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Home My WebLink About09-18-19 BID Minutes Downtown Business Improvement District Board Meeting Minutes September 18, 2019 Attending: Jolee Barry, Eric Bowman, Ileana Indreland, Susan Neubauer, Emily Cope, Chris Naumann Absent: Mike Basile, Erik Nelson, Eric Sutherland, Jeff Krauss Public Comments: David Loseff began by talking about the Holloran projects: Medical Arts, One11, Merin, AC Hotel. But then said, “it’s not about Holloran, but rather parking”. He said parking issues are nearing a crisis and the BID is the only formal voice for property owners to speak up about parking. Minutes Jolee asked that the discussion about prioritizing the completion of the side street streetscapes be prioritized and considered to be funded by a SID. Ileana asked that two uses of the word “decided” be removed from the 2020 BID Renewal section as nothing was decided but rather just discussed. ACTION: Eric Bowman moved to approve the August minutes as revised. Jolee Barry seconded the motion. All voted in favor. Finance Report Chris presented the FY20 year-to-date finances as of 9-18-19. He noted the income to date totals just shy of $70,000. Expenses included DBP management fee ($19,890), maintenance payroll ($15,655), and program investments ($24,341). The total cash position between checking and CD balances total just over $126,000. The board did not have any questions regarding the finance report. Executive Directors Report Maintenance Program Update Currently we have one full-time general maintenance employee (Mike Grant), one weekend general maintenance employee and one part-time garage maintenance employee (Trish). We have a 5-day flower watering employee (Kristin) and a 2-day watering employee (Avery). Below are the maintenance statistics comparing the year-to-date figures from this year (FY20) to the corresponding stats from last year (FY19). FY2019 Y-T-D FY2020 Y-T-D Total Ave/mnth Total Ave/mnth Difference Trash Emptied 647 323 663 331 +16 Recycling Emptied 184 97 156 78 -28 Graffiti Removed 45 22 66 33 +21 Building Project Updates Armory Hotel Substantial completion scheduled for December 31, 2019. Black & Olive Apartments under construction to be completed Fall 2019 Osborne Building (233 East Main) 4-story mixed use building with 2 floors of restaurant use and 2 floors of offices. Construction began October 2018. “OSM” Building 5 story mixed use building proposed on southwest corner of Babcock and Wallace—construction began Spring 2019 BG Mill Building 5 story mixed use building proposed on southwest corner of Mendenhall and Broadway—final site plan submitted One 11 Lofts (corner of North Willson and West Lamme) 50-unit apartment building with 53 parking spaces. Construction began spring 2019. Merin Condos (on North Bozeman across from Dave’s Sushi) 28 units of owner- occupied housing. In Final Site Plan review. Village Downtown 84 new residential loft units have been approved and 30 new residential condo units are under review by the City AC Hotel (5 East Mendenhall) 6 story 140 room full-service hotel. Currently in development review. East End Flats (240 East Mendenhall) 6-story mixed use project. Currently in development review. Veranda Apartments (111 South Church) proposed new construction of 6 units. New Businesses Update • Good Food Company—229 East Main—restaurant to open in Osborne Building • Blackbird Kitchen—140 East Main—former C. Moose—expansion under construction • TBD—2 East Main—former Miller’s Jewelry location—tenant improvements on- going • TBD—23 West Main—formerly Bent Lens • TBD—17 East Main—formerly Sun Dog Gallery • TBD—544 East Main—formerly Heeb’s Planning Updates In this section, I will provide update about several ongoing City planning processes. Community Plan (City Growth Policy) Update Consultants: Logan Simpson (Ft. Collins) Update: Draft Plan is to be publicly released in September 2019. https://www.bozeman.net/city-projects/bozeman-community-plan-update NCOD and Design Guidelines Update Consultants: Bendon Adams Consulting (Aspen, CO) and Orion Planning (Missoula, MT) Update: Final Document was released in August 2019. https://www.bozeman.net/city-projects/ncod-review Housing Needs Assessment and Action Plan Consultants: Navigate, LLC Workforce Housing Solutions Update: the Community Housing action plan is being drafted. https://www.bozeman.net/city-projects/community-housing-action-plan https://www.bozeman.net/city-projects/community-housing-needs-assessment