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HomeMy WebLinkAboutEconomic Advisory Commission - Minutes - 02/19/2020Economic Advisory Commission Regular February 19, 2020, 4 p.m. - 6 p.m. CIC Room in City Hall, 300 Laporte Ave 2/19/2020 – AGENDA Page 1 1. CALL TO ORDER Time started 4:05pm 2. ROLE CALL • Renee Walkup • Braulio Rojas • George Grossman • Aric Light • Connor Barry List of Board Members Absent: • Ted Settle • John Parks List of Staff Present: • Josh Birks, Director of Economic Sustainability • Jennifer Shagin, Redevelopment Support Specialist List of Council Members Present: • Emily Gorgol 3. AGENDA REVIEW Connor Reviewed the agenda with the committee, reminded the Board that they will continue to meet in this location from 4-6pm. He hopes that the new time is easier on everyone’s schedule and makes it easier for attendance. Connor reminded the Board that Council Member and Economic Advisory Commission (EAC) liaison Emily Gorgol is joining for the meeting tonight and that the EAC is excited to have a dialog with her to explore ways the EAC can offer more support to Council. 4. CITIZEN PARTICIPATION N/A 5. APPROVAL OF MINUTES Amendments: None Minutes approved as distributed 5-0-0 ECONOMIC ADVISORY COMMISSION 02/20/2019 – AGENDA Page 2 6. UNFINISHED BUSINESS a. Board and Commission Evaluation (Experiment) – Josh Birks &/or Ted Settle Updates from Ted that were sent to Josh. The online website has changed to reflect the new location and time. Ted wanted to remind everyone that the super issues meeting is on March 4th from 6-8pm. They will be discussing Broad evaluation and Oil and Gas. Ted’s understanding is that the meeting conduction will resemble the meeting that he had with Honore before Christmas, which was a more interactive format. The entire process will be about continuous improvement and construction of the Board to gather more public engagement. The March meeting location is now at the Senior Center, Renee is planning on being there. Ted would like to encourage everyone from EAC to attend as well. b. Harmony Gateway Recommendation – Braulio Rojas Connor highlighted that the question for consideration is confirmation from the committee on if they liked the last paragraph or not? There have been concerns expressed from members of the committee regarding the last paragraph. George talked about the last paragraph and mentioned his thoughts that we need to be positive here and the intent of wording in the last line needs to be there, he proposed revising it to, “Harmony gateway is important and we are happy the City is implementing this.” He wants to erase the comment referencing City Plan, because this memo is about a corridor plan and he thought it needed to be more specific to its implementation as opposed to the broader City plan. George mentioned that all the plans are well thought out, but it needs to be to kept overall more specific to the purpose of the Harmony Gateway plan. He highlighted that it’s about what all these Boards are ultimately doing, what we are recommending and what we want Council to do here? Josh mentioned that he and Renee had talked about using a template for these types of memos and possibly using the staff template. The staff template is a generalized template that staff uses for all of Council’s memos, it serves as a great framework for staff to clearly and concisely get information in front of Council in a consistent format. Council is used to seeing these types of memos and it could worthwhile for this commission to consider using a similar form of standardized communication. Discussion: George: I think using a standardized template may streamline the process and help us make this timelier for Council. ECONOMIC ADVISORY COMMISSION 02/20/2019 – AGENDA Page 3 Connor: Agreed a standardized template would be great. The bottom line with this one is getting the message out in the memo. I would prefer to keep it to one page, but I am OK with two pages because of how it is written and a lot of the content needs to stay. Connor motioned for a vote to formalize the adoption of memo: 5-0-0 motioned passed. Josh will coordinate with Erin to make sure it gets delivered. 7. NEW BUSINESS a. Workplan and Priorities Discussion with Councilmember Gorgol Connor introduced Emily to the Board, thanked her for being here and mentioned that the Economic Advisory Commission will be going through Q&A with her. Emily talked about her background and interest. She is from Fort Collins; and her background is in natural resources and public health. She has worked in a number of different industries and more recently has worked with collaborative resources for low income seniors. She ran for council because she wanted to be a younger voice on council and represent the underrepresented populations particularly those that she works with. She sees Fort Collins as a wonderful place to live and would like for everyone to be able to enjoy it as such. In the ten years that she was away from Fort Collins she worked in the restaurant industry and lived in various places around the Country. Emily talked about Council’s priorities and the priorities that