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HomeMy WebLinkAbout04/24/2001 Adjourned Meeting / Study Session 19 1 CITY OF YAKIMA, WASHINGTON ADJOURNED MEETING /STUDY SESSION OF THE CITY COUNCIL APRIL 24, 2001 - 7:30 A.M. CITY HALL -129 NORTH 2 STREET - COUNCIL CHAMBERS 1. ROLL CALL Present: Council: Mayor Mary Place, presiding, Council Members Clarence Barnett, Henry Beauchamp, Lynn Buchanan (present after 7:50 a.m.), Larry Mattson, John Puccinelli, and Bernard Sims Staff: City Manager Zais, Assistant City Attorney Peterson, Director of Finance and Budget Anson, Finance Department staff members Cindy Epperson and Tim Jensen, and City Clerk Roberts . 2. REVIEW OF SPORTS COMPLEX PROPOSAL • The City Manager speaks about the proposal City Manager Zais reviewed the history of the sports complex concept that began initially with the idea to build a City -owned and operated facility. The focus of the Yakima Rotary Trust (consisting of Rotary, Kiwanis and Lions Club members) shifted to the concept offered by Big League Dreams (BLD) to build a facility that includes five ball fields, batting cages, a multi -sport pavilion, a restaurant and a concession stand. This facility would be a boon to the City's tourism industry and result in increased sales tax revenue. • The cost of the project and how to pay for it City Manager Zais reported on several financial facts: • The total cost of the project, including infrastructure, site preparation and construction, and financing costs, etc. is $10.3 million. • In addition to the construction expense is the land acquisition costs; however, the land acquisition cost is within the current funding we have today. • The City has the capability to issue bonds for this purpose, but doesn't have the capability without it taking away from some other needed project. • A tax source to help pay for these bonds is being proposed. There may be other resources available that would reduce the bond amount. • We have $1 million from the resources we have secured from the sale of Larson Park and set aside for the relocation of one ball field. • We can apply for $500,000 from the County Economic Development Program for infrastructure needs and would seek a waiver requesting that entire sum as a grant. 192 APRIL 24, 2001 — ADJOURNED MEETING • • The local Rotary Trust Group has advanced about $100,000 for Big League Dreams' consulting fee. • The Rotary Trust Group donated about $0.6 million, toward land acquisition • $8.7 million is the unfunded balance City Manager Zais reported that we would finance the construction and then lease the facility to Big League Dreams to operate and manage. This fall was established as a deadline to put something together and finance this package because Big League Dreams has come to the attention of other cities in Washington who are interested in what BLD has to offer. We approached Big League Dreams; they did not seek us out. He enumerated the funding options that were considered and the reason for rejection: • An increase in the sales tax was ruled out because we don't have Home Rule • We considered property tax proposal, but it requires a 60% majority vote on a levy and there have been statewide initiatives to reduce the property tax (Council Member Buchanan present after 7:50 a.m.) • We are already facing mandates in the City's utility services All that was left to consider was the private utility tax to fund this project. Staff is suggesting that a 1% increase would provide sufficient resources to fund the amortized debt service on the unfunded $8.7 million. This would be a tax on private telephone (including cellular), gas, and power services. The increase would cost the average household about $18 per year. The cap on the amount of tax collected from large consumers would remain in tact for this additional amount. Mr. Zais stated that several things would have to happen before we would issue the bond: • Ensure that this goes forward to a public vote • Enter into lease negotiations with Big League Dreams • Design this facility • Enter into an interim consultant agreement with Big League Dreams through the campaign so we would have the necessary information for this project, and to ensure they are not lured away by someone else. We want to have a no- compete clause in the lease agreement to ensure our market is not weakened. He reviewed the reasons for recommending the increase in the tax on private utilities to fund this project. They are: • Everybody pays a portion of the project cost • The existing 6% tax on the private utilities is the lowest rate of any of the existing City utility taxes • The increase in this tax requires a vote of the people; i.e., the people will be allowed to decide the City's spending priorities • This tax adjustment requires a simple majority voter approval , • This tax provides a stable and reliable revenue source over the life of the bonds, which bond holders will require • The City's tax options are limited; other tax options identified are either not authorized or deemed unacceptable at this time 2 19 3. APRIL 24, 2001 — ADJOURNED MEETING • The tax on private utilities is a pass through and the administration of which is already established; thus, imposing the rate adjustment will not generate additional administrative expenses • The revenue from this tax may be used to pay the annual debt service on the bonds and, if available, to help pay the bonds off early or to support, if . necessary, operating or capital shortfalls at Kiwanis Park. Other revenue options are more restrictive. • The sports committee and community groups support this option • The tax would sunset when the bonds are paid in full He informed Council that due to the requirement of paying Big League Dreams a $300,000 license fee, the revenue to the City from the lease agreement wouldn't commence until the fifth year into the agreement. This revenue would help our entire parks system. • Staff recommendation City Manager Zais stated that staff recommends Council accept the concept of the Big League Dreams' project and direct staff to prepare the legislation to place a utility tax increase to support this project on the ballot, enter into negotiations with Big League Dreams, and to prepare legislation to authorize an interim agreement with Big League Dreams. • Council Comments and Questions • Council Member Barnett commented that he asked staff yesterday if the one - hour playing time limit would exclude any Little League use of the facility. Denise Nichols responded she learned that the one -hour restriction is only for adult softball games; the Little League would operate as they are now. Council Member Barnett brought up the issue of the multi -sport pavilion being an unheated, uninsulated tent structure and questioned whether that is feasible for our area and if it would restrict the amount of time the facility could be utilized. He thought it would certainly affect the corporate events and even keep spectators away during the winter months. He further asked if it would be within the funding capability to replace the tent structure with a structure that could be heated. City Manager Zais replied that there is a small contingency budget in the financing proposal, but not too much room to maneuver. We would not issue bonds until after the bids are opened and suggested adding this change as an alternate to the bid. There could be tw'o alternates; one for a prefabricated metal building (which is not recommended) and another alternate for a tilt -up concrete facility. Dave Franklin, KDF Architects, reported the cost for a prefabricated metal facility would add about $466,000 to the cost of the project and the tilt -up concrete structure would add $728,000. 