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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 08/28/2018 - BROADBAND AND ART IN PUBLIC PLACESDATE: STAFF: August 28, 2018 Ginny Sawyer, Policy and Project Manager WORK SESSION ITEM City Council SUBJECT FOR DISCUSSION Broadband and Art in Public Places. EXECUTIVE SUMMARY The purpose of this work session is to follow-up on Ordinance No. 056, 2018 which required outreach to consider whether the Art in Public Places (APP) Ordinance needs to be amended to address future Broadband System projects and to present any recommended amendments to Council before the end of 2018. This review should include consideration of a contribution amount capped at .5% of the Broadband System’s anticipated annual operating revenues once the system is in full operation as well as considerations for all underground capital projects. GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED 1. Does Council have additional questions or suggestions? 2. Which options does Council support? BACKGROUND / DISCUSSION The City of Fort Collins established an Art in Public Places (APP) program by ordinance in 1995. The program requires City capital projects greater than $250,000 to contribute 1% of capital cost to the APP program. Construction is defined as: The construction, rehabilitation, renovation, remodeling or improvement of any building, structure, street, sidewalk, park, utility or other public improvement by or for the City including landscaping, parking, design, engineering, equipment or furnishing for such improvement and all other costs, but excluding the cost of real property acquisition, vehicles and equipment not affixed to public property. The goals of the program are to: x Enrich the public environment for both residents and visitors through the visual arts. x Increase public access to works of art and to promote understanding and awareness of the visual arts in the public environment. x Promote a variety of artistic expression in the community. x Contribute to the community’s civic pride in its cultural diversity. x Support visual art. In 2012, amendments were made to the City Code to limit the 1% of project cost contributions from Utility funds to 0.5% of annual operating revenue to provide a level of cost protection to rate payers. Other than these changes, the APP program has not seen significant change since its inception. Staff and Council have been assessing how the new broadband effort fits within the APP program. The current provisions in the City Code could require a range of APP contributions from: x Zero, if broadband is treated as a separate utility (due to having no operating revenue). August 28, 2018 Page 2 x Over $600k if broadband is considered under Light and Power in calculating the required contribution and cap. x An amount agreeable to the public and Council, based on projected broadband revenue and aligned with the APP ordinance. While Light and Power is backing the bonds for broadband, all financing and operations are remaining separate and being treated as a separate enterprise. Options: 2018 2019 2020 2021 2022 Eligible BB Capital Appropriated 80,000,000 BB Revenue * 387,630 5,403,877 17,039,946 33,374,837 APP if included with L&P (A) 609,526 APP if BB is 5th Utility (B) 0 Hybrid (C) 166,874 * Estimated Revenue Staff has reached out to the Art In Public Places Board, Energy Board, Water Board, Transportation Board, and the Economic Advisory Commission to discuss how broadband and underground projects should relate to APP and to consider varying options. All boards expressed a commitment to the value of public art and a desire to ensure the success of a broadband service. A. Full Contribution (as considered under Light and Power): x There was no support for an early year full payment. x While there was not a common understanding of “iconic art” there was discussion that a broadband contribution could seed more “iconic” art. B. No Contribution: x There was little support for exempting broadband from APP entirely, although there was recognition that APP has never applied to a major start-up competitive operation. x There was some conversation that a differentiating factor is the bonding and maybe differing criteria should be developed for any project with a debt service payment. C. Hybrid Option: x Delay contributions until there is broadband operating revenue. x If broadband is considered on its own, (not under L&P) the estimated .5% cap is estimated to be between $150K-$170K potentially available in 2022. x Boards were not asked to take action; however, there was general support for and recognition that waiting until the broadband program is generating revenue helps serve both broadband and APP. Underground Projects: x In general, underground APP contributions were supported. Staff is recommending the hybrid option (C). This option recognizes and supports both the value of the APP program and the unique and untested entrance into municipal service in a competitive