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Home My WebLink About08-14-17 City Commission Packet Materials - C6. Resolution 4837, Parking Services Reserve Transfer Commission Memorandum REPORT TO: Honorable Mayor and City Commission FROM: Ed Meece, Parking Program Manager SUBJECT: Affirmation and Funding of the Parking Services Fund Long Term Maintenance Reserve MEETING DATE: August 14, 2017 AGENDA ITEM TYPE: Consent RECOMMENDATION: Approve Resolution No. 4837 affirming the purpose of the Parking Services Fund - Long Term Maintenance Reserve and establish a procedure for annual transfer of funds from the Parking Services Fund – Operational Reserve. BACKGROUND: The Parking Services Fund has had a Long Term Maintenance Reserve (LTMR) for several years. The purpose of the LTMR is to set aside funding, on a regular and planned basis, so as to support the cost of necessary capital improvement projects in a timely manner. However, previous imbalances between revenues and expenditures in the Parking Services Fund did not leave an Operational Reserve sufficient enough to support an annual transfer of dollars to the LTMR. A best practice for parking related business units (and most enterprise fund activities) is to transfer between 3-7% of Gross Parking Revenues1 annually, to fund capital improvements necessary within the parking operation. This practice is discussed and recommended in the City of Bozeman’s Strategic Parking Management Plan 2016 (Strategy #5). Currently, the Parking Services Fund – Operational Reserve has an FY 17/June Actual Ending Balance of $517,725.00 (not counting the FY 17 year end transfer of $250,000 in restricted funds from the Tax Increment Finance District). This is equivalent to 86% of FY 17 total actual expenditures. Based on this information, the PPM is comfortable recommending that the Parking Services Division implement a system for regularly transferring dollars from the Parking Services Fund Operating Reserve to the Parking Long Term Maintenance Reserve. Therefore, the Bozeman Parking Commission and Parking Program Manager are proposing a set of guidelines which establish an annual transfer procedure from the Parking Services Fund Operating Reserve to the Parking Long Term Maintenance Reserve. Within these procedures is a ‘tripwire’ that prevents the annual transfer if such an action would drop the Parking Services Fund Operating Reserve below an amount equal to 25% of total actual expenditures for the most recently completed fiscal year. In this event, the Parking Commission 1 Gross Parking Revenues are defined as total fund revenues, including Citation and Miscellaneous. 34 would deliberate as whether to modify the annual transfer amount, or perhaps even skip the annual transfer altogether. During FY 18, the Parking Program Manager will develop a comprehensive Parking Long Term Maintenance Capital Plan for the purpose of scheduling anticipated capital improvement projects, by Fiscal Year, and projecting the capability of current/future revenue streams to support the cost of such projects. The Parking Program Manager will present the Parking Long Term Maintenance Capital Plan to the Parking Commission for review and approval. FISCAL EFFECTS: For FY 17, the estimated amount of transfer from the Parking Services Fund Operating Reserve to Parking Services Fund Long Term Maintenance Reserve is $47,402.00. Following the transfer, the Parking Services Fund Operating Reserve (FY 17) Ending Balance is estimated to be $470,323.00. A definitive statement of the actual transfer amount, and resulting fund balance, will be available by the September 2017 regular meeting of the Bozeman Parking Commission. Attachments: Bozeman Parking Commission, Resolution 2017-03: “A RESOLUTION AFFIRMING THE PURPOSE OF THE LONG TERM MAINTENANCE FUND AND APPROVING ANNUAL FUNDING TRANSFER FROM PARKING SERVICES FUND (OPERATING) EQUAL TO 5% OF GROSS PARKING REVENUES”; Parking Enterprise Fund – Operating Reserve – Monthly Report (7/1/17); Parking Enterprise Fund June 2017 Revenue & Expenditure Report (7/6/17); Bozeman Parking Commission, Policy Guidelines, 2/9/11. Report compiled on: July 24, 2017 35 Page 1 of 3 COMMISSION RESOLUTION NO. 4837 A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF BOZEMAN, MONTANA, AFFIRMING THE ROLE OF THE PARKING SERVICES FUND LONG TERM MAINTENANCE RESERVE TO PLAN, FUND, AND IMPLEMENT THE INSTALLATION, MAINTENANCE, AND REPLACMENT OF INFRASTRUCTURE, EQUIPMENT, AND TECHNOLOGY NECESSARY FOR EFFECTIVE OPERATION OF THE MUNICIPAL PARKING SYSTEM AND ESTABLISHING PROCEDURES FOR AN ANNUAL TRANSFER OF FUNDS FROM THE PARKING SERVICES FUND OPERATING RESERVE TO THE LONG TERM MAINTENANCE RESERVE FOR THIS PURPOSE. WHEREAS, pursuant to Bozeman City Commission Resolution #3803, the Bozeman Parking Commission has jurisdiction over the B-3 zoning district, and any residential parking permit districts created by the Bozeman City Commission; and, WHEREAS, the Bozeman Parking Commission has established policy guidelines that specify “invest any Parking Enterprise Fund