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HomeMy WebLinkAbout1987-11-23 471 MINUTES OF THE MEETING OF THE CITY COMMISSION BOZEMAN, MONT ANA November 23, 1987 ************************ The Commission of the City of Bozeman met in regular session in the Commission Room, I Municipal Building, November 23,1987, at 2:00 p.m. Present were Mayor Mathre, Commissioner Jordan, Commissioner Stiff, Commissioner Martel, Commissioner Vant Hull, City Manager Wysocki, City Attorney Becker and Clerk of the Commission Sullivan. The meeting was opened with the Pledge of Allegiance and a moment of silence. None of the Commissioners requested that any of the items listed under Consent Items be removed for discussion. Minutes It was moved by Commissioner Jordan, seconded by Commissioner Stiff, that the minutes of the regular meeting of November 9, 1987 be approved as submitted. The motion carried by the following Aye and No vote: those voting Aye being Commissioner Jordan, Commissioner Stiff, Commissioner Martel, Commissioner Vant Hull and Mayor Mathre; those voting No, none. It was moved by Commissioner Stiff, seconded by Commissioner Martel, that the minutes of the regular meeting of November 16, 1987 be approved as submitted. The motion carried by the following Aye and No vote: those voting Aye being Commissioner Stiff, Commissioner Martel, Commissioner Vant Hull, Commissioner Jordan and Mayor Mathre; those voting No, none. Discussion - request for expansion of membership on the CDBG Loan Review Committee from five to seven City Manager Wysocki submitted to the Commission a memo from Mike Money, Administra- tive Consultant, requesting that membership on the Community Development Block Grant Loan I Review Committee be expanded from five to seven members. The City Manager noted that the Committee has directed Mr. Money to forward this request to the Commission. He then indicated that the Committee feels that to have representation from the low- or mOderate-income populace of the community could lend credibility to decisions made by that body. Commissioner Stiff noted that the Committee currently has five members from various occu- pational segments of the community and asked if the two new members would be from low- or mod- erate-income backgrounds or if one might be at large. He also questioned whether expansion of the Committee would be a good idea. Commissioner Vant Hull noted that the Committee currently has no designated composition; however, through the appointment process, the Commission has fi lied the positions with indi- viduals with specific expertise. She indicated an interest in maintaining the practice of con- sidering expertise in filling the positions; however, she does not feel that criteria should be established for various positions since it could create problems in filling them in the future. The Commissioner noted that if the Committee feels it could function better with a larger mem- bership, the Commission should not question the request. Commissioner Martel stated he is satisfied with the manner in which the Committee has acted; and he sees no reason to expand it to seven members. Commissioner Jordan stated he also feels the Committee has done a good job; however, he indicated he will support the requested increase since it has been submitted by that Committee. City Manager Wysocki recommended that the Commission approve the CDBG Loan Review Committeels request for expansion from five to seven members, and that the staff be authorized I and directed to prepare a Resolution to provide for that change. It was moved by Commissioner Vant Hull, seconded by Commissioner Jordan, that the Com- mission authorize and direct the staff to prepare a Resolution to increase the number of members on the Community Development Block Grant Loan Review Committee from five to seven. The mo- tion carried by the following Aye and No vote: those voting Aye being Commissioner Vant Hull, Commissioner Jordan, Commissioner Stiff and Mayor Mathre; those voting No being Commissioner Martel. 11-23-87 47') .:::.. Continued discussion - Capital Improvement Program for upcoming year City Manager Wysocki reminded the Commission that the document for the five-year Capi- tal Improvement Program was reviewed in detail at last week1s meeting. He then submitted to the Commissioners a table listing two projects which need to be added to the document and one project which is to change funding years. He indicated if the Commissioners have no further questions or comments, a tentative appropriation ordinance will be submitted at next weekls meeting for consideration. I Commissioner Stiff stated that he has requested a reconciliation statement to show ad- justments from the ending balance in Ordinance No. 1229, which was the appropriation ordinance for last fiscal year, to the fund balance as of June 30, 1987. He noted that information should be available prior to action on the appropriation ordinance for the upcoming year. Commissioner Vant Hull once again questioned the need for a burster. She suggested that to return to post card billings for water and sewer could eliminate the need for this piece of equipment. City Manager Wysocki reminded the Commissioners of the Privacy Act, which requires that all billings be sent in envelopes. He further indicated it would be difficult to generate a water billing on a post card through the computer. Commissioner Stiff noted that when he was in private practice, he found that a burster was a vital piece of equipment. He then indicated support for leaving this item in the