HomeMy WebLinkAboutApprove Funds to Conduct Analysis and Prepare Report on Main Council/Agency Meeting Held:
Deferred/Continued to:
®Approved ❑ Conditionally Approved ❑ Denied City Clerk's Signature
Council Meeting Date: March 16, 1998 Department ID Number: CS 98-016
CITY OF HUNTINGTON BEACH
REQUEST FOR COUNCIL ACTION
SUBMITTED TO: HONORABLE MAYOR AND CITY COUNCIL MEMBERS
SUBMITTED BY: RAY SILVER, Acting City Administrator07-4
PREPARED BY: RON HAGAN, Director, Community Services
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SUBJECT: APPROVE FUNDS TO CONDUCT ANALYSIS AND PREPARE A REPORT
ON MAIN PROMENADE PARKING STRUCTURE OPERATION
Fst,tement of Issue,Funding Source,Recommended Action,Alternative Action(s),Analysis,Environmental Status,Attachments)
Statement of Issue: Should funds be appropriated to hire a consultant to analyze parking
options and issues for the Main Promenade Parking Structure?
Funding Source: General Fund Unappropriated Fund Balance.
Recommended Action:
1. Motion to approve the scope of work for the analysis and report on parking operations at
the Main Promenade Parking Structure.
2. Motion to approve an amendment to the current year budget by appropriating $12,000
into Account C-AA-CS-344-3-90-00 from the General Fund Unappropriated Fund
Balance for a consultant to analyze Main Promenade Parking Structure operations; and
3. Motion to direct staff to develop a contract with a parking operations consultant, and
return to Council for approval of same.
Alternative Action(s): Do not proceed with an outside consultant to analyze and make
recommendations regarding the Main Promenade Parking Structure at this time.
Analysis: In January, Council directed staff to develop a scope of work to hire an outside
consultant to review, analyze, and make recommendations regarding the fees and
operational procedures for the Main Promenade Parking Structure. Staff has prepared the
attached scope of work for a consultant which consists of the following options:
• The sale of parking assets - This option would study the feasibility and
potential impact of selling the parking structure to a private company.
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REQUEST FOR COUNCIL ACTION
MEETING DATE: March 16, 1998 DEPARTMENT ID NUMBER: CS 98-016
• Privatize the parking structure by contracting for management and
operation - This option would study the potential impact of privatizing the
operations of the Main Promenade Parking Structure while retaining city
ownership.
• Revenue augmentation - This option would study various opportunities for
realigning current rates and operational procedures to increase bottom line
revenue.
• Refinancing assets - This option would analyze the possibilities and impact of
refinancing the debt service on the structure to reduce annual costs of operation.
In the original pro forma for the parking structure, it was anticipated that the downtown
redevelopment would be completed by 1995. Currently, downtown redevelopment is
approximately 25 percent complete. However, within the next two years, it is anticipated
that with Plaza Almeria, Blocks 104/105, 31 acres Hilton Phase II, Pier Plaza, and south
beach improvements, downtown redevelopment will be over 90 percent completed.
Although all of the options described in the scope of work attached should be looked at,
staff believes the number one reason that the structure does not command market rates
in order to cover debt service and cost of operations is the low demand for parking,
resulting in less than 40 percent occupancy. If there were a greater demand for parking
in the downtown, the options and scope of proposed study would be much more
meaningful. With such changing dynamics in the next few years downtown, a study
done under today's conditions may have to be redone under conditions that will exist
when downtown redevelopment is complete.
If Council wants to proceed with this study, staff will solicit bids on the scope of service
and return with a recommended contract. The estimated cost to provide the scope of
services is $12,000. No funds have been budgeted and, therefore, the study would
require an additional appropriation by Council.
Environmental Status: Not applicable.
Attachment(s):
NumberCity Clerk's
Page Description1. Scope of Work
2. FIS
RCA Author:
0030577.01 -2- 03/03/98 10:20 AM
ATTACHMENT # 1
PARKING OPTIONS AND ISSUES
1 SALE OF PARKING ASSETS
1.1 SCOPE - study the relevant issues that would impact the potential to sell, the
price that may be realized, and the nature of the sale(i.e. ground lease vs.
complete conveyance); identify steps to completion.
1.1.1 REVIEW - bond covenants and asset transferability; coastal regulations;
policy commitments to merchants; marketability issues of the property
1.1.2 ANALYSIS - outline the impact of current parking requirement
ordinances on investment potential of the facilities; quantify present
value of each facility as-is; discuss the relative values of sale in whole/
part; estimate impact of revenue augmentation on sales price (see
below); sale with validation programs in-place vs. free-market; etc.
1.1.3 POTENTIAL POLICY IssuEs - sale of parking operations in
whole/part will change the current policies on funding the maintenance
of public recreational space; which facilities are in the public's interest
to see privatized
2 MANAGEMENT / OPERATING AGREEMENT
2.1 SCOPE - study the potential for privatizing the opeialiofis only of the parking
services, in whole/ part to maximize yield on parking assets; identify steps to
completion.