market. August 28, 2018 Page 3 ATTACHMENTS 1. Ordinance No. 056, 2018 (PDF) 2. Transportation Board Minutes, July 18, 2018 (PDF) 3. Water Board Meeting Minutes, July 19, 2018 (PDF) 4. Energy Board Minutes, June 14, 2018 (PDF) 5. Economic Advisory Commission Minutes, July 18, 2018 (PDF) 6. PowerPoint (PDF) ATTACHMENT 1 TRANSPORTATION BOARD TYPE OF MEETING – REGULAR July 18, 2018, 6:00 p.m. 281 North College Ave, Fort Collins, CO 07/18/2018 – MINUTES Page 1 FOR REFERENCE: Chair: Eric Shenk Vice Chair: Council Liaison: Annabelle Berklund Ross Cunniff Staff Liaison: Paul Sizemore 970.224.6140 1. CALL TO ORDER Chair Shenk called the meeting to order at 6:00 PM. 2. ROLL CALL BOARD MEMBERS PRESENT: CITY STAFF PRESENT: Eric Shenk, Chair Annabelle Berklund, Vice Chair Cari Brown Nathalie Rachline York Indy Hart Valerie Arnold BOARD MEMBERS ABSENT: Karl Ayers Andrew Bondi Ginny Sawyer Aaron Iverson Amanda Mansfield PUBLIC PRESENT: None 3. AGENDA REVIEW Sizemore stated there were no changes to the published agenda. 4. CITIZEN PARTICIPATION None. 5. APPROVAL OF MINUTES – JUNE 2018 Sizemore noted a change to Arnold’s statement regarding E-bikes. ATTACHMENT 2 TRANSPORTATION BOARD TYPE OF MEETING – REGULAR 07/18/2018 – MINUTES Page 2 York made a motion, seconded by Brown to adopt the June 2018 minutes as amended. The motion was approved unanimously. 6. UNFINISHED BUSINESS None. 7. NEW BUSINESS a. Art in Public Places – Ginny Sawyer Ginny Sawyer, City Manager’s Office, stated the $140-150 million broadband bond appropriation included a funding portion for Art in Public Places (APP). She noted the arts typically receives 1% of a capital project cost; however, staff was directed to review whether the broadband project, and other underground projects, should allot the full 1%, be exempt, or be subject to some different option. Sawyer stated she is presenting before the Energy Board, Water Board, Transportation Board, and the Economic Advisory Commission. She outlined the typical Art in Public Places process for capital projects noting the artist is selected as part of the team prior to the project beginning. She also outlined the usual funding process and discussed existing Art in Public Places projects. Regarding the broadband project, Sawyer noted there will be no revenue until subscribers start joining. Arnold asked if the APP Ordinance includes language that would allow the City to exempt the broadband project. Sawyer replied Council can take action to exempt the project. Rachline asked when a final decision will be made. Sawyer replied she will return to Council with feedback at an August 28th work session. Brown asked about maintenance funding for APP projects. York replied a percentage of every project is retained for ongoing maintenance. York questioned why this project is being examined as a total bonding rather than as individual capital projects as they are completed. Sawyer stated part of the reason for the lump sum is that the 1% is taken at the time a project is appropriated funding, and because this project is bonded, the one large amount is done at once. Brown stated Horsetooth Rock is Fort Collins’ iconic piece and commented on APP projects. TRANSPORTATION BOARD TYPE OF MEETING – REGULAR 07/18/2018 – MINUTES Page 3 Hart supported York’s idea of allocating APP funds as individual capital pieces are completed. He stated it makes sense to either reduce the APP contribution or keep it as is for underground projects. Sawyer asked about the possibility of not having to tie the money to an exact utility. York replied he did not believe that was an option. He noted the APP budget for the average year is less than 1/10% of the entire City budget. Arnold asked if Sawyer is conducting outreach to the business community. Sawyer replied in the negative. Arnold suggested reaching out to the Chamber of Commerce. Sawyer replied she did approach them and they were not interested in being further involved. Arnold suggested reaching out to other business associations. Sawyer stated she would return with follow-up after the work session. b. Electric Vehicle Readiness Roadmap – Aaron Iverson/Amanda Mansfield/Carrie Frickman Amanda Mansfield, FC Moves Transportation Planner, stated the vision for the Electric Vehicle Readiness Roadmap is for Fort Collins to be a leader in encouraging the use of electric vehicles (EVs). She stated the Roadmap is currently in its final phase: plan development, which has involved developing and refining the vision, goals, strategies, and potential recommendations, as well as clarifying which departments will be in charge of implementing which EV readiness strategies. Mansfield stated the final EV steering committee meeting will be September 12th . The EV Readiness Roadmap and an outreach tool kit will also be finalized in September. She discussed the community-wide and government-focused goals. York requested a definition of electric vehicles. Mansfield replied it includes both personal use and City fleet vehicles. Aaron