June 21, 2016
Page 12
COUNCIL MINUTES
The City Council of the City of Raleigh met in a work session at 11:30 a.m. on Tuesday, June 21, 2016 in Room 305 of the Raleigh Municipal Building, Avery C. Upchurch Government Complex, 222 West Hargett Street, Raleigh, North Carolina, with the following present:
Mayor Nancy McFarlane
Mayor Pro Tem Kay C. Crowder (Absent and excused)
Councilor Mary-Ann Baldwin
Councilor Corey D. Branch
Councilor David N. Cox
Councilor Bonner Gaylord
Councilor Russ Stephenson
Councilor Richard A. “Dickie” Thompson
These are summary minutes unless otherwise indicated.
Mayor McFarlane called the meeting to order at 11:40 a.m. and indicated Mayor Pro Tem Crowder would be absent and excused from today’s meeting.
The following items were discussed.
INTERLOCAL AGREEMENT REVIEW – HOTEL OCCUPANCY AND PREPARED FOOD AND BEVERAGE TAXES - INFORMATION RECEIVED
City Manager Ruffin Hall indicated this will be the 20th amendment to the existing Interlocal Agreement and stated there has been much discussion among the stakeholders prior to today’s meeting. He indicated the goal is to have the City Council and County Commissioners approve the amendment by the second meeting in July 2016.
Chief Financial Officer Perry James presented the following information:
Background of Review Process
· March 23 Educational Review with Council set out a Review Process as called for in the 19th Amendment to the Interlocal Agreements:
ü Review Financial Models
ü Review Current Projections and Forecast
ü Review PNC Capital Plan
ü Review Convention Center Capital Plan
ü Inclusive of stakeholders
Phases of Review
Phase I
· Conduct review of updated models
· Consider changes based on revenue trends, current circumstances and stakeholder feedback
· City/County Managers make recommendations to governing Boards (20th Amendment – June
Clerk’s Note: Mr. James indicated the presentation was written prior to the date the City Manager would make the recommendations was changed to July.
Phase II
· Consider opportunities for expansions or new projects (21st Amendment) – Begin Summer
Phase I Process
Five meetings from March to May:
- 3/30/16: Educational Session
- 4/14/16: Capital Maintenance Plan Reviews
a) Raleigh Convention Center
b) PNC Arena
- 4/28/16: Review of key elements of funding models
- 5/12/16: Presented strawman with proposed modifications to both models
- 5/26/16: Based on feedback, reviewed revised strawman and communicated final recommendations
Key Goals – Phase I
· Due to positive revenue experience, consider more realistic revenue assumptions in short term modeling; remain conservative in long term
· Review and update maintenance needs for existing facilities that were included in the enabling legislation
· Consider administrative and other moderate model adjustments that would sustain existing commitments and provide a sound beginning point to a larger review of needs and capacity in Phase II
· Maintain future capacity similar to or greater than the existing models
· Do not alter the 85%/15% allocation of uncommitted funds between the Convention Center and other Projects
Other Items
· Agreement reached with centennial Authority to eliminate their payments of PILOT (payments-in-lieu-of-taxes) to Wake and Raleigh after 2022 in exchange for their self-funding of capital maintenance needs beyond 2021
· Request from Town of Cary to be considered as part of Phase II
o $900,000 annual maintenance
o $5.6 million equipment replacement
Next Steps
· Phase I –
o Receive feedback from Board of Commissioners and Raleigh City Council
o Prepare 20th Amendment to the ILA for consideration by both elected bodies in July
· Phase II –
o Begin late Summer 2016
Mr. James outlined each of the proposed changes to the Interlocal Agreement noting Council members received copies of the revised Strawman in their agenda packet with the proposed changes highlighted.
Mr. Thompson questioned if the percentage projections were annual with Mr. James responding in the affirmative.
Mr. Gaylord questioned whether the Convention Center maintenance was part of the 85/15 split with Mr. James responding in the affirmative.
Mr. Gaylord questioned whether there were any discussions regarding the amount of funds set aside for projects in Raleigh with Mr. James responding that item is currently in discussions with stakeholders.
Mr. Branch questioned whether there was previous funding for the Whitewater Park with Mayor McFarlane responding the $150k was spent for the park’s design.
Mr. Thompson requested clarification that debt service for Five County Stadium would be paid off this year and the PNC Arena in 2020 with Mr. James indicating that is correct.