2.1.1 REVIEW - consistency with current bond financing (fund accounting),
tax rules on management agreements, management agreements of other
public agencies
2.1.2 ANALYSIS - discuss the relative benefits of a fee-based management
agreement vs. profit-sharing; quantify guarantees which would maintain
the status quo as a performance floor; establish a reasonable
expectation of profit-sharing potential under various revenue schemes
2.1.3 POTENTIAL POLICY IssuEs - the nature of the relationship
between operator and merchants' associations; the nature of control
over rates, validations, etc.
3 REVENUE AUGMENTATION
3.1 SCOPE - study the various opportunities for realigning current rates,
rationalizing validation policies to eliminate abuse, establishing new revenue
streams from parking districts; can be an element of other options.
3.1.1 REVIEW - current rate structures, usage patterns, parking solutions of
other cities, success of districts for handling planned development
3.1.2 ANALYSIS - estimate impact of pricing changes, price discrimination
by time, validation changes; assess Transient Occupancy Tax on
parking operations or rate regulations for non-controlled facilities
3.1.3 POTENTIAL POLICY ISSUES - value of transient visitors; economic
development activities; enforcement of the intent of parking policy;
aligning controlled and non-controlled facilities under the parking
policy
4 REFINANCING ASSETS
4.1 SCOPE - study the possibilities of recapitalizing assets to reduce their burden
on parking operations; can be an element of other options.
4.1.1 REVIEW - bond documents, covenants and tax rules for legal options
in refinancing; survey bond market for appropriate tactics
4.1.2 ANALYSIS - quantify net present value of changes in debt service;
quantify present value of impact on parking operations ; assess the
ability to swap assets, partially refund or advance refund the combined
financing
4.1.3 POTENTIAL POLICY ISSUES - overall capital markets policy and
capital structure of the City; impact on executing other options with
regards to parking operations
ATTACH MEN T #2
� CITY OF HUNTINGTON BEACH
INTERDEPARTMENTAL COMMUNICA TION
To: Ray Silver, Acting City Administrator
From: Dan T.Villella, Director of Finance
Subject: FIS 98-34 Approve Funds to conduct Analysis and Prepare
a Report on Main Promenade Parking Structure Operation
Date: March 6, 1998
As required by Resolution 4832, a Fiscal Impact Statement has been
prepared for Appropriation for Approve Funding for "Approve Funds
to conduct Analysis and Prepare a Report on Main Promenade
Parking Structure Operation."
If the City Council approves this action (total appropriation $12,000)
the estimated unappropriated, undesignated General Fund Balance
at September 30, 1,998 will be reduced to $5,850,653.
obert J. F*a ,
Deputy City Administrator
fis9834
Adapted Current
Fund Balance-General Fund Budget Estimate
Beginning Fund Balance 10/1/97 (Est) $5,100,000 $7,884,000
Plus Estimated Increased Revenue 1,590,500
Plus One Time Revenue(Estimated) 1,358,780
Less Approved Budget Amendments (1,770,000)
Less Labor Contingencies (610,000)
Less Self-Insurance Transfers (1,800,000)
Less Pending FIS's (790,627)
Less FIS 98-34 (12,000)
Estimated 9/30/98 Balance $5,100,000 $5,850,653
Estimated General Fund Balance at September 30, 1998
$6,000,000
$5,500,000
$5,000,000
$5,850,653
$4,500,000
I I
$4,000,000 _
$5,100,000
$3,500,000
$3,000,000
ADOPTED BUDGET CURRENT ESTIMATE
G:WCCTGgFIS9798.XLS]fis9834
Page 1
RCA ROUTING SHEET
INITIATING DEPARTMENT: COMMUNITY SERVICES
SUBJECT: APPROVE FUNDS TO CONDUCT ANALYSIS AND
PREPARE A REPORT ON MAIN PROMENADE PARKING
STRUCTURE OPERATION
COUNCIL MEETING DATE: March 16, 1998
RCA ATTACHMENTS STATUS
Ordinance (w/exhibits & legislative draft if applicable) Not Applicable
Resolution (w/exhibits & legislative draft if applicable) Not Applicable
Tract Map, Location Map and/or other Exhibits Not Applicable
Contract/Agreement (w/exhibits if applicable)
(Signed in full by the City Attome Not Applicable
Subleases, Third Party Agreements, etc.
(Approved as to form by City Attome Not Applicable
Certificates of Insurance (Approved by the City Attome Not Applicable
Financial Impact Statement Unbudget, over $5,000) Attached
Bonds (If applicable) Not Applicable
Staff Report (If applicable) Not Applicable
Commission, Board or Committee Report (If applicable) Not Applicable
rFindings/Conditions for Approval and/or Denial Not Applicable
EXPLANATION FOR MISSING ATTACHMENTS
REVIEWED RETURNED FOR DED
Administrative Staff
Assistant City Administrator Initial
City Administrator Initial GZQ�
City Clerk
EXPLANATION FOR RETURN OF ITEM:
(Below • . For Only)