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HomeMy Public PortalAbout2009_tcwsmin0126 Council Work Session January 26, 2009 Council Chambers, 25 West Market Street, 7:30 p.m. Mayor Umstattd presiding. Council Members Present: David Butler, Thomas Dunn, II, Marty Martinez, Ken Reid, Kevin Wright and Mayor Kristen Umstattd Council Members Absent: Vice Mayor Hammier absent Staff Present: Town Manager John Wells, Town Attorney Jeanette Irby, Deputy Town Manager Kaj Dentler, Director of Public Works Tom Mason, Director of Parks and Recreation Rich Williams, Director of Plan Review Bill Ackman, Director of Planning and Zoning Susan Berry Hill, Director of Finance Norm Butts, Airport Director Tim Deike, Director of Human Resources Nancy Fixx, Director of Information Technology Wendy Wickens, Assistant Director of Capital Projects Management Tom Brandon, Senior Engineer Anne Geiger, Preservation Planner Annie McDonald, Chief of Accounting and Reporting Kim Williams, IT Project Manager John Callahan, and Management Specialist/Deputy Clerk of Council Debi Parry AGENDA ITEMS 1. Work Session Items for Discussion: Mayor Umstattd asked if Council Members have questions regarding the agenda items tomorrow night for the airport hangers. Kaj Dentler stated Council Member Wright asked three questions earlier in the day regarding the airport hangers agenda items. He stated the first question was asked in reference to the source of the additional funding for the project. He stated all of the additional funding is coming from the Airport Fund's Capital Projects Fund. He stated the second question asked was if the budget could be put back in place. He stated the only way to do that would be to scale back the project which would have a revenue implication to the Town. He stated the project is already tight in terms of making a profit. He stated the final question was when was the bid placed and could the project go back out to bid. He stated the bids were received in September and the project could be rebid; however, our portion of the contract is for items such as concrete and steel which have not reduced in value. He stated staff's recommendation is to move forward with the project. Further, he stated the other challenge is with our grant from the Virginia Department of Aviation (DOAV) if we were to rebid the project and if it came in at a higher price we would have to go back to DOAV to ask for more money, which could cause delays. Mayor Umstattd asked that staff outline the long-term positive financial impact of this project and keeping the airport in the black. Tim Deike stated the annual bond payment by the airport is $154,750. He stated the T-Hangers will generate $ 59,400 per year. Further, he stated he was going to charge $2,000 for each of the corporate hangers; however, the price can go as low as $1,800 and we will still have $189,000 which exceeds the bond payment for each year. Mr. Wells stated Council Member Reid also had questions regarding the likelihood of leasing the hangers in the current economy. Further, he asked Mr. Deike to address the waiting lists we currently have at the airport. Town Council Work Session of January 26, 2009 Paqe 2 Mr. Deike stated we have 55 people on the tie-down waiting list, 35 for the hanger waiting list and four to eight people on the corporate hanger list; although two recently dropped off when a jet company closed. He stated we currently have 280 based aircraft at the airport and the addition of the 23 tie-down spaces alone will send the number of aircraft above 300. Council Member Reid verified the revenue that would be generated if all six corporate hangers were rented out at $1,800 per month would be $129,600 per year. Further, he asked the minimum lease commitment for these hangers. Mr. Deike stated the minimum lease term for a hanger would be for a year and then month to month; however, it is his experience that lessees rarely give these hangers up. Council Member Reid asked when the Town can take over the condo hangers at the airport. Mr. Deike stated the first chance for the condo hangers to turn over would be 2012. He stated there is also a 10 year option on these hangers that would extend the leases to 2022. Council Member Reid asked if the airport is doing any marketing for the hangers. Mr. Deike stated they are not marketing as there are individuals consistently knocking on the door looking for space. Council Member Reid asked if the gross weight fees will be increased. Mr. Deike stated the gross weight fees increase each year using the Consumer Price Index. Council Member Reid verified the airport is running in the black this year. Mr. Wells stated if there are no further questions the item could be moved to the consent agenda for tomorrow night. He stated Council's action tomorrow night will be contingent on the Board of Supervisors' action on February 3 regarding the airport tax. Council Member Reid asked that these items be left off the consent agenda for tomorrow night. a. FY 2008 Audit Presentation Norm Butts introduced Mike Garber with PBGH, LLC to present the CAFR and related documents from our 2008 audit. He also introduced Chief of Accounting and Reporting Kim Williams stating she does the bulk of the Town's work on the audit. Further, he stated the Town was given an "unqualified opinion". Mike Garber, PBGH, LLC, stated the opinion on the financial statements is "unqualified". He outlined the 2008 audit CAFR document. He congratulated Council and Town management on the management