Sioux Falls City Council Agenda, Nov 21, 2017

1. As it regards item 47, this is an amendment to the council resolution regarding our reserve policy for the general fund as well as our policy that sets forth what divisions shall be run as an enterprise. While studying the parking issue I discovered the parking division is not listed in the divisions that the council by policy requires to be run as an enterprise. This resolution has not been updated in years. Back when the enterprise policy was added to this in 1999, parking was omitted. It was discussed but at the time parking was not running as an enterprise and it’s rates were not such that it could be run as an enterprise. In the ensuing years it was adjusted so that the parking division fees were adjusted and modeled so that it could run as an enterprise. It has run as an enterprise for years. This resolution sply adds one word, parking, to the resolution to enshrine the council policy that any administration must run it as enterprise. It has full support of finance and community development because it only clarifies how things already operate. It’s really a cleanup to make our policy reflect current reality. I am bringing this amendment simply as a cleanup and to enshrine the expectation that it must be run as an enterprise and pay it’s own way.

2. Thanks for the info Greg. It has been my understanding by looking at this city’s budget over the years, it was not yntil recently that it could be a enterprise fund. That is probably in part due to how much lease rates have increased in just the last couple years. That being said, I was just wondering how it was possible the city had 4.3 million available from the parking fund to put towards this new ramp. I seem to recall, could be wrong, the city secured a 9 million dollar bond, 2, maybe 3 years ago the last time a DT parking ramp was in the works. Did the city get a 9 million dollar bond a while back for parking, or am I misunderstanding something?

3. The parking division has zero debt at this point. There was a plan to bond for a ramp for many years but it has been pushed back repeatedly for whatever reason. You are correct in that rates have been ‘right sized’ so that they cover operational costs but also projected capital needs including being able to fund debt service on a ramp every so often as ramps age or the growth requires a new ramp. I have budgets and CIP’s back to 2007 and there has always been a ramp in the CIP, albeit in the ‘out years’ which is just a plan, and getting pushed back is not that uncommon. The numbers are a bit all over the place, but that’s because it was not a specific plan with a design, just a generic placeholder with a wet finger estimate. In the 2007 CIP, there was a plan to construct a new ramp in 2011 for an estimated 12.7 million. In 2008 there was a plan to build a ramp in 2011, this time for 16.6 million. The 2009 plan had the same cost, 16.6 million but put the construction out to 2012. In 2010, the estimated cost was still 2016, but the date was pushed back to 2013. In 2011, the estimated cost was 18.5 million and pushed the date back to 2014. In 2012, the cost was still 18.5 million but pushed it back another year to 2015. In addition, 1 million was budgeted for the removal of the river ramp (which did happen). In 2013, there was an estimated cost of 11 million with a build date projected still to be 2015. There isn’t any information to explain why the cost went from 18.5 million to 11 million. Could have been a lot of things. These were all so far out the numbers are almost meaningless, its not much different than having a vague idea you want to buy a car 5 years down the road and dreaming about what it might be and having a number in your head. In 2014, the cost was 10.72 million with a build date of 2015. In 2015 the cost was 10 million (engineering and construction) – same as the year before, but the 720K wasn’t there because it was spent (apparently) in 2014. So it kept the same 10 million dollar price tag, but pushed the ramp construction back, yet again, to 2016. In 2016, the CIP called for a 12 million dollar ramp to be constructed that year (but it did not happen). I believe that would have been for “The Banks” project which fell apart in 2016. Then, finally in 2017 we had a proposed CIP showing 18 million in total for a ramp to be constructed I believe in 2018. We preserved the 2.685 million dollars for the engineering work, but removed the 15.215 million dollars for “construction” and bonding of the proposed ramp. The council wanted a more firm plan before approving this in the CIP. A ramp has been on the radar for years, but has yet to be constructed for various reasons. The price tag has also bounced around. The parking division is debt free and has not taken out debt in many years as far as I know. That’s probably more detail than most want, but it gives a pretty good history and timeline from recent years including the entire Huether administration.

4. Greg, I think one of the factors why the ‘Banks’ project failed was that the developer was asked to pay a bigger portion of the parking ramp.

   Besides the cost, I also ask this question, “How does the private/public partnership help the community as a whole.”

   We all know we could build a stand alone parking ramp for about half the cost. The ramp would provide the parking we need DT. So how is sumplimenting the private developers helping SF taxpayers? It’s not. I say build a parking ramp at it’s true cost and if Legacy or any other developer wants to hook on to it, great. But taxpayers shouldn’t be footing the bill for private development. It doesn’t promote economic development, it’s just a handout.

5. $20 Million for less than 390 NEW parking spaces for public downtown use doesn’t wash out as a good deal for our residents. Also, the issue of revealing the identity of the people we are partnering with continues to be a concern with citizens. While I understand that The Legacy developer Norm Drake may not have rounded them all up yet, let’s have a clause in the contract that provides for the names of the investors to be made public. There is no reason for secrecy or anonymity when teaming up with citizen’s money. We need to reassure the public that there are no underhanded deals being made. Now More Than Ever. And let’s think ahead to ensure that we aren’t making decisions that will push public parking fees through the roof. $20 overtime parking tickets could become a reality in order to pay for the $20 Million ramp. I will do everything I can to protect the best interest of the citizens.

