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HomeMy WebLinkAbout2003-07-10 ACE MINUTES• • .•· 1 ( .. :·· • ALLIANCE FOR COMMERCE IN ENGLEWOOD July 10, 2003 I. CALL TO ORDER The regular meeting of the Alliance for Commerce in Englewood (ACE) was called to order in the Community Room of Englewood Civic Center at 11 :3 5 a.m ., Chairman Panetta presiding. Members present: Members absent: Alternate Present: Liaisons Present: Guests Present Staff Present: Cook, Guinther, McDermott, Rees, Schalk, Panetta Ashenfelter (with previous notice) Vasilas (entered late) Yurchick , Ackerly Wolosyn Robert Simpson, Director of Community Development Lauri Dannemiller, Senior Manager in Community Development Darren Hollingsworth, Business Development Specialist Michael Flaherty, Assistant City Manager Pauletta Puncerelli, Public Information Officer II. APPROVAL OF MINUTES June 5, 2003 Chairman Panetta called for consideration of the Minutes of June 5, 2003. Rees moved: Guinther seconded: The Minutes of June 5, 2003 be approved as written. The motion carried. III. INTRODUCTION OF MEMBERS Chairman Panetta asked that all members introduce themselves. Mr. Cook and Ms. McDermott were welcomed to the meeting as new appointees, and Ms . Guinther was congratulated on her reappointment to the Commission. Mr. Vasilas entered during the course of the meeting, and was introduced and welcomed at that time. IV. NEW BUSINESS Election of Vice-Chair Chairman Panetta stated that the Vice-chair position is vacant, and needs to be filled. He asked if anyone is interested in serving as Vice-chair. Mr. Rees volunteered to serve as Vice-Chair if no one else were interested . H:\G ROU P\BOARDS\ACE\Minutes\2003\ 7-10-2003 .doc 1 • • • Mr. Rees was elected Vice-Chair of the ACE by voice vote . V. OLD BUSINESS a. Occupational Privilege Tax Chairman Panetta stated that the Occupational Privilege Tax (OPT), or "head tax" issue was dis- cussed at the June meeting of ACE, and discussion was continued to the July meeting to give ACE members an opportunity to consider the proposal. Mr. Panetta stated that there is more than one item on the agenda for the meeting; however, the Commission will take as much time as necessary to consider the OPT issue, and consider other agenda items at subsequent meetings. Community Development Director Simpson stated that City Council is seeking feedback from the ACE membership regarding administration of the OPT should it be passed by voters in No- vember. Mr. Simpson stated that measures to place the OPT on the November ballot will be taken on July 21 when the issue is considered on first reading, and second reading scheduled in August. A second public forum hosted by the City Council is scheduled for July 17th in the Community Room of the Civic Center. Mr. Simpson reiterated that City Council is asking for assistance from ACE to shape policy issues on the OPT if it is approved in November. Mr. Schalk asked if any other plans to address the revenue shortfall have been developed . He acknowledged that the City is in a budget crisis now -have any immediate steps been identified to address revenue shortfalls . Is this OPT proposal the only one on the table? He stated that whenever businessmen have approached City Council they have received the message that "it's not your business ". Mr. Schalk stated that the proposed OPT will harm Englewood businesses. What is Plan B, or Plan C or Plan D? Mr. Flaherty responded to Mr. Schalk's inquiries regarding various scenarios to address revenue shortfalls , noting that Council will shortly receive a document citing budget cuts and ramifica- tions of the proposed cuts on services provided by the City. Mr. Flaherty stated that the Public Hearing on the budget is scheduled for September 15. He also advised that the budget must be based on actual revenue sources , not on "potential " revenue sources. Mr. Yurchick commented that City Council is asking for suggested alternative sources of reve- nue . Mr. Schalk stated that the proposed OPT means the City is "coming after the businesses to pay for services that are given to the residents". He is, as a member of ACE, supposed to represent the business interests in the Community, and stated that this proposal is not fair to the business community. In response to an inquiry, Ms . Dannemiller stated that approximately 27 % of Englewood resi- dents work within the City . H:\G RO UP\BOARDS \ACE\M i nutes\2 003\ 7-10-200 3.doc 2 • • • Mr. Cook asked if the tax were to be made applicable only to non-residential employees, would it have to be on the ballot. Ms. Wolosyn commented on