she is personally passionate about including advocacy for small businesses, non-College options for people who do not see the traditional 4-year university as an option for them, the missing gap for mid-income earners and residents who leave because they do not have in interest or ability to stay here. She wants to look at how to address the income and interest gaps of Fort Collins so that more people will stay. Discussion: Connor: I went to Colorado State University (CSU) and was fortunate to be able to stay here because I found a job in this community. But for most of everyone he knows, including his friends from College, Denver was the place to go. Emily: I think the barrier isn’t just College, but more about affordability, and social aspects. It’s about, how to we create a community that people want to stay here for? George: I hire a lot of local people that are about 24-30 years old, most of them are ECONOMIC ADVISORY COMMISSION 02/20/2019 – AGENDA Page 4 in a position where they went to college but didn’t get a job and just don’t know what to do with their lives at this stage. Their housing costs are too high, most of them have roommates, most aren’t married. However, he can’t offer them enough to incentivize them to stay. He has very few jobs that are of a higher wage. Renee: Is Council looking at adopting new ideas about restricting how many people can live in a home? Or revising the U+2 regulations? Emily: This was not adopted as a council priority but there is a lot of talk about housing, housing affordability and this can all be a part of the bigger conversation. Connor: What is your thinking around Tiny Homes? Do you support these communities? Emily: Mobile homes are the original tiny home but less expensive. I don’t know if having a tiny home park will be better or more affordable. For the most part, Tiny Homes end up being very expensive small housing, plus a lot of tiny home residents have storage units. Renee: What is your thinking about those in the trade industries? We live in a world where most people are college educated but it’s not that case that most people want to go to college. What are your thoughts on this? Emily: I think we have a lot of a natural pool for the trades. Capitalizing on this is more about collaborating with the Poudre School District (PSD) and our community partners, one example of this is childcare. PSD has a program where students interested in pursuing careers in early childhood can work with daycares in the City. Encouraging this trade is about creating visibility towards that path, a lot of people don’t know how to get into a sector. Josh: A great example of this is manufacturing. There is a lot of thinking around manufacturing that frames it as dirty grimy work but, when you go into a modern manufacturing facility it’s very high tech and clean. It’s a skilled labor industry. PSD has a program where students can bring their parents to a manufacturing facility to show both the students and parents the opportunities. The Economic Health Office is also starting up a trade sector that is focused on changing the perspective for people going into the trades. The intent of this would be to say yes, it can be hands on work, but you can also still make a really good salary and decent living in these industries. We are also working with PSD on future slab. The age-old story is that the doctor made a million before the plumber but in today’s world it’s the opposite because of the amount of debt the doctor had to go into before they could ever work. Braulio: For many in these situations, where they need to choose a path, it’s easy to say everyone has their own niche and it is hard to say that this is where you should go and many don’t know how to get a certain path. I think that we need to create a ECONOMIC ADVISORY COMMISSION 02/20/2019 – AGENDA Page 5 path for everyone, if someone wants to be in a trade then we need to encourage them, and we need to do the same for the traditional 4-year programs. We need to leave room for both paths in our community but it’s difficult because of the market and housing prices. Aric: How can we be most helpful to you as a commission? What is the most effective for council? Emily: What is your workplan? And it’s helpful to know what your priorities are. Has it worked well for you to work with Wade? Connor: in the past, our primary form of communication has been memos and then checking in the Wade to make sure that it was relayed to Council. We have been continuing to do this but haven’t been as proactive as we could be with issues. In some cases, we have run closer to rubber stamping items then we would like. Josh: In the past the commission has worked with issues on and off of Council’s radar. Some of our work on Council’s radar has been our work such as our work in trade sectors, other work not on Council’s radar has been items such as The Experiment. Other items related to Council’s radar have been partially on the 6- month calendar, other items have been more on it. The question is where do we spend our time to help you/Council the most? Emily: For everyone that has asked me this, I’ve been