6. Greg, I found where I got that 9 million dollar bonding number from. It was what the city was prepared to bond for the Banks project. When that fell through, so did the need for the bond. You are right. This concept has been kicked around for several years now, starting at 8th and Main. One certainty since these talks started about a DT ramp. Each year the price escalates. Not a little, but a lot. The Banks project was abandoned just last year, and bonding for that would have been 9 million. Now it is 16.5 million? None of this adds up.

   Can the city deplete its 4.1 million parking reserve fund, then borrow 16.5 million, make those bond payments and still meet operational and salary obligations without raising lease rates? Yes or no. If yes, could you explain how?

7. Greg, I found the following from another Walker Study the city paid for to justify raising parking rates a couple years ago. I hope you and the other councilors have heeded these words, and are prepared to be forever linked to this, good or bad, if your vote is yea.
   While we evaluate parking fees for the purpose of generating revenue to support future operating expenses, capital repairs and maintenance, we note that the revenue generated, is arguably secondary to the amount of funds that the Parking Division or private property owners can save by using pricing cues to manage the existing supply of spaces and being spared the land, construction and opportunity costs of overbuilding new parking facilities. Building new parking spaces to address a localized shortage is likely to result in a cost per new space that is hundreds of dollars more per month than the amount of revenue that new space can be expected to generate. To the extent that visitors or employees encounter a lack of parking, our experience indicates that this is primarily due to disequilibrium in pricing between different parking facilities within a downtown marketplace. The current pricing structure may have the unintended consequence of putting visitors and employees, transient and monthly parkers in competition for the most convenient and often least expensive spaces. Meanwhile, other spaces in the downtown parking system remain unoccupied. Without implementing proper pricing policies, competition for the “best” spaces is likely to persist while in some cases many parking spaces remain underutilized.

8. Over the last year I have grown to respect both Greg and Theresa for their council work. Great jobs both of you.
   But, I see no way this current funding arrangement can work without raising user fees considerably in the next few years for all city ramps and surface lots.

9. Warren, I think I know the answers to your questions but I want to get verification first. A couple of things I can say though. Rates have been adjusted in recent years to capture both operating costs but also money’s to fund future capital outlays recognizing ramps and lots will need replacement or repair or a new ramp with growth so it’s baked in already. Just like our water bills don’t just pay for our water they pay for future capital as well. They project capital needs and price accordingly.
   The entire system pays for the entire system. What I mean by that, it’s not like the revenues of one lot stay with that lot. Rates are set globally to fund capital and operating throughout the system. It’s not the case that rates will have to be set on the ramp to pay the bond payment itself. The fund already has 5 million in reserve because rates are now.set to fund capital and bonding and with a bond that money would start going to that. Traditionally they’ve needed a million or so in reserve to have a good cushion. That 4 million down payment would put it back to that level. Ramps and lots have been adjusted in recent years so that some cost more than others. A lot or ramp on the fringe of downtown might be around 35 dollars a month. A ramp in the middle of downtown might be more like 65. The 100+ rates are typically for reserved spots, where someone wants a specific space for example in a heated space on the ramp. Most pay for the ramp without a reserved space and park wherever there is a free spot.

10. Water and sewer rates for homeowners and businesses have Sky Rocketed. Both Council member Neitzert and I expressed concerns about the rate increases being proposed for the water and sewer rates (enterprise funds) when we were elected in Spring of 2016. I have repeatedly asked for an independent, performance audit of these citizen funded entities that have(in my opinion) minimal oversite. I hope that the next mayor and administration will take action on these concerns.Holding the line on fees we charge residents is the cornerstone of affordable living. One more thing..our water rates are being used to purchase large amounts of farmland north of town. This needs deeper scrutiny. I still remember the common sense ,courage and creative energy that my colleagues brought to the table in addressing the administration building back in the summer of 2016..
    This was truly an act of representation for the best interests of the citizens. I am putting that same energy and scrutiny into this parking ramp proposal.

11. User fees were 1.76 mil in 2015. Projected user fees for 2018 are 2.69 mil. I see where and how your parking fund is built. Seems like a lot for the user to absorb in three years. If user fees are 2.69 mil and and salary and NORMAL operating expenses are 1.995 mil, you aren’t leaving a lot for breathing space. In the most recent CIP, 315k was allocated just for cosmetic and security purposes for one ramp. Mind you, that was money also taken from the parking fund, over and above normal operating expenses. How much will be taken from the parking fund each year to pay off this bond. IMO the numbers are just too tight, and user fees will be raised, again, and again, and again.

12. Just watched some ksfy videos about the partnership. Appears this is going to be a 6-2 council vote. Game hanger? I have my doubts. What are the vacancy rates at the existing DT hotels? This is just going to be another case of the same hotel dollars being used, just in slightly different places. Economic impact of having two new DT hotels where what is there now does the job? Hard telling? The six councilors who vote for this, and our mayor, now own yet another bond payment. Good luck. You’ll need it.

13. This matter has inspired constructive criticism. The real answer is a combined interface. Wow, perhaps the council is behaving like democracy. Maybe this subject will not be the mayors ‘Yes Man Poster’ characteristic known for Rolfing, Erpenbach, and Kiley votes.

14. Even a super majority will be no good on this vote. It will be 6-2. In the meantime, move along, nothing to see here.

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