Memo - Central Business District Financing Policies
Administrative Services Department
Office of the City Manager
Memorandum
To:
From:
Date:
Subject:
Honorable Mayor and Members of the City Council
Steven C. Mielkej City Manager ~
April 6, 2001
Central Business District Financing Policies
At a February work session, the City Council outlined general agreement toward a
financing policy for the central business district. Attached to this memo you will find a
draft policy outlining general policies for the financing of ceo improvements. A
separate memo is being provided relative to the Lot 500/600 assessment, based upon
direction given by the City Council.
On April 17, the City Council will be requested to order an assessment hearing for Lot
500/600. The immediate question of a maximum improvement cost for the assessment
will need to be established by that date. Staff feels that enough information is in hand
in order to proceed with the assessment hearing.
The overall policy for financing of the central business district will likely require
additional discussion. It is recommended that subsequent to Council review of the draft
policy, the policy be solicited for dialogue and discussion prior to its formal adoption by
the City Council.
The policy outlines a variety of financing issues within the downtown. For the policy to
have merit, it is recommended that the City Council establish a central business district
fund. This fund would be utilized for subsidizing the cost of necessary parking system
expenses and improvements, including assessments.
The fund would be created.before or at the time of the decertification of Tax Increment
District 1-1. The Council would authorize an additional annual levy as a revenue
source for the fund. The fund would then be under the control of the City Council for
uses designated by the City Council.
Staff is recommending that parking lot reconstruction be established as a 70/30
assessment policy. The Council could then determine, on a case by case basis, the
amount of subsidy to be utilized from the central business district fund based upon the
circumstances for each parking lot. The reason the staff is recommending this is due to
our conclusion that each parking lot will be significantly different based upon the
circumstance of the parking lot.
Honorable Mayor and Members of the City Council
April 6, 2001
Page 2
For example, the next lot to be reconstructed is Lot 800. Lot 800 is north of First Street
North, and unlike most of the parking lots is not surrounded by commercial properties.
This parking lot is utilized by a variety of businesses and would be difficult to ascertain
benefit on a strict assessment basis. By utilizing the CBD fund to subsidize the70/3D
split, it would be possible to more accurately reflect the true benefit to the assessed
properties than is currently possible under a strict assessment amount. Subsequent
lots may also have circumstances calling for flexibility in the amount of subsidy
necessary to attain a fair assessment.
Additionally, Lot 400 (parking ramp) will require extensive renovations or reconstruction
at some point in the future as well. A strict assessment policy without the flexibility to
amend it may make it difficult to fairly assess the costs of renovating or reconstructing
the ramp. Therefore, it is staff's recommendation that each project be based upon a
determination at the time of what a fair amount is, utilizing the central business district
fund to subsidize the 70 percent assessment to the amount deemed appropriate by the
City Council at that time.
mayorcccbdfinancing
. DRAFT
POLICY
Central Business District (CBD) Financing Policy
1. PURPOSE
1.01 The purpose of this policy is to establish guidelines for the financing of
various types of improvements to the CBD. The CBD is and important component
of the City and it is recognized that a public-private partnership is necessary to
maintain and improve the CBD.
2. GENERAL
2.01 The City Council recognizes the importance of the CBD to the fabric of the
community. This policy outlines the City's commitment to the CBD by providing
resources to necessary maintenance and improvements.
3. FINANCING POLICY
3.01 The following table outlines the City's policies on the financing of various
types of improvements in the CBD. The policies are to be viewed as general
guidelines on financing various types of improvements. The City Council reserves
the right to vary from the guidelines, as circumstances require, based upon the
council's discretion.
Category
Type
Private Source
%
Public Source
%
Parldng System
New Lots
100 Special Service
District
Assessed
Private Source
o nla
Lot Reconstrnction 70 Special Service 30 Gen. Tax Levy
District
Assessed
CBD Fund
Lot Utility Mains 0 n/a 100 Utility Funds
Maintenance 0 n/a 100 General Fund
CBD Fund
Enforcement! 0 n/a 100 Parldng Fund
Administration Note: Revenues are inadequate to
support current level of service
Improvements!
Enhancements
i.e.
Landscaping
Dumpster Clusters
Sidewalk snow
removal
Facade Programs
100 Special Setvice
District
Private Source
o nla
Economic
Development
Redevelopment
Projects
X Private Source
X Economic Development Fund
Note: Percentage determined by
negotiated agreements.
4. CBDFUND
4.01 The CBD Fund will be. created for the purpose of financing public
improvements in the CBD.
4.02 The CBD Fund will be used to subsidize the cost of necessary parking
system expenses and improvements including assessments.
4.03 The CBD Fund shall be a special revenue fund. The revenues to the fund
shall include transfers from the general fund as determined necessary and
appropriate by the City Council.
Established 5/x/200 1