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04/01/2003 - Minutes (2) PROCEEDINGS OF THE CITY COUNCIL OF SALT LAKE CITY, UTAH TUESDAY, APRIL 1 , 2003 The City Council of Salt Lake City, Utah, met in a Work Session on Tuesday, April 1, 2003, at 5:30 p.m. in Room 326, City Council Office, City County Building, 451 South State Street. In Attendance: Council Members Carlton Christensen, Nancy Saxton, Jill Remington Love, Dave Buhler, Dale Lambert, Eric Jergensen and Van Turner. Also in Attendance: Mayor Ross C. "Rocky" Anderson; Ed Rutan, City Attorney; Cindy Gust-Jenson, Executive Council Director; Gary Mumford, Council Deputy Director/Senior Legislative Auditor; Janice Jardine, Council Planning & Policy Analyst; Russell Weeks, Council Policy Analyst; Lewis Zunguze, Planning Director; Alison Weyher, Community and Economic Development Director; Tim Harpst, Transportation Director; LuAnn Clark, HAND Director; Scott Vaterlaus, City Traffic Engineer; Gordon Haight II, Transportation Engineer; LeRoy Hooton, Public Utilities Director; Jim Lewis, Public Utilities Finance Administrator; Jeff Niermeyer, Public Utilities Deputy Director; Stephanie Duer, Water Conservation Coordinator; and Pam Johnson, Deputy City Recorder. Councilmember Christensen presided at and conducted the meeting. The meeting was called to order at 5:32 p.m. AGENDA ITEMS #1. REPORT OF THE EXECUTIVE DIRECTOR, INCLUDING REVIEW OF COUNCIL INFORMATION AND ANNOUNCEMENTS. View Attachment Cindy Gust-Jenson said the Council Chair and Vice Chair felt the agendaed public hearings should be held at the time advertised. She said during the City Council meeting, the items scheduled for public hearings would be addressed prior to the general public comments to the Council. See File M 03-5 for additional Council announcements. #2. INTERVIEW ADRIAN RAY AUTRY PRIOR TO CONSIDERATION OF HIS APPOINTMENT TO THE POLICE CIVILIAN REVIEW BOARD. Mr. Autry said as a minority, he felt it was important to make certain all points of view were represented. He said his educational background was in Organizational Studies in Human Behavior. He said he felt his upbringing, what he had been exposed to growing up, and his life experiences were the most valuable. #3. INTERVIEW RICHARD WIRICK PRIOR TO CONSIDERATION OF HIS APPOINTMENT TO THE BUSINESS ADVISORY BOARD. Mr. Wirick said he was involved with three other associations dedicated to the revitalization of the downtown area. He said he was excited about the potential of this board and the collaboration of each group. #4. RECEIVE A BRIEFING REGARDING PARKING METERS SPECIAL USE CONDITIONS, REMOVAL AND FEES. View Attachment Tim Harpst, Gary Mumford and Scott Vaterlaus briefed the Council. Mr. Mumford said the current ordinance was passed increasing fees to prevent perceived abuses. He said after enforcing the ordinance, the administration had identified several areas which needed changes. 03 - 1 PROCEEDINGS OF THE CITY COUNCIL OF SALT LAKE CITY, UTAH TUESDAY, APRIL 1 , 2003 Councilmember Buhler said the current ordinance did not work for delivery parking around the Convention and the Delta Centers. He said it might be easier to allow areas such as these to be exempt from special parking fees. Mr. Vaterlaus said the proposed ordinance change would specify those needing to obtain special parking permits, such as construction companies blocking public parking. Councilmember Buhler said the film and television industry put thousands of dollars into the City' s economy. He said having several different permit fees and areas would make it hard and costly for production companies to work in the City. Mr. Vaterlaus said changes were necessary to make the areas requiring permits clearer. He said the proposed ordinance lowered fees in most cases. Councilmember Saxton said public parking was already an issue downtown. She said when the parking meters were bagged parking resources and revenue were lost. Mr. Vaterlaus said in the proposed ordinance, the longer meters were bagged the more costly the fees. He said this encouraged permittees to bag meters only when necessary. He said they were working with parking enforcement to have the bags removed during the evening and returned during the day, until the permit had expired. Councilmember Saxton said she encouraged the administration to re-look at the City's street closure policy. She said businesses were already struggling in the downtown area and to close streets down made that business inaccessible to the public. Councilmember Lambert asked if there would be legal issues if different industries were charged different permit amounts for parking needs. Mr. Harpst said the City Attorney' s Office reviewed the proposed ordinance and felt it was legally sound. Councilmember Christensen said he wanted to see all businesses using parking meters charged. He said the businesses such as non-profit groups could apply for a wavier or reduction of fees permit. He said this would allow the City more control. Councilmember Jergensen said the parking situation did need guidelines and control. He said in many areas of the City, if a delivery or repair vehicles had to park in the only available parking available for the residents. Councilmember Buhler asked the administration to prepare another briefing and providing Council with feedback from the Convention and Visitors Bureau, the Delta Center, the film industry and others affected by the proposed ordinance. #5. RECEIVE A BRIEFING REGARDING CHANGES TO THE SMALL BUSINESS REVOLVING LOAN FUND AND A GRANT TO THE MICROENTERPRISE LOAN FUND. View Attachment LuAnn Clark, Alison Weyher and Gary Mumford briefed the Council from the handout. Councilmember Christensen asked why the loan was funded through the Microenterprise Loan Fund and not by the City. Ms. Weyher said it was important for startup businesses to go through the Microenterprise Loan Fund. She said they were able to provide one on one mentoring. She said they had the resources to review the business plan and business projections. She said Community Development Block Grant (CDBG) did not have staff, resources or training to do that. Councilmember Turner said criteria made it hard for west side or downtown businesses to qualify for the loan fund. Ms. Weyher said marketing was always a challenge. She said they had met with the Hispanic Chamber of Commerce and other minority groups advising them of the resources available to small businesses. She said it was the City's job to promote community growth and economic development. She said the City 03 - 2 PROCEEDINGS OF THE CITY COUNCIL OF SALT LAKE CITY, UTAH TUESDAY, APRIL 1 , 2003 had established loan criteria to make sure this was achieved. Councilmember Turner said sometimes even a small piece of equipment could help make a small business successful. He said more businesses would boost the economy and the City's tax base. Councilmember Jergensen said there was a balance between an investment the City should make on startup businesses and the Council' s financial obligation to its constituents. Ms. Weyher said a matrix had been established for loan applicants. She said the applicant had to get at least 70 points on the matrix for the loan to be approved. She said 60 of the 100 points were based on credit history and the businesses ability to repay the loan. She said the matrix also required 25% collateral. She said that was why most startup businesses could not meet loan requirements. Councilmember Jergensen asked how loan applications were reviewed and who made the final decision. Ms. Clark said loan applications were reviewed by a committee. She said a bank or loan officer was required to be on the committee. She said should the applicant meet the 70 point requirement of the loan matrix, the committee would forward the application to the Mayor who made the final decision. Councilmember Saxton said credit history should be the most important criteria. Ms. Weyher said the applicant had to have a credit score of 620 points or higher. She said of the possible 100 points on the matrix, 60 points were based on the applicant' s ability to repay the loan. She said 25 points were available for neighborhood impact and 15 points for economic development. A discussion was held on the pending KUTV Channel 2 loan. The discussion included how the loan would affect future loans from the City. Councilmember Love said there were many worthy businesses needing funding. She said she did not want the criteria to be biased for downtown or west side locations only. Ms. Weyher said loans were available for any qualifying business. She said areas needing the most business revitalization were downtown and the west side of the City. A straw poll was taken. Council Members voted in favor of moving this item forward for a public hearing. #6. HOLD A DISCUSSION REGARDING STREET LIGHTING ISSUES AND UPDATES. View Attachment Tim Harpst, Gordon Haight and Gary Mumford briefed the Council from the attached handout. Mr. Haight said the City spent about $2 million a year maintaining lighting throughout the City. He said many cities have adopted an Enterprise Fund for their lighting. He said this was an additional amount charged on residents utility bills. Councilmember Saxton asked why it was important to provide lighting in the City. Mr. Haight said safety was the main reason. He said as residents felt safer in neighborhoods, they spent more time outdoors creating a community atmosphere. He said other cities were installing citywide lighting, which was paid for with enterprise funds. Councilmember Buhler said although the program was available Citywide, it looked as if only some areas were interested. Mr. Haight said it took a great deal of organization to recruit a neighborhood. He said some areas had a great deal of turn over and the neighbors did not get to know each other well enough to implement the Special Interest District (SID) light funding. He said as someone new moved in, they did not realize it was the homeowners responsibility to maintain and pay for the lights. Councilmember Jergensen asked if the administration had approached the community 03 - 3 PROCEEDINGS OF THE CITY COUNCIL OF SALT LAKE CITY, UTAH TUESDAY, APRIL 1 , 2003 councils with the street lighting proposal. Mr. Harpst said the response had been the same as with SID funding. He said those familiar with the City' s street lighting program were in favor and those areas not lit now did not see the need. Mr. Haight said the proposed enterprise fund would be billed on a monthly basis. He said it would be installed City wide and maintenance would be controlled. Councilmember Love said each neighborhood was unique. She said it might not be feasible for each to follow the same City wide lighting program. Mr. Harpst said fees could be levied as to the economy of the area. Councilmember Christensen asked for the administration to return for an additional briefing. He asked that the Master Plan, the implementation plan and the estimated costs be made available in the briefing. #7. RECEIVE A BRIEFING ON THE PROPOSED BUDGET FOR WATER, SEWER AND STORM WATER. View Attachment LeRoy Hooton, Jeff Niermeyer, Jim Lewis and Stephanie Duer briefed the Council. Mr. Hooton said the Council had requested each water bill recipient be notified of the fee increase hearing. He said notices could be sent out as bulk mailing. He said this could be costly and result in everyone responding at the same time. He said if notices were sent out in the regular billing cycle, some residents might not receive their notice until after the hearing was held. Councilmember Buhler said the hearing could be postponed until after a complete billing cycle had been generated. Ms. Duer said the proposed rate increases and hearing information would be posted on the City's web site. Councilmember Jergensen said although it may not be cost prohibitive, residents would pay more attention to an announcement sent separately. A discussion was held on the proposed budget for the Water Department. Mr. Hooton said to bring the budget back in line, an 11% water rate increase was needed. Councilmember Christensen said this was a unique situation. He said a rate increase was requested prior to the final budget being passed. #8. HOLD A DISCUSSION REGARDING CDBG, ESG, HOPWA, AND HOME PROGRAMS. View Attachment LuAnn Clark and Gary Mumford briefed the Council from the attached handout. Ms. Clark said the discussion was continued from the Work Session meeting of Thursday, March 27, 2003. A discussion was held on the funding recommendations for the Community Development Block Grant (CDBG) programs. Ms. Clark said Council had asked for additional information on Taufer Park playground and park improvements. She said the Engineering Department had re-estimated the amount required at $25,000 less. A discussion was held on several items Community Development Action Committee (CDAC) chose not to fund. Councilmember Buhler asked about funding for refurbishing of the Boys and Girls Club. Ms. Clark said CDAC did not recommend funding this project. She said it was felt fundraising could be done for the work and items needed on this project. Councilmember Christensen questioned why CDBG had funded less than requested on several items. Ms. Clark said CDAC was short on funds and they evaluated what they felt was the most important. A discussion was held on the fact that CDAC had denied funds for planning on the Sugar House Community Study for Historic Nomination. Councilmember Christensen asked about funding for the Continuum of Care Coordinator for Utah Issues. He said when this was presented last year the position was for that year only. Ms. Clark said Utah Issues had determined a fulltime support person was needed to coordinate grants for Statewide homeless programs. She said CDAC did not fund this position because they felt those that benefited from the program should be 03 - 4 PROCEEDINGS OF THE CITY COUNCIL OF SALT LAKE CITY, UTAH TUESDAY, APRIL 1 , 2003 the ones to fund it. Councilmember Saxton asked if a breakdown could be provided for grants written and awarded to Salt Lake City. A discussion was held on the purpose of the Neighborhood Self-Help Grant and the programs it supported. Councilmember Christensen asked for the Council Members to fill out and return their funding recommendations for these items prior to the housing discussion scheduled on Thursday, April 3, 2003. The meeting adjourned at 10:29 p.m. pi 03 - 5 • TO: CITY COUNCIL MEMBERS FROM: COUNCIL MEMBER NANCY SAXTON, DISTRICT FOUR DATE: March 31, 2003 SUBJECT: TIME, PLACE AND MANNER - MAIN STREET PLAZA Given the significant community interest and the divergence of opinion associated with the Main Street Plaza issue, I would like to propose that the City Council ensure that all options -including Time, Place and Manner -- are open for discussion when this issue comes before us. The focus of the recent public process has been the proposal that includes selling / trading the easement with the Church of Jesus Christ of Latter-day Saints. I am recommending that the Council consider expanding the remaining portions of the public process to include the draft Time, Place and Manner ordinance (with modifications as deemed necessary by the City Administration, the City Attorney's Office and the legal opinion from Randy Dryer). I believe we have all seen the significant value public input brings to the resolution of City issues. While the Time, Place and Manner issue is a complex legal issue I believe if we as a Council agreed to release a summary of the Dryer legal opinion those with • specific interest in or knowledge of these legal issues would have the opportunity to provide written comment to the Council prior to our consideration of this issue. Following is a summary of my recommendation and a potential sequence: 1. Consider requesting a summary of the Dryer legal opinion. 2. Notify the Community Council Chairs and organizations that have expressed interest in Time, Place and Manner via letter of a public comment period; set an end date for the comment period (May 15, for example) 3. When setting the hearing date for the hearing on the proposal currently being advanced by the Administration, specify that comment will also be accepted at that time on Time, Place and Manner. 4. Post the legal opinion summary and any other relevant documents on the City's web site, and make the information available via fax or mail to those who request it but don't have access to the internet. 5. Consider holding an open house, a single public meeting or a series of public meetings to gather input in advance of the Council's public hearing on the issue of the Main Street Plaza. 6. Consider requesting that the City Attorney and / or outside legal counsel review recommendations from the public prior to the Council hearing. I would appreciate your consideration of my recommendation for this expanded public • process on this issue of broad public interest. City Council Announcements - • April 1 , 2003 A. Decisions, Feedback & Information needed by staff 1.Request in regard to Defense of the Bill of Rights.On March 11,2003 a group of people spoke to the Council regarding a movement in"Defense of the Bill of Rights". This group is asking that the City Council consider a resolution supporting such an effort.How would the Council like to respond to this group? 2.SPRING AIR MOUNTAIN-WEST—The City's resolution setting the requirements for industrial development revenue bonds requires an applicant to obtain a"direct-pay letter of credit"to protect investors and the City from default. Spring Air Mountain-West has arranged for a private placement of the bonds with a financial institution and proposes that a"sophisticated investor letter"be substituted for the direct-pay letter of credit. The sophisticated investor letter will restrict the buyer from marketing or reselling the bonds without the City's consent and will generally include the following: (1)the financial institution will hold the bonds in its own portfolio,(2)the financial institution routinely purchases similar investments,(3)the financial institution has researched the financial condition of Spring Air Mountain-West,(4)the financial institution understands the risks,(5)the financial institution will only look to Spring Air Mountain-West for repayment of the bonds,(6)the financial institution covenants not to 411 look to the City for payment in case of default. The City's financial advisor and a deputy city attorney have expressed that this arrangement meets all of the City's desires to protect investors and the City's name in the case of default. The exact language of the sophisticated investor letter will be negotiated between bond counsel and the City Attomey's Office to the satisfaction of the City Council. Is the Council willing to consider adopting a bond resolution that waives the letter of credit requirement in this case where there is a private placement with restrictions on reselling and provides that the City receive a "sophisticated investor letter"? B. Council Office Policies C. For Your Information 1.To assist Council Members in preparing for the upcoming Housing Fact Finding discussion scheduled for Thursday,April 3rd,staff has provided a binder with the following information: • The Council's Housing Policy statements-adopted December 14, 1999 • The Council's Downtown Economic Development Policy—adopted January 2003 A front page article in the Salt Lake Tribune dated March 11,2003 tells • of 63 cities and towns that have signed such resolutions in response to sections of the Patriot Act,Homeland Security Act,and a series of Executive Orders. Cities such as Denver Colorado, Detroit Michigan, Flagstaff,Arizona,Fairbanks,Alaska and Castle Valley.Utah to name a few. It is the city's responsibility to insure that its residen&feel safe and protected by just laws. You are responsible for observing the state and federal Constitutions and the Bill of Rights. Signed, • ' tst (393 S.N . 5'`ttQ,Ni CC; MEbI.� • • SALT LAKE CITY COUNCIL STAFF REPORT DATE: March 28,2003 SusJEcT: Fees to Bag Parking Meters&Reserve Restricted Curb Space AFFECTED COUNCIL DISTRICTS: Citywide and specifically Council District 4 STAFF REPORT BY: Gary Mumford ADMINISTRATIVE DEPT. Community&Economic Development / AND CONTACT PERSON: Tim I-Tarpst,Transportation Director KEY ELEMENTS: Upon presenting a valid request,the City will reserve parking meters by placing a bag over meters and by issuing dash board permits for authorized.vehicles. Prior to July 2002,the fee " for reserving each parking space was$10 per day for the first day,.$5 per day for the next fourteen days,and$3 per day thereafter.