City Council

Minutes of Joint Session of Redevelopment Agency of Ogden City, Utah, October 13, 2015 Page Minutes of the Joint Study Session of the Ogden City Redevelopment Agency, also acting as the City Council, held on Tuesday, October 13, 2015 at 5:30 p.m., in the Council Work Room on the third floor of the Municipal Building, 2549 Washington Boulevard, Ogden City, Weber County, Utah. Present: Chair Richard A. Hyer Vice Chair Marcia L. White Board members Bart E. Blair Neil K. Garner Caitlin K. Gochnour (arrived at 5:42 p.m.) Doug Stephens Amy L. Wicks Board Administrator Bill Cook Board Deputy Administrator Janene Eller-Smith Board Policy Analyst Glenn Symes Communications Manager Amy Sue Mabey Also present: Chief Administrative Officer Mark Johnson Community and Economic Development Director Tom Christopulos Community and Economic Development Deputy Manager Brandon Cooper Comptroller Lisa Stout Deputy City Recorder Abbie Zampedri The purpose of the Joint Study Session is to review agenda items for the Redevelopment Agency and Special City Council meetings, which begin at 6:00 p.m., to discuss a Fiscal Year 2016 Budget Amendment and to discuss Board and Council Business. Fiscal Year 2016 Budget Amendment Board Deputy Administrator Eller-Smith indicated there is an item on the special City Council meeting agenda to set a public hearing to consider a budget opening in the Fiscal Year 2016 budget. She noted Comptroller Stout is present to answer any questions the Council may have regarding the proposed amendment. Ms. Stout explained this proposed action is to recognize various appropriations of new revenue or expected activities. The City received a donation from Comcast Cares of $9,925. These funds are included as donation revenue and an appropriation to the Public Services Department special supplies budget to help fund the costs associated with volunteer efforts by the City. A Comcast Cares Day was held on Saturday April 25, 2015 and the City earned a donation for employees who volunteered that day. Additionally, this budget opening includes donation revenue given to the Police Department to help in the costs of replacing a police dog. This donation was made by a citizen for the purchase of a new police dog in the amount of $20,000. She added the City is proposing an appropriation of general fund balance for a branding initiative in the amount $100,000. The City currently has a budget of $60,000 from prior years for a commitment to rebrand the City, which will be carried forward to the current year budget. It is estimated that the cost to rebrand Ogden City will exceed $60,000. The additional funding will allow the City to pay for a consultant and help cover any necessary printing, publishing and change out costs. She then explained the City is proposing a use of Critical Contingency funding in the amount of $50,000 to be transferred to the Airport to help fund the City portion of the Airport Improvement Projects (AlP) awarded to the Ogden Hinckley Airport. Detail regarding the AlP's have been provided by Jon Greiner, Airport Manager. Use of $50,000 from the Critical Project Contingency will leave a budget of $61,065 available. The City is also including the Airport AlP award not already budgeted in the amount of $700,000, with $50,000 from the Ogden City Critical Contingency funding required as a match to the federal funds. She concluded the final appropriation included is to recognize expected revenue and expenses in the Information Technologies (IT) Fund from purchases made for and charged out to other City departments. This is normally done at year end, however the amount has been consistently $750,000 in the past few years, so it seems appropriate to move this budget action to a mid-year item and if any additional funding is necessary, add that funding at year end. Ms. Eller-Smith referenced the final item dealing with the IT Fund and asked if the money is already appropriated in the City’s budget. Ms. Stout answered yes and noted it is simply necessary to transfer the funding to other Departments that are essentially purchasing IT equipment. She noted this is typically a year-end adjustment item, but she felt she had a good understanding of what the appropriation would be and decided to include it in this budget opening. The amount does vary from year to year, but historically it is approximately $750,000 and she felt comfortable recommending a transfer of that amount. Board Administrator Cook referenced the City rebranding project and noted that of the $130,000 contract price $30,000 will be coming from the City Council’s professional and technical budget.  