FEMA Floodplain Map Next Steps: The final draft map will be released in 2nd quarter of 2020. The City then has 180 days to amend its floodplain regulations to incorporate the new maps. The new regulatory floodplain map would become effective by the beginning of 2021. North Black Pocket Park Construction of the North Black Pocket Park in southwest corner of Black Lot public parking lot is making significant progress. The project includes three elements: new pocket park; relocated Black Lot egress; and new streetscape including sidewalk, streetlamps, and trees. AV Construction began work the week of August 19th. Below is a basic construction schedule: • 8/19—8/21 Mobilization and site preparations • 8/21—9/11 Demo and excavation • 9/3—10/7 Concrete and electrical installation • 10/8—10/19 Landscaping installation Project Management Course I am taking a project management course at MSU…8 x 2-hour sessions on Tuesday nights. “Project Management Theory and Practice: Understand the basics of sequential project management processes, tools, and techniques. In this introductory course, you will learn valuable waterfall and agile project management methodologies and leave with the skills and techniques required to be a successful project manager. You will benefit from the instructors combined 50+ years of experience across 10 industries! We will examine real world examples that connect project management theories into actions, paired with tried- and-true management templates.” Instructors: • Lindsey Tollefson, Program Manager at Ascent Vision Technologies • Jess Short, Director of Program Management for SaaS Compliance at Oracle • Lisa Armitage, Process Improvement and Efficiencies Consultant Discussion and Decision Item Bridger Park Garage Lease Issue Ileana requested that the BID board send a formal letter to the City Commission asking that no further long-term leases be issued at the garage. Chris reminded the board that they sent a similar letter to the Bozeman Parking Commission back in March. The board agreed to send a letter directly the City Commission. Chris said he would send a draft to the board via e-mail for their feedback. 2020 BID Renewal Chris provided an updated BID assessment comparison that now includes FY2020 back to FY2011 (see below). He noted that the total taxable value of the BID increased from $4.57 million in FY19 to $6.26 million in FY20. The taxable value increase reduced the assessment rate to $0.0201 per dollar of taxable value. Therefore, over the 10-year life of this BID the assessment rate decreased 53% between FY11 and FY20. Next Chris presented a draft of the FY2021 budget, which would be the first fiscal year of the next 10-year district (see below). He mentioned that he and Emily had reviewed the draft with Eric Bowman at which time he had advised we strive for a total assessment of $155,000. Therefore, the total proposed income would be approximately $197,000. Chris reminded the board that they agreed to consider contributing funding to the District Manager position next year since the URD was fully funding the position in FY20. With the proposed $12,000 contribution to the DM position the new DBP Management Fee would be about $93,000. Ileana questioned paying over $90,000 for DBP costs and whether the BID receives any value in return. She said she would rather see those dollars invested “on the street” through BID programs. Jolee, Susan and Eric B responded individually with several examples of the value to the BID by being a member of the DBP and its associated staff. Ileana requested that Chris provide a breakdown of how each of the management fees (BID, DBA, URD) are invested in the Partnership. He agreed to prepare and provide that report. Chris also spoke about the potential need to make annual contributions to an operating reserve, project reserve, and capital reserve. Moving on to the payroll expenses for FY2021, Chris proposed a 20% increase to meet the demand of a more vibrant and possible expanded district. Jolee said she did not think this was enough of an increase and asked if Chris agreed. He said it was potentially not enough but that he continues to try and maximize the BID’s ROI. Susan asked if this would be adequate funding if we lost our tenured staff. Chris said it would cost considerably more to get the same amount of work done as performed by Mike and Trish. For program expenses, Chris proposed a 13% increase for