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HomeMy WebLinkAbout07-29-19 Work Session MinutesDublin City Council Work Session Monday, July 29, 2019 Council Chambers Minutes of Meeting Mayor Peterson called the Monday, July 29, 2019, Work Session of Dublin City Council to order at 5:35 p.m. at Dublin City Hall. Members present were: Mayor Peterson, Vice Mayor Amorose Groomes, Ms. Alutto, Ms. De Rosa, Ms. Fox, Mr. Keenan and Mr. Reiner. Staff members present: Mr. McDaniel, Ms. Mumma, Ms. Crandall, Mr. Earman, Ms. Goss, Ms. Burness, Mr. Stiffler, Ms. Richison and Mr. Plouck. Also present were representatives of the Dublin Arts Council and the Dublin Convention & Visitors Bureau. Hotel -Motel (Bed) Tax Fund Ms. Mumma noted that this is a good time to discuss the Fund, which is very healthy. In order to make future decisions regarding the fund, staff thought it would be helpful to have a baseline discussion regarding the Fund, how it works, and the revenues and expenditures. Some questions were included in the packet for discussion, although there is not an expectation those will all be resolved tonight. This will lay the groundwork for future conversations Council will have regarding the Fund. [A copy of the presentation was distributed in the packet.] Background The Fund was established to account for the revenues generated from the six percent hotel -motel tax imposed on all overnight stays within the City of Dublin. In addition, all revenues associated with the City's various community events are accounted for in this Fund. These are the two inflows of revenue for the Fund. The outflows of the Fund include all expenditures related to the DCVB, the Dublin Arts Council, community events, the public art program, and various community grants reviewed and approved by Council. She shared a graph of the expenses and revenues from 2014 through 2018 and the resulting fund balance of the Hotel -Motel Tax Fund. At the end of 2018, the Hotel -Motel Tax Fund balance was $4.26 million. At the end of the presentation, there will be five different areas outlined for Council's consideration: the City's needs, those of the DAC, those of the DCVB, community grants, and other. Hotel -Motel Tax Code Ms. Mumma stated that a six percent tax is imposed on all overnight stays in Dublin hotels. As of December of 2018, there were 17 hotels within the City. The State requires the City to pay 25 percent of those receipts to the local Convention and Visitors Bureau. City Council increased the DCVB allocation to 35 percent, beginning in January of 2016. Chapter 35 of the Dublin Code contains this law. Dublin City Council Work Session Monday, July 29, 2019 Page 2 of 14 In this same section, it is also stipulated how those funds — those generated from the bed tax - should be spent. These areas include: additional DCVB expenses beyond the mandated 25 percent; cultural arts; beautification of public property; improvement of the Historic District; Special Events; any other project or expenditure that would enhance the City's appeal to visitors and tourists; and community organizations who apply for a portion of the tax revenues through a grant process. Hotel -Motel Policies (formal or otherwise implied) In addition to the state law requirement of what goes to the DCVB, there are some policies — formal or otherwise implied — that Council should be aware of. Through an agreement with the DAC, the City pays 25 percent of gross bed tax revenue to the DAC. Additionally, as part of the Development Agreement with Crawford Hoying, the City pays 25 percent of the bed tax generated on the H2 Hotel and the Bridge Park hotels (currently, there is only one), until the Bridge Park Community Facility debt is paid off. In 2016, a discussion occurred with Council about a minimum fund balance policy of 100 percent of the hotel -motel tax estimate for the year. A formal recommendation from Council was never brought forward, however. She encourages Council to adopt a fund balance policy for this Fund at some point. Hotel -Motel Tax Revenue The Hotel -Motel Tax revenue is divided into two "buckets" — 35 percent allocated to the DCVB is put aside into a separate fund — Fund 804. It is set up as a separate account because of the statutory obligation to pay the DCVB. The remaining 65 percent of revenue is placed into Fund 232 — the general Hotel -Motel Tax Fund. This funds the DAC contribution, the City events, Event staff, grants, and the public art program. She shared a graph of the Hotel -Motel Tax Revenue between 2014 and 2018 as distributed between the two funds (804 and 232). Beginning in 2016, the City had 65 percent of the revenue to spend, as 35 percent was to be committed to the DCVB. She shared a slide showing the DCVB revenue from 2014 ($665,000) to nearly $1.2 million in 2018. This represents an 80.1 percent increase between 2014 and 2018. The next portion of the presentation relates to the 65 percent — Fund 232 — that the City uses for various purposes. She shared a slide showing the revenue of the Hotel -Motel Tax Fund (Fund 232). In addition to the bed tax, the other main source of revenues for this fund is from the Special Events — largely, the Dublin Irish Festival. There are also revenues from interest earnings, rent on the DAC building, and some miscellaneous revenue. However, 90 percent of the Fund 232 revenue is either generated by the bed tax itself or from City events. In terms of Event revenue, there are two events that generate revenue — the Irish Festival and Independence Day. She noted that Independence Day is a small piece of the total revenue from events. Sources of revenue from these two events include admissions, beverage