Iverson stated electric scooters and bicycles came up during the visioning discussion and the conclusion was that the EV is considered a street automobile for this purpose. Mansfield discussed the suggestions provided from the last steering committee meeting, one of which is requiring builders to provide EV charging stations as part of developments. Arnold asked how much that would add to the cost of a building. Mansfield replied she would get back to the Board on that question. Mansfield outlined specific questions posed to the group: which strategies are most important to accomplishing EV related goals most quickly and effectively, which City department should take the lead in implementing the EV Readiness Roadmap and the outreach tool kit, should the City install charging stations, and should the City provide Excerpt from Unapproved Water Board Minutes – July 19, 2018 Art in Public Places/Broadband and Underground Projects (Attachments available upon request) Senior Project Manager Ginny Sawyer summarized the Art in Public Places (APP) program, established by City ordinance in 1995. The question City Council is considering: “Is 1% the right amount for Broadband to pay?” Options could include delayed payment (City of Longmont has a Broadband service, delayed payment, and paid the full amount), staggered payment (pay 1% on annual amounts spent), or a reduced payment, among others. Another consideration is whether Broadband’s contribution could contribute to iconic art in our community -- such as Cloudgate (aka “The Bean”) in Chicago. A City Council Work Session on this topic is scheduled for August 28. Ms. Sawyer is working with the Art in Public Places and Cultural Resources boards on this issue, and will share the Water Board’s comments with City Council. She has given presentations to Energy Board, Transportation Advisory Board, and Economic Advisory Commission. She stated the current 0.5% cap on Utility contributions is in the interest of protecting ratepayers. Discussion Highlights Board members commented on and inquired about various related topics including the amount of money 1% would translate into; delayed or staggered payment; how the art is maintained (money is set aside for maintenance); whether the public comment received via email for tonight’s meeting is in reply to a City Council action (Ms. Sawyer stated City Council’s feedback was that zero dollars was probably not correct and the full 1% amount may not be the right amount); value beyond just art’s sake; Ms. Sawyer stated artists are usually part of project teams from the beginning; a board member suggested educational art such as for drivers to look at when waiting for trains to pass; the question of underground projects and how these projects apply to APP; percentage of above-ground and underground projects (most utilities infrastructure is underground); whether the 1% has been waived for any projects (no); location of project (doesn’t need to be within the city limits for the 1% to apply). Two board members stated they were in favor of delayed payment until Broadband generates revenue. One board member said the Art in Public Places (APP) program makes sense but connections aren’t clear between APP and some projects, such as the Michigan Ditch tunnel construction. That board member is in favor of an iconic art for Fort Collins; it could increase tourism. Another board member spoke in favor of art but also transparency with taxpayers and suggested allowing citizens to vote on whether a specific amount of money is spent for APP as part of a project. A board member said that if it were put to voters it might not pass and it would be unfortunate to not have new art in the community. A board member is in favor of reducing or waiving the 1% for projects in which debt is issued. Mr. Smith stated the City doesn’t issue debt most years. One board member liked the idea of tying APP to revenue streams. ATTACHMENT 3 difference between setting a goal and achieving it, and CSU’s commitment to 100RE. Ms. Ex shared that a larger business in the community made an interesting comment of the City setting the goal could provide cover and support for businesses to set a similar goal. Mr. McCollough added that the idea of natural gas as a transition for facilitating reliability as a possible solution and life-cycle assessment of renewable technologies was discussed. The committee also spent a lot of time discussing cost- effectiveness, defining equity, the differences in customer types, and considering partnerships beyond Platte River. Mr. Michell said in his opinion staff needs to do a lot more work on the 100RE goal proposal. Mr. Becker said one thing the Board can do is provide guard rails to staff and help define the goal. Mr. Michell shared that in his opinion the CAP goals are already very aggressive and 100RE is a distraction from them. Mr. Braslau disagreed, he thinks it helps reach the CAP goals. Mr. Behm said he thinks in the next three to five years 100RE goals will be