Mr. Stephenson questioned whether the source of funding for the Convention Center Financial Model would come from hotel and meal taxes or the general fund with Mr. James responding the funds would come out of the 85%.
Mr. Branch questioned whether the proposed increase in funds for the Convention Center would be for marketing purposes with Mr. James responding in the affirmative.
Discussion took place regarding funding for competitive projects with Mr. James indicating previous funds were used to catch up on old debt service for PNC Arena.
Mr. Thompson questioned how the Convention Center construction was funded with Mr. James responded the City Council approved the use of Certificates of Participation and indicated they are slated to be paid off in 2034.
Mr. Gaylord talked about previous discussions on the current financial model and expressed concern regarding maintaining fairness among the partners. He requested additional information on current revenue sources as well as projected sources.
Discussion took place on whether hospitality revenues were generated in a specific municipality or whether they benefited the region with City Manager Hall indicating staff will provide the information at a future work session.
Mr. Stephenson questioned when discussions will take place regarding Phase II and the Town of Cary’s requests with City Manager Hall indicating Phase I contains the technical adjustments to the Financial Model while Phase II will address future major projects.
Discussion took place regarding the Town of Cary’s requests as part of Phase II with Mayor McFarlane questioning whether the request affects Cary’s hold-harmless agreement and Chief Financial Officer James responding in the negative.
Ms. Baldwin talked about previous discussions regarding the Interlocal Agreement and complemented staff on their work regarding today’s presentation.
The information was received.
PUBLIC-PRIVATE PARTNERSHIPS – HIGHWOODS SIDEWALK PROJECT – INFORMATION RECEIVED – DIRECTION GIVEN
City Manager Ruffin Hall presented a brief overview of the item stating staff is requesting feedback from the Council regarding the next step in the process.
Transportation Manager Eric Lamb presented the following information:
What is a Public-Private Partnership (P3)?
· Joint venture between the City and one or more private entities involving cost sharing
· Allows for the use of public funds or resources by a private entity
· Formal contract/agreement between all parties spelling out responsibilities
· Each agreement requires City Council approval
Strings Attached
· Public money = public process
· Use of public funds requires public rules
− Public bid requirements for projects
− Public notice and hearing requirements
· City provides direct oversight of project
Types of Partnerships
· Public Utilities
− Utility Extension Agreements for offsite sewer installations
− Leases of City Property for Solar Arrays
· Stormwater
− Water Quality Cost Share Program
· Planning
− Façade Grant Program
· Economic Development
− Business Upfit Grants
· Housing & Neighborhoods
− Construction of Single Family Homes on City Properties
− Partnerships with Service Providers (homeless, fragile populations, special needs)
− Agreements with Private Lenders for First Time Homebuyers
· Transportation
− Street Improvement Projects
Project Selection
· City is approached by a private party
− Typically in context of a development plan
· Evaluation:
− Is the developer already obligated by development plan requirements to construct the improvements?
− Would public funding provide a more complete project than the developer could accomplish individually?
− Is joint funding in the public’s best interest?
· Developer’s engineer provides cost estimates
· Staff determines if funding is available for participation
· Formal proposal is developed for City Council consideration
Typical Terms
· City pays 50% of construction cost
· Developer provides all necessary right-of-way and easements for project
· Developer provides design and construction administration
− City must approve professional services
Recent Transportation P3’s
· US 70 Corridor
− Marvino Lane Extensions
− Country Trail
− Little Brier Creek Lane
− T. W. Alexander Drive Extension
· Pullen/Stinson Roundabout
· WakeMed/New Bern Avenue Pedestrian & Bus Shelter Improvements
· Oak Forest Road Extension
· Pullen Road Extension
Highwoods Boulevard
· No development plans pending
− Sidewalk would otherwise be required with any redevelopment
· City staff contacted by Highwoods Properties to explore idea of a joint-funded project
· Interested in constructing sidewalk along Highwoods Boulevard and 2 side streets
− Smoketree Court
− Poplarwood Court
· Project would otherwise be constructed by City-initiated sidewalk program
− Highwoods Boulevard ranked #124 out of 217 projects in current Pedestrian Plan
· Estimated cost = $505,000
· Highwoods is offering to provide half of the construction costs and all required easements
− Property Owners’ Group met on 6/1 to authorize request
Funding Options
· Previously dedicated sources of funding:
− US 70 Corridor Plan Implementation
− Public/Private Partnership Reserve
• Currently committed for Pullen Road Extension project
· Other Options
− Reallocate existing CIP funds
• Would require displacement of other commitments
Sidewalk Program
· Existing Sidewalk Program commitments that would be displaced:
− East Millbrook Road (Atlantic Avenue to Capital Boulevard)
− Spring Forest Road (McHines Place to Capital Boulevard)
− Wake Forest Road (Creekside to Georgetown)
Mr. Lamb pointed out the Pullen/Stinson roundabout was in fact a public/public partnership with the State and NC State University.