of the undesignated fund general fund balance of $13.4 million stating given the tough times we are in the level of balance is commendable. He stated the Airport Fund continues to show Town Council Work Session of January 26, 2009 Page 3 the accounting loss due to depreciation of assets and the Utility Fund continues to show an accounting gain; however, if you remove the developer donated assets, the Utility Fund shows a $2 million loss. He stated the audit found no issues in compliance, but did find a couple of internal control issues that have been addressed with management. Further, he stressed the importance of adopting a formal fraud policy. Council Member Reid stated the airport fund shows depreciation. Mr. Wells stated the net increase is a $50,000 positive number. Mr. Garber stated the change in net assets was $422,000. He stated if the depreciation of $658,000 is added back in and subtracted by the principal bond payments of $260,396 you see a negative $25,000 a year in cash. Council Member Reid asked the gross revenue for the airport was $978,000. Mr. Garber stated this was a $111,000 over 2007. Council Member Reid stated he is curious about the total governmental surplus regarding revenues under expenditures. Mr. Garber stated that is not a surplus as expenditures were above revenues. He stated in expenditures $48 million was budgeted and only $44.5 million was used. Council Member Reid stated so in this case we have a surplus. He stated every department came in under budget. Mr. Garber stated that is true when you look only on the expenditure side. He stated in the General Fund there was revenue of $41.9 million and expenditures of $42.9 million. Council Member Reid asked how that happened. Mr. Wells stated we planned on using the fund balance to balance our budget. He stated we actually performed better than what was anticipated. Mr. Garber stated if you look at the beginning budgeted number the Town budgeted to spend $4.5 million more than what was brought in. He stated at the end of the year when the final adjustments were made we only spent $1.55 more than revenue. Mr. Wells stated if you look at the economic situation and what was programmed we performed a lot better than what was budgeted. Council Member Reid stated there was $3.5 million that was budgeted to be spent, but was not. He verified the Town was able to keep the same levels of service in major service areas. Mr. Garber stated in almost every CAFR he has done the departments came in under budget. Town Council Work Session of January 26, 2009 Page 4 Council Member Reid stated it seems the departments are doing very good in keeping way under budget. He stated the Economic Development Department was also way under budget. Further, he clarified there were no complaints regarding service. Council Member Wright stated a lot of the savings over what we budgeted versus actual was reflected as we were going through the budget discussions as estimates. Mr. Wells stated the number you are seeing is not a surprise. He as we were working through the year we tried to bring the expenditures more in line with the revenue projections to minimize use of the undesignated fund balance. Council Member Wright stated for the past couple of years we came in to the budget with a surplus above and beyond the reserves that we can spend and at some point we have a fiduciary responsibility to spend our undesignated fund as opposed to massing it. He stated the approach we have taken over the past couple of budgets has been to balance the budget with that fund balance and the challenge that comes from that is figuring out how you will do that going forward versus a onetime cost. He asked what would be the impact of using these funds to payoff a bond versus continuing to balance the budget with this money. Mr. Garber stated to payoff debt would be a onetime expenditure and with the small amount of undesignated fund balance the Town has it could only pay off a $5 million debt item at most. He stated the payment on that debt is minimal and you would double your yearly debt service payment to payoff that small amount of debt. Further, he stated the Town's interest rates are lower than that of anyone who can borrow money and the savings would only be three to four percent on the annual payment. Mr. Butts stated as Finance Director he would like to see the Town have a 25 percent undesignated fund balance at all times as that is a 90 day reserve. He stated the fiscal policy is 15 percent. He stated the other item that concerns him is that we should have current revenue match current expenditures, which we haven't done in the last several years. He stated then any balance over the 25 percent could be used for one time expenditures such as a capital improvement project or setting up an additional reserve for capital outlay. Mr. Garber stated with the low interest rates the Town has, he would not recommend prepaying any bonds. Council Member Wright stated the Utility Fund operating short fall concerns him as people tend to pay attention to the positive bottom line; however, it is the operating expenses that are running at a negative. Mr. Wells stated our bond companies require a certain percentage of revenues against expenditures. He stated our coverage factor is 1.25 percent and our bond agreements require that if we do not meet that number, we have to initiate a rate study. Council Member Butler asked how the undesignated fund balance is invested. Town Council Work Session of January 26, 2009 