standard in the conversation. Mr. Behm noted there are currently two major candidates for Colorado governor that are calling for 100RE by 2040. Mr. Behm said it is not a distraction, but will become central to achieving CAP. Mr. Baumgarn said he personally thinks it is important to set a goal in order to move the conversation and the outcomes forward. Mr. Braslau commented if the goal is empty, more information is needed from staff on achievability. Mr. Baumgarn said he was confused if the Board’s role is to say yes, no, or maybe to the city setting/adopting a goal of 100RE. Mr. Michell said maybe the Board needs to be more explicit. Mr. Baumgarn said perhaps Council already feels an RE goal is implicit in the CAP Framework. Mr. McCollough reminded the Board that the issues and questions brought up did not need to be solved at this meeting. Art in Public Places Contributions Ginny Sawyer, Senior Project Manager (attachments available upon request) Ginny Sawyer shared that recently Council appropriated money for the Broadband project and the bonds within it, and with the ordinance they appropriated money for Art in Public Places (APP). Council wants staff to look at the appropriation and propose options for Council to consider for a Broadband contribution. Ms. Sawyer said Council also wants proposals for considerations to be applied to all underground project contributions to APP. The City has had an APP program since 1995; it requires 1 percent of all capital projects over $250,000 be dedicated to incorporating art into their project. In 2012 an amendment was made for the Utility contribution of 1 percent capital project up to 0.5 percent operating revenue. Ms. Sawyer said there was also a change for definition of construction to exclude equipment not affixed to public property. The goals of the APP program are to enrich the public environment for both residents and visitors through the visual arts, increase public access to works of art and to promote understanding and awareness of the visual arts in the public environment, promote a variety of artistic expression in the community, to contribute to the community’s civic pride and cultural diversity, and to support visual art. Ms. Sawyer said that the Utilities contributions to-date tend to be incorporated in the capital projects whether that be artistic aspects within the building or by tying into which utility is contributing (i.e. flood markers, a river flow outdoor learning space, and utility boxes.)Ms. Sawyer commented that the utility boxes are popular in Fort Collins, and save money in graffiti removal of potentially $30,000 a year. Ms. Sawyer presented a chart showing Capital projects recommended appropriations and what would be available within that recommendation for the APP program. Ms. Sawyer said that Council thinks that zero may not be the right number for the Broadband contribution, but a six hundred thousand sum number may not be right either. Ms. Sawyer asked for the Board’s thoughts on contributions for both Broadband and other underground projects. Mr. Michell noted there are big numbers coming up in terms of the $140 million for Broadband infrastructure. Mr. Michell said he also doesn’t think the number should be zero, but perhaps a one-time Energy Board Meeting Minutes June 14, 2018 ATTACHMENT 4 Art in Public Places Contributions Energy Board Minutes June 14, 2018 Energy Board Minutes June 14, 2018 lump sum charge from the initial money for the Broadband project. Mr. Michell said he doesn’t believe 1 percent of $140 million makes sense. Ms. Sawyer reminded that since Broadband is issued under L&P bonds it would be capped at .5 percent of L&P operating revenue. Ms. Sawyer said it should also be considered that currently Broadband has no operating revenue. Ms. Sawyer presented some questions to consider: x Is it to be delayed until Broadband has an operating revenue? x Is it to be a staggered payment based on year by year capital expenditure? x Should there be a shift in the Utility to try pulling together more money for bigger pieces for the benefit of the entire community? (Ms. Sawyer said there is a desire in the community for larger iconic art.) Mr. Giovando said it seems it should be proportional for what is being implemented in the capital cost for a year, because a staggered payment plan would make sense. Mr. Giovando added how that would be capped can be discussed. Ms. Sawyer said that APP committee will go to Council for a Work Session at the end of August, 2018 with some options. Ms. Sawyer’s guess is that Council will speak to which options they prefer and ask for more public outreach to see what people think about those options. Mr. Braslau said there are two aims in the ordinance, one aim is to support visual arts in general, something most people agree with because the City adopted APP. Mr. Braslau said the other aim to be considered is that as far as Broadband is concerned, this new service can benefit competitively, if is the APP contribution