act as administrative assistant and downtown liaison, working from the Cleveland Street office. Discussion ensued regarding the Administrative Support Manager position. It was indicated this is a fairly high level position with a salary of about $35,000. Responsibilities would include retention and recruitment, and working directly with the CRA under the direction of the City Manager. Staff support would be provided by existing City Hall staff. Ms. Deptula stated this position would work primarily on downtown issues, but as a City employee, would be required to work City-wide. Discussion ensued regarding the minimum number of people needed to accomplish the combined work of the two agencies. A question was raised regarding whether a fourth position to provide clerical could be possible if the agencies combine resources. Concern was expressed neither the CRA nor DDB is allowed to reimburse the City for any work done outside of downtown, but a City employee would not be allowed to devote full time to downtown alone. It was felt enough downtown duties exist to justify two full time people in the Cleveland Street office. A suggestion was made to contract a support position to the DDB to work exclusively on downtown. This was felt to be difficult to achieve, since the support positions would be answerable to the City Development Director. Concern was expressed this scenario leaves the DDB without a voice downtown and with no basis for reconstitution. It was felt a compromise could be achieved, as long as the contract was written to provide accountability to the Development Director. Discussion ensued regarding the definition of what is expected of the Development Director. Ms. Deptula stressed this is not intended for one person to come in and turn the City around overnight, but for them to cooperate with existing departments and agencies to achieve leadership with a global vision. A question was raised regarding whether a single individual could administrate the CRA and DDB alone. Discussion ensued regarding the importance of defining what is wanted of the combined agencies, to determine whether reconstitution could stimulate redevelopment better and more efficiently than the existing separate agencies. It was felt the resources of the combined agencies would be better used by attracting business rather than funding “parties” and events. Questions were raised how to determine what the combined organization is expected to do, with the available funds. It was felt this determination could be made if all parties agreed to participate in a full day work session to create a staffing model, evaluate the way money is spent currently, and look at how to pursue alternative funding sources, if needed. In response to a question, the City Manager indicated the Development Director position should be filled by October 1996. A question was raised regarding whether the DDB wants to rent space in the Cleveland Street office. General agreement was to look at subleasing to the DDB on a year-to-year basis for the remaining term of the lease, thought to be about four years. Ms. Deptula and Assistant City Manager Kathy Rice will investigate what will be needed to accomplish a sub-lease. It was generally agreed the Development Director should play an integral role in deciding what needs to be done and how to pull together to accomplish it. Discussion ensued regarding the concept of private industry working with property owners and the municipality to create a separate not-for-profit economic development agency. In this way, one entity does the work with funds allocated from different areas. It was indicated several candidates for the Development job have worked in that type of environment. Consensus was it would be premature to make any decisions today, without the expertise of the Development Director. A question was raised regarding whether waiting until October will adversely affect any special DDB programs for which funding is in place. This was not thought to be a problem, as no action is likely to occur before the end of the current fiscal year. Use of DDB Transfer of Dollars to CRA Discussion ensued regarding whether to transfer the funds, use the funds to run the DDB office, or achieve a common agreement regarding an alternative use for the dollars. The amount is estimated to be $23,547. Questions were raised regarding tax increment financing requirements. The City Manager stated the City is required to set aside 20% of its tax increment revenues for debt service, so transferring $23,547 back to the DDB costs the CRA $4,700. It was indicated the 20% set aside is a bond requirement. The payment to the CRA is a requirement that cannot be changed without changing state legislation. Questions were raised regarding whether it is possible to mitigate the $4,700 loss. Finance Director Simmons explained the bond covenant provisions and discussion ensued regarding covering the debt service requirement. One suggestion was to eliminate the transfer of funds to the CRA altogether, allowing the DDB to use the funds for downtown purposes without strings attached. Ms. Akin pointed out this is not possible, because that money must be used for CRA purposes. One DDB member disagreed, stating the money could be allocated to promoting the downtown plan, a common purpose of both entities. Ms. Simmons indicated this issue is complicated by, and contingent upon what happens with the Park Street garage bond issue. Discussion ensued regarding whether to request a change to the legislation for the payment to the CRA requirement prior to reconstitution, or to avoid a cumbersome, costly legislative process by waiting to see whether reconstitution occurs within the next year. Concern was expressed involving the legislature could have the negative result of completely changing the entire CRA legislation. It was indicated this issue will become moot if reconstitution takes place. While some were willing to wait, others did not want to delay possible progress for a year or more. A question was raised regarding how creation of a Clearwater beach CRA would affect reconstitution. Ms. Akin stated reconstitution would not be affected if the County approves two CRA’s for Clearwater, but several big questions would remain. One issue of concern to staff had been the County’s interest in preserving the power of condemnation in a reconstituted DDB. It was felt if the City, CRA, and DDB work in unison to establish and present reasonable grounds for reconstitution, the County would give it serious consideration. Consensus was to collect additional information regarding office use and the bonding issue and schedule an all day special session to work toward achieving combined goals. A tentative meeting date was set for Saturday, November 2, 1996, from 9:00 a.m. to 4:00 p.m. The meeting location will be determined, as a round table setting accessible to the public is desired. The DDB goals will be recirculated. The CRA will discuss CRA goals, for distribution prior to the joint meeting. It was hoped the new Development Director will be a low-ego, highconsensus type of individual who will be the key to pulling the two agencies together. It was indicated one of the questions asked of the candidates was whether they had experience working through conflicting goals. Adjournment The meeting adjourned at 6:58 p.m.