list of projects to be funded during the upcoming fiscal year. Discussion - FYI Items City Manager Wysocki presented to the Commission the following lIFor Your Informationll items. (1) Agenda and packet for the upcoming Zoning Commission meeting, which is to be held on November 24, 1987. (2) The City Manager reminded the Commissioners that City Hall will be closed on Thursday for Thanksgiving Day and on Friday for Heritage Day. I (3) Commissioner Jordan noted that he feels a fifth Monday discussion should be held next week if possible. He also suggested it may be a good opportunity to have representatives from various boards and commissions present if they wish to discuss any items. Commissioner Vant Hull suggested that the Commissioners submit a list of topics which they may wish to discuss under this item. (4) The City Manager stated he and other City representatives met with representa- tives from the Buttrey Shopping Center concerning their problems with young people. He noted one possible way to address the situation would be to hire another full-time police officer, who would be assigned to the lIhot spotsll around the community, with some financial participation from those whose property is involved. He noted this would help lower the costs to the private entities, such as Buttrey Shopping Center, while maintaining an additional uniformed police of- ficer during problem times. The City Manager noted that a long-term solution could possibly be addressed through educational programs at the schools. He also indicated that implementation of a certified re- serves program could be helpful. The City Manager then indicated that another meeting will be held on December 2 to discuss the situation further. Commissioner Martel asked what ordinances could be used for enforcement purposes in the parking lots. City Attorney Becker stated that he has found sixteen possible offenses under the State Statutes. He noted that traffic offenses may be written into City Court; however, any criminal offenses must be written into the juvenile court system for all minors. I Mayor Mathre requested that the staff submit a report back to the Commission when a po- tential solution has been developed. (5) Mayor Mathre noted that a copy of the evaluation form for the City Manager was included in the packets. She indicated that the City Manager usually submits a report on the status of the goals for the fiscal year prior to the Commissioners completing the evaluation form, suggesting that update be placed on next weekls agenda, with the forms to be completed by the following week. (6) Commissioner Stiff noted that the public hearing on the proposed revisions to the 11-23-87 473 business license ordinance is to be held this evening. He then suggested the Commissioners may wish to consider the possibility of earmarking the estimated $40,000 in revenues from licensing of apartments for the capital improvement program, since they have not been I icensed in the past and such action would have no impact on the General Fund revenues. Commissioner Jordan expressed concern about earmarking of revenues; however, he sug- gested that the amount of monies to be transferred from reserves to the capital improvement pro- I gram could be increased by a specified amount to cover that additional source of revenue. Mayor Mathre noted that a two-tiered licensing fee has been established for trailer courts and suggested that possibly apartment license fees should be set in a similar manner. City Attorney Becker reminded the Commissioners that business license fees are estab- lished for regulatory purposes, not as a revenue source. Consent Items to - It was moved by Commissioner Jordan, seconded by Commissioner Stiff, that the Consent Items be approved as listed above, and the appropriate persons be authorized and directed to complete the necessary actions. The motion carried by the following Aye and No vote: those voting Aye being Commissioner Jordan, Commissioner Stiff, Commissioner Martel, Commissioner Vant Hull and Mayor Mathre; those voting No, none. Recess - 3:23 p.m. Mayor Mathre recessed the meeting at 3: 23 p. m., to reconvene at 7: 00 p. m. for the pur- pose of conducting the scheduled public hearing. . I Reconvene - 7:00 p.m. Mayor Mathre reconvened the meeting at 7:00 p.m. for the purpose of conducting the sched- uled public hearing. Public hearing - Ordinance No. 1251 - revising Chapter 5 of the Bozeman Municipal Code re busi- ness licenses This was the time and place set for the public hearing on Ordinance No. 1251, entitled: ORDINANCE NO. 1251 AN ORDINANCE OF THE CITY COMMISSION OF THE CITY OF BOZEMAN, MONTANA AMENDING TITLE 5 OF THE BOZEMAN MUNICIPAL CODE, OF THE CITY OF BOZEMAN, MONT ANA. Mayor Mathre opened the public hearing. City Manager Wysocki noted that included in this weekls packet was a memo dated Novem- ber 19 outlining the revisions which have been suggested, along with possible amendments to those revisions. He stated that a listing of estimated revenue changes as a result of this or- dinance was also included. The City Manager further indicated that a letter of concern from Jim Banks, 7 Hill Street, was included in the packet, along with letters of opposition submitted by Randy Leep, D & R Music; Southwest Montana Home Builders Association; and Ruth Haggerty. He noted that a copy of information on the amoun"t of property taxes paid by various mobile home courts and apartment complexes, as collected by Commissioner Vant Hull, was also included. I The City Manager indicated that a letter of opposition