- Perhaps because of the low fee structure,some curb space may have been'reserved for extended periods of time beyond actual needs. To provide • an incentive to keep parking spaces in service to-the public,the City implemented a$50 per • day fee in July 2002. The larger fee has been successful in decreasing the amount of requests Iand number of days that parking spaces have been taken out of service. The Administration noted in its transmittal that the increase in the fees has caused - considerable hardship in certain instances. The$50 per dayfee-may also have a detrimental impact on the desirability to hold major conventions and functions. The Administration proposes,that a$25 per day fee May be more appropriate while continuing to provide the • incentive to keep parking„spaces available to the public. ' MATTERS AT ISSUE/QUESTIONS FOR THE ADMINISTRATION: The Administration developed a'revised proposed fee schedule in consultation with representatives of the Downtown Alliance,Delta Center and the Visitors&Convention Bureau. Other entities,such as the Utah Filni Commission,have requested that the City reconsider the fee structure. A,$25 fee adequately recoups the City's costs to process permits and bag the meters according to the Administration's transmittal. • In addition to adjusting the fee,the proposed ordinance includes some incentives to encourage filming within the City and hosting large scale conferences and other events downtown. • The proposed ordinance sets a$10 per space per day for requests from movie, television and commercial filming companies. • The proposed ordinance sets a reduced fee of$10 per space per day for major events of at least three days in duration and with an expected attendance of at least 5,000 people. • • The proposed ordinance also provides for fee waivers for 501(c)3 non-profit organizations (up • to 60 days annually)or for City-sponsored events. Organizations for religious,charitable,or educational purposes are examples of 501(c)3 organizations. Professional associations that hold seminars and conferences for members may also be 501(c)3 organizations. Because of the lack of a fee incentive to keep parking spaces in service to the public, the Council may wish to discuss with the Administration what procedures will be put into place to ensure that these organizations will reserve parking spaces only when absolutely necessary. The higher fees have been successful in reducing the number of parking spaces reserved based on actual revenue versus budget. Estimated revenue reflected in the budget was$140,000 for fiscal year 2002-03. Actual fee revenue for eight months is$49,800. Council staff estimates that annual revenue will be about$75,000 by June 30,2003. The Administration estimates that lowering the fee to$25 will not have a"significant impact"on revenue. However,Council staff calculates that if the lower fees don't result in more spaces being reserved,annual revenue will be less by$37,500(50% of$75,000 since the proposed$25 fee is 50% of the current $50 fee). The reduction could be more because of the reduced fees for the film/TV industry and for large events. The revenue loss could be less if there are more legitimate needs for reserving parking spaces. The Council may wish to discuss with the Administration the projected reductions in revenue and confirm that'the Administration is planning for this reduction in its proposed annual budget for fiscal year 2004: No additional fee is proposed for closing an entire street. If there are parking meters located • on the street to be closed,the fee for reserving the curb-side-parking will still apply: Most of the street closures are related to City events or parades. The Council may wish to discuss the option of establishing street closure fees with the Administration. cc Rocky Fluhart,David Nimkin,Alison Weyher,David Dobbins,Tim Harpst,Scott Vaterlaus,JD Baxter • PEAR I 0 2 O3 rL1,�t°)°ET I RPM° A ` I, ` �ALISON WEYHER SA II, ru.�a�t b� 3, � mm 4 - RDSS C. "ROCKY" ANDERSON DIRECTOR COMMUNITY AND ECONOMIC DEVELOPMENT MAYOR COUNCIL TRANSMIT V TO: Rocky Fluhart, Cr ief Administrative Officer ` DATE: February 27, 2003 FROM: Alison Weyher'V RE: Adjusting fees to bag parking meters and reserve restricted curb space. ST.X.FF CONTACT: Tim Harpst, Transportation Director 535-6630 RECOMMENDATION: That the City Council adopt the proposed ordinance modification. DOCUMENT TYPE: Ordinance BUDGET IMPACT: Prior to July 1, 2002, the parking meter bagging fee was $10 per day per meter for the first day, $5 per day for the next fourteen days, then $3 per day thereafter. During the most recent four-year period at that rate, the City received $3,800 monthly in meter fees. Last July 1, the fee was increased five-fold to $50 per meter per day with no sliding scale for the number of days the meter was bagged. Additionally, the same fee per parking space was • applied in restricted zones such as loading zones, bus zones and time restricted areas. Since the fee increase, the City has been averaging $6,300 monthly in fees. It is expected that the proposed-modifications-to-the-fee-structure-will have-a-small-impact-to there-venuebeing collected and likely settle in between the two figures reported above. DISCUSSION: The intent of the fee increase last July was threefold: 1. Insure recapture of the cost to bag, un-bag, and process permits. 2. Provide incentive to applicants to find other ways if at all possible to conduct their activity without inconveniencing the public by removing parking spaces from service. 3. Begin charging for non-metered curb space that impacted public use and required permit processing. The change to $50 was successful in reducing the number of requests for metered and non- metered spaces. However, the significant increase in the fees has caused considerable hardship in certain instances. The Convention & Visitors Bureau, the Delta Center and the Downtown Alliance have informed the City that the new rate structure is having a detrimental impact on the desirability to hold major conventions and functions that attract business to the downtown. The Salt Palace gave the example that major conventions could incur up to $6,000 in meter fees under the new rate structure. They request a reduction in such fees for major activities stating that these conventions generate business for the downtown area. They have indicated that there IIIhas already been some discussion by convention organizers about looking at facilities outside of Salt Lake City to host their conventions. The Delta Center experiences similar impacts for 451 SOUTH STATE STREET, ROOM 404, SALT LAKE CITY, UTAH 847 1 I TELEPHONE; 801-535-6230 FAX: 201-535-6005 Recv ,Eo aoaa events such as rodeos and circuses. Additionally, several non-profit agencies have contacted the • City stating that these fees are detrimental to fundraising events and that some of these events are supported by and/or partially sponsored by Salt Lake City. The State Film Commission annually requests a reduced fee structure for the filming industry. Analysis: Upon reviewing the issues raised by applicants since the fee has been raised to $50 per meter per day, the following modifications to the current ordinance are recommended: 1. Adjust the daily meter bagging and restricted space fee from $50 to $25. It is believed that a$25 per day meter and restricted space fee is sufficient incentive for applicants to exhaust other means of conducting their intended activity before requesting temporary use of public curb space. This rate recoups the City's cost to provide this service. Applying it to non-metered restricted space also recoups the City's cost to process the required permits. 2. Provide the ability to approve a fee waiver for no more than 60 days annually to any organization that provides proof of 501(c)(3) status. This fee has routinely been waived upon request. The proposed wording change clarifies the practice. 3. Provide a fee waiver for use of curb space in connection with City-sponsored events. This fee has also been routinely waived and the proposed wording change clarifies the practice. 4, Provide a reduced fee of$10 per space per day for requests from movie, television and commercial filming companies. This proposal continues the fee amount previously charged. It also responds to the continuing requests from the • State Film Commission and filming-industry to-offer-an-incentive to film within the City and recognizes the money their presence infuses into the local economy. 5. Provide a reduced fee of$10 per space per day for major events of at least three days duration and with expected attendance of at least 5,000 people. This continues the fee amount previously charged and responds to the continuing requests to provide incentive for organizations to host large scale conferences and other events downtown. Public Process: The recommendations have been developed with the advice of and in consultation with representatives of the Downtown Alliance, Delta Center and the Visitors and Convention Bureau. Relevant Ordinance: To implement the above described changes, City Ordinances 12.56.210, 12.56.325 and 14.12.130 need to be modified as shown in the accompanying ordinance draft. S • SALT LAKE CITY ORDINANCE No. of 2002 (Parking Meters Special Use Conditions, Loading Zones and Restricted Parking) AN ORDINANCE AMENDING SECTION 12.56.210,SALT LAKE CITY CODE, RELATING TO PARKING METERS SPECIAL USE CONDITIONS AND FEES; AMENDING SECTION 12.56.325, RELATING TO LOADING ZONES AND RESTRICTED PARKING - SPECIAL USE CONDITIONS AND FEES; AND AMENDING SECTION 14.12.130 RELATING TO REMOVAL OF PARKING METERS. Be it ordained by the City Council of Salt Lake City, Utah: SECTION 1, That Section 12.56.210,Salt Lake City Code, pertaining to parking • meters special use conditions and fees be, and the same hereby is, amended to read as follows: - 12.56.210 Parking Meters-Special Use Conditions And Fees: Permission to park in parking meter spaces without the deposit of a coin may be granted by the City Transportation Engineer or the Engineer's designee upon application being made therefor in writing upon the following conditions: A. A showing of a substantial need to temporarily close off the meters involved to the public use for a stated duration of time, B. The placing of authorized bags over the meters involved, and C. The payment daily in advance to the City Treasurer according to the following schedule: 1. Twenty-five dollars ($25.00)per meter per day, or part thereof 2. Ten dollars ($10.00)per meter per day, or part thereof for an event that: (i) continues for not less than three consecutive days, (ii) significantly fosters area business promotion, and(iii) has an expected attendance exceeding 5,000 persons. 3. Ten dollars ($10.00)per meter per day, or part thereof during the filming of a movie, television series or commercial. 4. No fee shall be charged to any organization, for up to a total of 60 days in any calendar year, that provides written verification from the Internal Revenue Service that the organization has been granted tax- exempt status under section 501(c)(3) of the Internal Revenue Code, or its successor 5. No fee shall be charged to any organization using such meter under the • direction of the City in connection with a City-sponsored special event. SECTION 2. That Section 12.56.325, Salt Lake City Code, pertaining to loading zones and restricted parking- special use conditions and fees be, and the same hereby is, enacted to read as follows: 12.56.325 Loading Zones and Restricted Parking-Special Use Conditions And Fees: Permission to park in loading zones and/or restricted parking areas may be granted by City Transportation Engineer or the Engineer's designee upon application being made therefor in writing upon the following conditions: A. A showing of a substantial need to temporarily close off the loading zone or restricted parking area to the public use for a stated duration of time, and 2 • B. The payment daily in advance to the City Treasurer according to the following schedule: 1. Twenty-five dollars ($25.00) per vehicle space in a loading zone or restricted parking area per day, or part thereof. 2. Ten dollars ($10.00)per vehicle space in a loading zone or restricted parking area per day, or part thereof for an event that: (i) continues for not less than three consecutive days, (ii) significantly fosters area business promotion, and(iii) has an expected attendance exceeding 5,000 persons. 3. Ten dollars ($10.00)per vehicle space in a loading zone or restricted parking area per day, or part thereof during the filming of a movie, • television series or commercial. 4. No fee shall apply outside the area of the City-bounded by the following streets: North Temple, 200 East, 600 South, and 200 West. 6. No fee shall be charged to any organization, for up to a total of 60 days in any calendar year that provides written verification from the Internal Revenue Service that the organization has been granted tax-exempt status under section 501(c)(3) of the Internal Revenue Code, or its successor. 7. No fee shall be charged to any organization using such loading zone or restricted parking area under the direction of the City in connection with a City-sponsored special event. • 3 SECTION 3. That Section 14.12.130, Salt Lake City Code, pertaining to removal of parking meters be, and the same hereby is, amended to read as follows: 14.12.130 Removal of parking meters. A. Permission to remove a parking meter or meters from the street may be granted by the transportation engineer or the engineer's designee upon application being made therefor in writing showing a substantial need to temporarily close off metered parking spaces to the public use for a stated duration of time, together with payment in advance to the city treasurer of the sum of twenty-five ($25.00) dollars per meter so removed per day, or part thereof. However, no fee shall be charged to (1) any organization, for up to a total of 60 days in any calendar year, that provides written verification from the Internal Revenue Service that the organization has been granted tax- exempt status under section 501(c)(3) of the Internal Revenue Code, or its successor, or • (2) any organization using such meter space under the direction of the City in connection with a City-sponsored special event The petitioner shall be responsible for, and install, meter post replacements according to city specifications, as set forth by the transportation engineer. B. When restricted parking areas are requested to be reserved for exclusive use by the petitioner and it is necessary to temporarily remove existing parking meters in order to relocate such restricted parking, the foregoing meter-removal provisions shall apply. SECTION 4. This ordinance shall take effect immediately upon the date of its first publication. • 4 4110 Passed by the City Council of Salt Lake City, Utah this day of 2002. CHAIRPERSON ATTEST: CHIEF DEPUTY CITY RECORDER Transmitted to Mayor on - - . - - - - - - Mayor's Action: Approved. Vetoed. • MAYOR ATTEST: CHTF.F DEPUTY CITY RECORDER APPROVED AS TO FORM Salt Lake City •ttorney's Office (SEAL) Date �c/�- o By i f� Bill No. of 2002. Published: G.\Ordinances 02\Atnending 12.56 210 et al re parking meters and loading zones LVS 1-3 1-03 clean version • 5 • SALT LAKE CITY ORDINANCE No. of 2002 (Parking Meters Special Use Conditions, Loading Zones and Restricted Parking) AN ORDINANCE AMENDING SECTION 12.56.210, SALT LAKE CITY CODE, RELATING TO PARKING METERS SPECIAL USE CONDITIONS AND FEES; AMENDING SECTION 12.56.325, RELATING TO LOADING ZONES AND RESTRICTED PARKING - SPECIAL USE CONDITIONS AND FEES; AND AMENDING SECTION 14.12.130 RELATING TO REMOVAL OF PARKING METERS. Be it ordained by the City Council of Salt Lake City, Utah: SECTION 1. That Section 12.56.210, Salt Lake City Code, pertaining to parking • meters special use conditions and fees be, and the same hereby is, amended to read as - ------ - ------ ----- -------- follows: - - - - -- - —- 12.56.210 Parking Meters-Special Use Conditions And Fees: Permission to park in parking meter spaces without the deposit of a coin may be ranted by_: A. Tthe City Transportation Engineer or the Engineer's designee upon application being made therefor in writing upon the following conditions: A. 11. A showing of a substantial need to temporarily close off the meters involved to the public use for a stated duration of time, B. 2. The placing of authorized bags over the meters involved, and C. 3. _The payment daily in advance to the City Treasurer according to the 4111 following schedule: 1. of-tT\\cnty-fivei;tt_- dollars ($2 t).00) per meter per day, or part • thereof. 2. Ten dollars (S 10.00) per meter per day, or part thereof For an event t1T:Et: r tit', leis than three consccutiv t; da;` . �i�aEli canti; t�,sters area business promotion, and (hi) has an expected attendance exccedina ).t)tiii persons. 3. Ten dollars (S 10.00) per meter per day, or part thereof during the filming of a movie, television series or commercial. 4. No Fee shall be ehamed to anv organization, for up to a total of 60 days in any calendar year, that provides vA ritten verification from the Internal Revenue Service that the orwanization has been uranted tax- exempt status under section 501(0(.3) of the Internal Revenue Code. or its successor 5. No fee shall be charged to any organization usin<a such meter under the direction otthe City in connection with a City-sponsored special event. B. The Mayor or the Mayor's authorized designee, for no more than a total of ten (10) days in anyone cal-end& year and upon threc--(3) working- days' advance notice to l order :etting forth the days_ hours and/or affected ar a or ar as of meter or meters. upon the :oilowing conditions: i When t for limited period to foss I. tnc waiver is _�z a ��itP«u ter foster area business bt: 1, ,lid de tt 2. 'Alien a .,ubstantial ;public interest is furthered 'b-the vaiv.,r. or • • 3. As an experiment to gather data on the effects of parking„ieters and the economy of the surroundimz areas. SECTION 2. That Section 12.56.325, Salt Lake City Code, pertaining to loading zones and restricted parking- special use conditions and fees be, and the same hereby is, enacted to read as follows: 12.56.325 Loading Zones and Restricted Parking-Special Use Conditions And Fees: Permission to park in loading zones and/or restricted parking areas may be granted by City Transportation Engineer or the Engineer's designee upon application being made therefor in writing upon the following conditions: A.A. A showing of a substantial need to temporarily close off the loading zone or restricted parking area to the public use for a stated duration of time, and • B.B. The payment daily in advance to the City Treasurer accordinz to the following schedule: - ----- ----- ---- - - - - -- -- - - -- 1. e€-tT«cnty-tivetitty dollars ($2550.00) per vehicle space in a loading zone or restricted parking area per day, or part thereof. 2. Ten dollars ($10.00) per vehicle space in a loadinu zone or restricted parkinu area per day. or part thereof for an event that: (i) continues for not less than three consecutive da's. ;ii) sisniticantly Foster; area hu5ine�-s promotion. and (hi) has an e';ne:neeted attendance exceedimc 5_is(1() persons. 3, Ten dollars (S i 0.00) er vehicle space in a loadinu zone or restricted narking area ner day. or Dart thereof durinu the filming of a movie. television series or commercial. 3 4. No �c;e shall apply outside the area of the City bounded by the 110 following streets: North Temple. 200 East. 600 South. and 200 `Vest. 6. No fee shall he charged to an'; oreailitation, for up to a total of 60 days in any calendar Year that pm y ides written \eri fication boil the Internal tie\enue SerA ice that the organization has been arantedl tax-eNcmpt status under <ecrion 501(c)( 3) of the Internal Re\enue Code. or its successor. 