is done intelligently. Mr. Behm wondered if rationale for other underground projects was being sought by Council only because Broadband is going to be underground. Ms. Sawyer answered that the underground project question comes up about every six years, and with Broadband happening it was brought up once again. Mr. Becker said it seems that the rational is if infrastructure is not seen it should not have art attached to it. Mr. Becker said when APP came about it was applied to infrastructure that already existed, and that Broadband is different since it is starting from scratch, so the same rules cannot be applied or it would be way too much money. Mr. Becker said it must be dialed back either through an exemption or by staggering cost it over time. Mr. Michell agreed with Mr. Becker, and said that is why he suggested a lump sum and as there are ongoing projects after the buildout then the regular rules can be applied. Mr. Braslau shared that he attended the APP Board meeting and that some of the members felt (facetiously) that art was so important that it could be receiving 99 percent of funding. Mr. Braslau said that art is a community value and he understands where the APP Board is coming from, although he questions what may be the right way to apply it in this particular case given that Broadband will begin without any operating revenue. Ms. Sawyer said the APP Board is open to various options whether it be a delayed payment, staggered payment, or lesser payment. Ms. Sawyer said the goal of APP and the goal for viability of the Utility and Broadband all must be balanced. Vice Chairperson Shores asked if staggered payments would hinder larger art projects that APP may be interested in. Ms. Sawyer answered that APP funds can roll over from year-to-year, so there is opportunity to build up money compared to the Utility funds that are more constrained with rate payer and the enterprise. Mr. Baumgarn said the $600,000 (.5 percent of project) compared to a $140 million budget doesn’t sound too extreme. Mr. Becker said one thing to think about is that Broadband is competing with Comcast, so it cannot be made so onerous that the business model starts to fail. Mr. Giovando said he thinks a delayed payment is not the right solution, because it could constrain while doing the initial build-out any potential synergy that might happen if the funding is not available either initially up-front with a lump sum or annually. Mr. Giovando said the Utility would then have to go back to try retrofitting art after the build-out, thus creating more of a challenge. Energy Board Minutes June 14, 2018 Energy Board Minutes June 14, 2018 Mr. Behm said he disagrees with the thought that if it is an underground project it shouldn’t be acknowledged within the APP program. Mr. Behm said there should not be exemptions for underground projects. Ms. Shores said she did not understand why there is a percentage of funds to APP, because it seems like there is a lot of variation of funding from year to year. Ms. Shores wondered if it would be better if there were consistent amount of funds every year. Ms. Sawyer responded that by building art into capital projects all over the City and by saying APP wants incorporation as close as possible with the project geographically it in a sense provides the funding mechanism instead of a line item that is at risk of going away. Mr. Braslau asked how much discussion is happening about the fact that there is zero operating revenue for Broadband. Ms. Sawyer said as of now Broadband is under L&P so the operating revenues will be combined and then whatever capital from either side would be at 1 percent until capped at .5 percent of the combined operating revenue. Mr. McCollough said there is a commitment to keep the financial aspect of both enterprises separate. Mr. Braslau said what happened is that APP was not included in the Broadband business plan in the beginning, and now it is realized that it corresponds (somewhat artificially) to a big chunk of money. Mr. Braslau said the question that is raising a problem is that Broadband must remain competitive. Mr. Michell said Broadband is its own thing so a decision should be made on Broadband, not that it is under L&P. Mr. Baumgarn said maybe there is a fixed dollar amount paid in a single payment that is tolerable, and not necessarily relative to the total cost of the project. Mr. Braslau said thinking that way could be dangerous, because every project would like to reduce what they are required to pay to APP. Mr. Becker recommended in lieu of an upfront payment, perhaps a future revenue based payment. Mr. Baumgarn added that it may help to know what APP would do with $200,00 or $600,000, for example, for an art project. Mr. Baumgarn said it may help gage if citizens feel the potential projects are an interesting trade off. Mr. Sawyer said when they look for an artist that will join the boring and conduit team she can ask them what their ideas are. Decision 2018 Mid Cycle