from Darigold Farms, 1001 North 7th Avenue, has just been received and should be included in the record for this public hear- ing. Administrative Services Di rector Miral Gamradt briefly reviewed the history of these pro- posed revisions. He noted that ,last December, three businesses submitted letters to the Com- mission requesting that the business license fees be adjusted for specific categories prior to the issuance of 1987 licenses. He reminded the Commissioners that at that time, they determined there was not adequate time to react; and they directed the staff to carefully review the or- dinance to determine if other sections should be revised as well. He noted that George Minder 11-23-87 471" was hired during the summer as an administrative intern; and his assignment was to review the business license ordinance, as well as a listing of current licenses. He noted that after re- viewing the list of licenses, Mr. Minder sent letters to businesses not licensed; and 165 new licenses were issued as a result of that work. He indicated that Mr. Minder has also reviewed the business license ordinance to determine which areas should possibly be revised to make the ordinance and accompanying fees more equitable. He noted many misclassifications were found; and those have since been adjusted under the current ordinance. I The Administrative Services Director then briefly reviewed the summary of proposed re- visions in the business license structure, along with seven proposed amendments to those re- visions. Mr. Walt Connell, attorney representing Karst Stage and City Transfer, submitted a lengthy presentation, a copy of which was submitted to each Commissioner. He stated that he worked in a city attorney's office for nine years and served as a part-time municipal judge for more than four years. He then indicated support for revision of the current business license ordinance; however, he stated opposition to the proposed revision. Mr. Connell stated the proposed ordinance is II... inartfully drafted, poorly thought out, illogical, unequitable, in certain parts is unconstitutionally vague, in certain parts is uncon- stitutionally overbroad, in part is subject to constitutional attack as being an interference with interstate commerce and it also violates the due process and equal protection clauses of th 14th Amendment of the United States Constitution, as well as Article 2 of the Montana Constitution... II He stated that he feels this ordinance would open the City to civil liability. He also cautioned the Commission that business license fees may be established for regulatory purposes only, and cannot be used as a source of revenue for the General Fund. Mr. Connell stated that the City must be careful about its use of those revenues, noting that it must be cautious not to exact a lIuse feell for public services such as streets. He noted that the proposal to include vehicles used in the business, based on the gross vehicle weight, in the business license fee could approach a lIuse fee." Mr. Wal t Connell expressed concern about the proposed revision to the I icense fee for I transportation firms, noting they are currently under strict federal and state regulations. He also expressed concern about the proposed license fee for apartments, noting the landlord al- ready pays personal or real property tax; and the imposition of a business license fee is close to double taxation. He further indicated that the licensing of home occupations will be very diffi- cult to enforce. He then noted that the proposed maximum license fee for a transportation firm is $600, while it is $400 for a different type of business. He then noted that licensing of itinerant vendors is one of the most litigated areas in business licensing; and they are already highly regulated through interstate commerce. Mr. Connell stated that he has reviewed each section of the proposed ordinance very care- fully and has listed areas of concern in his memo. He cautioned the Commission that portions would be very difficult to enforce and further cautioned them to avoid the IIMontana revenue rais- ing trap, II into which he feels the City of Bozeman as well as other communities have fallen. He reminded the Commissioners that a license fee must be based on regulatory powers only; and no regulations have been established under the existing ordinance or the proposed ordinance. Walt Connell noted that one of the items included in the packet of information on the pro- posed ordinance was a summary of estimated impacts the proposed revisions would have on reve- nues. He stated that summary indicates that an additional $54,000 would be generated; and that makes this appear to be a revenue source. He once again cautioned that public health, safety and welfare, as well as the costs of issuing the business license, are the items which must be considered when establishing business license fees; and he feels those issues are not the ones that have been addressed. I Mr. Connell then cautioned the Commissioners to be aware that if they pursue final adop- tion of the ordinance, it may have serious consequences and possibly result in further action. Mr. John Domenech, President and Chief Executive of Skyland Scientific Services, stated the company has been incorporated since 1978 and has had its offices at the old airport terminal. He noted the company, which certifies that drug manufacturing processes meet Food and Drug Administration regulations throughout the country, will be relocating to Bozeman in mid-January or February. He stated that under the