City Council

CITY OF SARATOGA SPRINGS 2009 COMPREHENSIVE BUDGET WORKSHOP WEDNESDAY December 17, 2008 6:30 P.M. PRESENT: Scott Johnson, Mayor John Franck, Commissioner of Accounts Ken Ivins, Commissioner of Finance Ron Kim, Commissioner of DPS Anthony Scirocco, Commissioner of DPW STAFF PRESENT: Michele Boxley, Deputy Commissioner, Accounts Eileen Finneran, Deputy Commissioner, DPS Kate Jarosh, Deputy Commissioner, Finance Shauna Sutton, Deputy Mayor Joe Scala, City Attorney ABSENT: Pat Design, Deputy Commissioner, DPW RECORDING OF PROCEEDING The proceedings of this meeting were taped for the benefit of the secretary. Because the minutes are not a verbatim record of the proceedings, the minutes are not a word-for-word transcript. Mayor Johnson opened the workshop at 7:10 pm. He announced there were 3 proposals/responses on the High Rock Lot RFP and asked for comments/questions from the Council. Commissioner Franck made the following general points: o He has concern because of the size, scope, and scale of the project that the financing is in tact. o 2 of the 3 proposals talk about paid parking, and all 3 proposals have parking and the police facility. After selecting one of the bidders, it is important to set up a panel of experts; he suggested Chief Moore, Chamber of Commerce, Special Assessment District, DBA, City Center, Engineer from DPW, liaison to land use boards, etc. He also suggested reaching out to the former Mayors and using their expertise or have them send a representative to the panel. Whatever they go forward with, they need to be united as a Council. o It was mentioned a few times that we will probably not be following the WICKS law with this project. He can live with that but he suggested looking into a project labor agreement. Because of the size of this project, he is concerned with overruns relating to time. He would like workers in the area to get this job because they need it and because they put money back into the economy. Project Labor Agreements (PLAs) have worked well in the past with municipalities because of the non-strike clause and they are on schedule. He has done research on this and has gone to the University of Michigan research, University of Tennessee research that show the PLAs come in at the same costs as regular contracts. Governor Pataki also endorsed PLAs and worked effectively and efficiently with them. Another program associated with the PLA is the Helmets to Hardhats; this program brings in military reservists from active duty to a career in the construction industry. We would have to do this in such a way that it is cost effective. Area communities that have successfully used the PLA are: the South Glens Falls School District, High Rock Lot RFP Workshop 12/17/08 Glens Falls Water Treatment Plant, Albany County Courthouse, Albany School District, and The Gideon Putnam. Commissioner Franck has reviewed all 3 proposals and wanted to bring up the above points to the Council. Mayor Johnson clarified with Commissioner Franck if he felt the WICKS law should be applied. Commissioner Franck stated it had been brought up from a cost saving measure that WICKS would not have gone forward. He does believe because of the size of this project that if the WICKS law is not going to be used, then we should have a PLA relating to this project. They will have to make sure it is cost effective but he believes it is important. Commissioner Ivins stated his comments center around finances and costs. His comments are as follows: o Things such as sales tax and mortgage tax will be added to the tax rolls. o He likes Commissioner Franck’s idea of a committee; we need a total community buy in on this project. o He has questions regarding the legality of lease to own. The City’s bond council stated it is not legal and will not go near it. He would like to see what is out there that states it is legal; what precedence has been set; and if other communities in New York have done it. If we do have to bond this, what kind of money is necessary to bond it and how is that broken down by project. o We are going to have to look at paid parking and where it is going to go. Maybe we can find a solution all can live with. One proposal mentions building a Woodlawn parking lot. No matter which proposal they go with, they should look at putting a parking lot there, especially if we go with paid parking as those spots are the ‘convenience’ spots for downtown. o The Bonacio proposal provided a shell and they need to know the cost to finish the entire project, and maybe Mr. Bonacio needs more information from the City to provide that information as to what we want inside. o We also need to know the operating costs of all of these proposals. o He mentioned the letter he received from the City Center. The letter mentioned putting workforce housing in part of the lot they use for a workload staging area. The Council will have to discuss this as a lot of money is being put into the City Center to bring more people into town and we do not want to hamper that progress. o He likes pieces of all the projects. He is not sure if it would be legal to take a piece from each proposal and bring it together under one bidder’s proposal. Mayor Johnson stated he believes they are allowed to award the bid and then negotiate further. Commissioner Scirocco made the following comments/suggestions: o He is concerned if a timeframe is required to be met regarding making a decision. o He feels the 3 proposals all work for the City. o Finances are an issue. o He likes the panel idea. o He feels with the economic stimulus plan President Elect Obama is talking about may be a way for the City to tap into creative financing for this project. o Paid parking is an issue but its time