Page 5 Mr. Garber stated the Local Government Investment Pool is a big piece of it, which is a safe as you can get. Mr. Butts stated the fiscal policy sets out three criteria that are used when making investments; safety, liquidity and yield. He stated we work with Davenport on our investment portfolio. Further, he stated the interest on our operating account is 0.65 percent. He stated it is not a good environment as treasuries are not providing a lot of yield. Council Member Butler stated safe today has taken on a whole new meaning. Mr. Garber stated the investments have to be AAA rated. He stated for example the Town is allowed to invest in AAA rated commercial paper; however, we do not know if that is necessarily safe today either. Mr. Butts stated the Town stopped investing in commercial paper even though it was AAA rated. He stated the Town also stopped buying Fanny Mae and Freddie Mac. Further, he stated we have a lot of treasuries and a lot in the Local Government Investment Pool. Council Member Butler stated he is disappointed that we budgeted and voted on a $4.5 million deficit last year as that is not fiscally prudent under any circumstances. He stated he does not share Council Member Reid's enthusiasm for the departments coming in $3.5 million under budget because that indicates that either there was $3.5 million in the budget that wasn't necessary or there were $3.5 million of less visible services to the public that were cut. He stated this coming fiscal year he does not support running a $4.5 million deficit or having the departments come in $3.5 million under budget, rather he would like to see the money used for what it was intended for. Council Member Martinez stated there was a large variance in Planning and Zoning and asked if that was due to position vacancies. Mr. Wells stated the majority of the savings were due to the fact that a number of positions were kept vacant as we anticipated the reorganization of the department. Council Member Martinez verified this was a one-time variance. He asked in the future when these type of variances occur that a metric or justification be provided to explain where the savings came from. He asked that an explanation be provided for the variance in the Police Department. He stated Council is very fortunate to have this problem as there are many localities that are in worse shape financially than Leesburg. Further, he asked if there is a procedure for the Finance Department to investigate the origin of various pockets of money that are found such as the Standing Residential Traffic Committee fund balance that Council was not aware of. Mr. Butts stated staff makes every effort throughout the year to look at instances of budget over number to make determinations as to why were are in that position. He stated we are always looking at revenue, receivables and what we do to collect that money and the same process applies to payables. He stated for example we are looking at proffer funds and are we spending them in a timely fashion. Town Council Work Session of Januarv 26, 2009 Page 6 Council Member Dunn stated he does not look at this as staff doing a failed job because they did not spend all of the money they were budgeted to spend. He stated he views this as we have taxed our citizens more than we should have and there are areas that we can save in our spending in Town. He stated we are a prosperous area and it does not seem that stimulus money from the Obama administration will be coming here too readily. He stated when there is an overage in private industry the savings goes back to the shareholders and in this case that is our citizens and the money should go back to them. Mayor Umstattd stated Mr. Garber has indicated that the Town needs to move forward with a formal fraud policy. She stated if you want a truly honest government there should be no penalty for any employee who goes to the Commonwealth's Attorney to report anything they view as legitimate fraud. She stated she does not agree with the theory that there will be no repercussions as long as an employee goes up through the chain of command within Town Hall. She asked for Mr. Garber's perspective on those two options. Mr. Garber stated the accompanying piece to the formal fraud policy is a whistle-blowing policy. He stated suggested doing both at the same time. He stated the fraud policy is to set the tone at the top to say that we will not tolerate any fraudulent activity that steals assets from the Town. He stated along with that you need to adopt a whistle-blowing policy to protect anyone that reports an incident of fraud. Mayor Umstattd stated under past management people have lost their jobs for going outside the Town government and going directly to the Commonwealth's Attorney. She stated you should not fear losing your job for going outside the Town structure because you do not know when there might be a corrupt Town structure. Council Member Martinez stated he would support implementing these policies. Mayor Umstattd stated we have a whistle-blowing policy in place that was implemented in 2000; however, we should review the policy. Council Member Reid stated this budget was approved during his first year on Council and the revenue came in over what was expected accept in a few categories. He stated this year is going to be worse because of the foreclosures. Mr. Wells stated the foreclosure activity was not as great for Fiscal Year 2008 as what we are seeing now or what we will be talking about. Council Member Reid