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HomeMy WebLinkAboutEconomic Advisory Commission - Minutes - 10/21/2020ECONOMIC ADVISORY COMMISSION TYPE OF MEETING – REGULAR October 21, 2020 4:00 - 6:00 pm Via Zoom 10/21/20 – MINUTES Page 1 PLEASE NOTE: Due to technical difficulties the initial part of the meeting was not recorded. As a result, the minutes for that portion of the meeting are high level based on notes taken during the meeting. 1.CALL TO ORDER 4:03 pm 2.ROLL CALL •List of Board Members Present − Connor Barry - Chair − Renee Walkup – Vice Chair − Aric Light − Julie Stackhouse − George Grossman − Braulio Rojas − John Parks •List of Board Members Absent – Excused or Unexcused; if no contact with Chair has been made − Ted Settle (Excused) − Cole Langford (Excused; Resigned) •List of Staff Members Present − Josh Birks, Director, Economic Sustainability − Lindsay Ex - Interim Housing Manager − Clay Frickey - Redevelopment Manager, Economic Sustainability •List of Guests - none 3.AGENDA REVIEW − No Changes Were made to the published agenda 4.PUBLIC PARTICIPATION − None ECONOMIC ADVISORY COMMISSION TYPE OF MEETING – REGULAR 10/21/20 – MINUTES Page 2 5. APPROVAL OF MINUTES − The Board reviewed the minutes and determined no changes were necessary. The minutes were approved as submitted and will be posted on the City’s website. 6. UNFINISHED BUSINESS Budget Statement - Board consideration - Josh Birks − The board reviewed a statement on the budget written by Commissioner Aric Light. After a brief discussion the board adopted the statement unanimously and instructed staff share the statement with the Finance Team. Super Board Meeting: Re-imagining Boards and Commissions - Share out − Commission members that attended the Super Board meeting shared their thoughts and comments. Josh Birks shared a brief statement emailed to him by Commissioner Ted Settle expressing some on-going concerns with the process. 7. NEW BUSINESS (RECORDING BEGAN) • Housing Strategic Plan Update - Lindsay Ex, Interim Housing Manager − Lindsay presented to the EAC in September with an overview of how her group is working to update the City's Housing Strategic Plan. She has returned to this month's EAC meeting to discuss the EAC's questions and suggestions, discuss organizing strategies from an economic perspective, and next steps. − The vision of the plan is: "Everyone has healthy, stable housing they can afford" − Clay pointed out the biggest challenges and questions are: escalating price of homes; insufficient incentives to meet housing goals; job growth outpacing housing; rising cost of development; lasting effects of COVID; health and stability; and how housing policies will also affect renters. − After presenting to many boards, commissions, and public forums, staff received ideas how to fine tune the plan's strategies. They combined them into a brainstorming document, organized into three targets: people impacted; levers; and income level. − Lindsay asked the EAC board to give feedback on the following questions: 1) How the strategies are organized and what stakeholders are missing? 2) What needs to change to address challenges, and who can help? 3) What trade-offs or competing interests might exist when considering the change needed? 4) when evaluating strategies, what criteria are important to consider from an ECONOMIC ADVISORY COMMISSION TYPE OF MEETING – REGULAR 10/21/20 – MINUTES Page 3 economic perspective? − Discussion: − Renee - Q - Asked if the City will adjust the matrix for the population, and why are we rushing to make projections until after COVID so we don't overbuild? A - There are many suppositions, but it is unknown what the long term impacts of COVID will be. There has been an Affordable Housing Plan since 1999 in Fort Collins with affordability as a continuing trend. Currently, incomes are not keeping pace with housing costs, and this is not anticipated to change in the near future. A plan of checks and balances would be helpful here. − George - Q - As a small business owner, he is discovering that where his employees are living is competing with student housing. He wonders if the City will address CSU's growth plans that seem to be building student housing on properties that could be used as affordable housing, especially Hughes Stadium. A - Some of this is a zoning issue, and that will be discussed by an ad hoc committee. − Julie - Suggested the city define "basic affordability of housing" and go from there to determine housing and zoning to support it. She sees low-end housing as a problem because there is not enough profit in it for developers. "Desirability of housing" would have a different solution. − Braulio - Felt this is a very complex issue and the City should focus on only what they can control, like zoning and permitting. He also suggested the city address the different markets of renting vs. owning with different approaches and solutions. Ownership creates a better sense of community. However, affordable housing suffers in recession like now because of COVID. It is easier to address when the economy is expanding. − Aric - Q - He felt the issues of zoning reform