HomeMy WebLinkAboutInformation Item: Status of CAGID Eco Pass ProgramWeekly Information Packet
To: Mayor Mark Ruzzin and members of City Council
From: Frank Bruno, City Manager
Molly Winter, Director, DUHMD/PS
RE: Status of CAGID Eco Pass Program
DATE: February 17, 2006
The purpose of this memorandum is to update City Council on the final determination regarding
the CAGID fund and the downtown employee Eco Pass program. The potential need for a line
of credit from the UHGID fund, anticipated in a worse case scenario, will not necessary.
Background
Last fall during the city budget process, staff anticipated the potential for a"perfect storm" of
financial circumstances in the CAGID fund in three azeas - St. Julien Hotel/CAGID gazage
project, CAGID EcoPass, and commercial leasing rates - which could have created a negative
fund balance in the CAGID fund. The following factors contributed to the anticipated shortfall:
St. Julien Hotel/CAGID Garage Project
The utility costs at the underground garage at 1000 Walnut were unusually high necessitating an
increased expense budget. Subsequently, a design error was discovered - the electrical meters
had been incorrectly assigned between the St. Julien Hotel and the CAGID garage; the garage
was being billed for the hotel electrical costs, and the garage charged for the hotel useage. The
situation has been corrected and credit given to CAGID. The gazage electrical costs have
declined dramatically, and the utility budget for the garage reduced accordingly.
During the fall of 2005, CAGID was awaiting final cost reconciliation for CAGID's share of the
garage expenses from St. Julien Partners. To be conservative, CAGID held additional funds in
reserve to cover unknown costs.
Due to the delays in the hotel and garage project, there was lower than expected short term
pazking utilization during 2005. The budget of $312,000 was reduced to $155,000 actuals; thus
reducing total revenues in the CAGID fund.
Garage construction cost overruns - athibutable to encountering additional rock on the site and
additional expenses for the finishing of the civic use site without a building - increased CAGID
expenses. When the final cost reconciliation is completed, CAGID will request additional tax
increment revenues to cover these expenses.
Commercial Real Estate Market
As a reflection of the downtown real estate mazket, 20051eases in our commercial rental spaces
were signed at a rate lower than projected, thus decreasing anticipated revenues. In addition, in
order to lease the spaces, unbudgeted tenant improvements were implemented.
CAGID Eco Pass
CAGID Eco Pass costs were projected at a maximum of $750,000 if the contract was structured
similarly to 2005 (including part-time employees) and a maximum rate increase from RTD was
put into effect.
Outcomes
Given the uncertainty of these circumstances, staff felt it was necessary to plan for a worse case
scenario, based on the information available at the time, to avoid a deficit in the 2007 CAGID
fund balance submitted in the budget process. Thus the discussion of a line of credit with the
UHGID fund emerged as an option. However, the line of credit will not be necessary due to the
positive resolution of multiple issues.
The first approach was a cazeful and rigorous exaznination of CAGID expenses and revenues. In
response, staff maximized revenues by readjusting the balance of long and short term pazking,
and accepring credit cards in the garages. CAGID expenses were reduced to a minimum. In
addition, several of the worst case scenarios outlined above proved to be less than anticipated:
St. Jutien Hotel/ CAGID Garage Project
CAGID's tally of the final reconciliation with St. Julien Partners for the garage costs was less
than budgeted. We are awaiting final acceptance by St. Julien Partners. Also the tax increment
revenue from the hotel accommodations tax came in higher than budgeted.
CAGID EcoPass Costs
The final costs of the program were $288,6861ess than the masimum anticipated due to a 10%
rather than 20% rate increase as well as negotiating the 2006 contract to exclude all part time
employees within the CAGID district; prior contracts had included this exclusion of part time
employees.
Next Steps
In order to develop a sustainable funding strategy for the downtown Eco Pass program, a
committee of diverse stakeholders has been convened to assist staff in considering options and
recommendations as part of the 2007 budget process. The group will consider a Downtown
Transportation Access Study that will document, analyze and assess the transportarion access for
all modes in the downtown area within the context of current and future development in order to
make informed financial and management decisions in support of an economically healthy
downtown and in alignment with the Transportation Master Plan. This study will examine
downtown transportation options such as transit, automobile, pedestrian, bike, recent and
projected development in the downtown, pazking supply both public and private, for both short
and long term sustainability.
For further information, please contact Molly Winter, 303 413-7317, winterm@ci.boulder.co.us.