stated he appreciates Council Member Dunn's comments. He stated he was not trying to say that he is enthusiastic that the staff didn't spend all the money; however, he stated he was looking at it from the standpoint of we are delivering services and maybe we are in fact over taxing. He stated coming from a business standpoint, as Council Member Dunn stated, our shareholders are our taxpayers. He stated he frequently gets questions about why there is a surplus or why the citizens are not getting a tax refund and the answer is we are living off this from year to year and are keeping this for a rainy day. He stated we are fortunate as Council Member Martinez said; however, the people of this Town are double taxed and he has made a Town Council Work Session of January 26, 2009 Page 7 commitment to the voters that he will do his best to give them a tax cut as we have for the past two years. He stated he will be looking at these numbers as we go through the budget to see if some departments are getting too much or too little and how we can work that out. Further, he echoed Mayor Umstattd's comments on the fraud policy. b. FY 2010 Budget Discussion Norm Butts outlined the projected budget picture for the Fiscal Year 2010 budget. He stated the taxable assessed value for FYl0 budget we have lost $869,000 from our tax base due to declining real estate assessment information from Loudoun County. He stated the commercial tax base has increased almost seven percent. Mayor Umstattd asked if the increase in the commercial tax base is due to the fact that we have more commercial development now or is it because commercial values are increasing across the board. Mr. Butts stated we have almost $100 million in new commercial construction and growth in the Town. He stated the revaluation of current commercial property dipped a bit; however, the new commercial construction brought us back up. He stated the effective tax rate is currently 21 cents to have the same tax levy brought in next year that we brought in last year. Further, he outlined what the tax bill would be for the average single family detached home at 18 cents, 19.25 cents, 19.75 cents and 20.5 cents and stated in each scenario the tax levy for the Fiscal Year would be lower than what was paid for Fiscal Year 2009. Council Member Butler verified that the 20.5 cent tax rate would still represent a four percent tax cut for the average single family detached home owner. Mr. Butts stated the revenue for Fiscal Year 2010 will be approximately $1.1 million less than was budgeted for Fiscal Year 2009. He stated the Town Manager is likely to propose no merit increases, no cost of living adjustment, no funding for four full time positions, required increased OPEB spending, reduced operating expenses by $88,000 and reduced capital outlay by 20 percent. Council Member Wright verified this is for the General Fund. Mr. Wells stated these numbers are still a work in progress and the line by line review has not been completed. He stated he expects to present his proposed budget at the end of February. Further, he stated in good times he would likely propose a budget around $48 million; however, this year the starting point was $46 million and that is still likely to decrease. Mr. Butts outlined the revenue and expenditure scenarios at the 18, 19.25, 19.75 and 20.5 cent tax rates. He stated the only change in revenue from these scenarios is the level of reserves used to balance the budget. Mr. Wells stated staff is working hard to create a budget that looks at FY 10 and FY 11. He stated the goal is to maintain a basic service package with some reduction, looking at some areas for economies and looking at the use of carryover funds in a way that will not set us up for trouble later on. He stated Town Council Work Session of January 26, 2009 Page 8 we are already in the process of looking at long term savings in a way that allows staff to be part of the change process. Council Member Dunn asked how different we are as a community from FY05 to now stating we spent $10 million less during that fiscal year than we are projecting to spend in FY 10. He stated the good days are gone and we have to look to adjust. He stated we still have the mindset that we are living heavy. Mr. Butts stated one of the things we've done in the past is look at our expenditures per capita controlling for growth. He stated looking in that fashion you may see that the growth is more modest than it seems. Mr. Wells stated it is important to understand what has caused the changes in the budget. He stated the first step is to look on a per capita bases and look at the residential growth, the growth in commercial development and increases in lane miles of roadway. Council Member Martinez thanked Mr. Butts for his presentation. Council Member Butler stated the proposed 2010 budget does not include any raises and eliminates funding for four full time positions. Further, he stated expenditures will be reduced by $88,000. He asked if there is a concern that some of the better employees working for the Town may decide to leave since they will not receive a salary increase. Mr. Wells stated he does not have that concern because there are no local governments in the Northern Virginia Area who will fund merit or cost of living increases. He stated the key is how well we can position ourselves in the long term to reinstate a pay increase plan as quickly as possible. Further, he stated the work environment also is part of helping employees stay with the