sales, contributions and donations. Dublin City Council Work Session Monday, July 29, 2019 Page 3 of 14 Given that over 40 percent of the Bed Tax Fund revenue is from Events, specifically from the Irish Festival, staff reviewed projected DIF revenues in a case where the event were cancelled in part or in full. Recognizing there is weather or other issue that can impact the Festival attendance, staff wanted to review the potential impact on revenues and expenditures. The graph shown reflects the impact on revenues. Approximately $2.2 million is projected as annual revenue. With a partial cancellation, about $1.8 million in revenue would still come in, but if it were fully cancelled, the revenue would be about $836,000. Much of the revenue comes in well ahead of the event — sponsorships, pre -purchase of tickets, etc. Hotel -Motel Tax Fund Expenditures On the expenditure side of the hotel -motel tax fund, the majority are related to community events, reflected in green. Other expenses include debt service on the DAC building, the grants awarded, and the Art in Public Places program. The largest expenditures relate to the Irish Festival. The general event expense includes those not attributable to a specific event, namely salaries and benefits for Events staff. This is therefore not associated with any one event. The salaries and benefits for Events staff is accounted for within this hotel -motel tax fund. Additionally, typical budget items for Events staff as any other City department has would be accounted for in this fund. The personnel costs associated with City events are not necessarily all of the personnel costs incurred. Staff from other departments work the DIF, and those costs are not charged back to the hotel -motel tax fund. So essentially, the departments funded by the General Fund are contributing staff to these events at a cost of about $450,000 per year. Ms. Fox asked of the general event expenses, how much is that annually? Is it $450,000? Ms. Mumma responded the $450K is not included in that expenditure graph. Vice Mayor Amorose Groomes asked if the events such as the Frog Jump and Easter Egg Hunt would be considered part of the General Fund event expenses. Ms. Mumma responded that often, with the grant process, City service costs will be waived. Therefore, those departments funded through the General Fund are bearing the expense of those. Ms. Alutto asked if employees are not specifically designated for an event, but are asked to work an event, are they paid overtime, and does the $450,000 figure include that overtime? Ms. Mumma responded it does include overtime costs. If the hours they work put them in overtime status, that is paid out of General Fund. Ms. Alutto asked if this is approved in advance and a planned expense. Ms. Mumma responded affirmatively. Staff also reviewed what expenses would be incurred with a partial or complete cancellation of the Dublin Irish Festival. About 95 percent of the expenditures are incurred prior to the actual event, and for this reason, it is important to have a fund balance policy in place. There is risk of not receiving a tremendous amount of anticipated revenue if the event has to be cancelled. Staff looked at the possibility of purchasing additional insurance to cover any cancellation. There are various levels of insurance available, but at a relatively high cost, given that there is a healthy fund balance. This option is continually reviewed in order to understand the exposure points for the events. Dublin Arts Council Community Grants Currently, the City provides 25 percent of the actual hotel -motel tax revenue to the DAC. Like the DCVB, this allocation changed beginning with receipts in January of 2016. Prior to that, the distribution to the DAC was based on 25 percent of an estimated schedule of hotel -motel tax revenues. It is now based on 25 percent of the actual amount of revenue. Dublin City Council Work Session Monday, July 29, 2019 Page 4 of 14 History re DAC funding In 1988, the City began providing funding to the DAC in the form of an annual bed tax grant. In 1997, Council authorized providing 25 percent of the actual hotel -motel tax revenues beginning in 1998 for a three-year period. The commitment by the DAC in order to have this increase was that they would continue the Art in Public Places program and become the organization through which all arts grants would be directed. In 2000, the City purchased and renovated the property at 7125 Riverside Drive to house the DAC and provide programming space. At that time, just over $2.1 million of debt was issued. That debt will be retired in 2020. As part of that original lease agreement, it stipulated there would be an endowment established; the City would pay 25 percent of the hotel -motel tax revenue, based on a projected amount. It ranged from $405,000 per year to $730,000 per year. The DAC was to pay rent to the City over the course of 26 years that ranged from $60,000 to $110,000 annually. It increased at about $2,000 per year. As part of that, the City would withhold that amount of rent from their monthly distribution of hotel -motel tax. The agreement also outlined responsibilities related to the facility for each of the parties. The lease agreement was modified in 2012; the rent was reduced, resulting in a $260,000 savings for the duration of the agreement. The funding endowment remained at 25 percent of projected hotel - motel tax revenue; and the DAC was to use the endowment funds for the Art in Public Places program (AIPPP) and the City was to withhold $75,000 annually from their endowment for that purpose. Each month, as the distribution is made to the