proposed revision, his license fee would be $400 as op- posed to $150 under the current ordinance. He then cautioned the Commission that the area is 11-23-87 4"75 currently in an economic recession; and care must be taken not to make more businesses go broke. He encouraged the Commission to not approve the proposed revisions to the business li- cense ordinance. Mr. Bob Fagliano, Three Rivers Disposal, stated support for the testimony submitted by the previous two speakers. He noted it appears that the proposed ordinance has been drafted while considering the revenues it would generate, not the overall impacts it would have on the I community. Mr. Mike Reichman, President-Elect for the Bozeman Area Chamber of Commerce, submit- ted a statement of opposition to the proposed business license revision. He stated that at its last meeting, the Board of Directors for the Chamber of Commerce did vote in opposition to the proposed business license revisions because the existing inequities have not been resolved. He noted that businesses also feel that the license fee is a duplication of taxation; and they cannot afford the additional cost increases. Mr. Tony Wastcoat, representing himself as well as a number of other apartment owners or managers, stated opposition to the proposed license fee for apartments. He noted that the Federal Tax Reform Act of 1986 had an adverse effect on real property owners, especially those owning rental units; and the State further impacted that effect. He noted that with the current rental market in Bozeman, the landlords have been unable to pass those increased costs along to the tenant. Mr. Wastcoat then stated that the real property taxes, water and sewer costs, and garbage collection costs have all increased over the past few years, further impacting the land- lord. Mr. Wastcoat stated he does not feel this would be a I icense fee, but would be an in- crease in property taxes. He stated the apartment owners in Bozeman cannot afford the in- creased costs; and to impose such a license fee would be disastrous. Tony Wastcoat noted that a number of homes are actively on the market; however, they are currently being rented because they are not selling. He then questioned how the City will find those rentals and enforce the ordinance. I Administrative Services Director Gamradt stated the City will incur enforcement problems in many areas. He then indicated that the staff will utilized whatever mechanism possible to identify rental units. Mr. Dan K lusmann, TO I Theatres, reminded the Commissioners that five years ago, the theatres incurred an 800 percent increase in business I icense fees. He then indicated that dur- ing the past five years, the theatres have increased the price on their tickets by 12 percent; however, with the discounts they have implemented, the actual per ticket cost has actually de- creased. Mr. Larry Bowman, President of the Downtown Bozeman Association, stated opposition to the proposed increases in the minimum and maximum license fees for retail businesses. He ques- tioned the intent of the proposed increases in license fees, whether it is to increase revenues or to require that larger businesses pay more than smaller businesses. Mr. Bowman stated that he feels the businesses already pay their fair share; and to use license fees as a source of revenue is inappropriate. Larry Bowman also noted that to increase business license fees could send a negative mes- sage to people wishing to start businesses in Bozeman or to expand existing businesses. He stated if the purpose of the proposed revisions is to make a more equitable fee system, he could support the concept; however, he would suggest that a lower square footage scale be used rather than an increase in fees. He then questioned how the ordinance would be enforced, stat- ing opposition to the proposal if an additional person must be hired to complete the enforcement tasks. I Mr. Bowman stated that until the questions and concerns raised are addressed, the Down- town Bozeman Association will remain opposed to the proposed revisions. Mr. Charles Beck stated he owns 48 rental units as well as a construction company. He concurred with the previous comments made. He noted that he paid over $22,000 in taxes last year; and he is opposed to paying another $480 in license fees for the apartments. Mr. Beck then noted that five years ago, the license fee for his construction company in- creased over 1000 percent, going from $7.50 to $100 per year. He also stated that he feels the Commissioners should publicly respond to questions which have been raised by the public so that they have accurate information. 11-23-87 47G Mr. Bob Schweitzer stated he represents a partnership of seven persons who own a 48- unit apartment complex. He indicated concurrence with prior comments; then noted that his 48- unit complex probably does not impact City services as much as 48 single-family dwellings do. He noted if it is the Cityls intent to raise revenues through this mechanism, it cannot be done. Mr. Dennis Kavanagh, 309 West Harrison Avenue, stated he is an outfitter. He noted that he did receive a letter this summer that he was required to have a business license, which he purchased. He noted, however, that there are other outfitters "that have probably not been I required to purchase a license because they are not so visible; and he does not feel that is fair. He then questioned how the City can regulate his business without knowing what goes on in his business. Mr. Len Sorensen stated he owns apartments as well