4_.7. No fee shall be charged to any organization using such loading tone or restricted parking area under the direction of the City in connection vv-ith a City-sponsored special event. SECTION 3. That Section 14.12.130, Salt Lake City Code, pertaining to removal • of parking meters be, and the same hereby is, amended to read as follows: 14.12.130 Removal of parking meters. A. Peuunission to remove a parking meter or meters from the street may be granted by the transportation engineer or the engineer's designee upon application being made therefor in writing showing a substantial need to temporarily close off metered parking spaces to the public use for a stated duration of time, together with payment in advance to the city treasurer of the sum of`\\ent` Ii\et;1 . (52 00) dollars per meter so removed per day, or part thereof. l-{ovv ever. no tee shall he charred to i I atm. oruanir-ei iou. for up to a total of 60 days in any calendar year. that ')r" ideas '.,ritten .eririear: 'a `r m the latent, i Revenue ~er' _. that the orauni•_t?nn has heen .n-antet: r- of the vier al :.e' enue Code. •'r is ue,:essor ,r 4 (2) ?i`_0re_3llitatitm?i U i l'.T such meter Linder the direetit,ri oitile City m connect (in it`: tit_ '. <, r•_t i:_:' c)• ,i";t The petitioner shall be responsible for, and install, meter post replacements according to city specifications, as set forth by the transportation engineer. B. When restricted parking areas are requested to be reserved for exclusive use by the petitioner and it is necessary to temporarily remove existing parking meters in order to relocate such restricted parking, the foregoing meter-removal provisions shall apply. SECTION 4. This ordinance shall take effect immediately upon the date of its first publication. Passed by the City Council of Salt Lake City, Utah this day of 2002. CHAIRPERSON ATTEST: CHIEF DEPUTY CITY RECORDER Transmitted to Mayor on Mayor's Action: Approved. Vetoed. • MAYOR 5 • • ATTEST: CHIEF DEPUTY CITY RECORDER SEAL) Bill No. of 2002. Published: G.Ordinances 02`Amending 12.56 210 et al re pal king meters and loading zones LVS 1-31-03 draft • • 6 • SALT LAKE CITY- COUNCIL 'STAFF REPORT • DATE: - March 28,2003 SuBJEcr•., Changes to the-Small Business Revolving Loan Fund Criteria, • • and a grant to the Utah Microenterprise;Loan Fund AFEcrED.CA[nv*q.DISTRIersi Citywide - - • - STAPF R.�:P E tiR't 13X== _ "Cay.•tViwxiford ._ _ADMINISTRATIVE D 3-rt ;`_ Department of Community&Economic Development - a- ., AND COST4 r-PERSON: Alison-Weyher,CED Director . - LuA Ciark, Director ., 1< x,ELEMENTS: On.June 13,2002,.the•City.:Council:adopted criteria for the.Smali Business'Revolving Loan Fund and uthorized=the.Mayor to/adit inistertk a-loan program-in-accordance With the.!criter�ia.:without Council approval;of individuall.loans..YUnder the criteria,an.evaluation:matri ,is`nsedto.rank the applic nt's.cr dit Mato ry,ability to re ay,the loam,collateral,management and business=exper ence igbbo rhood impacts,and f:cal p is of the los.,n relating to j o .creation and retention,leverage of itb is riv ,d act on the : _ p 1 �tv•p ate�£urids,an inip Ctty',4 to*structur'e.' The°criteria require that.at S . ports out_of a..possible 100.ypoints:be received inorder:to award'a lean:.-The matrix includes-15' points.for.fuliy,securedlo. s and up,to.:19;paints,for loans partially:secured,with collateral. Although_coilate'r`a :was.not;:recquired-forexistitng:b inesses'with.at:10,04three;years'experience,it rnal ea',i`ttdi uit forati applicant:to.receive '0:poii ts'ifmost of'the=`1.5-points-for collateral are=not awdrded 4Undcr.he'.2002,criteri start-up=.business can receiv a ii .% loa s fullyz secured . _- • and a amount t>least'itittort6 theamount of the:l o an,is i*Ovided•b the borrovi er or otlier-_lender` ` for the busi des ,` t°lie" 002h crtt r a also l equ a life nsurai cevn the b isinerss principals'.t a g:the City as:`lieno$ci The intet:Ottate forthe cutxent.programis;the: rime ra e.if the.4PPtie.kfit-- receiyes;a score,of at;least:$O; ints'andpr ie,pl s 2%10,if the at plic t receives.between 7Q and,80, - Seventy-six:loan applications-have been:.sent out�to'individual's'•,inquiring.about .loan'Pr ogram . since.the''loan-criteria were'iadopted,,but`only1one loal7i,l as been:`awarde& Due.to.the<poor�success o the.loan`progratn,;the,Ad%ninistr tigrt r queststhat=tlai Council.•relay.thetoan'criteriaarelating to} " c 11_0eral,,"interest rates,,and life InstiOnee. .`I a d iiinistration alsoto ses Ito'grant- 250,000 to `. the`Utah,Microenterprise Loan Fund tonrke small loans`tO$ itiesses;tiiat!do not qualifyfor=the City:'s.loatt'program..Additionally,the provides a:�loan:pro- `am to businesses:i. pacted' byniad`constructioh,and allows't;1eAdniinistirat iin:flexibility•tolproposelarger-1 ianshto'the Couttc l3for°cons dezation at lower rates wi hen.sig ii icant job'ereatio n or;new:a revenue-will be • MATTERS AT ISSUF/QUESTIONS FOR THE ADMINISTRATION: Collateral-The proposed changes allow a full 15 points in the evaluation matrix for both start-up • and established businesses that provide collateral to secure 25%of the loan amount, Start-up and recently established businesses with less than three years history must place other cash into the business of at least 10%of the loan amount according to the proposed criteria. It is proposed that loans of up to$100,000 are available to start-up businesses. Since loans that are not fully collateralized present more risk of nonpayment, the Council may wish to ask the Administration about the default rate of other similar loan programs and on input received from local financial institutions. One option would be to limit high-risk loans to$25,000 or$50,000 where a majority of the loan is unsecured Interest rate—The proposed change sets the interest rate for loans at the current prim rate at the time the loan is approved. The 2002 criteria set higher interest rates for loans with a greater perceived risk of nonpayment. This concept is similar to interest rates charged by the commercial lending industry. The Council may wish to discuss with the Administration the reasons for setting a single rate for all loans. Life insurance—The proposed change eliminates the requirement for life insurance. Obtaining a life insurance policy significantly,extends the loan processing time and can delay the applicant from receiving the loan proceeds for several weeks after the loan is approved. This is because the applicant doesn't normally apply for insurance until'notified.Out the loan has been approved. The Council may wish to discuss options with the Administration such as requiring life insurance on, business principals only for those loans in excess of$100,000. Grant to the Utah Microenterprise Loan Fund—The Administration approached the Utah 40 Microenterprise Loan Fund about combining its funds with a grant from the City to offer loans up to $25,000 to businesses in.Salt Lake City. The current maximum loan amount is$10,000. The proposal is to grant$250,006 to the Utah Microenterprise Loan Fund to make loans in Salt Lake • City particularly on Main Street and-the Westside. The Utah Microenterprise Loan Fund will provide 50%of the loan amount up to$10,000 and shares risks in the same ratio. Criteria for reviewing_applications will be the same criteria used by the Utah Microenterprise Loan Fund -including'an interest rate of 5$/0,above prime rate; Money from loan repayments will be available to the Utah Microenterprise Loan Fund to loan out again. The Utah Microenterprise Loan.Fund will receive$1,000 from the fund for each loan it makes to provide technical assistance on how to write a business plan and accounting,marketing and legal concerns. The Utah Microenterprise Loan Fund will report to the City annually on the use of the grant funds. The Council may wish to consider receiving a reportfromthe Utah Microenterprise Loan Fund more often than annually especially during the initial.couple'of years. The Council may wish to ask the Administrationabout • the default rate of past loans granted by the Utah Microenterprise Loan Fund to gain a better understanding of the risk level of these loans. Loans to businesses impacted by road construction—The Administration proposes an on-going program of offering loans to businesses impacted by road construction. Loan amounts will.be up to $15,000 at the current prime interest'tate'for a five-year term. Collateral equal to 25%of the loan .will be required. The Administration notes that of the 34 loans made to businesses impacted by light rail,5'loan balances.totaling$38,725 were written off after the City exhausted all collection procedures. Businesses adversely impacted by road construction are eligible for loans under the current loan program,but they must meet the same criteria requirements as other applicants. The Council may wish to ask about the possibility of providing an expedited process for this component of the loan program, given the potential immediate need for businesses impacted by construction. • Extraordinary loans—The Administration would like the flexibility to develop larger loans as situations arise similar to the loan to CBS/Viacom. The Council will be informed of any potential large loans that are in the development stage. The Council would need to take formal action prior to awarding an extraordinary loan. Bank pool program—The Administration is also working on the possibility of establishing a loan pool program with local banks to make loans to businesses in Salt Lake City that do not qualify for conventional financing. Under the loan pool concept,the City would share in the risk with the banks. The Council may wish to ask representatives of the Administration about the progress of this endeavor. cc: Rocky Fluhart,David Nimkin,Alison Weyher,LuAnn Clark,DJ Baxter -;,: 411 ) 411. MAR 1 8 2003 , SALT r \'Q a'c Ty"omPo rvA: iI'N A 0 ALISDN WEYHER 9��a . ® , ROSS C. "ROCKY" ANDERSON DIRECTOR COMMUNITY AND ECONOMIC DEVELOPMENT MAYOR COUNCIL TRANSMIIAL 01 TO: Rocky Fluhart, Chief Administrative Officer. DATE: March 5, 2003 ft 'i FROM: Alison Weyher ;i' RE: Proposed changes to the Small Business Revolving Loan Fund and grant to the Utah Microenterprise Loan Fund STAFF CONTACT: Alison Weyher, CED Director LuAnn Clark, HAND Director DOCUMENT TYPE: Resolution BUDGET IMPACT: The Small Business Revolving Loan Fund has a balance of approximately$3.36 million after the CBS/KUTV loan. The proposed $250,000 grant to the Utah Microenterprise Loan Fund will reduce the balance to $3.11 million. • DISCUSSION: The Small Business Revolving Loan Fund was established in 1991 from repayments from an Urban Development Action Grant(UDAG). A total of 22 loans have been made to local businesses for development and expansion and 34 to those impacted by light rail since then. The only active UDAG is the City Center loan. The loan balance is $1,955,521, and the loan matures in October 2009. City Center makes monthly payments of$28,808. The loan fund also receives interest income on loan payments and on its daily average cash balance. For the first six months of fiscal year 2003, it received $28,286 in interest on loan payments and $65,230 on its daily average cash balance. For fiscal year 2002, it received $51,725 in interest on loan payments and $153,093 on its daily average cash balance. Since 1991 the loan program has experienced five light rail impact loan losses in the amount of$38,298. In each case the City exhausted all collection procedures and was unable to collect the money. Three additional businesses have closed, and the City is still endeavoring to collect on their loans. Five other loans (two small business and three light rail) are two or more months past due. Current loan criteria provide the City can make loans up to $100,000 to start-up businesses if they provide collateral to fully secure the loan and contribute an amount equal to the City's loan amount. Established businesses can also receive loans greater • than $100,000 if they provide a 2-to-1 ratio of other financing to City funds. The interest rate for all loans is the current prime rate or prime plus 2%based on the score an 451 SOUTH STATE STREET, ROOM 404, SALT LAKE CITY, UTAH 841 1 1 TELEPHONE: 801-53S-6230 FAX: 801-S3S-6005 �C aEcrc co ce.Pew 4. application receives by the City's Small Business Revolving Loan Fund Committee on a loan evaluation matrix. 1111 The loan evaluation matrix is used to rank loan applications based on an applicant's credit history, ability to repay the loan, management ability and business experience, neighborhood impacts of the business, value of the collateral provided, and fiscal impacts of the loan relating to job creation and retention, leverage of public to private funds, and impact on the City's tax structure. Local banks typically make SBA loans to small businesses which require the borrower to make minimum cash injection of 10% of the loan amount and to pledge all of the business assets and personal assets, if necessary,to secure the loan. If there is no collateral, the business must have a 2.0 debt service coverage ratio meaning it must generate twice as much revenue as its debt payments. Since the loan criteria were adopted last June, seventy-six loan applications have been sent out to inquiries and one loan (excluding the loan to CBS/KUTV) has been made. It appears that most individuals and businesses seeking loans from the City are unable to qualify for them. Due to the small number of loans being processed and the complaints CED has received, the following proposals are recommended to make the Small Business Revolving Loan Fund more accessible: 1. Relax the loan criteria. 1111 2. Grant funds to the Utah Microenterprise Loan Fund to make loans to businesses that cannot qualify for loans from the City. 3. Establish an on-going program to make loans to businesses impacted by road construction. 4. The Administration would like the flexibility to propose larger loans at lower interest rates when significant job creation or new revenue will be generated. 1. Changes to make the Small Business Revolving Loan Fund criteria more borrower-friendly. A. Start-up businesses. Current criteria provide start-up businesses and those with less than three years operating history may qualify for loans up to $100,000 if they offer collateral to fully secure them and contribute an amount equal to the City's loan. The proposed changes peiiiiit start-up and recently established businesses to qualify for loans up to $100,000 if they provide collateral to secure 25% of the loan and make a cash injection of 10% of the City's loan amount. B. Established businesses. Existing criteria provide established businesses with three years operating history may qualify for loans up to $100,000 if they offer collateral to substantially secure them, or loans greater than $100,000 if they obtain a 2-to-1 ratio of other financing to City funds. The proposed change allows established businesses to s • qualify for loans up to $100,000 if they present collateral to secure 25% of the loan. For loans greater than $100,000, the 2-to-1 ratio of other financing to City funds remains the same, and the loans need to be fully collateralized. C. Interest rate. Present criteria provide the interest rate for a loan shall be the current prime rate if an application receives 80 points or more out of a total of 100 on the loan evaluation matrix, and the current prime rate plus 2.00% if it receives less than 80 points. The proposed change makes the interest rate for all loans the current prime rate. Interest rates on SBA loans range between prime plus 1.75% and prime plus 2.75%. Interest rates on non-SBA loans range between prime and prime plus 4.00% based on the bank's perception of risk in making the loan. D. Life insurance. Current criteria require life insurance on the company's principal(s) in the amount of the loan. The proposed change eliminates this requirement. 2. Grant to the Utah Microenterprise Loan Fund to make loans to businesses that cannot qualify for loans from the City. The UMLF has a proven record of making loans to start-up and existing small businesses, many of which are socially and economically disadvantaged and do not have access to traditional funding sources. The maximum loan the UMLF can make is $10,000. This initiative combines City and UMLF funds to make loans up to $25,000 to businesses in Salt Lake City. Loan • repayments will be made to the UMLF, which will loan the money out again in a manner similar to the City's own revolving loan fund. The proposal is for the City to grant $250,000 to the UMLF to make loans to businesses in Salt Lake City, particularly on Main Street and the Westside, which are unable to qualify for loans from the City's Small Business Revolving Loan Fund or obtain conventional financing. The UMLF will participate in each loan up to $10,000, and use its loan criteria and teiius including an interest rate of 5% above the current prime rate. The City and UMLF recognize these will be high-risk loans and that some losses will occur. The UMLF acknowledges it will endeavor to make successful loans by providing technical assistance to applicants, evaluating their credit history, taking into account their management ability and business experience, and estimating their likelihood of repaying the loans. 3. On-going program to make loans to businesses impacted by road construction as part of the Small Business Revolving Loan Fund. Offering loans to businesses impacted by road construction helps them deal with the adverse consequences caused by the construction. The City offered loans to businesses on Main Street and Fourth South that were impacted by light rail construction, and it received complaints from business owners adjacent to road construction along 1300 South and South Temple because their businesses were negatively impacted and offered no loans. Loan amounts will be up to $15,000 amortized at the current prime interest rate for a teiiii• of five years. Repayment of principal and interest will be deferred until the construction 4 is complete. The loans will need to be secured by collateral equal to 25% of the loan amount. They will also need to be guaranteed by the businesses and personally by their ID owners. 4. Extraordinary Loans. The Administration would like the flexibility to propose larger loans at lower rates when significant job creation or new revenue will be generated. For example, the Council recently approved a $1.2 million loan to CBS/Viacom. This loan will enable KUTV to move 85 jobs, with an average salary of$55,000 into our City. The Administration recommends that the Council allow the flexibility to approve such loans. The Administration proposes that, when warranted, these loans will be developed through the CED director's office, and informally discussed with Council staff. If it appears that there is sufficient interest to pursue the loan, the Administration will finalize the proposal and submit it to the Council for approval. CED is also working with local banks to establish a loan pool to make loans to businesses in Salt Lake City that do not qualify for conventional financing. A proposal will be forthcoming once the participating banks are solidified and program guidelines and operational procedures are agreed upon. Attachments: 1. Resolution 2. Proposed Loan Criteria and Evaluation Matrix 3. Proposed Grant to the Utah Microenterprise Loan Fund 4. Proposed Loan Program for Businesses Impacted by Road Construction • • RESOLUTION No. OF 2003 AMENDING RESOLUTION No. 31 OF 2002 and APPROVING A GRANT TO THE UTAH MICROENTERPRISE LOAN FUND WHEREAS, Salt Lake City established an Economic Development Revolving Loan Fund in 1991 (Resolution No. 93 of 1991) to "promote development which will enhance the vitality of the City"; and WHEREAS, the City renamed the program the Salt Lake City Small Business Revolving Loan Fund and adopted Loan Criteria and an Evaluation Matrix in 2002 (Resolution No. 31 of 2002); and WHEREAS, the City now desires to amend the aforementioned Loan Criteria and Evaluation Matrix; and WHEREAS, the City also desires to make a grant to the Utah Microenterprise Loan Fund; NOW, THEREFORE, BE IT RESOLVED by the City Council of Salt Lake City, Utah: • 1. It hereby adopts the attached Loan Criteria and Evaluation Matrix for the Salt Lake City Small Business Revolving Loan Fund. 2. It hereby approves a grant of$250,000 from the Small Business Revolving Loan Fund to the Utah Microenterprise Loan Fund to make loans to start-up and existing businesses in Salt Lake City. 3. The Mayor of Salt Lake City, Utah, is hereby authorized to execute and administer the Small Business Revolving Loan Fund as provided herein and to execute the necessary documents to make said grant to the Utah Microenterprise Loan Fund. Passed by the City Council of Salt Lake City, Utah, this_day of , 2003. SALT LAKE CITY COUNCIL By: CHAIR ATTEST: • Chief Deputy City Recorder APPROVED AS TO FARM Salt Lake City /Attorney's Office Date ��}/ 1 ' 'I4 By_`J6'� �L��vi L.