organization. Council Member Butler stated if the budget had to be cut further would that take police officers off the street. Mr. Wells stated this budget takes items out that do not greatly reduce services to the Town. He stated we are getting very close to the point where further reductions would result in service level changes. Council Member Butler expressed concern with running a large deficit as it seems 2011 will not be better than 2010 and assessments lag behind the market. He stated he does not want to end up with a situation similar to the Utility Fund. He stated it seems that utility rates may need to increase again after many years of Council artificially keeping the rates low for residents. Mr. Wells stated he shares that philosophy. He stated over the past five years the residential tax rate revenue has increase on average less than one percent per year. He stated during this time our State revenues have been reduced, eliminated or capped. He stated we need to be mindful of where we are placing the burden. Council Member Wright stated there is a natural growth to our budget that will happen through new construction, commercial growth and natural growth in Town Council Work Session of January 26, 2009 Page 9 assessments. He stated the unnatural spike in real estate values really began in 2002. Further, he stated what we are doing now in focusing on the tax bill is the same thing we need to do when the assessments begin to grow again. He stated he would also like to see expenditure comparisons beginning in 2003. He stated he shares Council Member Butler's concern about running a deficit. He stated he is comfortable with it for a year or two to get through this; however, he would like to see what the Town is doing to either right-size itself or find where the natural growth will fill the hole. Mr. Wells stated last year we were expecting a one year lag; however, now it is looking like a two or three year decline. Council Member Butler stated based on the population increase from 2004 to 2008 and inflation the FY 2010 budget should have been $47.6 million. Council Member Reid concurred with Council Member Wright's comments regarding right-sizing the government. He stated everybody is hurting and he hates to see Town Staff not get a pay increase. He stated he does not want to see us reduce capital projects as funding capital projects aids the local economy. He stated before he left Mr. Elsewaissi told him that the contractors are really looking for work now and he was seeing projects coming in with low bids. He stated we should maintain or expand the capital improvement project. He stated he does not support the notion that we have to keep everyone gainfully employed as this is an opportunity for the Town Manager to figure out what is necessary and what is not. He stated he would like to see Council give direction for the Town Manager to present an 18 or 19 cent budget. He stated that would send a powerful message to the community and businesses that we are able to not take much more out of their pockets during this time. He stated the departments already came in $3.5 million under budget and it would not take much to find another $1 million to bring the tax rate down. Mr. Wells stated if Council has a range in mind and staff can focus their efforts. He stated there is no option on the table where we will present a budget over the equalized rate of 21 cents. Council Member Reid stated this comes back to right-sizing the government and make sure that we have a government under control and are focusing on our key services areas. Council Member Martinez verified a 20.5 cent tax rate would still require $2.3 million from the reserves. He stated he would like to what the budget would look like at 20.5 cents and what services would have to be cut to go to a 19.75, 19.25 and 18 cent tax rate. Mr. Wells stated if Council wants to look at an 18 cent scenario he will follow the direction; however, the lower we go, the deeper the reductions will be and the creation of that list will be difficult to deal with. He stated the County has developed those cut lists and those issues tend to play out in the newspaper and that does not create the environment we want. Council Member Martinez stated he was just interested in the impact of an 18 cent tax rate. Town Council Work Session of January 26, 2009 Paqe 10 Council Member Dunn asked if we are too early in the process to request this information. Mr. Wells stated this is not too early and it is better for him to know what direction Council would like to go in as soon as possible. Council Member Wright stated passing a resolution stating that we want a budget at a certain rate is almost micromanaging more than the current process. He stated he would rather have Mr. Wells and staff set what they think is the best budget and then have Council review it. He stated he is leery of setting an arbitrary number without knowing the impact. Further, he stated he would love to see an 18 cent tax rate; however, he would not want that rate at a cost of $3.6 million from our $5 million financial safety net. Council Member Reid stated he could support directing a $43 million General Fund budget. He stated he is concerned with not setting direction as staff may come back with a budget that ensures each department is funded and Council then has to cut here and there. He stated the County has given all of their department's notice and have had to identify people for potential layoff. He stated what he is talking