has come. The current public safety facility isn’t working. The Woodlawn lot is a good idea. He would also like input from the public (residents and business people). He is willing to keep an open mind. Commissioner Kim stated the comments are all interesting and helpful. As soon as the stimulus plan came out, they went to Congressman Gillibrand with the High Rock proposal and the Fire House as his understanding was they were looking for shovel ready projects. Information was also sent to Clinton’s office and Schummer’s office. They are being told that they are not looking at this kind of project; they are looking at sewers and that type of infrastructure; they are not doing buildings. Page 2 of 7 High Rock Lot RFP Workshop 12/17/08 Commissioner Kim made the following comments: o He feels this meeting should produce a time table agreed upon by the Council. These numbers have a shelf life based upon market conditions that can be projected out. o He agrees they need to check finances. o He has no problem with a committee with the caveat that they come to a consensus about paid parking. If they don’t have paid parking, they can’t do this proposal. The smallest lease buy back is about $1.5 million or a 10 -15% tax increase. o In regards to the lease buy back, there is one decision out there regarding lease buy back that skirts all the laws that were set up to make sure public entities use the WICKS law and use competitive bidding. There is nothing that says you can’t do it, but no court yet has said they are blessing it. There is precedence to do this. Mayor Johnson stated lease to own is being done on a big scale across the country. We can look into it with getting legal opinion. Commissioner Franck stated from an accounting standpoint, this is a purchase. It is just that we are not bonding it; we are just ‘borrowing’ the money from them. Commissioner Kim stated again a time table is critical as well as the consensus on the parking. He came up with 17 questions for the bidders; he read off the list of questions. A copy of the questions was provided to the Council. Commissioner Franck asked if the burden of proof of legality of lease to purchase should be put on the bidder. Commissioner Ivins stated that could be done in-house. Mayor Johnson felt that would be going beyond the scope of the original RFP. Commissioner Ivins stated again that the Council needs to determine how they are going to pay for this. They also need to discuss paid parking and start getting public input on this. The public needs some facts as to how the paid parking will be set up so they have something to make comment on; not just be able to say they want it or don’t want it. Sales tax is not a quick thing; you need to go to the state legislature to pass something to increase sales tax. Commissioner Kim stated again they need to know what the shelf life is on these proposals. The time element needs to be resolved. His department can work on reasonable assumptions of parking revenue to start discussion with the public. Mayor Johnson stressed the following comments: o One concern is the timeline and how long the ‘prices’ are in effect because it has happened in the past where we have received proposals and nothing has occurred. We lose our credibility and it is not fair to the bidders. We should come up with a rough times frame so they as well as the bidders know where they are going. o He also agrees that financing this has to be done through some sort of paid parking. He is not against public input, but it can’t be a broad issue like paid parking; it needs to be structured in a format or proposal of what paid parking means. If the Council comes up with an idea of what they think is a solution for paid parking, then raise it as an issue for public comment, they will get more meaningful constructive comments. Commissioner Franck stated based upon that, they should pick a proposal, work with a committee and then propose it to the public. Without selecting a proposal, they can’t talk about the proposals, they have to go through the whole process of paid parking first. Mayor Johnson stated he agreed with the procedure that should be followed. It wouldn’t be appropriate to have a public forum and then use paid parking for the decision on the RFPs. It is his opinion is the Page 3 of 7 High Rock Lot RFP Workshop 12/17/08 solution for the community on any proposal is to include some kind of paid parking. As a Council they first have to agree that paid parking is a condition of any project going forward in that capacity. They can get public input after they award the bid to help fine tune what the community wants in terms of where paid parking should be, etc. There is nothing wrong with getting an advisory committee together on a quick basis for input, it is incumbent upon the Council to give them the charge of what we want from them. If we go the committee route, someone with a strong financial background should be part of the committee because the financing for this project is complex. He is not against committees, but if it is going to happen, the committee should be in rough format by New Years so that committee can meet in January and by the end of January the Council will have some input from them. The questions Commissioner Kim passed out are valid questions, he had some of the same questions himself. His concern is can this be done without invalidating the process. Commissioner Franck stated they have had many proposals in the past that didn’t work because they were too expensive. This is what he has been pushing for since January 2006. These alternative revenue themes work. He feels they are in conceptual agreement on this; workshops do work. We could have done a $17 million dollar