__ Salt Lake City Corporation Small Business Revolving Loan Fund • PROPOSED LOAN CRITERIA Purpose • The program is intended to stimulate small business development and expansion, encourage private investment, promote economic development, and enhance neighborhood vitality in Salt Lake City by making low-interest loans available to businesses. Eligible applicants, loan amounts, collateral requirements, and interest rate • Businesses located in or relocating to Salt Lake City. • Start-up businesses and those with less than three years operating history may qualify for loans up to $100,000 if they provide collateral to secure 25% of the loan and make a cash injection of 10% of the City's loan amount. • Established businesses with at least three years operating history may qualify for loans up to $100,000 if they present collateral to secure 25% of the loan, or loans greater than $100,000 if they provide a 2-to-1 ratio of other financing to City funds and fully collateralize the loan. • The interest rate for all loans shall be the current prime rate. • A loan evaluation matrix shall be used by the City's Small Business Loan Committee to rank loan applications based on an applicant's credit history, ability to repay the loan, • management ability and business experience, neighborhood impacts of the business, and fiscal impacts of the loan relating to job creation and retention, leverage of public to private funds, and impact on the City's tax structure in addition to the collateral requirements enumerated above. The loan evaluation matrix has a total of 100 points, and a loan application must receive at least 70 points to be recommended to the Mayor for final approval. • Existing businesses are also evaluated in teiius of any crime issues relating to the business. Based on a Police Department report, a loan will be denied to any business that has crime issues which the City is not satisfied that it is working to control. Use of loan funds,terms, guarantees, and City partnerships with private lenders • Loan funds may be used for the following: acquisition of land and buildings, new construction, facade and building renovation, landscape and property improvements, machinery and equipment, and working capital. Refinancing of existing business debt will only be considered as part of a business expansion. • Loan terms are typically 5 years,but can be up to 7 years for equipment and 20 years for acquisition of land and building construction. • Loans may be prepaid, in part or whole, at any time without penalty. • Loans shall be guaranteed by the business and personally by the Borrower. In addition, the Borrower shall agree to subordinate all officer debt and defer monthly payments to all officers to the City's loan. • The City encourages participation of private lending institutions and looks favorably at • providing funds to fill the gap between the owner's equity and conventional financing. The City may subordinate its security interest to the private lender. • Required financial information • Completed application including a signed personal financial statement, list of business obligations, and a description of assets to secure the loan. • Business plan including a marketing plan, management plan, and financial plan. The financial plan must provide three years financial projections, the first year by month, including balance sheets, income statements, and cash flow statements. Notes and assumptions are required. The business plan must also include resumes of key management personnel. • Personal federal and state income tax returns for the previous three years including all schedules and W-2 forms are required. All tax returns must be signed and dated. • For businesses established three or more years, corporate federal and state income tax returns for the previous three years, and for businesses established for one or two years, corporate federal and state income tax returns for the years of operation. All tax returns must be signed and dated. • For businesses established three or more years, historical financial statements for the last three years including balance sheets and income statements, and for businesses established for one or two years, historical financial statements for the years of operation including balance sheets and income statements. For all businesses except start-up, a current interim statement less than 60 days old is also required. All financial statements must be signed and dated. • Site information: If purchasing a building or land, a real estate contract is required. If • constructing a facility, the specifications and contractor estimates must be included. If leasing, a copy of the existing or proposed lease agreement must be included. • Use of funds: A budget outlining the proposed use of funds is required. If working capital is requested, a proposed working capital budget is required. If funds are requested to purchase equipment, two bids are required. • Organizational: If incorporated, a certificate, articles,by-laws and all minutes reflecting current stockholders and directors must be provided. If a partnership, a partnership agreement must be provided. If a sole-proprietor,proof of registration must be provided. Insurance requirements • The Borrower must provide evidence in a form acceptable to Salt Lake City Corporation of(1) comprehensive general liability insurance with a minimum coverage amount of $1,000,000 per occurrence and $2,000,000 aggregate, with the City named as an "additional insured"; (2) fire and casualty insurance upon any property, real or personal, owned or used by the Borrower in its operations in an amount at least equal to all indebtedness against the property, with the City named as a"loss payee"; and(3) a certificate of workers compensation insurance sufficient to cover all of the Borrower's employees pursuant to Utah State statutes. All insurance required by the City shall be continuous for the term of the loan. Costs to the Borrower • The Borrower is responsible for the following costs at the time of closing or they are to • be deducted from the loan amount: (a) a loan origination fee of 1.00% of the loan amount, (b) interim interest from the date of closing to the end of the month of closing, (c) closing cost, (d) recording fee, (e) Uniform Commercial Code filing fee, (f) appraisal cost, and(g) letter report cost. Loans to businesses impacted by road construction • • Businesses impacted by road construction are eligible to apply for loans up to $15,000 amortized at the current prime interest rate for a term of five years. Repayment of principal and interest will be deferred until the construction is complete. • Loans will be secured by collateral equal to 25% of the loan amount. • Loans shall be guaranteed by the business and personally by the owner. The Borrower is responsible to pay closing costs. • The Borrower must also provide evidence in a form acceptable to Salt Lake City Corporation of(1) comprehensive general liability insurance with a minimum coverage amount of$1,000,000 per occurrence and$2,000,000 aggregate, with the City named as an"additional insured"; (2) fire and casualty insurance upon any property, real or personal, owned or used by the Borrower in its operations in an amount at least equal to all indebtedness against the property,with the City named as a"loss payee"; and(3) a certificate of workers compensation insurance sufficient to cover all of the Borrower's employees pursuant to Utah State statutes. All insurance required by the City shall be continuous for the term of the loan. • Loan applications shall include (1) a letter from the business owner requesting the loan, (2) business tax returns for the past three years or since the business was established if less than three years, (3) a list of business obligations, and (4) a personal financial statement of the business owner. • The financial infoiiiiation must verify the financial viability of the business, and the • applicant's credit report must demonstrate payment of past obligations. • Loan applications shall be reviewed by the Small Business Revolving Loan Fund Committee and forwarded to the Mayor for a final decision. • • Salt Lake City Corporation Small Business Revolving Loan Fund Committee PROPOSED LOAN EVALUATION MATRIX Business Applicant: Date: Individual Applicant: (1)APPLICANT'S CREDIT HISTORY Possible Points Actual Points A. Credit Score 681 and above 8 641-680 5 621-640 2 620 and below Loan Denied 8 A. B. Does the applicant's credit history demonstrate payment of past obligations? 7 B. • 15 Note: The City will use the Experian credit score. A credit report will be obtained for each individual applying for the loan and each person offering to guarantee it. If any applicant's or guarantor's credit score is 620 or below, the loan will be denied. The applicant may present extenuating circumstances to the loan committee, and if the committee finds them acceptable, it may overturn the denial. Where there is more than one personal credit report, the committee will derive a composite score for"A" and "B" above. (2) BUSINESS' ABILITY TO REPAY THE LOAN Possible Points Actual Points A. What is the financial viability of the business based on past and current tax returns and income statements or financial projections for a start-up business? 8 A. B. Are the financial projections reasonable based on past and current tax returns and income statements or the business plan IIIfor a start-up business? 7 B. 15 (3) COLLATERAL TO SECURE THE LOAN Possible Points Actual Points . A. Is collateral sufficient to secure 25% of the loan, or in the case of a loan greater than$100,000, the entire loan amount? 15 A. B. Is collateral insufficient to secure 25% of the loan, or in the case of a loan greater than$100,000, the entire loan amount? Loan Denied B. 15 (4) APPLICANT'S MANAGEMENT ABILITY AND BUSINESS EXPERIENCE Possible Points Actual Points A. What management ability and operational experience does the applicant have in teinls of this type of business? 8 A. B. Does the business plan thoroughly address the marketing,management and financial operation of the business? 7 B. 15 • (5) NEIGHBORHOOD IMPACTS OF THE BUSINESS Possible Points Actual Points A. Does the business contribute to neighborhood revitalization or preservation? Does the business meet a need or provide a service that is not currently available? Does the business have any negative community impacts? 10 A. B. Is the business located in a target area for business development or a Community Development Block Grant or Redevelopment Agency area? 15 B. 25 • • (6) FISCAL IMPACTS OF THE LOAN A. Job creation or retention How many jobs are projected to be created? Are the wages comparable to market wages for similar jobs? Does the loan facilitate retention of existing jobs? 5 A. B. Leverage of public to private funds Does the ratio of public to private financing demonstrate that the City's loan funds are being matched by at least 10%private investment? 5 B. C. Impact on the City's tax structure Does projected property and sales tax revenue demonstrate that the City's loan funds are positively contributing to the City's tax base? 5 C. 15 • Total 100 PROPOSED GRANT AGREEMENT UTAH MICROENTERPRISE LOAN FUND • UMLF Revolving Loan Fund Program for Businesses in Salt Lake City Parties /Purpose • Salt Lake City Corporation (City) has a Small Business Revolving Loan Fund program to stimulate business development and expansion, encourage private investment, promote economic development, and enhance neighborhood vitality in the City. • The Utah Microenterprise Loan Fund(UMLF)provides financing and management support to entrepreneurs of start-up and existing businesses, especially those who are socially and economically disadvantaged, who do not have access to traditional funding sources. • The City and UMLF desire to enter into an agreement whereby the City will provide grant funds to the UMLF for a revolving loan fund program for entrepreneurs of start-up and existing businesses located within the corporate limits of Salt Lake City, particularly on Main Street and its westside, who are unable to qualify for a loan from the City's Small Business Revolving Loan Fund • or obtain conventional financing. • The City and UMLF recognize that these will be high-risk loans and that some losses will occur. The UMLF acknowledges that it will endeavor to make successful loans by providing technical assistance to applicants, evaluating their credit history, taking into account their management ability and business experience, and estimating their likelihood of repaying the loans. Budget/Administration • The City agrees to grant $250,000 to the UMLF for the above referenced revolving loan fund program. The City further agrees that the UMLF shall receive $1,000 from the fund for each loan it makes to provide technical assistance to borrowers located in Salt Lake City. Technical assistance shall include pre- and post-loan counseling and training from UMLF staff and outside consultants on how to write a business plan and on matters specific to individual businesses such as accounting,marketing and legal concerns. • The UMLF agrees to participate in each loan up to $10,000. That is, any loan up to $20,000 will be made as a 50/50 split between the UMLF and City grant funds. For example, a $14,000 loan will be made with $7,000 from the UMLF and ' $7,000 from City grant funds. A $25,000 loan will be made with $10,000 from • 1 • the UMLF and $15,000 from City grant funds. Each loan will be executed by a single promissory note payable to the UMLF. • Loan principal payments will revolve back to the appropriate loan accounts based on each party's pro-rated participation in the loan and will be available to be loaned out again. Interest will go to the UMLF for loan administration. • The UMLF shall report to the City annually on the use of grant funds including the amount of funds remaining, the number of applications received, the number of loans approved, the dollar amount of loans issued, and the status of outstanding loans including the number and dollar amount of loans written off and the number of loans and dollar amount that are more than 60 days delinquent. Eligible Applicants /Loan Amounts /Interest Rate/Loan Terms /Loan Origination Fee/Distribution of Losses • Eligible applicants shall include entrepreneurs of start-up and existing businesses located within the corporate limits of Salt Lake City, particularly on Main Street and its westside, who are unable to qualify for a loan from the City's Small Business Revolving Loan Fund or obtain conventional financing. • Loan amounts and loan criteria will be determined by the UMLF,but loan • amounts shall not exceed $25,000. • The interest rate shall be the current prime rate plus 5%. • Loans of$10,000 or less will be amortized for a maximum term of five years. Loans of more than $10,000 will be amortized over 5-10 years with a maximum term of five years, and a balloon payment due at the end of the tear. At that time, the UMLF can extend the teiiii an additional 1-5 years. • The UMLF will charge a loan origination fee of 1% per year of the loan amount (i.e., for a $10,000 loan amortized for a five year term, the fee will be $500). For loan amounts larger than $10,000, the UMLF will charge 1%per year of the loan amount up to a 5%maximum (i.e., for$25,000 loan amortized for a five year term, the fee will be $1,250). The fee will not be greater than 5% for loans that exceed a five year Willi. The loan origination fee will be collected from the loan proceeds, and will be used by the UMLF for programs and administration. • The UMLF and City will share any losses on a pro-rated basis, based on the structure of the loan (i.e. for a$25,000 loan, any losses will be shared on a 40/60 basis; for a $20,000 loan, any losses will be shared on a 50/50 basis). III I PROPOSED LOAN PROGRAM FOR BUSINESSES IMPACTED BY ROAD CONSTRUCTION IN SALT LAKE CITY • Description: Salt Lake City offers loans to businesses adversely impacted by road construction in the City as an on-going part of its Small Business Revolving Loan Fund program. Eligibility: Existing businesses adversely impacted by road construction in Salt Lake City. Loan Amount: Up to $15,000. Loan Term: Five years. There is no penalty for prepayment. Interest Rate: Current prime interest rate. Repayment: Repayment of principal and interest is deferred until the construction is complete. Insurance: The Borrower must provide current certificates of (1) comprehensive general liability insurance, (2) fire and casualty insurance, and (3) workers compensation insurance. Collateral: Loans will be secured by collateral at least equal to 25% of the • loan amount. Guarantees: Loans will be guaranteed by the business and personally by the owner. Closing Costs: The Borrower is responsible to pay closing costs. Application Requirements: 1. A letter from the business owner requesting the loan. 2. Business tax returns for the past three years or since the business was established if less than three years. 3. List of business obligations. 4. Personal financial statement of the business owner. The financial information must verify the viability of the business, and the applicant's credit report must demonstrate payment of past obligations. Review and Loan applications will be reviewed by the Small Business Approval: Revolving Loan Fund Committee and forwarded to the Mayor for a final decision. 1111 • t - SALT LAKE'CITY COUNCIL `STAFF:' PORT - DATE:: March 28,1003. , , - .. S�tsJ P • - Street Lighting Issues , AFFEcil3P COUNCIL DISTRIcTs: Citywide ' STAFF RilifORT Byf Gary Muniford , ADMiNIsniATvE thu r Camnunity,=&`Econoanic Development AND CQNTAcTPERSON: Tim Harpst,Traps'poitatign Director. - KEY:ELM** - , There are approximately:13,000'stre4-lights. i Salt ce`City_with 2,200 within special improvement districts:and::1:7,5a0:wider.the prlte lilting=program: The City typically provides.a cobrulhead l ghit fixture"onsa4-wooden'poleat:intersections and-one midblock light. Theme°are' a, lly 63o 8'lights° r:b1QC C face on raial streets: Additional:or decorative lighting innieiig lxit'hoods is;provided'thr,.ough`assees ,e ntsito property**s-or_through,the- private light ig program.wit.lights=paid for aidconnected-to homed ners'electric meters: The<decorative°lighting.private lighting is.often=partially.paid fort rough the Ctty's matching Alb gr tpro am. The City-Tra pporta ion}Division has-,met:with all 23-community councils to obtain citizen inputyr atrd3 g;street.lighting,with the.inte4t_t-p create�an updated street:itghtirlg'ptau. 'T'-he ' dniiii$i at oo- j�)tes..that`the co.St.ctffe rice between cobra:head h `tsf,o4`voaden sole with v itott;vbing 00044`topedestrian o ier t 4h ting,:oii decorative.poles'with- . oxide grotind� g o ..: i l i l iii �. g'the decpi'at1ve sy tens,more.affo#able. apse the`c eco�rative_:pedestri riehted=lig w'a ;ctser 0,!'the2 'round-and the`fixtitres -. j•1 ,��nillg '` ,`_�,.t to, he; l W t ra the ' . . . - dixecl A� ttc�io� hhn� sl lle. alks.a�t<,l,sty' s ya r�.tlian.�.tQ bed�eQ�. . w : a(ll ht ng=his-F1 s400.-ei{ort.;> in able-'lors the ove ig skies; "T ie'` k decorative tig ti g'requires nos-lightsper;block.`There are:several decbrative;:flxti#4$and poles availableao>ai option-*oulal to allo each yiieigi bofhpod to have distiuct li litiui - , The oitation°T l'u iori'; :bi ief the:Council'Din sni ie of,the issues relating to:street,' l g t g Incltid4i+yi-(��`the foli 7iw � ' _ � ' � s.l ra veie}a..�.(`tI?istritets ;. 'N aultet ante s<{ .