DAC, the City subtracts from this the rent and the amount for the AIPPP. In 2015, the lease agreement was modified to go back to providing 25 percent of the actual hotel -motel tax revenue. The City has subsequently made additional improvements to the DAC facility in excess of $650,000 as outlined on the slide. She shared a graph depicting the payment structure. The blue represents the net revenue paid to the DAC; the green represents the AIPPP amount; and the red represents the rent for the DAC building. In regard to the AIPPP, the monies set aside for this from 2016 through 2019 has not been spent. In looking at the fund balance of $4.2 million, $300,000 is due to the DAC for the AIPPP. Community Grants The budget includes $200,000 programmed each year for the community grant program. The slide lists the various organizations who have received grants. Grant applications are accepted in the fall and reviewed by the Finance Committee in late November and then by Council in early December. The organizations are required to submit receipts and provide documentation of how they have spent the funds to ensure accordance with the application and grant guidelines. She shared a graph of the hotel -motel tax fund revenue and expenditures, including the fund balance. This slide demonstrates that event revenue alone is insufficient to cover the event expenditures. She then offered to walk through the various considerations that need to be reviewed. City's Needs Ms. Mumma stated that it is important to recognize that the General Fund is subsidizing the community events. In speaking about the health of the hotel -motel tax fund, it is important to understand that this fund alone cannot bear 100 percent of its costs. Some options for the future could include: --Create more vibrancy in downtown Dublin through a coordinator position or historian. Dublin City Council Work Session Monday, July 29, 2019 Page 5 of 14 --Perhaps events in downtown Dublin could be served by an Event manager and promotions could be funded for the downtown Dublin events. --Maintenance and improvements to the Historic District could be funded by hotel -motel tax. All of these would fit the criteria for use of the hotel -motel tax funds, which criteria can be modified by Council if desired. --Future needs of the City — funding for improvements to event venues, funding for future events at Riverside Crossing Park. It is important to ensure flexibility to accommodate these items to continue having high quality events as exist today. --Other items such as a Fieldhouse. In terms of bringing hotel -motel tax revenues to the City with hotel room stays, a fieldhouse could generate significant revenues for the City. In terms of City needs, particularly with the revenues and expenditures associated with the Irish Festival, she believes it is important to have a formal fund balance policy for Hotel -Motel Tax Fund. It is necessary to look at the fund in totality. With a weather issue resulting in event cancellation or by burdening the entire fund with the full cost of events, a healthy fund balance would quickly be depleted. Looking historically, she reviewed how much of event expenditures is not covered by event revenue. How much of the hotel -motel tax fund is the City dependent on to cover that gap? Over a five-year period, in 2015, 86 percent of the bed tax revenue that year was needed to cover net expenses of the fund. In 2016, 128 percent of the bed tax revenue was needed to meet the expenses. This graph shows the potential swings from one year to the next, depending upon revenues and expenditures. Based on this, if the City wanted to have a 50 percent Hotel -Motel Tax Fund Balance policy or 75 or 125 percent -- based on the 65 percent of the Fund that the City maintains (35 percent is committed to the DCVB), she will provide some policy options. Staff's recommendation is to maintain a 100 percent Fund Balance, but she will share later some options for Council to consider. Dublin Arts Council The City owns the DAC building, and the debt will be paid off in 2020. Because of the agreement in place with the DAC, the rent payments will continue through 2027. The question is what happens to that building when the debt is paid off. This is a consideration for Council. The provision of 25 percent of actual hotel -motel tax revenue to the DAC is in place through 2026. Does Council foresee any changes to the distribution, potentially at a higher rate than what is already provided for in the agreement? What happens at the end of that agreement? These are considerations to be determined. Dublin Convention and Visitors Bureau Does Council intend to continue providing 35 percent of the hotel -motel tax revenue to the DCVB as opposed to the 25 percent required by law? When Council made that change in 2016, there was no discussion or timetable for revisiting this. Staff is not recommending one way or another; this is simply a consideration for Council about whether this percentage should be reviewed periodically. Community Grant Program Does Council desire to continue providing grants to the community? If so, should there be any changes to the process? A couple of years ago, Council approved an administrative review process for staff to review some routine grant applications, provided the amount was no higher than the previous year and that the applicant had followed all of the requirements. Is that still something Dublin City Council Work Session Monday, July 29, 2019 Page 6 of 14 Council is comfortable with? Should more focus be placed on applications that include room nights that generate revenue? Should the DCVB be involved in awarding those grants as