Vice Chair White referenced the Airport grant match and asked if the grant is ongoing and if it will be necessary to provide $750,000 in matching funds on an annual basis. Ms. Stout stated that based on the Airport’s passenger threshold, the City qualifies for a $1 million grant each year from the Federal Aviation Agency (FAA). The City must provide a match in order to use the money. Chief Administrative Officer Johnson noted the City could decline use of the funds, but it would not be very wise as the matching requirement is only 10 percent and the money is desperately needed at the Airport. RDA Agenda Review Mr. Cook and other members of Board staff briefly reviewed the items listed on the Redevelopment Agency (RDA) agenda. Community and Economic Development Deputy Manager Cooper provided the Board with additional information regarding interlocal and incentive agreements relative to the Kiesel Community Development Project Area (CDA). He noted it has taken a year to negotiate agreements and create the CDA. The commitment amount is $1,120,000 over the 20 year CDA term, which begins in 2017. One thing that sets this agreement apart when compared to past participation and incentive agreements is that the tax increment is being split between the developer and the seller and that is to cover the gap in the property acquisition. Board member Wicks asked if the RDA will still be obligated to pay the seller for the property if the project fails. Mr. Cooper noted that the RDA’s participation in the project is post-performance according to the agreement. The seller is assuming the risk as payment of the purchase price and is based on several conditions and if certain conditions are not met the RDA’s obligation to the seller and developer are null. Vice Chair White asked if the developer will have the opportunity to secure additional RDA financing for the project. Mr. Cooper answered no; he noted the developer has access to additional independent funding sources, but no additional RDA increment will be committed to the project. Board member Stephens inquired as to the risk the RDA is assuming for this project. Mr. Cooper reiterated the RDA’s risk is minimal as all contributions to be made by the RDA are post-performance. Mr. Cooper summarized the two interlocal agreements between the RDA and Weber County and the Ogden School District for the dedication of tax increment for the Kiesel CDA. Both entities have contributed 100% of their increment to the project for the full 20 year period. Weber County’s increment is estimated to be $2 million while Ogden School District’s increment is estimated to be $6 million. He noted that when developing a CDA all entity agreements are individually brokered rather than negotiated through a Taxing Entity Committee (TEC). He added that he has received positive feedback from Weber County and they have indicated they feel the relationship between the City and County is improving. Ms. Eller-Smith asked if the RDA will seek participation from any other taxing entity committees, to which Mr. Cooper answered no. The amount dedicated by the two larger taxing entities is sufficient to meet the proforma for the project. Board member Gochnour asked if developers of other projects within the CDA have the ability to negotiate similar agreements with the RDA for their project. Mr. Cooper answered yes and noted that tax increment is available for individual buildings in the project area. Vice Chair White asked if there is any way to ensure developers who are receiving significant contributions from the RDA will have an emotional attachment to their project or the community. She wondered if there are opportunities to incentivize them to make some kind of community contribution, such as sponsoring something at a local sporting event or creating a scholarship fund. Community and Economic Development Director Christopulos stated the City can ask for those types of contributions from developers, but his main focus has been ensuring a quality, high-end product that will provide a benefit to the community. In this particular situation the developer is considering purchasing and developing additional properties through the City and he feels that will serve as a manifestation of their commitment to the City. Board member Wicks interjected she is hopeful the developer will complete future projects with his own money. Mr. Christopulos agreed and pointed out that the difficulty with older buildings, such as the Kiesel building, is that the cost of renovation is so high that it is impossible for a developer to justify the return on investment. He reiterated that he is focused on ensuring the developer provides a quality product and he does not want to damage the relationship the City has with the developer by requiring something like sponsorship of a local sporting event. Mr. Cooper added that it may be more important to get the businesses that occupy the buildings renovated by the developer to become invested in the community because that is a very long term investment. He stated it is possible to suggest that developers do some of the things Vice Chair White inquired about, but he does not feel it is wise to require it. Vice Chair White noted that it would be a good gesture to the School District for contributing 100 percent of their increment to the project for the entire 20 year period. The discussion concluded with a brief focus on the models that are used to determine the appropriate level of participation in these types of projects by entities like the RDA, Weber County, and the Ogden School District. The meeting adjourned at 5:58 p.m. ________________________________________ ABBIE ZAMPEDRI DEPUTY CITY RECORDER ________________________________________ RICHARD A. HYER, CHAIR APPROVED: December 8, 2015