police station and not gotten parking or we could have built a $9 - $12 million dollar police station and used up parking. They have the ability in some of the proposals to get 1 – 2 parking lots, a police station, a movie theater, and have potentially less property tax increase than if we just built a police station. Former Councils were correct not to move forward with past proposals as they did not make financial sense. These proposals make sense to him. It is probably worth spending a few dollars for a forensic accountant to come in upon acceptance with the caveat that you have to have the financing. Commissioner Kim asked if we do the financing before or after we accept. Mayor Johnson stated he believes it should be done before hand. Bond Council can easily give an opinion if the lease buy back arrangement is legal in New York State. The concept on which we are awarding the bid is a lease buy back concept. Commissioner Franck stated we need to differentiate between bond council and credit; they are two different things. Mayor Johnson stated typically the lease buy back arrangements are not removed from bonding council that much. We need to get the information from the bond council to satisfy some of us on the Council. Commissioner Kim stated to some extent, doing due diligence may help with the selection of the proposal. He doesn’t have a problem with doing due diligence with a forensic accountant, but maybe this should be done upfront and use that as a criteria in their selection. Commissioner Franck stated he believes they can run parallel. To save time, they need to make sure the financing is in line. Commissioner Ivins stated he doesn’t want to put contractors through making things happen if the Council isn’t sold on investigating or paying for this project through paid parking. He is willing to put off how the paid parking will look down the line, but the Council has to come to consensus on paid parking. The contractors have made the suggestion of paid parking as a way to pay for this but we don’t have to do it that way; we can do it through property tax. This is our decision and his opinion is paid parking is the way to go. Commissioner Kim stated if they don’t do paid parking, they don’t build the building. He would like to hear from the public because he is hearing if we do paid parking, we destroy Saratoga Springs. He doesn’t agree with that, but if the City feels that way, he would like to hear their opinion so he could consider their analysis. If there is an analysis out that that says paid parking is going to destroy Saratoga Springs, he will pause on this project. If downtown Saratoga is destroyed, we won’t need that many police officers. Commissioner Ivins stated this is the point he is trying to make. He doesn’t want to put the contractors through all this if the project is going to be dead because of paid parking. Page 4 of 7 High Rock Lot RFP Workshop 12/17/08 Commissioner Kim said it sounds like we are trying to figure out if we award it then make these decisions, or do we make the decisions and then award. Commissioner Franck stated he has no problem doing it either way, but if they are going to talk about paid parking, the proposals have to be put to the side. We can only talk about paid parking and nothing contributing to the proposals. After people feel comfortable about the consensus for parking then you pick the proposal; or you pick the proposal and say what type of paid parking you want. Commissioner Kim stated this is part of the quandary they are in. Paid parking is linked to these proposals, so it is hard to talk about them. Commissioner Ivins stated we can talk about the general concept of paid parking and explain what people are going to get for their paid parking. Is there going to be a cost benefit to the taxpayer to do this? Commissioner Franck stated a decision needs to be made. People who need to get their tax returns done are going to have to pay for parking when they go to his office on Broadway. We have to make the decision on the scope and the severity of paid parking but if this is only way it going to be done, then let’s get moving. If people are saying they can’t take the shots; that’s fine, the police station won’t get built. Commissioner Kim stated his experience has taught him the only way things get done in this City is by having community buy in. Sometimes community buy in requires leadership; and part of the leadership is convincing people of what is right. You have to have the process to get people’s buy in or you don’t get there; that’s his concern. He doesn’t buy into building a police station and destroying downtown. Mayor Johnson stated he didn’t feel any of them were objecting to paid parking in the City. The question is the scope or the extent of it. He is sensing they want some input regarding the extent of paid parking in the City. As a Council they have to recognize that if they are building a parking garage, the garage has to be paid parking otherwise we won’t be able to begin paying back the cost of construction and operation. Parking garages are expensive; about $25000 per spot. He spoke to a lot of people in the community; residents, businesses on Broadway, downtown merchants and got the feel that there should not be paid parking on Broadway; not necessarily in the City or downtown, just no paid parking on Broadway. That is something they can focus on as a Council after. Commissioner Kim stated one of the proposals relies on the paid parking income. If paid parking is something that was dropped because the community or the Council felt was important; that is going to change some of the numbers in at least one of the proposals. He would argue to the same people the spots on Broadway are