administrative difficulties in determin- ing residency of employees; also that any "tax" levied must be approved by voters per the TA- BOR Act. Mr. Cook commented that at one time, Denver's head tax applied only to workers not living in Denver. Mr. Flaherty and Ms. Puncerelli gave a power-point presentation with graphics displaying sources of revenue, the percentage division of those revenues for City departments, cited meas- ures to address revenue shortfalls through expenditure cuts -hiring freeze, delay replacing fleet vehicles, eliminate pay-out of unused personal leave for employees, salary increase freeze, hold- ing the line on health care expenditures even though it necessitates change of provider, and other proposals. Mr. Flaherty discussed negotiations with the three City unions, noting the EEA union has agreed to the zero salary increase for 2004; however the Police and Fire unions will not agree, and negotiations have gone to "impasse''. Employees that are not covered by any of the unions will comply with salary mandates determined by City Manager Sears -no pay out on per- sonal leave, no salary increase, etc. Mr. Panetta asked what percentage of health care cost is paid by an employee. Mr. Flaherty stated that approximately 15 % of the health care cost is paid by an employee; the remainder is picked up by the City. Mr. Flaherty also noted that approximately 2/3 of the City employees be- long to the three unions. Ms. Dannemiller reviewed a memorandum to the ACE membership on the OPT. Ms . Dannemil- ler addressed various topics of the memorandum: Exemptions; Timing; Equity; Staffing; and Enforcement. Ms. Dannemiller stated that a recent Indicator Study shows that 22,000 people are employed in Englewood. Not all of these employees are highly paid, and exemptions for those earning minimum wage may be an option for the OPT. Also exempted would be religious, gov- ernmental, or charitable organizations qualifying for 50lc(3) status -Ms. Dannemiller empha- sized that this exemption would apply only to the organization, and not the individual employees of those organizations. Mr. Yurchick asked what the poverty level is, and wanted "hard numbers". Ms. Dannemiller stated she did not have the exact figures at hand, but gave an estimate of $10,000 to $12,000 per year for an individual. Mr. Schalk asked if a sliding scale based on salary had been considered in conjunction with the OPT, and not the flat fee as proposed. Mr. Schalk stated "this will kill the small guy." He sug- gested that a means to put some of the revenue-generating burden on health care businesses be explored. Ms. Dannemiller stated that the fee was based on "use of services" and a flat rate equalizes the issue. Mr. Rees commented that residents use the streets and other city services, and "they aren't paying anything". The rate of taxation for business property versus that of resi- dential property was discussed. Ms. Dannemiller stated that the City has no control over the taxation rate differential for business versus residential property. Ms. Wolosyn also addressed some of Mr. Schalk's concerns regarding the OPT, and what the City has done to assist business people . H :\G ROUP\BOARDS\ACE\Minutes\2003\ 7-10-2003 .doc 3 • • • Mr. Rees stated that in his opinion, "the City is putting the cart before the horse", and he is "do- ing all I can do to make sure the OPT is not passed by City Council." Mr. Simpson reiterated that staff has been asked to get input from the ACE Commission; if ACE votes to oppose the OPT, we need to know that. But, if the OPT does go forward, and should it be approved by the voters, policies for administration and enforcement need to be developed, and the City is looking for input from ACE in that event. Mr. Vasilas asked if Council has any idea how many businesses will choose not to locate in Englewood if the OPT is enacted? Businesses will choose to locate in jurisdictions where there is no OPT, and some existing businesses and employees may choose to relocate from Engle- wood. Would Gart's Sports have chosen to locate in Englewood if the OPT had been in effect two years ago? These are some questions/issues that need to be considered before Council goes forward with the OPT. Ms . McDermott asked what are the alternatives to putting this tax in place? What departments have the biggest share of the budget -Parks & Recreation, Public Works and Safety Services. Why is the water park being constructed during a time of revenue shortfall -couldn't this project have been shelved until revenues improve? Ms . McDermott stated that business people are also experiencing