opposed to the City Council doing that? Should more focus be on self-sufficiency of the organizations if they have received grants for many years? Is there a point in time they should be expected to be self- sufficient? What is the impact on City operations and funding when City services are provided as a grant? The General Fund is bearing some of the expenses related to these grants when City services are involved. Staff would recommend that providing City services for events such as the Sundays at Scioto would come through a bed tax grant process so that the hotel -motel tax fund can be charged versus the General Fund. Does Council want to provide funding for races, as discussed in previous years? Periodically, discussion is need to ensure everyone is on the same page about these grants. Other If Council should want to utilize funds to support the proposed fieldhouse, hotel -motel tax funds could be used for that. In looking at future events in downtown Dublin and Bridge Street, they could be funded using bed tax dollars. Programming of events at Riverside Crossing Park could also be funded through bed tax revenues. Anything that supports the criteria for bed tax grants as outlined in the Code could be applicable uses for the bed tax dollars. There are a number of General Fund/operating expenditures that could be charged to this bed tax fund. These could include maintenance in the Historic District and capital improvements in the Historic District, as examples. Next Steps Clearly, all of these issues cannot be addressed tonight. However, whatever discussion occurs tonight will be followed up by staff. She recommends preparing a fund balance policy for the hotel - motel tax fund, if Council is supportive, and this would be brought forward in the future. At the same time, it is appropriate to review the Code and the criteria for hotel -motel tax fund spending. There are also some nuances with the bed tax itself and how it is administered that need to be addressed, given that this Code has not been updated since the late 1980s. She invited Council discussion. Council Discussion Mayor Peterson referenced the bar graph with revenues and expenditures for the bed tax fund. She had mentioned a $450,000 subsidy from the General Fund for events. Is that amount included in the expenditures shown on the bar graph, or is that in addition? Ms. Mumma responded it is an additional item and is not included in the expenditures. Mayor Peterson noted that the expenditures for events are therefore even higher, after including this item. Mayor Peterson asked if room nights for particular events are tracked - perhaps by the DCVB. Mr. Dring responded that all of that data is tracked. The largest events for room nights are the Nike Soccer Cup for two weekends in April; the Memorial Tournament; and the Irish Festival. Those are the top three. Mayor Peterson asked if there is a way to connect that $450,000 to individual events — those that may use City manpower, yet generate hotel -motel tax revenue. Ms. Mumma responded that the $450,000 is largely reflective of City events — the Irish Festival, Independence Day and St. Patrick's Day. There are not many grants for City services that would impact the total subsidy amount — generally, these costs are related to City events. Vice Mayor Amorose Groomes asked if the Nike Cup receives waivers for City service costs. Dublin City Council Work Session Monday, July 29, 2019 Page 7 of 14 Mr. Dring responded that he believes this event receives a grant for City services. Ms. Mumma responded this number can be checked and reported back. (Note: the grant approved by Council in December of 2018 was for up to $7,500 in City services for the 2019 Nike Cup.) Ms. Mumma stated that as part of the grant process, the DCVB provides information to the Finance Committee about the previous year room nights in local hotels for the event. Mayor Peterson stated he does not have concern about the $450,000 subsidy for City events, as these events benefit City residents. He would not necessarily support subsidizing events that are not attended by the general citizenry and that benefit a specific group. Ms. Alutto agreed, noting that in past Committee discussion for the grants when City services are requested, it is recognized that the City services are paid for by the General Fund and not by the bed tax fund. Ms. Fox asked about the grant criteria. Does the City track the ability for an organization to self - sustain its event through revenue from the event? She is aware the DCVB regularly provides a pro forma on their results, and they are self-sustaining. Arts is somewhat different. What is the criteria for understanding the return on the grant monies provided? Ms. Mumma responded there is not a mechanism to bring those groups back before Council. Once the grant is awarded, the organization submits documentation supporting any payment being requested by the organization. During the application process, the organizations provide information related to other sources of funding they receive. But there is no post event follow up or report out on the event. Ms. Alutto commented that for returning grant applicants, staff prepares the history of the requestor. But it is not necessarily a follow-up report to the actual event. It may include whether or not there are more projected room nights for an event in a future year. Ms. Fox asked about the Memorial Tournament. Is that funding provided out of the General Fund or the hotel -motel tax fund? Ms. Mumma responded that any staff time invested in the Tournament support comes from the respective department budget. Mr. McDaniel added that there is a sponsorship