3 194 APRIL 24, 2001 — ADJOURNED MEETING e Comments from the audience Greg Luring, Yakima Rotary Trust, advised Council that his group discussed the issue of the pavilion. He stated they had several objectives in mind, the primary objective was to keep the bond amount in the eight million - dollar price range so the ballot measure would be more likely to pass. This project would help beautify that area of our city. The big blue pavilion tent is an attraction to draw people to the facility and some members thought the concrete tilt -up building would detract from the appearance of the complex. Gene Rostvold, Kiwanis Club, commented that he was involved in the original committee in 1994 to look at athletic facilities. He stated that members of the Trust spoke with Big League Dreams about the pavilion and said the tent is their signature structure and they feel that facility is attractive and goes along with their replica fields. He thought they would prefer the concrete tilt -up facility over the metal facility. Jim Smith, Rotary Club, commented that when the Odekirks, representing Big League Dreams, were in Yakima, they thought the tent structure would work. It is up to them to make this complex viable. They felt they could get 90% of the activities in there. Gary George stated he was in a similar facility with a metal building in Ohio last winter and felt that Yakima could have a successful complex, too. He did indicate his preference would be for a concrete building. Scott Wagner, Rotary Trust, supported the add - alternative option on the bid. Mike Nixon, Chair of the Parks and Recreation Commission, reported the Commission has not had an opportunity to review this proposal, but is committed to the concept of a sports complex. Denise Nichols advised Council that the Big League Dreams would offer the same activities that the Parks and Recreation Division offers now for adult softball. The 180 teams would sign up with Big League Dreams who would assume the expenditures for operation and maintenance of that facility. We would assume that Little League, youth baseball and girls softball would also use this facility. Little League could still use Elks Park and we could continue to offer a youth baseball program, as would the YMCA. These programs have been impacted by the limitation of the fields. The remaining 11 acres at Kiwanis Park would be outside the control of Big League Dreams (the pond uses three acres) and would serve as a neighborhood park and could offer fields for youth baseball or soccer. Because not as much time would be needed to maintain Kiwanis Park, staff could concentrate on the maintenance of the other parks. We plan on putting two more soccer fields and additional parking at Chesterley Park, in addition to a path system. Gene Rostvold spoke about the northwest section of Kiwanis Park that would not be controlled by Big League Dreams and announced that the service clubs have made a commitment to develop that area of the park. They feel there should be an area in this park that the citizens can use without being charged. 4 1 9 5 APRIL24, 2001 — ADJOURNED MEETING • Council reviews the staff recommendations • Recommendation No. 1: Approve the concept of constructing a sports complex at Kiwanis Park The Council consensus was to accept Recommendation No. 1. • Recommendation No. 2: Direct staff to prepare legislation (for May 1, 2001 Council meeting) to call for a ballot proposition, in the September primary election, authorizing a 1°/0 increase in the city's tax rate on the private electric, gas and telephone utilities; (the revenue from which is to be used principally to pay the debt on bonds issued to finance the construction of the sports complex). • The Council consensus was to accept Recommendation No. 2. • Recommendation No. 3: Direct staff to enter into more detailed negotiations with Big League Dreams (BLD) relative to a lease agreement for the operation and maintenance of the sports complex. (The lease must also include a $300,000 license fee to BLD) The Council consensus was to accept Recommendation No. 3. Council Members Puccinelli and Sims agreed to serve on the negotiating team and a member of the Parks and Recreation Commission will also be asked to serve on this team. • Recommendation No. 4: Direct staff to prepare legislation authorizing an interim agreement between the City and BLD for consulting services through the September primary time period. City Manager Zais commented that the $100,000 fee would be credited against their fee if we continue with the project. In addition, the Rotary Trust has agreed to help with $50,000 of that fee, to be credited through the land acquisition contribution. The Council consensus was to accept Recommendation No. 4. City Manager Zais acknowledged the extraordinary efforts put forth on this project by the Sports Complex Committee, Denise Nichols and Tami Andringa from the Parks and Recreation Division, the Parks and Recreation Commission, and the Finance Department staff members Rita Anson, Tim Jensen, Cindy Epperson, Mary Grable and Edna Pettyjohn. He also acknowledged the Odekirks for their investment so far in Yakima. . 3. EXECUTIVE SESSION REGARDING PENDING LITIGATION (PLEASE ALLOW 20 MINUTES) The Mayor announced that Council would move into Executive Session at 8:52 a.m. for approximately 15 -20 minutes for the purpose of discussing pending litigation and then immediately adjourn to May 1, 2001 at 7:30 a.m. for a study session. 5 196 APRIL 24, 2001 — ADJOURNED MEETING 4. ADJOURNMENT Following the conclusion of the Executive Session, the meeting adjourned at 9:15 a.m. to May 1, 2001 at 7:30 a.m. in the Council Chambers for a Study Session on water cost -of- service study and stormwater issues. READ AND CERTIFIED ACCURATE BY: / _ `,,„s ,.. : �` %I SA -d/ • 1 BER ,i, ■ DATE 41 , I C s N EMBER �� DATE b ATTEST: 1 4 2774,,,J,t, CITY CLERK MARY PLACE, MAYOR An audio and video tape of this meeting are available in the ity Clerk's Office 1 6