about here is what services or programs may have to be cut or reevaluated. Council Member Dunn stated he would feel better about giving a tax rate number or a couple and asking staff what a budget with those rates will look like. He stated he does not believe that we are running so thin that the next thing is people are on the chopping block. He stated we can still provide good services in the Town with reductions. Council Member Wright asked if Mr. Wells has a feel for what Council is looking for. Mr. Wells stated to maintain services to the highest level possible, not lose bodies but freeze positions, and hold all pay flat he would like to look for a budget that results in a 7-10 percent reduction in the average tax bill. Council Member Reid asked about capital improvements. Mr. Wells stated this would not affect the capital improvements budget as the bond payments do not come take effect in the first year. Council Member Reid stated he would like to push more capital improvements projects forward. Mr. Wells stated the philosophy in our Capital Project effort is to make sure that what we propose we can do. He stated over the past couple of years we have over promised. He stated the important part is to look at the drainage project that Council is scheduled to vote on tomorrow, which has a savings of $700,000 over what was budgeted. He stated that is capturing the market at the right time and the more we can move projects forward to capture this market the better. Council Member Reid stated maintenance projects are important; however, he would rather see the money spent on sidewalks or new projects. Further, he Town Council Work Session of January 26, 2009 Paqe 11 asked if the elimination of pay increases for the Police Department will lead to a demoralized force or cause officers to leave. Chief Price stated all other local government agencies in the area are not providing raises or reducing staff. He stated that coupled with the current economy has reduced the desire to move from one agency to another. Mayor Umstattd stated across the region projections from local governments are that layoffs will be 1,200 this year. She stated she does not want to see that happen in Leesburg. Further, she stated it seems to be the consensus of Council that no one wants to go with the equalized tax rate or even 20 cents. Council Members Butler and Martinez stated they could possibly support a 20.5 cent tax rate as that would still represent a tax bill decrease to the average home owner. Mayor Umstattd stated she would not be willing to go that high. Council Member Dunn stated he would be willing to keep the real estate tax at its current rate because he believes at that rate we are still running heavy. Mayor Umstattd stated she does not believe the growth is out of line based on inflation. She stated she does not think we can afford to build a performing arts center or undertake major construction projects at this time. She stated we need to tighten our belts and not take on new initiatives. She stated her preference would be to eliminate our economic development reserve and add that funding to our carryover reserve. She stated she would like to see as Iowa tax rate as possible to give our citizens a tax decrease. She stated a good goal is to deliver lower tax bills by a recognizable amount and not layoff current employees. Council Member Dunn stated he believes Council Member Reid is saying that it costs less now to do capital improvement projects now. He stated perhaps we can renegotiate some existing contracts to free up funds for new projects. c. H-l Design Guidelines Council Member Dunn asked if it would be better to defer this discussion and vote tomorrow night until the next meeting when Vice Mayor Hammier is in attendance. He stated she seemed to have a number of concerns when this item was discussed before. It was the consensus of Council to move forward with discussion tonight. Annie McDonald outlined the proposed amendments stating have been vetted by the Town Attorney and Planning Director. Council Member Wright stated for replacement of fences and walls and for wood he did not see the change regarding matching material, height and detail, especially in the case where the whole fence is gone. He stated when you hear "matching" you think the same thing as opposed to the same look and feel. Further, he stated he wanted to be sure there were no unintended consequences Town Council Work Session of Januarv 26, 2009 Paqe 12 from the current language. He stated in the Section on Height the language is not specific as to what is meant by "relate". Ms. McDonald stated different jurisdictions handle that differently. She stated in looking at the language other localities use it is not uncommon to see "relate", "respect", and "consistency". She stated it is not just a single aspect that a project meets, it is a sum total of the guidelines together. Council Member Butler thanked Ms. McDonald for her briefing. Further, he pointed out a missing word in the table of contents. Council Member Reid stated he does not have a problem with voting tomorrow night. He asked if there is something we can do to make sure that we are clear that massing does not mean reducing the square footage of a building. He asked if one or two words could be added to say that massing does not mean to take away from the square footage of a building, rather it deals with design elements and setbacks to make the building appear smaller. Ms. McDonald stated the text reads, "The