package for the Tournament, which comes out of the General Fund. This is one that could be argued should come from hotel -motel tax fund. He added that this has not been done, because in purchasing a sponsorship, the City has been able to leverage certain aspects of the sponsorship — such as the villa use — which is used to celebrate and thank volunteers and the business community, etc. It would be a bit challenging to ensure this fits the bed tax criteria. Ms. Fox stated she wants to understand what is the best use of hotel -motel tax funds, given the many community events and grant requests. She does not have concerns with the City funding the major Tournament event out of the General Fund as it provides significant benefit to the City. Mr. McDaniel stated that the question may be whether events such as Spooktacular, tree lighting, etc. are driving hotel room nights. These are of benefit to the community, but the question relates to funding support in terms of the budget. Ms. Fox stated it comes back to what is the best use of bed tax dollars. It is not always just to increase room nights, but what it gives to the community by bringing more people to Dublin. Vice Mayor Amorose Groomes suggested that perhaps these could be divided into inward facing events and outward facing events — those that attract people to the community and those that are Dublin City Council Work Session Monday, July 29, 2019 Page 8 of 14 for the community. It is easier for her to support General Fund expenditures for inward -facing events versus outward facing ones. Perhaps this is an easier way to consider this matter. These are significant dollars. Ms. De Rosa asked how the six percent tax was established. Ms. Mumma responded it was established by Dublin Code. Ms. De Rosa stated that the City could change that to a higher tax, if desired. How does Dublin compare to other communities in the hotel -motel tax amount levied? Mr. Dring stated that in the City of Dublin, there is a six percent City hotel -motel tax; a four percent Franklin County tax; and sales tax. There is an additional tax of .5 percent levied for Bridge Park hotels. Dublin is one of the highest visitor tax cities in the entire U.S., given the total of these taxes paid for hotel stays. Likewise are the cities of Columbus, Grove City, Hilliard — Central Ohio cities. Ms. De Rosa asked if all of the Central Ohio cities levy six percent. Mr. Dring responded affirmatively. Ms. Alutto asked how the Franklin county hotel -motel tax of four percent compares with other counties. Mr. Dring responded that Cleveland, Cincinnati, Indianapolis do not have a county tax, and are at a total of 12-13 percent tax on hotel stays. It is somewhat of a competitive disadvantage. Ms. De Rosa asked about the four percent that goes to the county — does the City of Dublin see any part of that? Mr. Dring responded it does not come back to the City. Ms. De Rosa stated that is levied by law, correct? Mr. Dring responded that all of this four percent goes to the Franklin County Convention Facility Authority, which oversees the Nationwide Arena, the Columbus Convention Center and the Hilton Hotel downtown Columbus. Mr. Keenan asked if this was the tax contemplated by Crawford Hoying to provide some funding for the fieldhouse project. Mr. Dring responded affirmatively. Mr. Keenan asked if there is any update on that matter. Mr. Dring responded he and Mr. McDaniel have talked about this, but believe it is a long shot to secure any of that Franklin County tax revenue. Mr. Reiner asked the fieldhouse, and how that is proposed to be funded. He is aware that will be a constant revenue drain, and it would compete with City needs, Dublin Arts Council, DCVB, and community grants. In the fieldhouse business, much revenue comes from parking and concessions. Imposing a charge for parking would impact the Bridge Street District's success as it includes free parking — so that is not likely. For concessions, his research indicates that both parking fees and concession revenues would be needed to make the project work. Otherwise, such a project would be a constant drain to the City. Will the fieldhouse generate the cash needed to cover this? Mr. McDaniel responded that the fieldhouse was mentioned in this discussion because of the ongoing conversation about it. He recognizes that Council's guidance was not to talk about funding for a fieldhouse, but to focus on the traffic impacts. It is likely there will be a funding request for a Dublin City Council Work Session Monday, July 29, 2019 Page 9 of 14 fieldhouse, and staff has done some analysis on potential funding sources — should Council want to contribute. Much discussion is needed before anything moves forward. Staff is not advocating for anything at this time. Vice Mayor Amorose Groomes asked about the H2 Hotel and Bridge Park hotels in terms of the hotel -motel tax paid. Ms. Mumma clarified that the two hotels pay the same hotel -motel tax, but receive 25 percent back per the Bridge Park Development agreement. Vice Mayor Amorose Groomes asked if the same arrangement will apply for the next two hotels in Bridge Park. For H2 Hotel and Bridge Park hotel, is that a defined period, or in perpetuity? Ms. Mumma stated that the agreement provides for every hotel within the Bridge Park development and the H2 Hotel. Modifications were made to the development agreement late in 2018. She explained that in 2015, the City did not anticipate the hotel -motel tax funding for the DCVB would later be increased to 35 percent. That original agreement provided that the Bridge Park hotels (plus H2 Hotel) would receive 25 percent of the hotel -motel taxes paid