a reduction in revenues -sales are slow, and they have had to reduce overhead to stay solvent. This can entail reduction in employees. Ms . McDermott urged that questions and concerns be laid out and answers obtained before proceeding. Ms . McDermott also commented on the lack of communication from the City to existing businesses, and cited redevelopment of property on West Floyd Avenue to the Table Stakes South -she knew nothing about it, nor did any of her staff. Ms. McDermott stated she has been told there is a newsletter or flyer sent to all businesses providing such news , but she has ne ver received or seen such a document , nor have any of the employees in her business. Ms . McDermott emphasized the need for the City to pub- licize new retail businesses, new restaurants , etc ., and encourage employees of areas such as the Swedish Medical Center to shop and eat in Englewood. Ms. McDermott reiterated that the City isn't doing enough to notify people what is going on. Ms. Dannemiller noted that the water park is a revenue generator, and is financed through a bond issue. Mr. Flaherty stated that the water park , while not a Water World type of facility , will be a "destination use", and will attract more than Englewood residents. Ms . Guinther asked about alternatives that are being considered . Mr. Flaherty noted that sales tax is the largest revenue source for the City , and one focus for improvement is to revitalize Broadway to encourage location of additional businesses. Improvement of housing in the City is also a goal. Mr. Flaherty pointed out that Englewood is land-locked, and cannot expand the tax base area-wise, so any revenue enhancement must come through redevelopment. Mr. Panetta stated that he has spoken with several business people, and their questions are "what 's in this for us". Mr. Panetta stated the business community "shares the pain" of the City. How many other businesses will look at enactment of the OPT negatively, and refuse to locate in Englewood, or choose to relocate from Englewood. Mr. Panetta asked what services may be cut if the OPT is not enacted. Maybe there should be a proposal placed on the ballot wherein the residents and businesses share the tax burden. He felt that more information is needed on the H:\GRO UP\BOARDS \ACE\Mi nute s\200 3\ 7-10-2003 .doc 4 • • • OPT -impact on businesses, services that may be reduced or eliminated, etc . The prevailing opinion is that "the business community has taken enough of a hit , and this is a difficult pill to swallow ." Also, the title of the proposal -Occupational "Privilege" Tax -does not sit well with the business community; the terminology or title of the proposal "leaves a lot to be desired." Mr. Schalk stated that he has attended several meetings and people are unhappy. He stated he is very unhappy with the way this has come before the ACE membership. Mr. Schalk echoed Ms. McDermott's comments on the need for the City to improve and increase marketing and promo- tion of existing businesses . Mr. Schalk further suggested elimination of the yearly parade, and put the $25,000 cost of that function into promotional efforts . He stated the concerts in the park don 't promote the City-they are nice for the residents, but don't attract non-residents to shop or dine in the City. Mr. Schalk urged efforts to improve marketing efforts and make the City an exciting place for business people to locate. Mr. Schalk stated that the City can do something that is great for the "community", but what will be done to assist the business people. Ms . Guinther discussed research that she has done regarding OPT in other jurisdictions. It serves only as a "band-aid" -not a "cure" for revenue problems. An OPT drives businesses to other communities that do not have a head-tax , and if the City of Englewood imposes such a tax on the community it "will defeat everything Bob Simpson has tried to do to get new businesses". Ms. Guinther reiterated that an OPT does not help in the long-run -employers won't expand or hire new people. Ms . Guinther cited problems experienced by cities such as Philadelphia -it is going broke -states where municipalities have imposed an OPT or head tax are Delaware, Pennsyl- vania , Arizona, and Colorado . Ms. Guinther asked what the long-term effect will be on the busi- ness community if the OPT is enacted. Ms . Guinther suggested that there must be alternative sources of revenues, and cited possible enactment of a grocery tax -other communities have such taxes. Mr. Flaherty cautioned against comparing taxation rates in Colorado to other states , or even