encouraging everyone to look at Council priorities so that you can be a little more proactive and see where our energies are, as opposed to rubber stamping. Josh: The EAC’s aide to Council can be more indirect as well. For example, if the EAC is working on something that relates to Council priorities but is not on the 6- month calendar, that is still helpful. Emily: I would say setting priorities and going two years out is always helpful. I also think it’s always helpful to have suggested questions of items that you can ask. Affordable Housing is an easy one, sometimes the Board has questions that they can ask of staff or the applicant. George: How do you want information relayed? Emily: Either email or memo. Josh: I think our memos sent to you from the EAC go to the Council packet and are part of the large packets that you get every Thursday. Renee: Is it easier for you and the rest of Council to have recommended questions? If so, we can do this for metro districts when comes through us. Emily: Yes, that’s helpful. It helps break it down for council and it helps you break it down. So many of the things we work on are not isolated and each decision either ECONOMIC ADVISORY COMMISSION 02/20/2019 – AGENDA Page 6 positively or negatively affects another item, it’s very helpful to have this at least somewhat broken down before it comes before Council so that if anything Council can see the amount of analysis and work that went into it. Connor: In looking at our priorities, of any of those that are up there (on the screen), which of those topics do you think would be most pressing? Emily: What is Industry Cluster Reboot? I’m not as familiar with that one. Josh: This is what the Economic Health Office (EHO) has been working on and we’ve reached out to regional partners to evaluate this. Council will interact with this in the upcoming budget process. Part of this is that what we call Industry 4.0 is about the fourth major era of revamp since the industrial revolution. Industry 4.0 is about bringing a lot of every single process in and how power supports that, part of it is moving towards renewable energy sources and it’s a challenge that a lot of the local manufacturers are struggling to keep up with. Emily: The first three of your priorities are very much on council’s mind. Industry 4.0 and Climate Economy is interesting as well. Josh: Many of these priorities are here because the world is realizing that climate change has to be baked into every economic decision. It’s about being aware of where and how we produce things, the effect of their production and the cumulative effects. Connor: Cities are also doing this with safety security and data. There are a lot of challenges and how all of these are and can be implemented and evaluated. Emily: I would say Futures committee would be a great place for this to channel through Josh: That’s a great idea or it may come that maybe this committee can form a Futures committee Connor: We have also been working on affordable and attainable housing from an economic standpoint. Emily: Have you been part of the Home2Health EPS study? Or has anyone from this committee gone to any of the community meetings? Josh: EPS is still working on gathering the data for this. We can see if we can get this here is in March, I have been in contact with the other project managers on this and they doing a lot of community outreach and background research in order to be able to tee up our conversation and be ready for our work session in March. Emily: I think that would be a good one. On March 24, we will talk about IHO, inclusionary fees, loans and other options as well. Those are a total of four policy related options that we will be talking about. One item that we will be discussing is ECONOMIC ADVISORY COMMISSION 02/20/2019 – AGENDA Page 7 public voice, where in the past have people in Affordable Housing or in need of Affordable Housing voiced their thoughts? Josh: In the past public voices have been worked into Council’s packet and our recommendation to Council, however what has happened is that the public portion is well baked in at that point. A lot of times EAC will include a recommendation to Council with this. Emily: I wonder if maybe Sue can come and present to EAC about Affordable Housing the EPS study? Josh: Sue is the project manager with the EPS study. Part of being the project manager is knowing when the team has the information to share and frame a recommendation. EPA has a very tight deadline and little time to formulate a recommendation. As a commission we can help Council by focusing on questions that should be asked as opposed to making meaningful recommendations or comments. Part of this can even be making sure it’s part of the public forum. Braulio: What I’ve seen in my time here is that the City’s operates faster than our commission, issues come here first and eventually they come to our table. I think we were proactive last year in producing memos and I think we need to keep that routine. An issue comes here, and we send information to Council so that they have all the information for any decision that you need to make. We would like to