�: _ . :and:_ y - 'The : Qiild` 61�e-to�lsetil�°witb he ,. „:� p o difk��veloo � :ti n # ;patatiwo � e�optd-bp ordriaric��:or wltet�er:art x a st ative, aster lan i satisfacl/L�fjy'.V - - MATTERS AT ISSUE - Citizen Expectations-The Council may wish to clarify with the Administration the expectations that citizens may have based upon the presentations made at the community council meetings. Homeowner Associations In District Six there is a homeowner association that wants to contract with the City for lighting through the neighborhood matching grant program. This has some advantages to the City in that the coordination would be with one entity rather than with a number of individual property owners. The Community and Economic Development Department can provide additional information at the briefing and may request Council feedback on this concept. Street Lighting Special Improvement Districts-It typically takes six months or longer to work through the cost calculations and public process of street lighting special improvement districts. Assessments are based on cost per running foot of property,which requires lengthy detailed reviews of property plats; Special improvement district extensions have accumulated funds for maintenance and replacement of lighting. However,the accumulated funds in a lighting extension are usually not sufficient to upgrade the lights when the entire system fails. The Transportation Division points out that there are several alternatives to the SID.program including a citywide utility assessment or citywide assessments based on property values. Assessments could be set at several levels to reflect what residents have already spent on lighting or the type and amount of lighting in each neighborhood. Dedicated street lighting revenue would make it possible to bond for updating and replacing street lights. The Division • doesn't have a specific recommendation for any of the funding options mentioned. Private Lighting Program-Under the private lighting program,street lights are placed in the park strips of a neighborhood with each light connected to a homeowner's electric service. Property owners with lights sign revocable permits that are recorded with the property that . stipulates that the homeowner is responsible for.operating and maintaining the streetlight. One problem with the private lighting program is that the lighting is inconsistent(some dark sections)because of the inability to find willing neighbors to have the light connected to their home electric service. Some neighborhoods have used the City's Matching Grant Program to pay for a portion of the capital costs. This has occurred primarily in the areas east of 700 East, while efforts to use these funds in other areas of the City have not generally been successful. A recent inventory of private lights shows that over 30% of these lights are not operating. The Transportation Division suggests that the private lighting program be modified to require City . maintenance with a single wiring circuit within the public right of way. The private lighting program could also evolve into,a special improvement district or into a citywide lighting program. Maintenance of Street Lights-Salt Lake City contracts its street light maintenance to Utah Power&Light. In turn,'UP&L.contracts much;of its light maintenance to private providers. The.City has experienced some delays in reactivating non-operational lights. The Transportation Division is exploring options for contracting directly with private providers or for using City crews. • <r CIP,:CDBG and RDA Funding-The City is using community development block grant funds to add pedestrian-oriented lighting with underground wiring in eligible neighborhoods with higher than average crime statistics. The Transportation Division is exploring the possibility for using CDBG funds to help with financing a portion(25%)of deteriorated lighting in a Rose Park neighborhood currently provided by a special improvement district. The City is reviewing an RDA application requesting funds for street lighting in West Capital Hill. Additional lighting will increase the operating and maintenance costs for the City's general fund. The Transportation Division suggests that a citywide SID or citywide assessment would provide for flexible assessments to offset the increased operating costs. In several past years,the City budgeted some funds in CIP for replacement of lighting. Special improvement district lighting is not eligible to receive CIP funding to update deteriorated . lighting. The Division desires to discuss with the Council the option for allowing the use of UP funds for the capital costs of special improvement districts. cc: Rocky Fluhart,David Nimkir,Alison Weyher,David Dobbins,Tim Harpst,JD Baxter rfS • • 3 � ���,T Y� npnp 7��v p MAR 1 8 2003 ALISON WEYHER S�— 1 r�. r, �J1itli ¢ .V PO ©,et ONI � � ! ROSS C. "ROCKY" ANDERSON DIRECTOR COMMUNITY AND ECONOMIC DEVELOPMENT MAYOR COUNCIL TRANSMITTAL 4` 71 TO: Rocky Fluhart, C ief Administrative Officer DATE: March 13, 2003 FROM: Alison Weyher RE: Street lighting issues and update STAFF CONTACT: Tim Harpst, Transportation Director 535-6630 Gordon Haight, Transportation Division 535-7147 RECOMMENDATION: That the City Council hold a briefing and provide direction. DOCUMENT TYPE: Briefing only DISCUSSION: The City Council requested the Administration explore the possibility of using accumulated reserves in the street lighting special improvement districts for converting assessment districts to the privately-owned street light program, for upgrading lights to decorative residential oriented lights or for reducing assessments to property owners. City • Council has also requested a status report on the creation of a street lighting master plan. These points have been researched by the Transportation Division as part of a broad evaluation of the entire lighting program. The research has identified several specific matters that need to be addressed including creation of a citywide lighting plan and an associated financial plan. Analysis: The status of the street lighting program is contained in the attached document. Recommendations are made for the major topics of SIDs,private lighting program, maintenance, funding sources and a master lighting plan. Public Process: The Transportation Division has visited each of the City's 23 community councils to provide information on the latest lighting technologies and seek input on the type of lighting desired by the community. Relevant Ordinance: There is no existing ordinance covering a street lighting master plan. There are three Council approved street lighting SIDs that could be impacted should a different assessment method for lighting be used. • 451 SOUTH STATE STREET, ROOM 404, SALT LAKE CITY, UTAH 841 1 1 TELEPHONE: 801-535-6230 FAX: 801-535-6005 Recrcco PaPEw Salt Lake City Street Lighting Program March 13, 2003 History Salt Lake City has a long history of street lighting. Ours was the fifth city in the United States to have electric street lights. By 1887, street lights were operating on Main, 100 South and 200 South Streets downtown. Over the years, the City has used street lighting to improve traveler safety and accommodate evening activities. In commercial areas such as the downtown, lighting continues to provide an essential service by allowing shopping, cultural and entertainment activities to be viable late into the evening. In residential areas, lower levels of lighting encourages walking, bicycling and neighborhood ambience. Crossroads The City's street lighting program is at a major crossroads. As part of responding to the City Council's request to evaluate aspects of the street lighting special improvement districts (SIDs), the Transportation Division has also been conducting an evaluation of all aspects of the program to determine areas needing improvement as well as the desirability of a lighting master plan. As a result of this evaluation, a number of significant issues have been identified that need to be • addressed. They include: 1. SIDs. Should they be continued or evolved into a citywide SID or citywide assessment of another type? Can their existing reserves be used to replace existing lighting with decorative, residential-oriented lighting? 2. Private Lighting. Should this program be continued, modified to require city maintenance or evolved into a citywide lighting program? 3. Maintenance. Should lighting maintenance be done by City forces or put out to bid to private providers instead of continuing the longstanding practice of UP&L maintenance? 4. CIP, CDBG and Matching Grant lighting funding. Should the rules currently being followed be changed to provide a more flexible and equitable use of these funds? 5. Master Plan. Should the City have a City Council-adopted street lighting master plan, not currently required by statute, or an updated administrative master plan as in the past? The remainder of this report provides the status and current recommendations on these issues. Additional research and strategic Administrative and City Council decision-making will be required to resolve them. To gain a better understanding of these issues, it is important to first understand the current street lighting programs offered by the City. • Lighting Programs. There are currently four lighting programs offered in Salt Lake City. Traffic Safety Lighting For years, lighting had generally been installed on local streets for pedestrian and traffic safety at intersections and one midblock light per standard city block. These lights typically consist of standard cobra head lighting fixtures on wooden poles. Purchase, installation, maintenance and operation cost responsibility: 100% City Continuous Lighting Systems Brighter and more uniform lighting is provided along busier, arterial streets for traveler safety. This lighting is either cobra head lights on wooden poles or decorative fixtures and poles such as those along State Street and along the University light rail line. There are typically 6 to 8 lights per block face to provide this level of lighting. Purchase, installation, maintenance and operation cost responsibility: 100% City Special Improvement District Lighting Additional lighting in residential and commercial areas is provided via special improvement districts wherein abutting property owners agree to pay 75% of the operating and maintenance costs and the City pays 25%. This percentage participation is based on a study of all SIDs in the City. The City's 25 %represents the lighting the City would typically provide if the higher level of SID lighting was not present. The capital cost for construction of SID lighting projects were either part of the initial development or were paid for by the SID. In some cases other funds, • such as RDA monies, have been used to pay for a portion or all of the initial capital cost. There are currently 50 lighting extensions (SID lighted neighborhoods) grouped within 3 large lighting districts. Approximately half of them are located in the City's central business district and the Sugar House business district. The other half are in residential neighborhoods. See Map A for the locations of SID lighting areas. The great majority of the lights in SIDs are decorative lights. Purchase and installation cost responsibility: varies Maintenance and operation cost responsibility: 25% City, 75% abutting property owner Private Lighting Over the past 6 years the City has allowed residential neighborhoods to install privately owned, decorative streetlights on the public right of way in the park strip. Each streetlight is connected to the wiring of the home of the owner of the streetlight. Each light owner signs a revocable permit that is recorded with the property. It stipulates that the homeowner is responsible for all operation and maintenance costs associated with operating the streetlight. This program allows for relatively inexpensive and decorative lighting that often provides a unique character to the neighborhood due to the multiple combinations of poles and lighting fixtures available. For these reasons, this program has been very popular. See Map B for the locations of private lighting areas. Many of the residents installing private lighting have availed themselves of the City's Matching Grant program to pay a portion of the capital and installation cost. Purchase, installation, maintenance and operation responsibility: 100% abutting property owner Number of street lights • There are currently approximately 13,000 street lights in Salt Lake City. 2,200 are within SID areas and 1,750 are private lights. The rest are continuous lighting and traffic safety lights. 2 Lighting costs and funding sources • The City currently budgets approximately$990,000 annually for operating and maintaining the traffic safety and continuous lighting programs. • The City currently budgets approximately$360,000 annually for the City's portion of operating and maintaining the special improvement districts. • The City currently expends more than $200,000 annually in Matching Grant funds for private lighting. • The City has been spending $10,000 to $100,000+annually in Community Development Block Grant funds to supplement traffic safety lighting in higher crime areas. • The City has been budgeting approximately$500,000 annually in Capital Improvement Program funds for replacement of continuous lighting systems and$50,000 annually for new lighting This represents an annual investment in the range of$2,000,000 by the City to operate, maintain and upgrade/install street lights. Lighting in new developments When new development is approved, the City requires new street lighting to be installed by the developer which is then dedicated to the City. Examples of this include such projects as the University Light Rail Extension, I-15 reconstruction, new residential subdivisions and commercial projects, and City projects including the City Library and the Intermodal Hub. • Issues The following issues have arisen from the research that has been conducted. Issue 1. Special Improvement Districts Should they be continued or evolved into a citywide SID or citywide assessment of another type? Can their existing reserves be used to replace existing lighting with decorative, residential- oriented lighting? The SID street light process used by Salt Lake City for decades is cumbersome. It typically takes six months or longer to work through the cost calculation and public process. SIDs are typically established for one-time capital improvements such as constructing curb, gutter and sidewalk improvements, even street lighting installations. It is a good mechanism for insuring the ability to lien a property when billings are not paid. However,the legal mechanism is not particularly well suited for ongoing maintenance. The current street lighting SID mechanism has evolved to combine lighting areas, known as "extensions," into one of three jumbo SID lighting districts. These districts are established with a rate structure for each extension that must be periodically increased as O&M costs increase. Rates are set annually using a best estimate to generate sufficient funds to cover O&M costs plus build a reserve to cover significant maintenance such as replacement of damaged wiring and conduit or replacement of knocked 410 down poles, etc. The reserves in each extension vary over time and are impacted by the percent 3 411 of property owners paying their billings and the amount of maintenance required to keep the system operating. An alternative to the SID process would be to convert to a citywide utility assessment, a citywide SID or possibly an enterprise fund type mechanism. A citywide assessment could pay for the power and maintenance of all streetlights as well as capital replacement and installation of new lights as necessary. Several cities in the Wasatch Front have recently done this. Orem, for example, assesses each property owner in residential areas $3.25 per month to cover the cost of installing new lights (there was little lighting in residential areas prior to this program) and the cost to replace lights as needed. They increased their utility franchise fee from 5.36%to 6.00% to cover the cost of electrical power. Orem, a city of 90,000 is using this method to install 3,800 lights. Some communities assess for street lighting on utility bills. Others assess for lighting according to property value. This illustrates that there are a number of ways to accumulate the funding needed. Salt Lake City currently relies heavily on General Fund income for lighting. Whichever funding mechanism is established, it should be done in a manner that it is possible to bond for new and replacement street lights. In Salt Lake City, which has established lighting on most of its streets, assessments would need to be set at several levels to reflect what residents have already spent on lighting in their neighborhoods as well as the cost to provide different levels of lighting. Since the City uses General Fund monies to fund a base level of lighting, this amount could be placed into the fund annually toward the base level lighting cost and an assessment on a property by property basis . added for each area where higher than base level lighting is provided. The amount of the assessment would match the cost to provide the additional lighting. Monies currently in SID accounts are eligible to be used toward conversion of existing lighting to decorative lighting. Recommendation: 1. Complete a comparison of the existing SID method with a citywide utility assessment, a citywide SID, an enterprise fund and other assessment methods to determine which is best suited for the situation. 2. Regardless of the method used, change assessment cost calculations from the cumbersome"cost per running foot of property owned"by each property owner which requires lengthy detailed reviews of property plats to a"unit cost"per property. Issue 2. Private Lighting Should this program be continued, modified to require city maintenance or evolved into a citywide lighting program? Private lighting has been a very popular program. Neighbors group to identify a light pole and fixture style they desire for their neighborhood. The program is eligible for the City's Matching • Grant Program which has provided significant assistance in helping pay the capital cost of 4 purchasing and installing the poles, lights and underground wiring. More than 1,750 private streetlights have been installed. III Issue 2.a. Poor maintenance A recent inventory of these lights has shown that over 30% of these lights were not operating. This prompted the Transportation Division to send a letter January 28, 2003 to each of the residents with revocable permits to remind them of their responsibility to maintain and operate the lights. Some have not bothered to replace bulbs. Some simply throw the circuit breaker for the lights to the off position. Clearly, the intent of the program was well intentioned. The experience, however, is that many property owners with lights have changed their minds about operating the lights even after having signed a revocable permit to do so or agreeing to do so when purchasing a property from a homeowner who installed the light. Some of these neighbors who grouped to install the lights in the neighborhood no longer group to help insure the lights stay operational. It is too soon to tell the impact of the reminder letter which also provided information on how to reactivate the lights. Some owners have taken action to make their lights operational,but there are still many not operating. Issue 2.b. Matching Grants not being utilized by less affluent neighborhoods. The vast majority of lights installed with matching funds are east of 700 East as shown on Map B. Several efforts to use these funds in other areas of the City have not been successful. Clearly, the intent of the Matching Grant program as it pertains to street lighting is not being fulfilled. Several neighborhood groups have requested modification to the funding eligibility policies to • allow Matching Grant funds to be used within existing SIDs to help defray the capital cost when updating old lighting systems. Other neighborhoods would like to be eligible for the program for the same reason when stating new SIDs. Homeowner associations have also requested eligibility since these organizations are already established to handle billing and assessing for services at condominiums and planned unit developments. At present, Matching Grant monies are not eligible to be used to help offset the capital portion of SID's or eligible to be provided to homeowners associations. Issue 2.c. Lack of full lighting coverage within private lighting areas. It is not atypical for neighborhoods to propose plans with less than regular spacing for lights because of the inability to find willing neighbors to have the light connected to their home electric service. This results in some dark areas or inconsistent lighting at best. Recommendation: Convert the private lighting program into an SID (or its successor), but allow residents to use the Matching Grant program to help defray the capital cost. Installing the same lights, but connecting them to a single wiring circuit within the public right of way will allow the city to maintain the lights, provide more uniform spacing of the lights and utilize the Matching Grant program more uniformly citywide. • 5 • Issue 3. Maintenance Should lighting maintenance be done by City forces or put out to bid to private providers instead of continuing the longstanding practice of UP&L maintenance? When the City purchased the street lighting system from UP&L in 1987,part of the negotiated purchase included the City's commitment to have UP&L provide maintenance services as well as power. That commitment is no longer in force, thus opening the door for maintenance by the City or a contract service provider. The lengthy response time from UP&L has long been considered unacceptable by the administration and the public. Repeated requests to shorten response time have not been fruitful despite repeated promises by UP&L to do so. Changes in the internal organization of UP&L in recent years have not shown promise of improvement in maintenance response times. Further, UP&L now contracts much of their street lighting maintenance to a private provider, thus making UP&L not much more than a middleman with respect to maintenance. Five communities in the Wasatch Front area have recently placed their lighting maintenance out to bid and contracted for the service with private firms. When this is done, a lower power only rate is paid to UP&L. Information is currently being gathered on how well the 72-hour response time requirement is working and how the cost difference of contracted maintenance with power only rates compares with UP&L's O&M rates. Preliminary indications are that there is a cost savings in going to contracted maintenance and relying on UP&L only for power. • Recommendation: , Finish exploring placing the maintenance of street lights out to contract or having it done by City forces. If it makes sense to go this route from a financial savings and/or improved response time basis, require 72-hour response times to reactivate non-operational lights. Issue 4. CIP, CDBG and Matching Grant lighting funding Should the rules currently being followed be changed to provide a more flexible and equitable use of these funds? Several restrictions currently in place limit the use of available funds for new and upgraded lighting. CDBG Funds The City has used these funds to install additional streetlights in eligible neighborhoods with higher than average crime statistics to supplement the previously installed traffic safety lighting. Until recently the new lights were required to be on wooden poles with overhead wiring. With changes to the City's administrative lighting policy, these funds can now be used to install decorative streetlights with underground wiring. The decorative street lighting provides better pedestrian-scale lighting and adds to neighborhood aesthetics. This recent change for adding more flexibility when using CDBG funding is proving beneficial. Such lighting is currently • being installed on Redondo and Hollywood Streets and is scheduled to be installed on Montgomery Street. 