overall massing of a building relates to the shape, organization and relative size of the building". Council Member Wright stated we have asked the question of several architects who are not on the BAR and the consensus was the language makes sense. He stated the guidelines properly address the issue. Council Member Reid stated he feels we are ready to move forward tomorrow night. d. Performing Arts Center Louise Stevens introduced herself to Council as the consultant that has been working with staff and the steering committee on the Performing Arts Center Feasibility study. She stated public input was gathered and an economic analysis and business plan study was conducted for this report. She stated the premise was to narrowly determine the feasibility of this center with no public funding in the capital or operating phase. She outlined her report and stated it is financially feasible to construct a facility in two phases with the smaller scale component developed first and the larger hall developed second. She stated this is in part so that the non-profit group funding the project can prove themselves and build confidence for the second phase of fundraising by showing the first phase. She outlined a potential partnership opportunity with George Mason University for their performing arts administration, set design and technical programs. She stated the cost for the two phases would be about $24.5 million or $375 per square foot. She suggested the Barber and Ross site or the Liberty Street lot site as potential locations for this facility. Council Member Reid asked how much of the site would the facility need. Ms. Stevens stated ideally the center would need about a three to three and a half acre site; however, it could fit into the two and a half acre Liberty Street lot. She outlined the economic benefit of the center stating it would be widespread including transient occupancy tax, meals tax, licensing taxes and sales tax. She stated there would be about $5.4 million in annual impact into the community including 206 events and 87,000 visits. She stated she recommends leadership Town Council Work Session of January 26, 2009 Paqe 13 from the Town to move forward in assigning staff to shepherd this forward, working with the steering committee to evolve into a board of directors and negotiating support from partners such as universities, the County financing opportunities. Further, she stated she recommended to the steering committee today an aggressive schedule for the next six months including providing a work plan to Council. Council Member Dunn stated this is worth pursuing if it will not cost the Town anything. He stated we do not have any say in the Barber and Ross site, nor can we purchase it; however, we do have some say over the Liberty Street lot. He stated the square footage of the Waterford Building, across from the Liberty Street lot, is close to 50,000 square feet and that site is slightly smaller than the Liberty Street lot. Council Member Martinez thanked Ms. Stevens for her presentation stating he is excited for the steering committee to move forward. Council Member Butler asked why a minimum of 21 Board of Directors is recommended. Ms. Stevens stated there is so much hard work to be done by this group. She stated there are a number of tasks involved in the operations; however, there is a larger task involved in the initial fundraising. Council Member Butler asked if the 300 seat theatre would have a pit. Ms. Stevens stated it would not; however, you could put seating for a small ensemble of 12. She stated often in small halls there are spaces off in the wings. Council Member Butler stated that is one of the criticisms of Franklin Park. He stated the size of the larger hall has the subject of much discussion and asked if the committee has endorsed an 800 seat hall. Ms. Stevens stated it has been a hard discussion; however, there was a coming together around the cost effectiveness and the realization that smaller does not mean less wonderful. Council Member Butler stated he was pleasantly surprised to see the 800 seat recommendation. He stated he is concerned about placing this center on the Liberty Street lot as it will be more spread out than the Waterford Building. He stated this is a tremendous economic opportunity for the Town as it will bring visitors on the weekends and evenings. Further, he stated he was happy to see that this could be used for instructional space and conference space. Council Member Wright stated he was glad that the mission was restated at the front that there will be no public funding. He asked if the cost estimate includes land acquisition or if the Town would be required to acquire the land. Ms. Stevens stated she believes there is an opportunity for the Town to negotiate to have the Barber and Ross site donated to the Town, which could be more beneficial to the bank owner for a naming opportunity. Town Council Work Session of January 26, 2009 Page 14 Council Member Wright stated the challenge with Liberty Street and comparing it to the Waterford project is the height differential with the lot location. He stated there is a lot of infrastructure to be done in the Crescent District and the steering committee needs to realize that if there is any tax increment financing available it will be used for our infrastructure before this project. He stated this presentation was helpful and the performing arts center has a lot of potential in the community; however, the community needs to help it along. Council