keep communication open with you. What is the best way to reach you? Emily: Yes, and please keep in contact with me. The best way to reach me is my email or my cellphone. It has been great being here and I apologize I have to leave for another meeting. Emily left 4:55pm b. Metro District Update and Working Session Josh presented the metro district presentation that went before council in December. He overviewed how the service plan is really the document that creates the metro district, it is the guiding document for metro districts and how Council can allow what happens and when especially in terms of infrastructure. By law it’s either City Council or County Commissioners that is charged with approving the plans. Plans also have to be certified by the district court. Once in election is held, then the service plan can become a metro district. There have also been several metro districts and harsh critiques mentioned in the Denver post. It’s important to remember that not all Service plans are created equally, a lot of communities have policies and model service plans in place that don’t allow for items that are in our model service plan, such as mill levy caps and debt maximums. Some communities will impose tighter maximums on debt. Metro districts in the 1990s were more harmful because they allowed for the use of general obligation debt where the burden can easily outgrow the revenue in the long ECONOMIC ADVISORY COMMISSION 02/20/2019 – AGENDA Page 8 term. Now, most if not all metro districts are restricted solely to revenue bonds, where the bond holder is only guaranteed a revenue stream. In Fort Collins we have gone above most service plans to increase transparency to the buyer and to move to end user control as quick as possible. We also have debt maximums in place, this is 40 years from the date the service plan is approved not when constructed is started. We also only allow for additional debt to be issued if it can be certified to benefit the district by an independent third-party analysis. Discussion: Renee: You mentioned we try and transfer the Board as quickly as possible, is there a standard that is in place for this? Josh: No. The challenge is that we can’t force future residents to run for the Board. What we can do is make sure the district publicizes well and encourages residents to run for the Board. Renee: The league of women voters has talked about metro districts as well. Is 40 years the typical service agreement or is that typical max? Josh: Typically metro district debt is ongoing. The average bond is usually 30 years, realistically 40 years doesn’t allow that big of a window to get things built and the project to be able to issue bonds. Typically, it takes a development 5-7 years to generate enough revenue to issue a bond, which really only leaves about 30 years for the metro district to use that revenue stream. Braulio: Where does this information come from? Are there metro district standards that everyone follows? Josh: All of this has come from practitioners over time. The City has a model service agreement with standards that a metro district must meet before it’s plan may be approved by City Council. City council has to approve all metro district before it can be formed. Braulio: If City Council sets what the mill levy could be, does the metro district have to respect that? Josh: Yes, and if the metro district ever wanted to change this then they would have to go back to Council. If they are going to increase mills in their district, then it’s a TABOR election. This is usually why the developer will often ask for the highest number of mills first, so that they don’t have to worry about going to an election. ECONOMIC ADVISORY COMMISSION 02/20/2019 – AGENDA Page 9 Braulio: It seems like City Council is protecting the public interest and pushing back on the amount of debt the development wants so that the end-users are protected. George: Is Montava is a metro district? Are there any others in Fort Collins? Josh: Yes, Montava is a metro district. Right now, there are 9 metro districts that can include commercial development, and 2 that are commercial. All our service plans carry a 3-year window to where Council can dissolve the district if there has been no action in 3 years. Part of this is about incentivizing so that conditions move forward, if something like the recession were to strike then Council can move to take other action. George: Does all this work create rules for future metro districts? Josh: Yes, in 2018 we did a big rework where moved to create a policy that didn’t allow for all residential. In 2008 we created a plan for commercial development that was very motivated by the market, this round of changes was focused on breaking up all metro districts that were solely commercial. In 2018 we had a similarly worked on limiting residential, because it allows the district to pay for some of the cost to make the feasibility easy. In either scenario, metro districts shift the cost of development unto the end-users or residents of the district. Renee: What about affordability? Are people in metro districts paying extra taxes Josh: Metro