6 Issue 4.a. Can CDBG funds be used within an SID? • The City is currently awaiting response from HUD to determine if CDBG funds can be used within SID areas such as Rose Park where residents seek funding assistance in replacing their current deteriorated overhead lighting system with an underground wired decorative lighting system. HUD has interpreted that CDBG funds cannot be used for O&M,nor can the City charge residents for O&M for lights purchased and installed using CDBG funds. Specifically, the Transportation Division has asked for an interpretation on the eligibility of CDBG funds to pay for the purchase and installation of the City's 25%portion of street lights within SIDs since the City pays the O&M for these lights. Issue 4.b. How to pay for RDA-funded street lighting projects that increase the City's O&M costs The City is reviewing an RDA application requesting funds for street lighting in West Capital Hill. Since the proposal would add more lights than currently exist, the City would need to increase the annual O&M budget to accommodate the extra lights. With a Citywide SID or similar assessment, O&M funds would be assured by modifying the assessment. CIP Funds Over the years,the City has funded new and upgraded streetlights along major arterial roads with CIP monies. One example is the State Street Lighting Project. If a citywide assessment for lighting is charged, it could be structured to cover the capital cost of these major lighting replacement projects as well as the O&M for them. This would reduce the impact to the CIP program. • CIP funds are not currently considered eligible for SID lighting. Allowing eligibility for part or all of the capital portion of lighting SIDs would help neighborhoods afford getting into this type of lighting. Recommendation: Continue to pursue eligibility to use CDBG funds for SID capital costs. Consider allowing the use of CIP funds for the capital costs of SID (or its successor) lighting. Issue 5. Master Plan Should the City have a City Council adopted street lighting master plan, not currently required by statute, or an administrative master plan as in the past? There was never any significant master planning for street lighting until the late 1980's. Prior to that date, lighting consisted of the Traffic Safety Lighting program and SIDs. An effort was undertaken in the late 80's by the Transportation Division with the assistance of the City's Planning Division and members of the then informal Salt Lake City Transportation Advisory Committee, a predecessor of today's City Council ordinance-created Transportation Advisory Board. That effort led to an informal plan that has been used as a guideline for light types and style since then. • 7 More recently, the Transportation Division undertook a proactive effort to learn what citizens wanted in street lighting with the intent to create a more formal plan. This master planning effort involved meeting with each community council. There are now new technologies for light sources, light globes and poles. The cost difference between cobra head lights on wooden poles with overhead wiring and decorative lighting on decorative poles with underground wiring is growing smaller, thus making decorative systems more affordable. The following are key elements that should be considered in a Salt Lake City Street Lighting Master Plan and that have resulted from research and public input: Desire for decorative pedestrian-oriented lighting. The desire to see decorative pedestrian- oriented lighting throughout the City has been clearly expressed by all 23 community councils. This includes eventual conversion of cobra-head lighting on major arterials to decorative lights such as has been done on State Street. This type of lighting enhances a pedestrian-oriented, pedestrian-friendly city. Funding for lighting. An important aspect associated with decorative lighting is that it requires more lights per block than traffic safety lighting,thus a higher operating cost. Converting the residential areas of the City to decorative lighting will require additional funding. Going to a citywide SID or similar type mechanism to achieve the funding is one option. More than half of the cities in Salt Lake County now charge a street lighting fee as part of the utility bill. The fee ranges from $1.75 to $4.25 per month. Two communities have a street lighting assessment on • property tax. In each of these cities, a street lighting enterprise fund or an SID has been created that installs and maintains all the streetlights. The purpose of these funds and districts is to insure that the money is only used for street lighting. Salt Lake City currently pays lighting costs via General Fund allocations each year. When various funding mechanisms used in other cities were discussed with Community Councils, a discrete assessment for lighting was strongly supported. The City would need to look at several equity issues dealing with neighborhoods that have already contributed to street lighting. If an assessment or fee system is begun in Salt Lake City, several rate levels should be developed to account for and credit existing lighting costs already paid by property owners, such as those in the private lighting program. The City has not been able to financially keep up with the replacement of the City's older and worn out lighting systems. Creating a citywide lighting fee would allow adequate funding to maintain existing lighting and replace worn out lighting. Maintenance. Should a fee or assessment be charged for lighting, it should cover the cost of maintenance including covering the power and maintenance of private lights which would then become city-owned lights. Environmental issues. Concerns are being expressed nationwide about stray light and its impact on being able to see the evening skies. The community councils have been supportive of • requiring dark sky compliant shielding on street lights. Both Dark Skies International and Utah Skies are supportive of our City adopting a dark sky compliant policy. Compliance simply 8 involves using fixtures that direct all or the majority of light downward and either zero or a IIIminimal amount of light upward, usually only enough to illuminate the top of decorative light globes. This not only allows improved observation of the night sky, but also more efficiently directs the light downward to the sidewalk and street. We have modified the City's administrative lighting policy to require dark sky compliant lights from this point forward. Design. Each community council desires to have distinct light fixtures. Many have already selected or are currently selecting a style of decorative light and pole for their area. Associated with this is the undergrounding of the wiring. There is strong belief that a single lighting style should be used consistently within a neighborhood or along a major street to achieve uniformity. Light source. The community has a desire to replace sodium vapor lights with the whiter, more daylight type light emitted by metal halide light source. Banners. The City is currently in the process of creating a banner ordinance to regulate the use of banners on light poles. There is public support to allow the use of banners throughout the City. Elaborations on the above points are being crafted into a draft street lighting master plan. There is no statutory requirement to have an adopted street lighting master plan. Having a comprehensive lighting master plan will help clarify where the lighting development is headed and assist in prioritizing lighting work. Such a plan would contain the above elements shown in broader detail. Recommendation: III It would be helpful for City Council to inform the Administration if it desires to adopt a lighting master plan or if adoption of an administrative master plan is satisfactory. S 9 • , 0 • N . :•• ,• • • • • • •. 1 S • :(4)/ / , f\ ....., ...,-•,, c,..i. :, 11 h --''''''''',, il r• • ...••. ... _. ,.,..... ,i1c,1 _ , "RI —1 1, ......;Y—• ----17,`------ . . 1,,,, Vigra ql ccil,, !I \< .'s,'".",. •• ,,-,,.. ,ti I ",, . --,..74,4., ,,,0" , .,,....:=42,.,... 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The operating 1 udiget for the Stormwater Fund for fia ii.1 y`ear-2003�-2004.is proposed • to be 2,950,6.17,.which is au inch s :.o 2,'�55-=oar ..2°lo.;ove�r fiseai'. 2002- 2003.. ••'-The =proposed .capital -budget is-$11,575,000,'which is-`an increase -of = $5,025;68,9 ih.fi5 'year 2003-k2004.;•'. - - • • ' • .. . • ' : •' • - _•. sr"0MWAFTER FUND - - �.�, _ /PROMMS ,OBU®+ . , ,, , . " - stdrmwratetn.14a ce fee - :"$5,.205;199'. , $5,348,101, $' •'5Z952 '1:0%.' ' ' � ke _ ._. .tntailA-,� - 3ocpp -27Q 30i40) . (10.0%)! _ -impadrf .: : , .2SO,b�_. ' 000 , . - , : . . ' •' . 'ati� ii; etoers- 5if, 06 '5S ' - _ - #er,iivie04 ,. . 40Ot oT ,f � E ,. f - .. nd'� . - - ‘9;000,0 ' ''Tt•i , l �0 00) - (11-1%) - - Uq r .r 4I 1,�t6 Total revenue other f : - $1&4014 e9:.:.$1g05;51t $,.(105582) OW% ) , , . _' 'a��I ,:,.-:, .- -r. .fi; dr:" L' � , tea. `�, }' , - - - - - oo0)aties':v`vveges I'trenetits - $'144"%i40.;' ,$1480 i51 :$.:''$1,011 ' 2-.1%_ - • r- • MatetiatS'. Sup files. ':1,19,1 - , .'ifq,o ` .. ' ,60.0 '0.5%.- _ :i1eT es f r+i( s. 1,2$9,572 1,3 0 t '6 n' 1, 4;` 4 /0 . . - qa!,!!' LOMYa .. .` :! r, --,:"�':,y',, " a -: .,,tt _ .,,' '_ - -- 'csf t:ttip'I `m nt: ,6, 9 3�1:1: , ..i f,O '. i i'e ' gvf4 ,0$9' . "'36.1% - ._ , . . . . ,v04i _*,tio'cio .dent 4_0;000 iit.',-''-, ( oo O0O) ,(ai 1%) _, - . . . ; . ;-De '_ : - • $7'5, ,` . . - 00 -. -�; 25�59O.' :p.11:3- % t_ 1*O ,e t w:ervves �.Sit19 006 + ' '; (00,019,405. ._ ; _ . • . ,-, - ,. ''' .;, $1a ,601:;199'=-`$15; 91 , s135,552. "-0:91fro' . • E POTENTIAL MATTERS AT ISSUE The major matters reflected in the proposed budgets for the Stormwater Fund • include: • Capital improvement program-The proposed budget includes two collection line projects: 900 South (State Street to Jordan River) and 1700 South (500 West to 900 West). See the budget book provided by the Department for a complete listing of projects. • Bonding-The Stormwater program is proposing to bond for $8 million to help finance the 900 South storm drain line. The start date on this storm drain was postponed. The bonds will not be issued in fiscal year 2002-03, but are now scheduled for fiscal year 2003-04. The bond amount was originally proposed to be $9 million, Because of the delay, the Stormwater Fund has accumulated more cash for the project. Therefore, the proposed bond amount has been "reduced to $8 million. The first bond repayment of $800,000 has been included in the budget. If the 900 South project is delayed until spring 2004, the repaying will not occur in fiscal year 2004. • No rate increase - The six-year cash flow schedule does not indicate a rate increase anytime during the next six years. Observations- Review of Budget Detail Council staff reviewed the budget detail and met with Department representatives to obtain explanations of differences between fiscal year 2002 actual costs and the • proposed budgeted or variations between fiscal year 2003 budget and the proposed budget. A listing of each cost center by division is attached to this report. The Council may wish to obtain additional explanations from Department - representatives regarding the proposed budget. • General pay increase - The budget assumes a 3% general pay increase. The Mayor's proposed salary adjustment, if any, will be included in the Mayor's • recommended budget that.will be presented to the Council on the first Tuesday in May. Any increases are subject to the Council's consideration. The proposed budget for the Stormwater Fund reflects.a 2% increase rather than 3% because some savings that has occurred and because of a reduction in staffing by 0.2 FTE. • Buildings supplies - A budget of$25,000 is proposed, Actual fiscal year 2002 expenditures were $3,930, and costs for the first nine months of the current fiscal year (as of March 27, 2003) are $4,330. This line-item budget includes contingency funds in case pumps need to be replaced. • Electrical power for pumping - A budget of$46,680 is proposed. Actual fiscal year 2002 expenditures were $38,410, and recorded costs for the first nine months of the current fiscal year (as of March 27, 2003) are $14,890. Not all power bills for the nine months would have been received. • Training, travel, conventions &,workshops - A budget of $18,760 is proposed. Actual fiscal.year 20()2 expenditures 'were $1,210, and costs for the first nine months of the current fiscal year (as of March 27, 2003) are $427. �" 2 • Fleet maintenance and fuel - A budget of,$140,890 is proposed. Actual fiscal year 2002 expenditures were $129,000 and actual costs for the first nine months • of the current fiscal'year (as of March 27, 2003) are $92,1110. The Department is requesting, a budget increase because of fuel price increases and because the Department has deferred replacement of some,vehicles to help offset revenue , shortfalls:'An older fleet usually requires more maintenance. • Payment iti lieu of.taxes -`The..budget of $132,000 represents an increase of $37,240'in payments to the General Fund. The payment-in-lieu-of-taxes formula is based on prior year net income. • Administrative service fees for General Fund services - A budget,of $60,000 represents an increase Of$18,800. The General Fund provides-attorney support, accounting, payroll,, human resource Management, purchasing, and other services for the Department of Public Services. The actual amount of the reimbursement is based on a cost study performed quarterly. • "GIS" cost center - A budget for the GIS cost center is proposed to increase by 10% from $192,760 to $210,610. Actual, costs- for fiscal year 2002 were $175,770: The GIS function provides mappini and locating services for all three funds .(water, sewer and stormwater). ' Costs are allocated to the three funds ,based on actual services performed. The increase is due to'transferring one employee from the engineering cost center to the GIS cost center. Capital Improvement Budget The proposed budget reflects a capital improvement budget of$11,575,000 for fiscal . 4 year 2003-2.004. A detail listing of the projects'is included in the budget book from the'Department (included in your packet). Proposed Capital improvement Program . olle�on lines ' ,.Lift stations 220,000 Total Capital Improvement Program $11,515 Q00 Additional Information BACKGROUND . < The Department of Public Utilities'maintains (Aver'432 miles of stormwater pipe and ' collection lines using 30 employees. It was 1991 when the General Fund transferred the entire storm drain system under Public Utilities management.. July 1991 began the implementation of a new stornriwater fee based on surface.:area. Since that/time iat't e _ there have been no rate increases and:no.public tax dollars have been,used to help the`aystem: Stormwater employees also Mot itor the snow pack Water content and manage the stormnwater permit process. ` LEGISLATIVE INTENT STATEMENTS No legislative:intent statements are outstanding for the Stormwater Fund. During the briefing on the proposed budget, the Council may wish to identify legislative intents relating to the Stormwater Fund. During the briefing, the Council may wish to identify potential programs or functions to be added to the Council's list for future audits. S • 411). • Appendix Stormwater Fund Proposed Budget by Cost Center • FY04 FY02 FY03 ' Proposed• Actual Budget Budget' Comments Maintenance Division 53-10200 Stormwater Maintenance 778,781 1,075,436 1,089,657 ,Engineering Division 53-16300 Field Engineering 308,864 407,072 406;452 Inspections of work; Design • `WateriQuality Division 53-10700 Water Quality 126,880 149,541 156,328, Stormwater quality program; Sampling of industrial entities Finance Division 53-10500 Administration ` 1,115,411 1,033,053 1,087,567 Including data processing,professional servies,risk Management premium workers comp,administrative fee,payment in lieu of taxes AdministratianDivision 53-10900 GIS ` 176,768. 