back, after the deduction for the DCVB allocation, which was at that time 25 percent. After that development agreement was approved, Council increased the amount of annual funding to the DCVB from 25 percent to 35 percent. Because that 25 percent of hotel -motel tax to be returned to the Bridge Park and H2 Hotels was already pledged for some of the debt service for Bridge Park Community Facilities, it was necessary to leave those two existing hotels as is. However, for future hotels in Bridge Park, the language was changed — whatever amount is allocated to the DCVB, the City takes that off first and the future hotels receive 25 percent back. Vice Mayor Amorose Groomes asked if that is in perpetuity. Ms. Mumma responded that is in place until the Community Facilities debt service is paid off — most likely, 30 years. Vice Mayor Amorose Groomes noted she is trying to anticipate where future hotels would be in terms of future revenue. There is a projected 2-4 percent hotel -motel tax revenue decrease in 2019, and a 6-8 percent hotel -motel tax revenue decrease in 2020. It appears the revenues will rebound by 2021. Perhaps if another hotel is added, that increase will likely be delayed. Ms. Mumma responded it is difficult to estimate, as it is unknown where the saturation point will be. Absent more City events or a new arena or fieldhouse, it may be simply taking from one hotel to another newer hotel. Mr. McDaniel added that the Crowne Plaza will be offline for renovations, so it is difficult to estimate the 2019-2020 revenues. Ms. Mumma stated that in terms of the hotel -motel tax revenue itself, investing in things that generate more of this revenue benefits everyone. Vice Mayor Amorose Groomes stated this is part of her thinking of "inward -facing" versus "outward facing" delineation — what events generate revenue to the fund and what events are for the community and serve to build a sense of community. Mr. McDaniel stated that other items where more discussion is needed are the Downtown Alliance, and how that can be fueled. Staff has looked at Special Improvement Districts like the Fountain Square SID in downtown Cincinnati. Funding is invested that regenerates revenue and funds activities. Trying to generate more activities and events could be fueled, if desired. Vice Mayor Amorose Groomes stated that perhaps a couple of organizations could be consolidated to do this. Dublin City Council Work Session Monday, July 29, 2019 Page 10 of 14 Mr. McDaniel added that staffing and resourcing it appropriately would bring a return on investment. It could be managed in such a way that it would not impact the General Fund resources. This would require a lot of study to understand how these work in other cities. Dublin is now a large enough city, and the potential of City investments in HD, the new park, Bridge Park, etc. indicate that a SID could make sense. Vice Mayor Amorose Groomes stated that many of the grant programs provide a clear return on investment, such as the HD fagade improvements program and the private equity that has been generated. But for many grants the City provides, the events occur but little information is provided about what the event has generated in activity at restaurants or room nights. She would encourage consolidation of grant recipients into a more organized way so that we could get feedback to determine if the money is well spent. Ms. De Rosa noted that the community grants total only $200,000 out of $4 million. She believes it is important to talk about the grant programs, but more important to talk about the larger expenditures from hotel -motel tax revenue. Perhaps staff is thinking differently about how to operate events, as these are the larger numbers. The community grant totals are small, but important. Mr. McDaniel responded that perhaps using the inward/outward facing categories, the $200,000 community grants would come from the General Fund as they are community building, and not bringing in outside visitors. Ms. De Rosa confirmed that what she hears is that in anticipation of the larger activities that can be accommodated with the new park, it will require thinking differently about the bigger ticket expenditures of hotel -motel tax revenues. Mr. Reiner commented about the community grants. Funding was often provided as "seed money" to begin a program or event, with the understanding the grant would be for a one or two-year cycle only. For SIDs, he understands the charges are assessed per lineal foot across the frontage of a building. The charge is to the businesses, as he understands. Mr. McDaniel responded that there are different ways to establish improvement districts. Ms. Crandall added that they are generally based on property tax or square footage of each property that pays into the SID. Mr. McDaniel stated that there could be cost per linear foot or frontage foot, or a special assessment of another type could be leveraged. These tends to be centered around hard infrastructure reinvestments. There are other ways to infuse funding around a SID that might relate to more event -driven things — perhaps hotel -motel tax revenues. From that, revenues come, but stay within the SID. Ms. Crandall stated that staff can bring back information on the different types of programs that exist and how they are funded. Staff plans to look at a Main Street program and bring someone in to discuss that. Perhaps all of this could be discussed at the same time. Mr. Reiner that in Columbus, a SID was done on a linear cost per face foot of the building. With that SID, planters were added, trash services were provided, and security provided. He was surprised that the business owners