district residents are paying to live there, what they pay is based on their lot size and for the most part can be a write off on their taxes. In terms of debt we limit debt to a max of 40 mills, this is broken down to 10 mills for common areas and 30 mills for overall debt. Renee: What about common areas such as sidewalks? Doesn’t the city take care of sidewalks or does the metro district? Josh: It depends. Typically, the City will take care of sidewalks however this may not always be the case much of this relates to the whole hierarchy of maintenance in the City. George: Wouldn’t maintenance be in the service plan for each metro district? Josh: Yes. In some way’s metro districts are a way to operate amenities that HOAs typically cover, the difference is that metro districts are subject to sunshine laws and TABOR, plus most private property owners can write their taxes off. There are HOAs in Denver that are converting to metro for these reasons. George: If it’s all based on property taxes, then wouldn’t this charge some residents more ECONOMIC ADVISORY COMMISSION 02/20/2019 – AGENDA Page 10 than others to live in the metro district? Josh: It depends on how you look at it, someone with a bigger lot will be paying more but unless they surpass the County threshold, they can equally write it off. A lot of the issue with Metro districts for us is what we are asking them to provide. Metro districts can operate and provide services like an HOA. In our service plan we are asking the metro district to pay for broader community benefits which forces the residents of the metro district to pay extra for City wide benefits. The issue is we need to have metro district create some sort of benefit that meets the Fort Collins goals and dually provides a benefit for Fort Collins residents and those in the metro district. Affordable Housing is another portion of this that is harder to manage. It can be fair to assume that if we ask for 10% the metro district to be affordable, any one resident can contribute their fair share toward the overall community objective. This formula gets messy where we are asking the metro district resident paying the extra tax to additionally cover community goals. This is also why establishing minimums of deliverables is harder because you are asking a smaller pool of residents to pay for broader goals that touch everyone. In our service plan we need to establish a consistent set of criteria and broader community benefits. Council looks at the polarities between these two in order to try and achieve both while being able to articulate what criteria is the most important. Our direction from Council was to use the tool sparingly, have a role on when to use the application, and that all projects should deliver exceptional outcomes – it’s unclear what exceptional actual is. Staff found with North Field metro district that Council saw exceptional as much higher than what staff had interpreted this as. We need to have enough predictability so that any developer that is going to this process knows what council wants. Next steps, we will be working internally to determine if we are getting close or not. We will then take this out a working group with Aric and Braulio to refine the score card, refine our questions and then come back to EAC in April, AH Board and other boards that have had interest. Right now, we have a work session on this with City Council on 5/12. Renee: I thought that this decision was in April? Did this move? Josh: No, it’s been May 12. My hope is that after the work session we will have a revised draft in June. If not, we will go back do more work then it cold be Sept/Oct before the policy is changed. The push is that if a metro district is going to be formed this year, it needs to happen in November, and they would need to know by September. If we are going to make policy changes then we need to make those changes this year before a new metro district proposed. We will be reaching out to Braulio and Aric on metro districts working group. Braulio: What would be the difference if the City wants to accomplish these items on their ECONOMIC ADVISORY COMMISSION 02/20/2019 – AGENDA Page 11 own and how are metro districts different then the City investing and issuing bonds on their own? Josh: A city can do that but without a vote of the people a city cannot issue a bond or raise taxes. Metro districts have allowed for smaller amounts of debt and taxes to be issued that are not City wide, unless they issue more debt, they don’t necessarily require a vote of the people. For a city to create met would have to put a tax raise on the ballot because it would affect the whole City. I think what we’ve done in Fort Collins is that the market wants this tool so that they can create housing and achieve community objectives. It’s a matter of the market asking for this tool, and is this a tool that could it be a fair exchange for community benefits. Braulio: When I look at this it can easily not be a transparent mechanism because the bonds and the developer costs are shifted to the end user. So, the development will be seen as more competitive because the house is