Appropriation Request Tim McCollough, Light and Power Operations Manager (attachments available upon request) Mr. McCollough said he was speaking on behalf of L&P to seek a mid-year appropriation from reserves to fund three projects. Mr. McCollough pulled up a Story Map link to show a full summary of the mid- year appropriation request items. One project is the Water Treatment Facility (WTF), which was funded in the fiscal year of 2017/2018 from the Water fund in the total of $1.3 million to annex the WTF, buy out the Xcel infrastructure, and bring it into Fort Collins City territory. The WTF annexation was appropriated, what L&P is seeking now is an appropriation out of L&P reserves. Mr. McCollough said basically the money needs to be moved from the Water fund to L&P. Mr. McCollough said it is self- funding, as it is the same money that Council has already appropriated for Water during the 2017/2018 BFO cycle. Mr. McCollough said to build the infrastructure it needs to be a L&P expense, so from an accounting stand point L&P must move the money and this is the action to do so. Ms. Shores asked why it wasn’t appropriated that way initially. Mr. McCollough answered this is a lesson learned for future budgets, and he said it may have been possible to include this all in the same BFO. Since it is not the reality of what happened, the appropriation request is the conclusion that came from meeting with internal staff and the finance committee. Mr. Braslau asked if Mr. McCollough anticipated any difficulties with this change in the budget. Mr. McCollough answered no, that this is seen as a benign issue from a budgeting stand point. Council has already heard this at the Council/Finance committee, so Economic Advisory Commission REGULAR MEETING 07/18/2018 – MINUTES Page 3 all of the liaisons with the latest update. May consider swapping a monthly meeting for a joint meeting. May consider meeting in a month when there is a fifth week. Council mentioned homelessness and housing as potential topics for the full group to consider. 7. NEW BUSINESS a. Art in Public Places/ Broadband & Underground Project Update— Ginny Sawyer (Listen/Clarify/ Discuss) Ginny Sawyer provided an overview presentation on the Art in Public Places/ Broadband & Underground Project Update and facilitated a discussion for feedback. Ginny Sawyer— The Art in Public Places program traditionally gets 1 percent of capital costs of City-related capital projects. With Broadband, I was tasked with having conversations about how this should be applied to the Broadband project and other underground projects. In 2012 an amendment was added to cap Utility contributions and exclude “equipment not affixed to public property.” This plays into Broadband because there will be infrastructure put into private property. APP enriches the public environment for both residents and visitors through the visual arts. Examples: Transformer Murals, Flood Markers. Hope to have a variety of options to give to Council for consideration. Broadband: Delay payment? Stagger payment? Reduce/Eliminate payment? Iconic Art (for Example Chicago- The Bean)? Other? Underground: Keep as is? Reduce Contribution? Exempt from AAP, Other? Ted Settle— Staggering makes sense in my mind. Connor Barry— I would agree that staggering might make sense, as opposed to one Iconic Art piece. Economic Advisory Commission Meeting Minutes July 18, 2018 ATTACHMENT 5 Economic Advisory Commission REGULAR MEETING 07/18/2018 – MINUTES Page 4 Ginny Sawyer— Current code does attempt to connect the art to the project from which it came from, but this may be something to consider when it comes to Broadband. Certainly, there will be things like cabinets and flowerpots, and boxes or is it some fiber art installation because its fiber related. I am sure there are endless ideas out there. We do get local artists bids, but we also get national artists as well. Josh Birks— I’m hearing that the Art Community is interested in having it applied as broadly as possible, so there is as much funds available as possible. Anne Hutchison— There was no line for APP in the budget for Broadband, which I think is why Council is wanting to get feedback. As a community, we have said this is our vision so in my mind this fits in that bucket. Connor Barry— Have we considered options to invest in our art community to use with this larger some of money? So for example, for training or artist space. We should really think about the possibilities of use. John Parks— This would be a process-oriented approach as opposed to product- oriented approach. Could be a combination. Ted Settle— I would extend our comments to underground as well. Craig Mueller— I would advocate that we continue to keep the 1 percent investment with Underground Projects as well. Ginny Sawyer— Does it make sense to loosen funds from waste water? Anne Hutchison— I would look to the Art in Public Places board for recommendations. Ted Settle— I like the idea of the money flowing into one fund. Anne