endorsed it. Ms. Crandall stated there are a number of SIDs that exist across Ohio, and they have proven to be successful. Ms. Fox stated in regard to the utilization of this money, Main Street USA and other organizations combine historic preservation with economic development and community building. As we discuss improvements in the Historic District, Bridge Street and Frantz Road, perhaps serious consideration Dublin City Council Work Session Monday, July 29, 2019 Page 11 of 14 should be given to a coordinated and focused energy of a Master Plan on Dublin's Main Street — which could be from Rings Road all the way to Sawmill. The person in charge would work with the City's economic development team, the Downtown Alliance and Crawford Hoying — pulling all of that together in a coordinated way. Vice Mayor Amorose Groomes stated that the question regarding the future of the DAC building should be addressed soon, given the debt is nearly paid off. The City wanted to acquire that because of the desire to acquire property along the riverfront. She does not have interest in the City not owning that property. She envisions that one day, the City would own everything up to Scioto Park. She supports efforts to have all of the property from Scioto Park south to 161 or the Kiwanis Park owned by the City in the future. She does not have interest in the City not owning the DAC property. Mayor Peterson stated he is reviewing the questions before Council tonight to see if there are some that can be resolved tonight. It seems that the DAC building ownership is a separate, specific asset for discussion. But many of the issues could be addressed in an update to the Code, i.e. establishing a fund balance policy for hotel -motel tax; how to account for the $450,000 subsidy from the General Fund for events; the 35 percent allocation to the DCVB and when that is revisited. He believes that an updated ordinance could address many of the issues raised tonight. Ms. Mumma stated that to the extent these items can be addressed at one time, it would be great. Whether all belongs in Chapter 35 of the Code she is not certain. She would like to have discussion with Legal staff about the 25 versus the 35 percent. Council has the authority to modify that at any time. Mayor Peterson stated the question is whether a regular review of the percentage should be done. Certainly, future Councils have the discretion to revisit that issue. He noted that he does not want to lose the momentum on resolving some of these issues. What is the best way forward — a staff memo that identifies the issues individually with the ordinance being part of that? What is staff's recommendation? In terms of the DAC building, he does not foresee anything other than the City owning that building. Mr. Keenan noted that the building was purchased around 2002, and the property has great potential. The owner of the property to the north has issues in regard to the outdoor use of the property, which would help raise revenues and increase public use. Mayor Peterson stated that is more of a programming issue versus an ownership issue. Mr. Keenan stated the City has to have ownership of the facility and property before they can program it. The opportunity to purchase the DAC building was brought forward by Dublin staff and staff brought a proposal to the DAC for them to locate in the building and lease it back, with help in providing the funding for the lease via bed tax. That is how the present structure was derived. There is a large commitment for maintenance for the building as well. He definitely supports keeping the property under City ownership, given its historical nature and the devotion to the arts by the Gelpi family. Mr. Reiner commented that he understands from DAC staff that there has been less issue with noise from the neighbors. There has always been a goal of acquiring the land between the bridge and the DAC facility, seeking any opportunities. Dublin City Council Work Session Monday, July 29, 2019 Page 12 of 14 Ms. Alutto stated she would like to have more discussion about the grant process. The form and process need to be updated. Perhaps that could be handled by a Finance Committee meeting. She agrees with the questions asked by Ms. De Rosa and Ms. Fox about follow-up — perhaps a survey is completed at the end before release of funds. She supports Vice Mayor Amorose Groomes' suggestion of categorizing the inward facing versus outward facing events. She would like to have a follow-up discussion in an appropriate venue, perhaps Finance Committee. Vice Mayor Amorose Groomes stated that the inward/outward could be a percentage — the Irish Festival is likely a 60/40 split — 60 percent Dubliners and 40 percent out of town. Staff would have a good sense of those percentages. Ms. Mumma stated that in order to facilitate that discussion, staff could take the 18 grant applications and the information provided as part of that process. It would be appropriate to have the discussion at a Finance Committee meeting. Even though the Administrative review process has worked well, staff will articulate all of the steps for the Committee meeting. The Committee can discuss the matter of repeat applications, as Mr. Reiner has brought up. Having those organizations come forward every three to five years about their sources of funding for their program or event could be discussed in that venue. Mayor Peterson stated that the template could be that used by the DCVB in seeking an increased percent of bed tax — demonstrating the return on investment from what is spent. The DCVB articulated well the return on investment from their bed tax funding by the City, and for