the most valuable spots and those are the spots they should be charging the most for because of the convenience. Those spots should be short term. Mayor Johnson agreed that if there is paid parking, the best spots should be the most expensive and the best spots are on Broadway. However, he doesn’t believe that is the feel of the people who have businesses on Broadway. It is important to get feedback from groups such as the DBA, SAD, the Chamber of Commerce, and the City Center on the extent of paid parking not the idea of paid parking. Commissioner Franck stated what he hears in this room through public comment and what he hears outside the room different many times. He believes public comment is important, and it does help him form his opinion, but he doesn’t just form his opinion in this room. When we pick one of the proposals, these are guidelines, so if we want to take some things away or ask for more things we can. The reason he mentioned having a committee after they choose the proposal is because those people have been here a lot longer, they have more experience, and they have a stake in downtown. Of the 62 cities in New York, 40+ have paid parking. Mayor Johnson stated the sky is the limit as to what you can do with paid parking. This is not just meters, it has gotten sophisticated and user friendly to the point where you can use your cell phone from your table in the restaurant to extend the time on your meter. People are receptive to this. We are behind the times to our financial detriment; that’s why we can’t afford to build services we think we need and it is time that we have to agree to the concept and then fine tune it. He recommended forming a committee for Page 5 of 7 High Rock Lot RFP Workshop 12/17/08 input within 30 days. We can meet with that committee and give then a charge to come back to us with advice with general concepts. Our obligation is deciding the RFP. Commissioner Kim agrees with that but suggested before creating the committee, they choose a proposal. Commissioner Ivins stated he doesn’t have a problem with first choosing a proposal, but we need to do that with the understanding that we are leaning toward paid parking. How the paid parking is going to be structured will be determined later, with the community’s consensus. He stressed again that he doesn’t want to waste the contractors’ time. If we don’t do paid parking, this project is dead in the water. He wants to see the project happen, but they have to decide as a group if they are going to pursue paid parking. Commissioner Scirocco asked if they can walk away from the table tonight with assignments and bring something back. Before anything can be put out to the public, they have to have some idea as a Council. The technology is there to benefit the taxpayers and the City. There is taxable property in these proposals and sales tax is also in there; paid parking is not the only thing in there. In the meantime they can form the committee and look at the financing part. Mayor Johnson asked who on the Council has a concern of the legality of the leasing arrangement. Commissioner Ivins stated he will be contacting our bond council regarding the legality of the leasing arrangement because they were the ones who raised the issue with him. He will get their opinion. Mayor Johnson stated if Commissioner Ivins still has a concern after exploring the legality of the leasing arrangement with the bond council they may need to discuss retention of council for an outside legal opinion. Commissioner Kim stated he has a memo from the respondents that lays out the legality of leasing arrangement. He will forward a copy to Commissioner Ivins to share with bond council. Mayor Johnson set a timeline/target date of 60 days to the end of February to award the bid. Commissioner Kim confirmed that the award of bid will happen no later than February 27th. Commissioner Ivins stated he will have the opinion of the bond council for the January 6th Council Meeting. Mayor Johnson suggested inviting groups in to talk about paid parking and express their opinions. These discussions will not be related to a proposal. Commissioner Kim stated the financial due diligence should be done prior to the award of a proposal. Commissioner Franck stated the bond council can look at the legality of lease arrangements and the financing structure at the same time. They have the expertise to say if someone is financially viable. Commissioner Kim asked if the investigation from the bond council will come with a letter stating what they did. Yes. Commissioner Kim asked that we could expect that letter by the end of January. Yes. Mayor Johnson stated since this has been raised as an issue in public forum, they are obligated to the City in their fiduciary capacity to share what they are thinking of doing is legal. Page 6 of 7 High Rock Lot RFP Workshop 12/17/08 Commissioner Franck reminded everyone that the date of the end of January for the bond council letter is a guideline; it may be done earlier. Deputy Commissioner Finneran asked if the questions that were passed around will be given to the contractors who bid on the project. Commissioner Franck stated the questions are important, but he doesn’t know if there are any additions to them. Commissioner Kim suggested setting a date for submission of questions and put all the questions on one form. It was decided all questions are to be given to Commissioner Franck’s office. Deputy Commissioner Finneran asked who will be sending the letter to the bond council. Mayor Johnson stated Commissioner Ivins will be sending the letter if he still has concerns. The workshop concluded at 8:45 p.m. Respectfully submitted, Lisa Ribis Clerk Approved: 1/20/09 Vote: 5 - 0 Page 7 of 7