Member Reid stated this is a wonderful report. He stated as Council Member Butler said this is a wonderful opportunity; however, the devil is in the details as to whether we will get any leadership to do anything as these are very hard times. He asked why Ms. Stevens did not meet with Dr. Hatrick any sooner than a month ago regarding a partnership with the new high school. Ms. Stevens stated there were ongoing inquiries. Mr. Wells stated there were discussions early on. Council Member Reid stated he spoke with the local groups and was told that a 300 seat theatre next to the high school would address their space needs. He stated it is a shame that the School Board and the board of supervisors did not show any initiative as there was money for that building. He verified this could be used to show movies and art films. Ms. Stevens stated it could be used for a theatrical simulcast for such performances as the Washington Metropolitan Opera. She stated you would also want that type of technology for your meeting facilities. Council Member Reid asked if we would be going into competition with hotels and Lansdowne if we go into the conference center area. Ms. Stevens stated this would be a very different facility than what they could offer. Council Member Reid asked if we have the population base for this here given the number of concert halls in the area and could this attract "name acts". Ms. Stevens stated $425,000 a year would be included in the budget for performers fees. She stated there is also a potential to rent. Council Member Reid asked what size parking garage could be purchased for $5 million. Ms. Stevens stated the $5 million figure was put in as a place holder to indicate the need for parking. Council Member Reid stated from what he understands structured parking costs around $20,000 to $25,000 per space and for two theatres you would need about 400 spaces, which would be $8 million. He stated we need to talk to George Mason and the County to ensure they are on board with us as for this to work there can only be one center. Town Council Work Session of Januarv 26, 2009 Paqe 15 Mayor Umstattd stated Council Member Martinez would like to have a resolution for tomorrow night to direct the steering committee to move forward. Council Member Dunn asked what the leadership would be envisioned from the Town. Ms. Stevens stated she would envision the Town assisting in the negotiations for the Barber and Ross property and a partnership with a university. Council Member Reid expressed concern in moving forward with a vote tomorrow night as this will take more staff time. Ara Bagdasarian, Performing Arts Steering Committee, the Committee is only asking that the Council accept the study tomorrow night. He stated they will be back in a month with a plan for moving forward and would ask for approval at that time. Mayor Umstattd stated Council could accept the plan tomorrow night. She stated Ms. Stevens indicated that moving forward with no Town funding was challenging; however, one of the slides presented indicated 95 percent private funding which would leave 5 percent public funding. She stated she is not optimistic that the County would take this on in this economic climate and neither could the Town. She stated it would be difficult to squeeze this center onto the Liberty Street lot. Further, she asked how much of the center could be placed underground to ensure a maximum height of 45 feet above ground. Ms. Stevens stated there has been a great movement in architecture around centers like this to have excavation or to create hills of landscaping for it to appear excavated in. She stated the public would enter at mid height and walk down to their seats. She stated it is her understanding that this type of excavation would be difficult on the Barber and Ross site; however, it would be ideal. Mayor Umstattd stated she has heard from George Mason University that the Barber and Ross site would be ideal for this type of use. Council Member Reid asked if they felt the site might be good for them. Mayor Umstattd stated she does not believe that they have come to any decision as to what they want to do in the Town yet. Council Member Reid stated he thought George Mason University might be looking for a donation of land. Sandy Kane, Performing Arts Steering Committee Chair, thanked Louise Stevens for her hard work stating she took the committee's heads out of the clouds back in reality. She stated she also reached out to the entire community and received excellent input. 2. Additions to Future Council Meetings Mayor Umstattd stated we received a letter from Congressman Wolf asking for a letter in support of his letter to Governor Kaine to establish an interstate compact to review proposed construction plans for the transmission line projects in Virginia and Town Council Work Session of January 26, 2009 Page 16 surrounding states. She asked if Council would be interested in approving a letter tomorrow night. Council Member Reid asked if we are going to weigh in formally with the Governor regarding the Federal Stimulus Bill. Mayor Umstattd stated that would be fine. Council Member Wright asked that the memo on the fac;ade improvement program be forwarded to the Economic Development Commission for recommendation. Further, he asked that staff be encouraged to quadruple their efforts in grant identification. Adjournment On a motion by Council Member Wright, seconded by Council Member Dunn, the meeting was adjourned at 11: 12 p.m. 2009_tcwsmin0126 ~