as a mobile home park. He noted that in 1983, his license fee on the mobile home park increased from $25 to $125; and shortly thereafter, he incurred a 300 percent increase in water costs. He noted the proposed apartment license fee will have a definite impact. Mr. Sorensen then questioned how the City will enforce an apartment license fee. He noted his apartment complex is easily visible; however, there are many basement apartments, houses which are rented, and sleeping rooms which are not so easily visible. He noted that his apartments and mobile home court are his livelihood while most rentals are a sideline. Mrs. Lanette Walker, owner of LaCourier, stated her small business is placed in the same category as large transportation firms. She stated opposition to the proposed license fees, not- ing that businesses cannot afford more expenses at this time. She then indicated that during earlier meetings on this subject, it was pointed out that the intent of these revisions is to make the fee structure more equitable, not to generate revenues. Mr. Stephen Hample, Financial Network I nvestment Corporation, stated that he purchased a business license when he opened his firm. He noted that when he asked what benefit he would receive, he got no response. He indicated that he feels this proposal is a method of gen- erating revenue and cautioned the Commission to be careful on how they deal with the business community. I B rea k - 8: 26 to 8: 34 p. m . Mayor Mathre declared a break from 8:26 p.m. to 8:34 p.m., in accordance with Commis- sion policy established at their regular meeting of March 14, 1983. - Ordinance No. 1251 - revising Chapter 5 of the Bozeman Munici al Mr. Dave Jarrett stated he owns a group of apartment buildings. He then stated oppo- sition to the proposed license fee for apartments for numerous reasons, including those which have been I isted above. He expressed concern that only those apartments readily visible would incur the license fee, with the licensing requirement not being enforced for those not so visible. He indicated opposition to establishing a fee that cannot be regulated. Mr. Ed Hoadley, owner of Hoadley1s Exxon and Rent-A-Wreck, asked if the vehicles in his rental service would be considered in determining the business license fee; and the Adminis- trative Services Director indicated they would be. Mr. Hoadley then stated his office is just large enough to hold two desks and, based on square footage, he expressed strong opposition to the implementation of a license fee that would cost him $400 per year. The Commissioners discussed whether to continue or close the public hearing at this time. Following a brief discussion, the Commissioners concurred that they need time to review the in- formation which has been submitted up to this point, keeping the public hearing open in case they need additional input from the public. I Mr. Jerry Perkins, owner of Karst Stage, asked if it would be possible for the publ ic to obtain information prepared by the staff in time to review it adequately prior to the next portion of the public hearing so that they are aware of the Cityls position. Mayor Mathre noted that the information distributed in the Commissionersl packets on Wed- nesday is then publ ic information. She indicated that it is uncertain whether the staff would have an opportunity to respond prior to distribution of the packets, however, since that will be done on Wednesday afternoon. Commissioner Stiff indicated that he feels possible establishment of a business license fee 11-23-87 417 for apartments should be separated from the remainder of the license fees prior to the Commis- sion taking any action on the proposed revisions. Mr. Bob Fagliano noted a number of people have expressed concern about the proposed business license ordinance. He cautioned the Commission that hopefully this is not a mechanism for generating additional revenues. Commissioner Jordan noted that at the first meeting, the Commissioners made it perfectly I clear that they knew som-ething was wrong with the existing business license ordinance; how- ever, it suddenly appears that the Commission is trying to raise revenues rather than create a more equitable situation. He then reminded those present that property tax revenues are split, with more than 50 percent going to the school district, over 20 percent going to the county and the remainder to the city. City Manager Wysocki noted that the proposed revisions to the business license fee struc- ture started as a result of concern expressed that small businesses were required to pay the minimum license fee, based on square footage, while large businesses paid a maximum of $150, even though the square footage basis may require a higher fee. He noted that some of the pro- posed revisions were designed to address those inequities. The City Manager further noted that several inequities existed as a result of misclassification of businesses; and those have been addressed through reclassification. Mayor Mathre continued the public hearing to 7: 00 p.m. on Monday, November 30, 1987. Adjournment - 9:04 p.m. There being no further business to come before the Commission at this time, it was moved by Commissioner Stiff, seconded by Commissioner Martel, that the meeting be adjourned. The motion carried by the following Aye and No vote: those voting Aye being Commissioner Stiff, Com- missioner Martel, Commissioner Vant Hull, Commissioner Jordan and Mayor Mathre; those voting No, none. I JUDITH A. MATHRE, Mayor ATTEST: Clerk of the Commission I 11-23-87