FY2021. Chris then distributed a spreadsheet of the BID annual assessment projection scenarios for FY21-FY30. He showed three projection scenarios all based off a first-year assessment of $155k: 1.5%, 2.0%, and 3.0% annual increases. He said there are several ways the board can determine that annual increases: prescribe the assessment dollar amount for each of the 10 years; determine an annual escalator like 2% or 3%; or designate a “not to exceed” annual escalator like 4% or 5%. The board agreed they could give this more thought and decide at a future meeting. Chris then presented some estimations of possible operating, capital, and project reserves. He gave the capital expenditure example that the Kawasaki Mule and the Ford F250 will both need to be replaced within the next 2-3 years at a cost of $25,000 to $30,000. Chris noted that in terms of projects, the board had authorized $45,000 in FY18, $20,000 in FY19, and $15,000 in FY20. Typically, non-profits and companies maintain an operating reserve equal to 3 to 6 months of operating costs which would be $48,000 to $96,000. Chris concluded that he recommends the board budget $8,500 a year to be invested in operating, capital and project reserves. Meeting was adjourned at 1:15 pm FISCAL YEAR TAX. VALUE ASSESSMENT RATE*PER $10K**DECREASE*** 2020 6,263,000$ 126,000$ 0.0201 201$ -53% 2019 4,567,534$ 126,000$ 0.0276 276$ 2018 4,204,204$ 126,000$ 0.0300 300$ 2017 3,700,506$ 120,000$ 0.0324 324$ 2016 3,518,855$ 120,000$ 0.0341 341$ 2015 3,236,421$ 120,000$ 0.0371 371$ 2014 3,140,950$ 120,000$ 0.0382 382$ 2013 2,970,220$ 114,000$ 0.0384 384$ 2012 2,754,222$ 114,000$ 0.0414 414$ 2011 2,652,520$ 114,000$ 0.0430 430$ * Assessment dollars paid per dollar of taxable value **Assessment paid per $10,000 of taxable value ***Percentage decrease of assessment paid per taxable value since FY2011 NOTE: over last decade the total assessment increased 11% while the assessed rate decreased 53% DOWNTOWN BID ANNUAL ASSESSMENT COMPARISON Downtown BID FY2021 Projected Budget APPROVED ESTIMATED FY2020 FY2021 Income BID Assessment 126,000 153,986 22% Contract Income 17,000 17,000 Interest Income 100 100 Mobile Vending Fees 1,750 2,500 Flower Sponsorshihps 9,000 9,000 Christmas Light Sponsorships 4,500 4,500 Streetlamp Banners 10,000 10,000 Total Income 168,350$ 197,086$ 17% Expenses Management Fee 79,560 93,151 17%12k District Manager Operating Reserve Contribution Project Reserve Contribution Captial Reserve Contribution Total Expenses 79,560$ 93,151$ 17% Payroll Expenses Maintenance Staff 25,000 32,500 30%Additional PTE Taxes 2,200 2,860 30% Work Comp 1,500 1,950 30% Maintenance Staff--Garage 10,000 10,000 Taxes 750 750 Work Comp 750 750 Total Payroll Expenses 40,200$ 48,810$ 21% Programs Christmas Lights 2,000 2,000 Christmas Light Spider Repair 1,500 1,500 Christmas Lights Storage 1,000 1,000 New Banners 3,000 3,000 Flower Expenses 22,000 24,000 Flower Water 150 200 Tree Purchases 1,500 2,000 Marketing 2,500 2,500 Maintenance Supplies 2,000 2,600 30% Garbage Bags 1,750 2,275 30% Graffiti Supplies 750 975 30% Graffiti Contracted Removal 3,000 3,900 30% Mule Service & Fuel 1,000 1,300 30% Truck Service & Fuel 2,000 2,100 Truck Insurance 3,250 3,250 Program Contingency 1,000 Total Program Expenses 47,400$ 53,600$ 13% Total BID Expenses 167,160$ 195,561$ 17% NET ASSESSMENT INCOME 1,190$ 1,525$ Downtown BID Annual Assessment Projections FY21-FY30Fiscal Year1.5% Increase2.0% Increase3% Increase2011-20202021155,000 155,000 155,000 114,000 2022157,325 158,100 159,650 114,000 2023159,685 161,262 164,440 114,000 2024162,080 164,487 169,373 120,000 2025164,511 167,777 174,454 120,000 2026166,979 171,133 179,687 120,000 2027169,484 174,555 185,078 120,000 2028172,026 178,046 190,630 126,000 2029174,606 181,607 196,349 126,000 2030177,225 185,239 202,240 126,000 total increase14%20%30%11%1,658,922$ 1,697,207$ 1,776,902$ 1,200,000$ Financial Reserves Considerations10-yr LowAnnual Low10-yr HighAnnual HighCapital30,000 3,000 45,000 4,500 replace Mule and Truck at minimum (adding 2nd truck +$15k)Projects50,000 5,000 100,000 10,000 FY18=$45k FY19=$20k FY20=$15k $??/yr going forwardOperating42,500 4,250 85,000 8,500 3-6 months is typically advisableTotal122,500$ 12,250$ 230,000$ 23,000$ cash on-hand90,000 90,000 Balance32,500$ 3,250$ 140,000$ 14,000$ Average of High and Low = $85k or $8,500 annually…blend (grey figures) also = $85k/$8,500Known Capital Expenses:FY202114,000 new MuleFY202514,000 new Truck