cheaper but then the end user is paying more because of the amount of debt. Renee: I know that the lender also has to calculate the metro district into your home loan so there is some light shed on what you are paying. Josh: With any development, the infrastructure has to be paid for. Without the metro district then the house is more expensive, the developer has to pay for the infrastructure one way or another and more often than not they use they metro district. If they don’t have this tool available, then the cost will show up in either house price or HOA or somewhere. It’s important for the end user to understand that this cost is being recovered by the developer regardless of how its financed to them. George: Do any of these policies or rules work on that aspect? The developer is trying to maximize profit, are they gaming the system by passing this on and selling the home at the same price regardless? If a 500k home in a metro district and can be sold for lower, is it still being sold at 500k? Is there a way to regulate this? Josh: The policy doesn’t set the prices but what we are getting is the developers are able to get to their price points to us sooner. Connor: It’s tricky. You’re fighting house prices which are set by the market and builder. Josh: The overall cost of the home is the bundle. I don’t think the market would allow for 50% property taxes and charge 500k home because you as the homeowner aren’t going to be able to pay for that or get approved. George: I think the question here is the public revenue subsidizing private transactions. I look at these things and think, what would the developer do without this? The rules and policies take a lot of great things into account but where does it go too far to where the developer is over taking? It’s about how do we maximize the benefit while minimizing the ECONOMIC ADVISORY COMMISSION 02/20/2019 – AGENDA Page 12 negative consequences? Josh: That’s the crux of it. Some developers have been taking a huge amounts of debt that are to be paid off over twenty year increments, in some of these cases the risk is really not that bad where in others. There will always be people looking for loopholes and our purpose here is to try and close some of those loopholes and keep it mutually beneficial. George: What are you looking for from us? Josh: In April we will looking at asking Council if we have addressed all the right issues, have we improved it, will this be good for the community? It’s about providing the critical review. Today was about bringing you up to speed and answering any questions that you might have. Connor: The point of this discussion was to get this in now before the April feedback. George: I would also like to get these worked into the work session. It could become a really deep dive discussion with Council. Josh: Council work sessions are very formal and it’s hard to really be able to dive deep. If you want this can keep coming back to the EAC to keep you updated. Renee: I agree this is a huge topic and it affects every part of our City. It’s so big that an hour is really not enough time to dive into it and I would like to see us spend more time on it before we made a recommendation. Josh: If you want to send questions on this, I can provide answers and somehow reinforce what you think and want for question in our follow up in March? Jennifer or Erin will send a follow up out. Connor: Adjourned meeting at 6:03pm 8. BOARD MEMBER REPORTS 9. OTHER BUSINESS George: I sent a DDA item out about incentivizing people to shop local. The program started in November, this was the first year. The idea was every shop had a paper passport that for every ten dollars they would put a sticker, the full ticket was then placed in a raffle. It was modeled off of a program in Outawa CA. The most interesting thing to me was the survey afterwards, and I really encourage people to do that survey, this is where you could see the data of if someone ECONOMIC ADVISORY COMMISSION 02/20/2019 – AGENDA Page 13 spent more or less or if they shopped in a store verses online. Close to 40% of people felt that they spent more locally because of the program. The DDA felt that it was hugely successful, and they anticipate greater outcomes next year with the community and with business. Business participating each paid $200 to pay for all the promotions. Most people found out from going into businesses. Renee: The interesting part is that no one told me about this. But I thought it was great Braulio: Was there a social media promotion? George: Yes. It was online, on websites, DDA’s webpage and in the paper Braulio: I think there are a lot great free places where we can advertise this George: They foresee this has having the same effect as great plates. It’s a very micro economic platform and it will interesting to see what is happening in both. 10. ADJOURNMENT Connor adjourned the meeting at 6:03pm UPCOMING TOPICS March:  Destination Master Plan Update  Open Slot April:  Open Slot  Open Slot Unscheduled:  Affordable Housing Priorities and Affordable Housing Strategic Plan (March Worksession)  Council Liaison Discussion – Councilmember Gorgol