AGENDA #8
MEMORANDUM
TO: Mayor and Town Council
FROM: W. Calvin Horton, Town Manager
SUBJECT: Resolutions Authorizing Reservation of Downtown District Tax Revenues and Negotiation of a Performance Agreement with the Downtown Commission
DATE: June 23, 2003
Adoption of the attached Resolution A would instruct the Manager to reserve $20,000 of Downtown District Tax revenues in 2003-04 for economic development purposes to be determined by the Council.
Adoption of Resolution B would authorize the Manager to negotiate a performance agreement with the Downtown Commission for services to be funded from the Downtown Service District tax, with the amount of the contract to be $50,000.
Adoption of Resolution C would authorize a performance agreement with the Downtown Commission in the amount of $70,000 as requested by the Downtown Commission.
At the Budget Work Session on May 21, the Council instructed the Manager to prepare a proposal that would hold a portion of the 2003-04 Downtown District Tax revenues in reserve for economic development purposes to be determined by the Council. With about 25-30% of the revenues in reserve, the remaining amount would be available for a performance agreement with the Downtown Commission.
The Council received a budget presentation from the Downtown Commission on March 5. On June 9, Mr. Charles House, Commission Chair, petitioned the Council to leave the Commission’s funding at $70,000 for 2003-04.
On June 11, 2003, Mr. House sent a letter (please see Attachment 1) to the Council outlining a proposal for continued Town support and a Commission work program that would include employment of an Economic Development Director.
In July 1989, the Council established a downtown service district to enhance the downtown area through promotional activities and supplemental services.
The downtown service district includes all properties with Town Center-1 and –2 zoning, with the exception of property used only for residential purposes.
State law allows either the Town or an organization under contract with the Town to provide the supplemental municipal services funded from service district taxes. Currently, the non-profit Downtown Commission provides services funded from the Downtown Service District tax through performance agreements with the Town.
Under the Council’s plan for using Downtown Service District funds, the Town may provide or supplement any municipal service allowed under State law, plus marketing and promotion activities. Services provided in the Downtown District have included:
Downtown Service District Revenues
The Council recently set the Downtown Service District tax rate for fiscal 2003-04 as 6.2 cents per $100 of property value. The estimated value of the tax base in the Downtown Tax District is about $113,000,000. We project revenue to be approximately $70,000 in 2003-04, about the same as in the past year.
DISCUSSION
We have reviewed the Downtown Commission’s annual financial reports and have discussed the Commission’s operations with Chair Charles House and Executive Director Robert Humphreys. Mr. House provided information about the Commission’s allocation of Town funds in an e-mail message on June 4, 2003 (please see Attachment 2). Based on our review and discussions, we believe that limiting the Town’s performance agreement with the Commission to $50,000 would result in a reduction in the Commission’s advertising and “branding” program. The Commission would focus their work on promotions and events. The Commission expended about $19,000 on its branding program and about $21,000 on other advertising in 2002.
Adoption of the attached Resolution A would instruct the Manager to reserve $20,000 of Downtown District Tax revenues in 2003-04 for economic development purposes to be determined by the Council.
Adoption of Resolution B would authorize the Manager to negotiate a performance agreement with the Downtown Commission for services to be funded from the Downtown Service District tax, with the amount of the contract to be $50,000.
Adoption of Resolution C would authorize a performance agreement with the Downtown Commission in the amount of $70,000 as requested by the Downtown Commission.
We recommend that the Council adopt either Resolution A and B or Resolution C.
ATTACHMENTS
1. June 11, 2003 letter from Downtown Commission Chair Charles House to Mayor Kevin Foy (p. 7).
2. June 4, 2003 e-mail message from Downtown Commission Chair Charles House to Town Manager Cal Horton (p. 10).
RESOLUTION A
A RESOLUTION AUTHORIZING THE TOWN MANAGER TO RESERVE $20,000 OF DOWNTOWN DISTRICT TAX REVENUES IN 2003-04 FOR ECONOMIC DEVELOPMENT PURPOSES TO BE DETERMINED BY THE COUNCIL (2003-06-23/R-19a)
WHEREAS, in July 1989, the Town Council established a downtown service district to enhance the downtown area through promotional activities and supplemental services; and
WHEREAS, the Chapel Hill Downtown Commission provides services to the district and is funded from the Downtown Service District tax, and operates under performance agreements with the Town; and
WHEREAS, at the Budget Work Session on May 21, the Council instructed the Manager to prepare a proposal that would hold a portion of the 2003-04 Downtown District Tax revenues in reserve for economic development purposes to be determined by the Council; and
WHEREAS, with approximately 25-30% of the revenues in reserve, the remaining amount would be available for a performance agreement with the Downtown Commission;
NOW, THEREFORE, BE IT RESOLVED by the Council of the Town of Chapel Hill that the Council authorizes the Manager to reserve $20,000 of Downtown District Tax revenues in 2003-04 for economic development purposes to be determined by the Council.
This the 23rd day of June, 2003.
RESOLUTION B
A RESOLUTION AUTHORIZING A PERFORMANCE AGREEMENT WITH THE DOWNTOWN COMMISSION FOR SERVICES TO BE FUNDED FROM THE DOWNTOWN SERVICE DISTRICT TAX, WITH THE AMOUNT OF THE CONTRACT TO BE $50,000 (2003-06-23/R-19b)
WHEREAS, in July 1989, the Town Council established a downtown service district to enhance the downtown area through promotional activities and supplemental services; and
WHEREAS, the Chapel Hill Downtown Commission provides services to the district and is funded from the Downtown Service District tax, and operates under performance agreements with the Town; and
WHEREAS, services provided by the Downtown Commission may include:
WHEREAS, the Council considers renewal of a performance agreement with the Downtown Commission on an annual basis as part of the budget process;
NOW, THEREFORE, BE IT RESOLVED by the Council of the Town of Chapel Hill that the Council authorizes the Manager to enter into a performance agreement with the Downtown Commission for services in 2003-04, with the funding level limited to $50,000 for 2003-04.
This the 23rd day of June, 2003.
RESOLUTION C
A RESOLUTION AUTHORIZING A PERFORMANCE AGREEMENT WITH THE DOWNTOWN COMMISSION IN THE AMOUNT OF $70,000 AS REQUESTED BY THE DOWNTOWN COMMISSION (2003-06-23/R-19c)
WHEREAS, in July 1989, the Town Council established a downtown service district to enhance the downtown area through promotional activities and supplemental services; and
WHEREAS, the Chapel Hill Downtown Commission provides services to the district and is funded from the Downtown Service District tax, and operates under performance agreements with the Town; and
WHEREAS, services provided by the Downtown Commission include:
WHEREAS, the Council considers renewal of a performance agreement with the Downtown Commission on an annual basis as part of the budget process;
NOW, THEREFORE, BE IT RESOLVED by the Council of the Town of Chapel Hill that the Council authorizes the Manager to enter into a performance agreement with the Downtown Commission for services in 2003-04, with the funding level of approximately $70,000, to include the estimated revenue to be received from the Downtown Service District tax based on the tax rate adopted by the Council for 2003-04.
This the 23rd day of June, 2003.