192,760 210,613 Mapping;locating • 410- „ „ -Total $_2,505,704 $ 2,857,862 $ 2,950,617 • • • • SALT LAKE CITY COUNCIL STAFF REPORT BUDGET ANALYSIS-FISCAL,YEAR 2003-04 DATE: March 28, 2003 SUBJECT: WATER FUND STAFF REPORT BY: Gaty Mumford CC: Rocky Fluhart, David Nimkin, LeRoy Hooton, Jeff Niermeyer, Jim Lewis, Steve Fawcett, Susi Kontgis, DJ Baxter The operating budget for the Water Enterprise Fund for fiscal year 2003-2004 is proposed to be $32,087,237, which is an increase of$2,652,256 or 9% increase over fiscal year 2002-2003. Additional water purchases represent 7.4% of the increase. The increase to operations would be only 1.6% if additional water purchases are not considered. The capital budget including debt service is proposed to be $22,007,831, which is a decrease of$4,329,602. WATER FUND PROPOSED BUDGET • - Revenue&other sources Metered sales $40,257,000 $41,413 498 $1,156,498 3.0% Interest income 1,250,000 800,000 (450,000) (36.0%) Interfund charges 2,049,020 2126,425 77,405 3.8% Sale of used equipment 50,000 50 000 - - Contributions b developers 1,105,000 1,355,000 250,000 22.6% Use of cash reserves 18,219,708 14,540,349 (3,679,359) (20.2%) Total revenue&other $62,930,728 $60,285,272 $(2,645,456) 4 2% sources ( ) Salaries, wages&benefits $13,075,538 $13,616,812 $ 541,274 4.1% Water purchases 6,825,000 9,050,000 2,225,000 32.6% Materials&supplies 2,272,473 2 394,399 121,926 5.4% Char.es for services 7,261,970 7,026 026 235,944) 3.2% Ca.ital Outla Capital improvement 26,337,433 22,007,831 (4,329,602) (16.4%) Vehicles&equipment 2,358,314 1,447,500 (910,814) (38.6%) Debt Services 4,800,000 4,742,704 (57,296) (1.2%) Totthla l Expenses&Capital $62,930,728 $60,285,272 $(2,645,456) (4.2%) Ou SALT LAKE CITY COUNCIL STAFF REPORT BUDGET ANALYSIS-FISCAL YEAR 2003-04 DATE: March 18, 2003 SUBJECT: WATER FUND STAFF REPORT BY: Gary Mumford CC: Rocky Fluhart, David Nimkin, LeRoy Hooton, Jeff Niermeyer, Jim Lewis, Steve Fawcett, Susi Kontgis, DJ Baxter The operating budget for the Water Enterprise Fund for fiscal year 2003-2004 is proposed to be $32,087,237, which is an increase of$2,652,256 or 9% increase over fiscal year 2002-2003. Additional water purchases represent 7.4% of the increase. The increase to operations would be only 1.6% if additional water purchases are not considered. The capital budget including debt service is proposed to be $22,007,831, which is a decrease of$4,329,602. WATER FUND PROPOSED BUDGET Revenue&other sources Metered sales $40,257,000 $41,413,498 $1,156,498 3.0% Interest income 1,250,000 800,000 (450,000) 36.0%) Interfund char•es 2,049,020 2,126,425 77,405 3.8% Sale of used equipment 50,000 50,000 - - Contributions by developers 1,105,000 1,355,000 250,000 22.6% Use of cash reserves 18,219,708 14,540,349 (3,679,359) (20.2%) Total revenue&other sources $62,930,728 $60,285,272 $(2,645,456) (4.2%) Expenses Salaries,wages&benefits $13,075,538 $13,616,812 $ 541,274 4.1% Water purchases 6,825,000 9,050,000 2,225,000 32.6% Materials&supplies 2,272,473 2,394,399 121,926 5.4% Charges for services 7,261,970 7,026,026 235,944 3.2% Ca•ital Outla Capital improvement 26,337,433 22,007,831 (4,329,602 (16.4%) Vehicles&equipment 2,358,314 1,447,500 (910,814) (38.6%) Debt Services 4,800,000 4,742,704 (57,296) (1.2%) Total Expenses&Capital o Outla $62,930,728 $60,285,272 $(2,645,456) (4.2/o) POTENTIAL MATTERS AT ISSUE The major matters reflected in the proposed budgets for the Water Fund include: • Water conservation rate structure - The Water Fund budget proposes the implementation of a new water rate structure to encourage greater water conservation. The Department briefed the City Council on the rate structure at work sessions on February 6 and March 20. The Department is putting together the following additional information and may be able to give oral reports on some items at the budget briefmg. a. Relationship between demand reduction and future rate increases b. Who are the "winners" and "losers"? c. Shift from commercial to residential d. Relationship between demand reduction and future cost savings e. What similar cities in Utah and the West are doing with rates f. Explanation of the calculations/ramifications of city/county multiplier g. Brochure to be mailed to customers to further enhance public understanding of proposed rate restructuring including a "matrix" calculator and savings tips for indoor use h. Calculator that customers can use on the Department's web site to estimate their bill under new structure • Water rate increase - In 1996, Salt Lake City Public Utilities conducted a water master plan to determine its water supply needs through the year 2025. Sandy City did likewise. The Metropolitan Water District of Salt Lake and Sandy took the two plans and developed a master plan of improvements to meet both cities' water needs to 2025. Salt Lake City will need additional water supply and • treatment conveyance systems to meet its future growth demand in addition to implementing stronger water conservation measures. The Metropolitan Water District project will provide redundancy in protecting against seismic events and unforeseen loss of water supply or facility failures. The proposed budget for the City's Water Fund for fiscal year 2003-2004 includes a 3% water rate increase approved by the Council in June 2001 to begin to fmance the Metropolitan Water District's capital improvement program, which will require the City to pay higher wholesale water rates (from $125 to $150 per acre-foot). The 3% rate increase has been built into the proposed new water rate structure. Assessments are also proposed beginning with fiscal year 2004-05. • Capital improvement program - The total capital improvement and capital outlay budget of $22,007,831 is the third year of the Department's five-year capital improvement program approved by the City Council in June 2001. The major project is the upgrade to the City Creek Canyon Water Treatment Plant. A detail listing of the projects is included in the budget book from the Department. The Council may wish to ask representatives of the Department about the City's current allocation for capital as compared to industry standards and about plans to move toward the industry standard. • Water meter replacement program - The proposed budget includes $1,300,000 for replacement of water meters. As water meters age, they begin to inaccurately measure water use (read low). The Department has determined that it is cost effective to replace meters that are 15 years old. During the past two years, the Department has replaced 24,000 meters with about 5,000 of these being radio reading devices. The Council may wish to discuss the success of the radio read meters with representative of the Department and the plans for accelerating the radio read component of the meter replacement program. 2 • Elimination of staff positions - The budget proposes eliminating one full-time position (0.5 FTE is applicable to the Water Fund with the other portion • applicable to the Sewer Fund and to the Stormwater Fund) and eliminating one vacant part-time position for a total savings of$40,000. Observations -Review of Budget Detail Council staff reviewed the budget detail and met with Department representatives to obtain explanations of differences between fiscal year 2002 actual costs and the proposed budgeted or variations between fiscal year 2003 budget and the proposed budget. A listing of each cost center by division is attached to this report. The Council may wish to obtain additional explanations from Department representatives regarding the proposed budget. • Water sales revenue - The Department is projecting that water conservation will result in a loss of 8% of revenue. This estimated decrease in water usage has been built into the proposed rates so that the Water Fund's revenue will not be reduced. Therefore, the revenue budget shows a 3% increase, which was approved by the Council in June 2001 relating to the capital improvement program of the Metropolitan Water District. • Interest revenue - The Department is projecting a decrease of $450,000 due to lower interest rates and less cash reserves. • General pay increase - The budget assumes a 3% general pay increase. The Mayor's proposed salary adjustment, if any, will be included in the Mayor's recommended budget that will be presented to the Council on the first Tuesday in May. Any increases are subject to the Council's consideration. • • Overtime -The budget includes $475,000 for overtime. Actual overtime costs for the first nine months of the current fiscal year (as of March 27, 2003) are $477,100. Most of the overtime relates to maintenance costs to cover 24-hour 7- day operations and for emergency work in connection with water line breaks. Overtime of $112,000 is due to scheduling at the three water treatment plants. Workers at the plants are on 12-hour shifts, working three days one week and four days the next week. The Fair Labor Standards Act requires the City to pay overtime in any week where work exceeds 40 hours. Therefore, workers earn overtime for 8 hours every other week. This built-in scheduled overtime allowed the Department to reduce the number of employees necessary to operate water treatment facilities on a 24-hour 7-day-per-week schedule. • Water purchases - A budget of $9,050,000 is proposed for purchases of water from the Metropolitan Water District, from the Central Utah Project and from the spot market. Due to lower than normal stream flows in City Creek, Parleys and Big Cottonwood Creek, additional water will be purchased. Actual fiscal year 2002 expenditures were $7,648,520. The Council may wish to ask the Department to report on the latest estimates of the severity of the drought conditions. • Chemicals - A budget of $486,450 is proposed for chemicals. Actual fiscal year 2002 expenditures were $246,950. Actual costs for the first nine months of the current fiscal year (as of March 27, 2003) are $128,980 although some invoices relating to this period may not have been paid or recorded. The increase need for chemicals is due to the low water conditions, which contain more sediment. More chemicals are usually required in the purification process to remove higher levels of sediment. 3 • Electrical power for pumping-A budget of$1,577,190 is proposed. Actual fiscal • year 2002 expenditures were $1,321,730. The Department projects that irrigation pumping relating to exchange agreements will need to begin in June rather than in mid July. • Special forms - A budget of$87,040 is proposed for special forms. Actual fiscal year 2002 expenditures were $33,500, and costs for the first nine months of the current fiscal year (as of March 27, 2003) are $52,100. The increase is related to additional flyers for the watershed education program. • Postage - A budget of$364,935 is proposed. Actual fiscal year 2002 expenditures were $288,844. Actual recorded costs for the first nine months of the current fiscal year (as of March 27, 2003) are $202,480. The increased budget relates to a new contractor for printing and mailing bills. The low bid contractor charges less for printing but more for postage. The Department will be monitoring the contractor's services to determine whether postage costs can be reduced. • Travel, conferences and seminars - A budget of $68,980 is proposed. Actual fiscal year 2002 expenditures were $53,875, and costs for the first nine months of the current fiscal year (as of March 27, 2003) are $39,770. Conference attendance and other discretionary expenses have been limited because the drought/conservation efforts have reduced revenue. The Council may wish to ask the Administration whether this level of budget is similar to that in general fund departments or whether there is an extenuating circumstance for the level of funding in Public Utilities. • • Administrative service fees for General Fund services - A budget of $650,000 is proposed. Actual fiscal year 2002 expenditures were $497,408. The General Fund provides attorney support, accounting, payroll, human resource management, purchasing, and other services for the Department of Public Services. The actual amount of the reimbursement is based on a cost study performed quarterly. • "Meter repair" cost center - A budget for the meter repair cost center is proposed to increase by 25% from $335,341 to $420,192. (See attached listing of cost centers by division.) This function routinely tests meters for accuracy and determines timing for replacement. Large meters are reconditioned in the Department's meter repair shop and placed back into service. The meter repair function has recently been involved with installation of the radio read meters. • "Source of water" cost center - A budget for the source of water cost center is proposed to increase by 25% from $196,657 to $246,327. This cost center consists of one hydrologist and one assistant to monitor snow pack and wells. The information recorded by these individuals is important to the Department for projecting water rights. The increase is due to assessment fees charged by the Utah Lake Water Users Association for a capital project. • "Water quality & analysis" cost center - A budget for this cost center is proposed to increase by 10% from $589,138 to $650,354. Employees take water samples and by using scientific analysis determine the amount of chemicals necessary • each day at the three treatment plants. The analysis ensures the safety of drinking water and prevents the overuse of chemicals, which results in savings to the Department. 4 • "Storehouse" cost center - A budget for the storehouse cost center is proposed to increase by 21% from $177,628 to $215,956. Four employees manage the e inventory of pipe, fittings, tools, gloves, etc. and account for acquisitions and use. The increase relates to reclassifications following an audit by Human Resource Management Division. For internal control purposes this function reports to the Finance Director rather than to the Maintenance Division. The • "Customer service" cost center - A budget for this cost center is proposed to increase by 15% from $898,552 to $1,032,062. Employees in the contract office and in the billing office are being crossed trained to backup the customer service function. Training and backup time is charged to the customer service cost center. • "GIS" cost center - A budget for the GIS cost center is proposed to increase by 9% from $527,386 to $577,294. Actual costs for fiscal year 2002 were $452,296. The GIS function provides mapping and locating services for all three funds (water, sewer and stormwater). Costs are allocated to the three funds based on actual services performed. The increase is due to transferring one employee from the engineering cost center to the GIS cost center. Capital Improvement Budget The proposed budget reflects a capital improvement budget of$22,007,831 for fiscal year 2003-2004. A detail listing of the projects is included in the budget book from the Department (included in your packet). • Proposed Capital Improvement Program Fiscal year 2003-2004 Treatment plants $13,345,000 Replacement of water lines and hydrants 5,106,831 Service line replacement 1,800,000 Water meter replacement 1,300,000 Land purchases 250,000 Pumping plant upgrades 61,000 Landscaping—conservation projects 60,000 Maintenance buildings 55,000 Water stock purchases 30,000 Total Capital Improvement Program $22,007,831 • 5 • Additional Information BACKGROUND Salt Lake City's water delivery system to City and County residents depends on a complex network of dams, aqueducts, water treatment plants, distribution reservoirs, and water mains. Upkeep and maintenance of older systems and construction of new systems is very costly. The Department of Public Utilities has over 90,000 water service connections. The Department maintains treatment plants, wells, reservoirs, 1,199 miles of water mains, and 167 miles of conduit and supply lines. LEGISLATIVE INTENT STATEMENTS The Council previously issued the following legislative intent statements that relate to the Water Fund. Radio-Reading Water Meter Pilot Program - It is the intent of the City Council that the Administration briefs the Council on the effectiveness of the radio-reading water meter pilot program after approximately 4,000 hard-to-read meters are replaced with radio reading devices and the Administration calculates the cost versus the benefits of the program including long-term benefits. • Results/Steps Taken: In addition to the pilot program, the Department has replaced another 1,000 meters. The pilot program was generally very successful especially on driving routes where the meter reader doesn't need to exit the vehicle. The Department has decided to expand the program to the areas on the City's high east side. Secondary Water Systems - It is the intent of the City Council that the Department of Public Utilities continues developing secondary water systems for parks and golf courses and considers including a secondary parallel water system in new developments within the Northwest Quadrant. Results/Steps Taken: The Administration will continue its current policy of looking for cost-effective ways to use secondary water sources for the greening of public property. The Department of Public Utilities completed a water efficiency study in May 2002, which reviewed all green spaces and the cost-effectiveness of implementing secondary water use. The Department will use this information to encourage wise water use and promote secondary parallel water systems in new developments within the Northwest Quadrant. During the briefing on the proposed budget, the Council may wish to identify legislative intents relating to the Department of Public Utilities. • During the briefing, the Council may wish to identify potential programs or functions to be added to the Council's list for future audits. 6 Appendix Water Fund Page 1 • Proposed Budget by Cost Center FY04 FY02 FY03 Proposed • Actual Budget Budget Comments Maintenance Division 51-00100 Canal Maintenance $ 522,997 $ 433,170 $ 454,106 51-00300 Deep Wells 511,175 562,244 591,412 Electricity FY02$463,479; FY03$491,156;FY04$505,891 51-01400 Distribution 1,950,989 2,183,984 2,232,862 Emergency crews;dispatch 51-01500 Telemetry 254,555 287,544 285,068 Remotely monitors reservoirs and line pressure;automatically adjusts to maintain appropriate pressure 51-01700 Maintenance 2,746,291 2,751,864 2,787,338 Routine maintenance;permitting fees; asphalt;concrete 51-02000 Work Order Office 154,723 189,247 187,136 Scheduling maintenance work 51-02200 General Maintenance 407,197 642,665 500,832 Electricity,natural gas,janitorial for Administration&Shops complex 51-02300 Fleet Maintenance 105,268 530,459 368,319 Delayed replacing some vehicles resulting in additional maintenance costs 51-02400 Meter Repair 330,440 335,341 420,102 Repair of large meters;replacements as • reported by meter readers and billing; installation of radio meters 51-02500 Electrical 353,163 375,824 344,845 Maintaining electrical motors for pumps,etc. Water Quality Division 51-00200 Source of Water 214,136 196,657 246,327 One hydrologist&one assistant to monitor snow pack&wells;records information to protect water rights 51-00400 Booster Pumping Stations 1,012,509 1,038,730 1,074,075 Electricity FY02$857,720;FY03$866,745; FY04$892,747 51-00500 Irrigation Pumping 126,988 203,898 209,730 Normally begin pumping in mid July; budgeted to begin pumping in June 51-00600 Watershed Patrol 953,096 1,145,787 1,112,989 Contract FY02$432,691;FY03$575,000; FY04$455,000 51-00700 Purification City Creek 706,264 633,120 687,224 51-00800 Purification Parleys 895,440 958,881 956,775 51-00900 Purification Big Cottonwood 927,599 877,245 934,356 51-01000 Cross Connections 195,104 201,424 213,103 Inspecting&testing of 8000 backflow preventors in businessesIII 51-01100 Metropolitan Water 7,648,516 6,825,000 9,050,000 Appendix Water Fund Page 2 Proposed Budget by Cost Center FY04 • FY02 FY03 Proposed Actual Budget Budget Comments 51-01200 Little Dell Dam 32,139 40,516 40,584 Metropolitan Water District provide water from Little Dell without charge because City maintains dam and recreation 51-01800 Water Quality&Analysis 499,781 589,138 650,354 Sampling;scientific analysis of amount of chemicals necessary to be added to water at the three treatment plants 51-03500 Little Dell Recreation 80,263 104,334 106,647 Metropolitan Water District provide water from Little Dell without charge because City maintains dam and recreation Engineering Division 51-01300 Engineering 641,870 718,190 612,568 Finance Division 51-02100 Storehouse 185,507 177,628 215,956 Manages inventory including issues and receiving 51-02600 Meter Reading 701,637 769,886 827,942 51-02700 Billing 1,156,229 1,196,912 1,170,774 Postage FY02$273,785;FY03$324,000; FY$324,000 Data processing FY02$370,718;FY03 51-02800 Customer Service 875,524 898,552 1,032,062 Cross training employees in contract office, billing office and customer services 900 Accounting 531,317 529,821 483,786 51-03200 Administrative Services 2,333,133 2,661,697 2,690,410 Including professional services,claims,risk premium,workers comp,payment in lieu of taxes Administration Division 51-01600 GIS 452,296 527,386 577,294 Mapping,surveying,locating services 51-03000 Safety Program 327,679 185,253 188,085 51-03100 Administration 99,310 105,123 107,744 51-03300 Contracts&construction 322,076 305,768 327,860 Includes water stock assessments$80,000 51-03400 Development&Review 247,075 251,693 230,000 51-03600 Water Conservation - - 168,482 1 full-time employee;participation in the residential Slow-the-Flow program; educational brochures,materials,and advertising;2 demonstration gardens; summer irrigation audit program for city cites • Total $28,502,286 $29,434,981 $32,087,237 • SALT LAKE CITY COUNCIL-STAFF REPOUT • - T=ANALYSIS - - S - DATE: March 28, 2003 SUBJECT: SEWER FUND STAFF REPORT BY: Gary Mumford CC: Rocky Fluhart, David Nimkin, LeRoy Hooton, Jeff Niermeyer, Jim Lewis, Steve Fawcett, Susi Kontgis, DJ Baxter The operating budget for the Sewer Fund for fiscal year 2003-2004 is proposed to be $9,599,700, which is an increase of$368,943 or 4% over fiscal year 2002-2003. The capital budget is proposed to be $33,793,500, which is a decrease of$1,336,057. SEWER FUND PROPOSED BUDGETS Revenue&other sources Sewer services fees $14,824,000 _ $15,813,180 $789,160 5.3% Interest income 800,000 450,000 (350,000) (43.8%) • Permits 85,000 85,000 - - Impact fees 600,000. 600,000 • - - Other 807,000 807,000 = - Bond proceeds 25,000,000 25,000,000 - - Use of cash reserves, 5,078,114 .4,677,540 (500,574) (9.9%) Total revenue&other sources $47,194,114 $47,132,700 $ (61,414) (0.1%) Expenses Salaries,wages&benefits $5,502,235 $5,875,520 $ 173,285 3.1% ° Materials&supplies 1,343,620 1,320,362 (23,268) (1.7%) Charges for services 2,384,902 2,603,828 21.8,926 9.2% Capital Outlay Capital improvement .. 35,129,557 - 33,793,500 (1,336,057) (3.8%) Vehicles&equipment 1,308,800 959,500 (349,300) (26.7%) Debt Services 1,525,000 2,780,000 . 