Mr. Lamb submitted a packet of information from Highwoods Properties noting the packet included a formal letter of proposal dated June 21, 2016 and signed by Jeff Smith; the body of which reads as follows:
To the esteemed members of the Raleigh City Council,
As the Council deliberates the recent proposal to move forward in establishing sidewalks along the high traffic area of Highwoods Boulevard between Capital Boulevard and Atlantic Avenue, the Highwoods Property Owners Association (POA) would like to provide additional information regarding the necessity of this project and the urgency of its completion. Councilman David Cox originally proposed this project at a meeting earlier this year.
The fact that there are not sidewalks along Highwoods Boulevard already is a significant safety issue that needs to be rectified. This road connects the 28 independent office buildings that comprise the Highwoods Business Park and is used by each of the approximately 5,000 employees who commute to work within its confines. Traffic maps accompanying this letter show nearly 10,000 vehicles (9,820) use the Highwoods corridor daily. Without sidewalks in place, employees of the park and local residents provide a steady stream of foot traffic along either side of the road. This creates a perilous situation where people on foot are sharing heavily-trafficked pavement with 10,000 motor vehicles each day.
Without the passage sidewalks would afford, daily commuters and local residents also have no safe means of accessing public transportation. The only bus stop currently serving the park is on the north-bound side of Capital Boulevard. As it stands, park employees and residents are left to navigate the Highwoods traffic, then cross six lanes of Capital Boulevard via intersections without crosswalks just to use the bus system. The pressing need for this project's approval and completion only intensifies as employment numbers in the park continue to grow and the mobility needs of its patrons and surrounding residents increases.
The addition of these sidewalks is a natural accompaniment to, and important predecessor of, the Capital Boulevard improvement plan slated for 2017. The Capital Boulevard improvement plan calls for new crosswalks and significant paving and milling overlay to be done in the vicinity of the intersection of Capital and Highwoods Boulevard next summer, which would offer potential cost savings with shared supervision and practicality of completing concurrently. The success of this project and the Wake Transit proposed plan which will establish a 15 minute bus service serving the Highwoods Office Park along Highwoods Boulevard (known as the "hospital loop" as routes to the three major Raleigh hospitals) with funding if approved on the November ballot with the y, cent sales tax, would directly benefit from the addition of sidewalks to Highwoods Boulevard, making it bus-stop ready and foot-traffic friendly for this proposed 15 minute service route. This project would also afford the thousands of workers and local residents who commute to and through the park each day the opportunity to use our city's public transportation infrastructure.
The Highwoods POA considers this matter it's most pressing priority. Three large corporations are headquartered within the park: global employers INC Research and Workplace Options, in addition to Highwoods Properties. The largest tenant is WakeMed, which occupies three full buildings and employs 1,040 people across these locations. For these employers and every other trying to recruit new employees to the area, the war for talent is ve1y real. Prospective employees compare these businesses to others in Durham, Morrisville, Cary, and Research Triangle Park. Companies have to be able to provide a safe and healthy working environment to stay competitive, which means offering a situation where employees can move around on foot during the workday without having to dodge traffic. INC Research has openly stated that the City's commitment to this sidewalk project will be a key consideration as it plans for the future of its global headquarters and the 700 current employees that work along Highwoods Boulevard and they are considering bringing 500 additional employees into Highwoods office park which would potentially be housed in a new office building to be constructed on Beechleaf Court, alternatively they would be pulling out of the park in total.
Because of the reasons laid out in this letter, and as Councilman Cox has previously communicated, the POA overwhelmingly supports the creation a public-private partnership with the City of Raleigh to ensure the completion of this sidewalk project within the calendar year 2017. As community advocates, The POA has authorized up to $300,000 in funding to share in 50% of the construction cots based upon a completion of this project within calendar year 2017. This amount is over 50% of the currently estimated total project cost to allow room for contingency.