Hutchison— The program is reaching a level of maturity now. So, it might be Economic Advisory Commission REGULAR MEETING 07/18/2018 – MINUTES Page 5 time for some modification to overall vision relative to how we spend this money. Ginny Sawyer— We are needing to decommission pieces now. Ted Settle— The program may be below the radar screen and might need more visibility. Ginny Sawyer— There’s one program manager and a small board. Next steps are that this will go to Council Aug. 28th . I can report back and then there will be one final meeting after that. Josh Birks— I suggest submitting our minutes to the work session and then when it gets to the point of the options, then we can comment on a specific option. In summary, EAC was in favor of having the 1 percent for Art in Public Places be applied to Broadband and Underground projects with the idea that how the money is spent and on what could be further explored and expanded. b. KFCG Sunset Update— Ginny Sawyer (Listen/Clarify/ Discuss) Ginny Sawyer provided an update on the KFCG sunset. Revenue can be replaced in full or at another amount. Funded through City Sales Tax at .85. Overall, we have seen a 20 percent increase in population. If you look at employee count, we have increased but remain stable in 8.5 range per 1,000. If we opted to generate the $23M annually (current KFCG without Use Tax) with groceries total tax would be 3.75 percent or 3.85 percent without groceries. Currently scheduled: x July 24th Work Session x November 13 Work Session x Last day to Refer Ballot language— February 5, 2019 x Election— April 2, 2019 1 Art in Public Places/Broadband Ginny Sawyer City Council - Work Session - August 28, 2018 ATTACHMENT 6 Direction Sought 1. Does Council have additional questions or suggestions? 2. Does Council support any of the options? a. Full Exemption b. Full Payment under Light & Power (L&P) cap c. Amended payment based on broadband revenue 2 Background ƒ May 2018, Ord. 065 ƒ Appropriated Bond proceeds for broadband ƒ Appropriated money ($609K) for Art in Public Places (APP) ƒ Requested outreach to determine if APP should be amended to address future broadband projects 3 APP History ƒ Since 1995 ƒ 1% of all City capital projects over $250,000 ƒ 2012 amendment to cap Utility contributions ƒ 1% of capital up to 0.5% operating revenue ƒ 2012 amendment to definition of construction ƒ Excluded “…the cost of real property acquisition, vehicles, equipment not affixed to public property and any improvements made by any special improvement district.” 4 APP Program Goals Enrich the public environment for both residents and visitors through the visual arts. Increase public access to works of art and to promote understanding and awareness of the visual arts in the public environment. Promote a variety of artistic expression in the community. Contribute to the community’s civic pride in its cultural diversity. Support visual art. 5 APP Ordinance/Broadband APP Sec. 23-304.(b) The amount of annual contributions to the APP program for each Utility fund shall be limited to one-half (.5) percent of the budgeted operating revenue in such Utility fund for that year. Broadband ƒ New start-up with $0 operating revenue in the year funds appropriated ƒ Competitive environment ƒ Full operating revenue expected in 2022/2023 6 Option A – Exempt Broadband from APP Considerations: ƒ Little public support ƒ Benefits competitive broadband program now and into the future 7 Option B: Broadband under the L&P Cap Considerations: ƒ Largest level of contribution - $609K ƒ L&P is backing the bonds, however all financing, books, etc are separate (in anticipation of possible 5th utility) ƒ Little public support for payments ahead of revenue ƒ Puts additional burden on broadband in a competitive market 8 Option C - Hybrid Considerations: ƒ Supports both APP and broadband ƒ Outreach supported this option ƒ 5th utility approach where contribution is based on mature operating revenue in 2022 ƒ Payment determined on budgeted 2022 revenue 9 Options 10 2018 2019 2020 2021 2022 Eligible BB Capital Appropriated 80,000,000 BB Estimated Revenue 387,630 5,403,877 17,039,946 33,374,837 APP if included with L&P (A) 609,526 APP if BB is 5th Utility (B) 0 Hybrid (C) 166,874 Outreach Water Board * Energy Board * Transportation Board * Economic Advisory Commission ƒ Support for both public art and the success of broadband ƒ Recognition of uniqueness of the situation ƒ Little support for exemption or a full payment under Light and Power prior to revenue generation ƒ Overall support for some type/amount of contribution ƒ Overall support for underground projects contributing ƒ Lots of interesting ideas ƒ Exempt bonded projects ƒ Use broadband as start for “iconic” art ƒ Use APP for training programs 11 Direction Sought 1. Does Council have additional questions or suggestions? 2. Does Council support any of the options? a. Full Exemption b. Full Payment under Light & Power (L&P) cap c. Amended payment based on broadband revenue 12