1,255,000 82.3% Total Expenses&Capital $47,194,114 847,132,700 $ (61,414) (0.1%) • I POTENTIAL MATTERS AT ISSUE The major matters reflected in the proposed budgets for the Sewer Fund include: • Sewer rate increase — In June 2000, the City Council adopted a six-year incremental sewer rate increase to coincide with a six-year,capital improvement plan. Sewer rates were increased 12%% on January 1, 2001, 9% on July 1, 2001, 9% on July 1, 2002, and 9% on July 1, '2003. Future rate increases already authorized are 9% on July 1, 2004 and 7% July 1, 2005. While the rate • ordinance does not bind future Councils, it makes it necessary for the Council to take format action in order for the planned increase not to be implemented. t. •, • Capital improvement Program - The proposed budget includes the continuation of a $70 million, six year capital improvement program that was approved the City Couricil in June 2000. The program includes an upgrade to the waste water reclamation'plant to handle an increase in organic loading. The capital improvement plan also-includes two major sewer trunk lines. A detail listing of the projects is included in the budget book from the Department In fiscal year 2000-01, the Council adopted a new sewer rate structure for industrial and commercial customers that included a wake,strength component. The Council may wish to ask representatives of the Department whether the rate structure has been successful in reducing some of the waste strength component • Bond Issue - The budget proposes issuing $25 million in bonds to upgrade the existing wastewater treatment plant. This bond issue was originally planned for the current fileal year ending June 2003, but,was deferred to fiscal year 2003-04 because design plans where not finalized. -The Department is Uncertain whether `the full $25'million will need to be isaued. Later in fiscal year 2003-04 when the Department prepares a bond briefing document, the Council can have additional discussions before considering authorization of the bonds. The proposed budget for fiscal -year• 2003-04 includes" the use of -accumulated reserve funds of • $4,577,540 to help finance the capital improveraent program. , - Observations-Review of-Bugget Detail _ Council staff reviewed the budget detail and met with Department representatives to obtain explanations of differences between fiscal year 2002 actual costs and the proposed budgeted or variations between fiscal year 2003 budget and the proposed • budget. A listing of each cost center by division is attached to this report. The Council may- wish to 'obtain additional explanations from Department representatives regarding the proposed budget , • Revenge -Although a 9% rate increase has already,been approved to be effective for fiscal year- 003-04, sewer fee revenue is projected to increase only: 5% because'of water conservation and a clown turn in the economy. Sewer charges are based on winter water usage, which is projected to decrease as both residential and businesses strive for conservation of water. • General pay increase - The budget assumes a 3% general pay increase. The Mayor's proposed salary adjustment, if any, will be included in the Mayor's recommended budget that will be presented to the Council on the first Tuesday in May. ,Any increases are subject to the Council's-consideration. The budget includes a reduction of 1.3 FrE positions totaling about$61,000. • Overtime The budget includes $237,080 for overtimel Actual overtime costs for the first nine Months of the current fiscal year (as of March 27, 2003) are $16,5,870. - Some- Overtime., relates to emergency Work; but:roost is due ,to scheduled overtime at'the reclamation plant Workers at the plant are on_ 12- hOur shiftst working three days One week and four days the next week, The Fair Labor Standards Act requites the City to pay overtime in any week where work exceeds. 46, hours., Therefore„worker's-e arn overtime for 8 ,hours every Other week. .The 12-houeshiftp,.ailowd,the Depart:in:eta in the past tpelinthiate.one6- erdPloYee.Vrew-,a414,04e anpevisor for aAet•savitig in costs. . • • Grounds supplies - A budget of $84,000 is proposed for outside grounds supplies. Actual fiscal year 2002 expenditures were $50,580. The Department idesires to upgrade some of the irrigation systems around the sewer lift stations and at the Reclamation Plant. • Chemicals - A budget of$203,540 is proposed for chemicals. Actual fiscal year 2002 expenditures were $127,750, and costs for the first nine months of the current fiscal year (as of March 27, 2003) are $79,600. The increase use of chemicals is proposed to handle the high sewer strength component. • Electrical power- A budget of$581,310 is proposed for electricity. Actual fiscal year 2002 expenditures were $451,445, and costs for the first nine months of the current fiscal year (as of March 27, 2003) are $290,300. The Department budgets for a normal water table, which allows some water into the sewer system requiring more pumping then when the water table is low because of drought conditions. The water table will probably remain low in fiscal year 2004. Water conservation has also reduced waste flows arriving at the plant for treatment. Therefore, part of the budget for electrical power may not be necessary. • Sludge management - A budget of $50,000 is proposed, but actual fiscal year 2002 expenditures were only $845. There are no expenses during the first nine months of the current fiscal year (as of March 27, 2003). The Department has been able to dispose of sludge at a Kennecott site during the past few years, but the Department doesn't know if it will be allowed to continue this practice. The budget is for landfill costs in case regulators discontinue allowing Kennecott to accept the sludge. • Fleet maintenance and fuel - A budget of $270,720 is proposed. Actual fiscal • year 2002 expenditures were $211,390, and costs for the first nine months of the current fiscal year (as of March 27, 2003) are $131,550. The Department is requesting a budget increase because of fuel price increases and because the Department has deferred replacement of some vehicles to help offset revenue shortfalls. An older fleet usually requires more maintenance. • Travel, conferences and seminars - A budget of $48,920 is proposed. Actual fiscal year 2002 expenditures were $11,430, and costs for the first nine months of the current fiscal year (as of March 27, 2003) are $12,010. Conference attendance and other discretionary expenses have been limited because of revenue shortfalls. • Payment in lieu of taxes - The budget of $284,110 represents an increase of $154,735 in ,payments to the General Fund. The payment-in-lieu-of-taxes formula is based on prior year net income. • "collection lines" cost center - A budget for the collection lines cost center is proposed to increase by 49% from$380,215 to $550,670. (See attached listing of cost centers by division.) Actual costs, for fiscal year 2002 were $314,070. Several streets both within the City and in the County service area are scheduled to receive an asphalt overlay requiring the Department to raise manholes. The costs for the cement crew were not fully budgeted last year. Permit fees have increased in Salt Lake City. Additional asphalt and compacting work are required for street cuts to meet higher restoration requirements. • 3 • Capital pamovement Budget • The proposed budget reflects a capital improvement budget of$33,793,500 for fiscal year 2003-2004 A detail listing of the projects is included in the budget book frorn. • the Department(included in your packet). Proposed Capital Improvement program' Treatment plant - , $29,180,0g0 Collection lines 4;101;§00 Lift stations - ,460,000 Maintenance&repair shoPs 31,000 Site irnprovements 25,000 • ' Total Capital Improvement Program $33,793,500 • Additional Information BACKGROUND The Department of Public Utilities has over 48,350 sewer connections. The Sewer Find maintains 633, miles Of sanitary sewer pipe and connection lines. The reclamation plant treats an average of 35,000,000 gallons of sanitary sewer per day. - Maintaining the sewer lines and operating the lift stations and reclamation plant is accomplished with 102 employees. Effective January 1, 2001, sewer fees are based on discharge strength as well as volume: Approximately 1,700 of the 48,000 accounts are charged an additional fee, because they discharge sewage with • strengths greater than domestic or residential sewer flows. This change sets rateS so that residential customers or commercial customers'With domestic discharges do not subsidize customers 'with greater than' domestic strength discharges. This rate structure encourages businesses to reduce discharge strengths. The average residential sewer bill in fiscal:year 2002-2003 was $192.65 and is estimated to be $111.89 in fiscal yefir 2003-2004. LEGISLATIVE INTENT STATEMENTS No legislative intent statements are outstanding for the Sewer Fund. During the briefing on the proposed budget, the Council may wish 'to identify, legislative intents relating to the Department of Management Services „ e During the briefing;the Council may wish to identify potential programs or ftinCtions to be added to the Council's list for Mire audits: ; • „ • • • , , - , • f Appendix Sewer Fund Proposed Budget by Cost Center • FY04 FY02 FY03 Proposed Actual Budget Budget. Comments Maintenance Division 52-10100 Lift stations $ 372,029 $ 372,476 $ 381,605 52-10600 Collection Lines 314,068 380,215 550,670 Budget increase for additional concrete work relating to raising manholes as a result of road construction 52-10800 Mobile Camera Inspections 194,850 203,862 . 218,758 52-11000 Fleet Maintenance 15,015 165,532 170,971 Reclamation Division 52-11200 Maintenance 1,707,556 1,934,250 1,932,965 Maintains Reclamation Plant 52-11300 Administration 400,791 403,953 430,072 52-12200 Operations 2,145,513 2,659,400 2,560,489 Operation of Reclamation Plant including electricity for pumping,natural gas,waste disposal,chemicals 52-12300 Reclamation Fleet Maintenance 77,068 95,393 95,393 2400 Pre-Treatment 246,618 272,745 256,878 Industrial pre-treatment program required by EPA; sampling industriaVcommercial Engineering Division 52-10400 Field Engineering 286,875 332,489 328,530 Inspection of work; Lateral connection Water Quality Division 52-11100 Laboratory 299,170 371,411 399,503 Stonmvater sample Finance Division 52-11500 Accounting 716,638 722,708 789,729 Data processing FY02$134,225;FY03 $110,000;FY04$140,000 Professional services FY02$484,000;FY03 52-11700 General Operations 989,758 946,551 1,086,094 Including Risk Management fee;administrative service fee;payment In lieu of taxes Administration Division 52-11400 GIS 263,815 288,047 314,179 52-11900 Administration 79,417 . 81,725 83,864 40 Total $ 8;109,181 $ 9,230,757 $ 9,599,700 ' • Message Page 1 of 2 Weaver, Lehua • From: Sears, Michael Sent: Friday, March 28, 2003 12:26 PM To: City Council Members Cc: Mumford, Gary; Jones, Sylvia; Weaver, Lehua Subject: FW: CDBG questions Categories: Program/Policy Council Members, Attached are the responses to Council Member questions from the March 27th CDBG briefing.The Council will be continuing their discussion on proposed CDBG, HOME, ESG and HOPWA projects during the April 1, 2003 Council meeting. The public hearing for the federal grants will be April 8, 2003. Gary Mumford will be the staff contact on CDBG related matters for the April 1, 2003 meeting. If you have any questions, please contact Cindy, Gary or myself. Thanks. Michael Original Message From: Clark, Luann Sent: Friday, March 28, 2003 12:18 PM To: Sears, Michael Cc: Gust-Jenson, Cindy; Weyher, Alison; Pope, Val Subject: CDBG questions • Michael: Here are the answers to the two questions from yesterday: 1. Life Care - Critical Home Repair Program: Last year Life Care performed 507 jobs in 183 homes serving 275 people. The do not track hours just for the critical home repairs because they have employees and volunteers who go out and do repairs as well as some of the other services they provide such as home safety checks, yard care, friendly visits etc. They do track how much is spent on each household annually and the average is $234.11. If they receive the increase in funding they will perform 588 jobs in 260 homes serving approximately 360 people. As with all of the other programs serving low income residents they are seeing an increase in the need for service. 2. Tauffer Park - The playground equipment was installed when the park was built in 1978. The City allocated $66,748 in Year 2 (1976-77)to purchase the property, design and construct the park and in Year 3 (1977-1978) an additional $14,777 was allocated for construction expenses. I talked to Val Pope and he said that during the first year or so a problem was discovered with the playground equipment and some modifications were made to the equipment to resolve the safety issue. We have checked our files and no-additional CDBG funds were allocated to the project for the changes. Engineering also checked their files and • they have no records showing the changes to the equipment. Other than the changes early on, no other changes, additions or replacements have been made to the playground 3/28/2003 Message Page 2 of 2 equipment. No additional funding from CDBG has been allocated to the park until this new request was submitted. I have sent an e-mail to Randy Hillier to see if any funding was allocated over the years from CIP. I will update you as soon as I hear from him. II Val also explained that the City put in several sets of wood playground equipment during the late 70's. The wood has deteriorated and over the last four or five years Parks has been replacing all of those playgrounds. Depending on funding allocations they plan to accomplish the replacement of the playground equipment within the next year or so. I think these were the only two questions from yesterday. I have also asked Karen Wiley to start preparing the information we will need to amend our Consolidated Plan to make the change to have the Housing Trust Fund review the HOWPA applications. Please let me know if I have missed anything or if I can provide any additional information. Thanks, LuAnn 11111 3/28/2003 S1-' 1 . fi ;11Pw IOC= S LEROY W. HOOTON, JR. — ROSS C. "ROCKY" ANDERSON DIRECTOR DEPARTMENT OF PUBLIC UTILITIES MAYOR WATER SUPPLY AND WATERWORKS WATER RECLAMATION AND STORMWATER TO: City Council DATE: April 1, 2003 FROM: LeRoy W. Hooton Jr. 1. 3.ti SUBJECT: City Council requested information on water rate restructure STAFF CONTACT: Jim Lewis, Finance Administrator(483-6773) DOCUMENT TYPE: None RECOMMENDATION: None BUDGET IMPACT: None BACKGROUND/DISCUSSION: Response to the City Council request for additional information related to the proposed water rate restructure: 1. In response to the City Councils question regarding demand reduction and future rate increases: The attached chart(attachment 1) shows the actual water • deliveries and the forecasted water deliveries compared to the 1997 Salt Lake City Water Master Plan over the next 25 years. We are anticipating a reduction in water deliveries by 8%from our normal budget amount of 100,000 acre feet due to the public education process,public reaction related to the drought and the rate restructure. The effect on future rate increases depends on the reaction next year and into the future by our customers. If our customers will use water wisely and reduce their outside watering demand the city will save 27,831 acre feet of water by 2025 at a estimated savings of$26 million based on the current cost of Utah Lake System Water inflated to the year 2025. The City would also save additional capital outlay by delaying future water growth related projects. The effect on future rate increases will depend on the reaction from our customers. If our customers maintain the forecasted use pattern all proposed rate increases would be needed to finance the needed capital replacement program. 2. In response to the City Council question regarding the rate structure shifting costs between customer classes or who are the"winners"and "losers": Attached is a worksheet(attachment 2)listing the revenue generated by customer class and totals showing the difference between city and county customers. Since the water rate structure is based on the peak demand on the system those customer classes that place the greater peak demand on the system and use the most discretionary outside water will be effected more than users which require a constant non peak and limited irrigation usage. • 3. In response to the City Council question related to what similar cities in Utah and the West are doing with rates: Currently in Utah only a few cities have 1 530 SOUTH WEST TEMPLE, SALT LAKE CITY, UTAH 841 1 5 TELEPHONE: SO 1-483-5900 FAX: 80 1-483-5S 1 8 is �� Recrceo rwreR • implemented inclining seasonal rates. Park City, Kearns Improvement District and Riverton have implemented inclining block rates. Currently Draper City and Jordan Valley Conservancy District are going thru the rate review process. Sandy and St George have implemented our current seasonal rate structure. Larger cities such as Las Vegas, San Diego, Sacramento and Tucson have implemented inclining block rates. In the 2002 Water and Wastewater Rate Survey by Raftelis Financial Consulting, it reported, that 50%of comparable cities had implemented inclining block rates the remaining cities reported both declining block rates and uniform. 4. The City Council requested a brochure be prepared to be mailed out to all customers to further enhance the public education process and to notify them of the rate hearing on April 22,2003: Attached is a proposed brochure,which has been prepared and is ready to be mailed out to all customers on April 9 thru April 11, 2003. 5. The City Council requested preparation of an Internet web calculator to help educate our customers on the effect of the rate restructure: The web calculator for city residential customers has now been programmed and is waiting to be posted to our web site. We are currently working on a similar web page for commercial and industrial and county residential customers. 6. The City Council requested a breakdown of summer water usage history for • city accounts: Attached are two billing frequency charts showing summer time usage for summer accounts. The first chart(attachment 3) shows the water usage for city accounts for the period April to October with the second chart (attachment 4) showing water usage for the highest usage months of July and August. 7. The effect of the City/county multiplier from 1.35 to 1.5 is as follows: The rate increase for an average residential customer would drop from 13.65%to 9.29%. City Rates Current 1.35 Maintain 1.50 Current Maintain 1.50 Differential Differential Option Differential Rate Option Rate Option Average Rate Option Annual Bill Average Annual Bill Block 1: Up to $0.72 $0.70 900 cubic feet Block 2: From $1.10 $1.02 901 cubic feet to $254.43 $244.67 2,900 cubic feet• Block 3: Excess $1.53 $1.45 13.65% 9.29% of 2,900 cubic increase increase feet • County Rates Current 1.35 Maintain 1.50 Current Maintain 1.50 Differential Differential Option Differential Rate Option Rate Option Average Rate Option Annual Bill Average Annual Bill Block 1: Up to $0.97 $1.05 900 cubic feet Block 2: From $1.49 $1.53 $434.13 $452.16 901 cubic feet to 2,900 cubic feet Block 3: Excess $2.07 $2.18 11.23% 15.85% of 2,900 cubic increase increase feet • • • • • Average Demand vs Conservation Savings 140,000 .a 120,000 et 100,000 ♦ ♦ A Q 80,000 - - - 4 ��44 TTCO' 60,000 ~I 40,000 i Co) 20,000 _ a 0 I , I I I I 1°�^tigf�tiCPC) 0ti���ti��tiib 414 4°' 4* � tip# e tiffs'. s •ti�.# <..) �sb. tiffs if ti��ti��A ti1oti�I>ti��Nti��63 ti4 ��h Years -Ai—Master plan water volume Actual & Projected Demand 5- N I z 0 • Attachment No. 2 • SALT LAKE CITY WATER UTILITIES WATER RATE STUDY CLASS REVENUE SUMMARY W/1.50 RATIO Revenue for Revenue for Current Proposed Revenue Change % Change Class Rates Rates Inside City Residential $ 10,405,583.03 $ 10,701,832.58 $ 296,249.55 2.8470% Non-Residential $ 13,337,133.04 $ 12,212,182.33 $ (1,124,950.72) -8.4347% Irrigation $ 1,422,956.43 $ 1,477,385.84 $ 54,429.42 3.8251% Total $ 25,165,672.50 $ 24,391,400.75 (774,272) (0.02) Outside City Residential $ 11,597,341.98 $ 12,368,105.82 $ 770,763.84 6.6460% Non-Residential $ 4,062,246.48 $ 3,919,861.21 $ (142,385.27) -3.5051% /ligation $ 505,456.39 $ 554,002.28 $ 48,545.89 9.6044% gIrtal 16,165,045 $ 16,841,969.30 676,924 0.13 Private Fire Protection $ 64,728.00 $ 135,569.00 $70,841 109.4441% Total Rate Revenue $ 41,395,445.35 $ 41,368,939.05 $ (26,506.29) $ (0.00) • • • • > SALT LAKE CITY WATER RATE STUDY BILLING FREQUENCY RESIDENTIAL SUMMER MONTHS (APR—OCT) 120 1.`;;;3w� ,f � 'S ^ : • . % ~... t w z F ' a "�� ;'d} e ; k . ,y va F " •�. ,�Y ,.. .,..„. • .:a rily : 1I1i xy,`� , .u3• � ; , ,,. �100 44. ." 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