and U+2 should be addressed first but wanted to know what staff thinks is the easiest item to address? A - Lindsay agreed these are issues the City can control and would be easiest, and they will be evaluating the feasibility of it. The City has hired a consultant to help develop an evaluation framework and an ad hoc committee will do a deeper dive and establish priorities. − Clay - pointed out the housing market is not delivering the types of housing that is currently needed because it is hard to finance. Developing a financing strategy for these types of projects is something the City is investigating. Julie agreed it would be desirable, but would be difficult to do. − Conner - Regarding question #1 above, he felt that possible missing strategy levers could be to define the time frame it would take to get this done, and ECONOMIC ADVISORY COMMISSION TYPE OF MEETING – REGULAR 10/21/20 – MINUTES Page 4 the difficulty of actually moving any of the levers because of lack of political backing. − Connor - regarding #2 above, he suggests this plan needs bold, consistent leadership. It has been an unsolved issue for too long. Zoning is also key. − Next Steps: − More engagement in October and November − Two Super Issues meetings in November − December 8, presentation to Council Work Session. − More ways for the EAC members to get involved: Sign up for a workshop, go through an "At Your Own Pace" module, request a work group conversation. − Connor asked for a future update, perhaps in December. • Capping 3rd Party Delivery Fees, Temporarily - Josh Birks − Background: The Colorado Restaurant Association and some local restaurants approached the City to put a cap on food delivery fees charged by 3rd parties like Grub Hub, Uber Eats, Door Dash, etc. They are concerned that restaurant revenue will drop during the colder months and 3rd party delivery fees will eat into their already-reduced revenues. − Typical 3rd party, individually-negotiated, delivery fees can be as high as 35% of purchase, and a fee over 20% reportedly erases all profit to the restaurant, especially the small, single location restaurants. In addition, some 3rd party delivery service marketing efforts have been misleading. Several other cities, including Denver, are also considering capping or have already capped delivery fees without affecting volume of sales. − Because of COVID, restaurant revenues from indoor dining / carry-out have fallen from 80% / 20% to 1/3 from indoor dining, 1/3 from outdoor dining, and 1/3 from carryout. During this same time, 3rd party deliveries have doubled and are cutting into a larger part of local restaurants' revenue. − Q - Julie stated it was her understanding the delivery companies operate at a net loss and wondered that, if their fees were capped, if they would leave the market. A. - Josh was unaware they were operating at a net loss because restaurants are reporting the opposite. He will research it. − The recommended temporary ordinance to Fort Collins' City Council is similar to one Denver has instituted: cap delivery fee at 15%; 3rd party cannot recover cost from customers or drivers; prohibits delivery without restaurant agreement; and ECONOMIC ADVISORY COMMISSION TYPE OF MEETING – REGULAR 10/21/20 – MINUTES Page 5 ordinance would terminate potentially at end of February, 2021. − Josh stated there is a possibility this issue might come before Council on November 4 and asked, if the EAC has any recommendations for Council regarding imposing such a cap, that they should make them at this meeting. He also asked the group if they had any additional information to Council that might be useful in considering the proposed change. − Discussion: − Q - George - Have restaurants raised prices to cover this fee? A - Some have raised food prices slightly, but not enough to bridge the gap. They do not want to discourage business by raising prices higher. − Q - George - If a restaurant is getting good sales through a 3rd party delivery service, have you talked to them about doing their own delivery? A - Yes, but they are reluctant to incur additional costs of self delivery. − Josh - In order to get a feel of how serious a problem exists, the City is sending a survey to local restaurants that have an outdoor dining permit asking how many use 3rd party delivery services, what % of sales come from that, and what other costs are incurred by the delivery services. − Q - Renee - Is there one delivery service that is replicating restaurant menus on their website? A - More than one has been reported. − Q - Renee - If the 15% cap is implemented, how will the city police that? If they violate the ordinance, it could harm the restaurant's reputation and have negative long-term ramifications. A - A method needs to be developed. - Q - Julie - wouldn't the restaurants report the fees they are being charged that are over 15%? A - The restaurants would be empowered not to pay more than 15% - Braulio - Was agreeable to set a cap. He pointed out that the delivery companies' fees do not stay in Fort Collins. - Q - Julie - Does NoCo Nosh charge the same fees as the larger delivery companies? A- Josh has not yet