profits into three fiscal reserves: Parking Operating Reserve, Parking Capital Reserve, and Bridger Park Downtown Long Term Maintenance Reserve Funds”; and, WHEREAS, previously, the one-time proceeds from the sale of a condominium space in the Bridger Park Downtown Garage and an on-going annual allocation of interest proceeds from the Downtown Tax Increment Finance District were (are) deposited into the Long Term Maintenance Reserve with the knowledge and acceptance of the Parking Services Division; and, 36 Resolution 4837, Creating an Annual Transfer from Parking Services Operation Reserve to Long Term Maintenance Reserve Page 2 of 3 WHEREAS, parking industry best practices and the City of Bozeman Strategic Parking Management Plan 2016 (Strategy #5) both recommend the allocation of 3-7% of annual Gross Parking Revenues to a capital maintenance reserve; and WHEREAS, the Bozeman Parking Commission and Parking Services Division desire that such an allocation become a routine business practice for the proper funding of necessary capital projects within the municipal parking system; and, WHEREAS, the Bozeman Parking Commission and Parking Services Division will implement a five year capital maintenance plan for the purpose of directing annual expenditures from the Parking Long Term Maintenance Reserve, prior to June 30, 2018, and before any expenditures from the Long Term Maintenance Reserve for this purpose; NOW THEREFORE, BE IT RESOLVED that the Bozeman City Commission establishes the following procedures for an annual transfer from the Parking Services Fund Operating Reserve to the Parking Services Fund Long Term Maintenance Reserve: 1. The transfer shall be conducted by the City of Bozeman Finance Department as part of their annual Fiscal Year End closing procedures, with notice to the Bozeman Parking Commission of the final amount of transfer and the resulting Ending Balance of the Parking Services Fund Operating Reserve and Parking Services Fund Long Term Maintenance Reserve by September 1st of each year. 2. The amount of the transfer shall be equal to 5% of the actual Gross Parking Revenues for the most recently completed fiscal year. Gross Parking Revenues does not include any funds transferred from the Downtown Tax Increment Finance District for capital expenditures. 3. The transfer shall not be executed in any year where the amount calculated for transfer would leave the Parking Operating Reserve with less than 25% Actual Ending Balance as compared to the total actual expenditures for the most recently completed fiscal year (excluding any transfer of funds from the Downtown Tax Increment Financing District). 37 Resolution 4837, Creating an Annual Transfer from Parking Services Operation Reserve to Long Term Maintenance Reserve Page 3 of 3 4. The Parking Services Fund Long Term Maintenance Reserve shall be utilized for parking system-wide capital project funding and implementation, combining the previously stated, but not established, Parking Capital Reserve and Bridger Park Downtown Long Term Maintenance Reserve into this single account in the Parking Fund. PASSED, ADOPTED, AND APPROVED by the City Commission of the City of Bozeman, Montana, at a regular session thereof held on the 14th day of August, 2017. ___________________________________ CARSON TAYLOR Mayor ATTEST: ________________________________________ ROBIN CROUGH City Clerk APPROVED AS TO FORM: ___________________________________ GREG SULLIVAN City Attorney 38 39 40 FY16 FY16 FY16 FY16 FY16 FY16 FY16 FY16 FY16 FY16 FY16 FY16 GRAND July Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun TOTAL working capital - beginning 52,082$ 22,735$ 11,617$ 4,737$ (1,519)$ 1,352$ 120,706$ 134,526$ 133,584$ 137,411$ 138,905$ 157,252$ 52,082$ plus: revenues 23,681$ 32,313$ 39,711$ 35,340$ 41,716$ 177,020$ 31,421$ 42,636$ 50,264$ 50,926$ 55,233$ 102,028$ 682,290$ less: expenditures (53,028)$ (43,430)$ (46,592)$ (41,596)$ (38,845)$ (57,665)$ (17,601)$ (43,579)$ (46,436)$ (49,432)$ (36,886)$ (89,726)$ (564,817)$ working capital - ending 22,735$ 11,617$ 4,737$ (1,519)$ 1,352$ 120,706$ 134,526$ 133,584$ 137,411$ 138,905$ 157,252$ 169,555$ 169,555$ - (to-date) FY17 FY17 FY17 FY17 FY17 FY17 FY17 FY17 FY17 FY17 FY17 FY17 GRAND July Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun TOTAL working capital - beginning 169,555$ 153,923$ 163,134$ 180,875$ 192,047$ 210,512$ 433,701$ 433,661$ 443,811$ 447,391$ 474,350$ 488,852$ 169,555$ plus: revenues 42,665$ 57,136$ 69,311$ 68,927$ 66,486$ 269,615$ 57,894$ 59,011$ 66,968$ 81,655$ 58,324$ 300,065$ 1,198,057$ less: expenditures (58,297)$ (47,925)$ (51,569)$ (57,756)$ (48,020)$ (46,427)$ (57,934)$ (48,861)$ (63,388)$ (54,696)$ (43,822)$ (21,191)$ (599,887)$ working capital - ending 153,923$ 163,134$ 180,875$ 192,047$ 210,512$ 433,701$ 433,661$ 443,811$ 447,391$ 474,350$ 488,852$ 767,725$ 767,725$ Parking Enterprise Fund --Monthly Fund Balance Report (as of 7/1/17) Includes $250,000 transfer from Downtown TIF District --Restricted for Fund Balance without TIFD Transfer: $517,725 41 42 43 44