that reason, the percentage was increased to 35 percent. Ms. Alutto added that this would also be an opportunity to review the larger bed tax funding amounts being given out and what we want that to look like going forward. She would be interested in having this conversation. She believes everyone is in agreement on the direction forward, but the timeframe is yet to be determined. Ms. Fox agreed that the $200,000 in community grant funding is not a major portion of this Fund. However, she does not want to put a burden on the small organizations who seek these grants. But the organizations who come for sizable funding should prepare a pro forma of some type to show how they are utilizing the funds. The DCVB is a great example of the return they provide in revenues. For the arts, it is more challenging as the room nights are less frequently connected to the arts. It would be important to help the arts groups become more revenue raisers to help themselves become self-sustaining. Perhaps not in percentages that are given, but in funding needs. A good portion of hotel -motel tax revenue goes to two entities. We need to determine if those are the only two entities the funds should be used for. Ms. Alutto noted that $200,000 over a period of time actually is a decreasing amount, given the value of money. Perhaps there is a way to increase that, or should it be tied to a percentage. That would be another great discussion point, including how that impacts the other pieces of the "pie." Mr. Keenan noted that Council generally does not grant the entire $200,000 of funds available for the community grants. Beyond that, the funds allocated are not always utilized as the grant recipients do not present the documentation to receive the funding. That information is available from the records. Ms. Mumma stated that staff can provide that information. Dublin City Council Work Session Monday, July 29, 2019 Page 13 of 14 Vice Mayor Amorose Groomes commented regarding the proposed fund balance policy for hotel - motel tax. She supports policies as they make decision-making easer. She is in favor of staff bringing forward a policy for a fund balance for the hotel -motel tax fund. She added that the financial policies should be somewhat consistent in terms of the General Fund policy. Ms. Mumma stated that because of the General Fund policy, the Debt policy and the stand-alone policies such as this, she would prefer to do this separate from the Code regarding the hotel -motel tax and its collection. She will prepare a fund balance policy to bring forward to Council. For the other items, they can be discussed when the Code itself is revisited — updating the language, the procedures for how the tax is collected, language about entities not paying their taxes — things that need to be tightened up. If there are items discussed tonight that can be further expanded upon in that section of the Code, staff will do so. But to begin, the items bulleted in the presentation are specifically what the Code provides as eligible expenses for the tax revenues. She asked if Council is supportive of those, and if Council wants to see anything added or removed? The current criteria offers flexibility, but if there is something missing, that can be considered. Mr. McDaniel added that, as a result of this discussion, staff could bring back what Council has validated that they want to continue to do; after those things are subtracted, what remains; and then items for further discussion. With the partners present tonight who share in bed tax revenues, he wants to assure them that staff is not advocating change for that. Perhaps there is more research needed around some of the other items. Mr. Reiner commented that there is not an arts entity in the country that is self-sufficient, and there are a lot of intangible benefits. He agrees with Ms. Fox about helping the arts organizations in their efforts to raise revenue. Vice Mayor Amorose Groomes stated she supports Mr. McDaniel's idea to consolidate some of the organizations and efforts for events — particularly throughout the Bridge Street corridor. She would like to see a more concerted effort, which would help provide some expertise to learn about the return on these investments. Ms. Fox agreed, adding that we should think about expanding that outside of the Historic District. The Main Street USA concept can incorporate the HD and also include the outer edges. In talking about how we develop Bridge Street, it would be worthwhile to have one voice for all of these efforts. Ms. Mumma noted that in terms of grant monies not being utilized, it varies from year to year. In some years, nearly all of the allocation has been spent, while in other years, only half has been spent. Much relates to timing as well. But the City has never spent 100 percent of the allocation. Mr. Reiner asked if there is any carryover year-to-year for monies not granted. Ms. Mumma responded that at year end, similar to every account, if not encumbered for a purchase (or grant), the funds are returned to the fund balance. To the extent all of the grant monies are not spent, that contributes to the fund balance increasing over time. Mayor Peterson asked if the topics discussed tonight can be handled in a future Council meeting, versus another work session. He knows that decisions need to be made. Dublin City Council Work Session Monday, July 29, 2019 Page 14 of 14 Mr. McDaniel responded that staff suggests returning with an adopting mechanism — whether a resolution or staff report — for many of these items. For the remainder, more time is needed to research them. The work session was adjourned at 6:55 p.m. Clerk of Council