contacted them about fees. However, their business structure is different. It is a co-op between a restaurant and NoCo Nosh. Josh noted some have asked why the City doesn't subsidize NoCo Nosh, but it might be problematic. - Braulio - suggested that local citizens could get a contract to be a delivery person instead of the large delivery companies. Josh - pointed out that customer take out helps the restaurant keep similar revenue as dine-in business. ECONOMIC ADVISORY COMMISSION TYPE OF MEETING – REGULAR 10/21/20 – MINUTES Page 6 - Josh explained that staff is concerned we are getting into the cold months and perhaps a plan that isn't perfect would be better than no plan. - Julie - She thought this needed to be carefully thought through, and wanted to be sure there are no unintended consequences to a fee cap. - She didn't think there would be much risk trying this plan until February, but did suggest any false advertising needs to be corrected. - If the 3rd party delivery businesses are indeed operating at a loss, she was concerned they might go out of business with this cap and suggested they make sure the restaurants get their fair share, even if they need to charge the customer more. - She suggested there be an alternative for restaurants if the delivery businesses do leave the market. - Josh relayed concern from the restaurants that there is little transparency from the delivery businesses how their fee structure works and that it sometimes doesn't really help the restaurants financially to use their service. - Connor - doesn't see any potential negative impact from a fee cap. He also understands the delivery companies are just barely making a profit. He sees enforcement of the fee cap as the main challenge for the City. - Q - Julie - Have any cities that have instituted a fee cap had, or are currently in any litigation about enforcement of the cap? A - Josh will investigate. - Q - George - has the City created any ordinances in the past like this one to protect local businesses? George is ok with NoCo Nosh because it is a local business, but he is concerned about the city choosing to protect a particular industry (the restaurant industry) from forces outside the city (non- local delivery services). A - Josh did not know of any past protective ordinance such as this. - Board action: Renee moved that the EAC recommend to Council to adopt a 15% fee cap from third party delivery services. Aric seconded the motion. − Discussion: − Conner is personally in favor of a short term fee, − Julie did not want to see local businesses hurt, but was not sure a long term cap is the right way to do it. Short term would be preferable. Because of that, Julie offered the following friendly amendment: The fee cap would be in effect until February, 2021. She also wanted to be sure the recommendation would only be made if there is no ECONOMIC ADVISORY COMMISSION TYPE OF MEETING – REGULAR 10/21/20 – MINUTES Page 7 litigation risk. − Braulio - supports the motion to set a cap, but suggested it not specify a percentage. − Q - Renee is concerned, if the EAC makes a recommendation to Council, most restaurants using these services would probably want to weigh in with Council also. With Council chambers being closed because of COVID, how would they do that? A - Josh pointed out that a questionnaire went out to restaurants who have had outdoor dining and, among other things, asks for input relative to delivery from third party delivery services. Also, there are several ways for restaurants to comment to Council: In-person in chambers at a council meeting; via zoom during a council meeting; or remotely by phone and email. − Q - John - Instead of limiting a percentage of the sale, why not have a flat fee? A - Josh stated he did not know if that is possible within their business model. − Connor restated the motion: The EAC recommends to Council to adopt a fee cap from third party restaurant delivery services, with an end date in February, 2021. Motion passed unanimously 7-0-0 − Follow up: − Connor will put the motion in written form and send to Josh to put in Council packets for the November 4, 2020, meeting. − Josh will research answers to questions raised in this discussion. • Business COVID Recovery - Josh Birks − Update on the Small Business Assistance Program − The second round has now been closed with 182 completed applications. Selected businesses will receive $1.5 million. − They are considering a third round of $1.8 million in assistance, focusing on restaurants, but it would be a faster turn-around. − Other updates (Outdoor Dining, Etc.) - Josh Birks − Outdoor patio dining has been extended through October, 2021. − A recently established Larimer and Weld County municipalities and public/private partners team collaborated to put out an RFP to build a Regional Economic Recovery plan. 8. COMMISSION MEMBER AND STAFF REPORTS ECONOMIC ADVISORY COMMISSION TYPE OF MEETING – REGULAR 10/21/20 – MINUTES Page 8 9. OTHER BUSINESS Confirm Availability for November and December - Holiday impacts − Connor asked the group to alert him if they cannot make any meetings in November and December. 10. ADJOURN 6:00 PM