community to community. Mr. Flaherty commented that Denver has a head-tax, has had some success with this revenue source , and generates several million dollars per year. Arvada can ex- pand their land base for new development -Englewood cannot do so. Englewood has consid- ered increasing the property tax mil levy -this step would affect both residential and commer- cial/industrial properties; however, the mil levy would have to be increased by seven to eight mils to meet the revenue needs . A food tax has been considered, and an estimate of only $200 ,000 would be generated. Mr. Flaherty stated that the cities in Colorado that are doing well are those able to expand the land base and attract new development. Mr. Flaherty stated that the budgets for the large departments cited by Ms. McDermott can be drastically cut, as she sug- gested ; however, business people and residents will have to understand the impact that such budget reductions will have on the quality of life enjoyed by the residents and businesses -snow removal may or may not be accomplished in a timely manner, street maintenance will suffer, rec- reational programs may be reduced or eliminated, and fire and police response may be slowed dramatically because of reduction of personnel to fight fires and uniformed officers on the street. Mr. Flaherty emphasized that this is a very difficult time for everyone concerned -the City can- not go bankrupt, and services must be provided. Mr . Flaherty pointed out that the OPT has not been approved by the Council , but we have to plan for the worst-case scenario . H:\G RO U P\BOARDS\ACE\Minutes\200 3\ 7-10 -2 003 .doc 5 • • • Mr. Panetta noted that the Englewood residents may realize that their property taxes may in- crease if the OPT is not approved, and thus vote accordingly if the OPT is on the November bal- lot. If this issue is on the ballot and is passed, then ACE has not adequately supported the busi- ness community. Mr. Schalk stated that "things should be happening now -begin cutting staff, and notify depart- ments to anticipate a given percentage cut in funds/personnel". The issue of impasse in negotia- tions with the Police and Fire unions regarding the zero salary increase in 2004 was again briefly noted . Mr. Flaherty addressed contractual obligations under existing union contracts. Mr. Flaherty stated there is no easy solution to this issue. The OPT will affect people who live or work in Englewood; it may impact businesses in terms of the way business is conducted or in the way land is used. Mr. Cook discussed the need to get the community behind the City, and suggested the use of volunteers in lieu of paid employees. He supported an improved promotional/marketing effort, and asked what it will take to get the entire community -business people and residents --in- volved in solving this problem. Mr. Rees agreed with Mr. Cook on the need for total community involvement. He asked how many people in Englewood are homeowners. Mr. Simpson esti- mated that 55 % of the residents are homeowners . Mr. Rees noted this figure may be high, and cited the Alexan development in CityCenter Englewood . If this proposal is placed on the ballot, it will allow a "transient" population to set policy for the City of Englewood . Discussion ensued. Ms. Dannemiller commented that a "service tax " on health services was considered, but City Council decided not to pursue that proposal. Council and staff considered other revenue generating options before deciding to pursue the OPT. Mr. Panetta noted that there were several business people in the audience , and asked if there were comments from them . Connie Sanchez , Glass Warehouse, stated that she felt there are understanding residents in Englewood, and they "might step up to the plate and help out". Ms. Sanchez stated that in her opinion , "Council wants to enact the OPT because a large number of Englewood business own- ers cannot vote on the issue , and the citizens would vote for it because they aren't educated." Ms. Sanchez took issue with Ms. Wolosyn's use of the terminology "concessions to businesses" in her earlier discussion with Mr. Schalk; Ms. Sanchez stated that this terminology is a "put down ", and she didn't appreciate it. Ms . Wolosyn stated that her use of the term was in no way intended as a "put down ", and apologized if Ms . Sanchez was offended. Ms. Sanchez then presented a two-page document from the Governmental Affairs Committee of the greater Englewood Chamber of Commerce, which document sets forth several "brainstorm- ing" ideas for increasing revenues and reducing expenditures. Bob Voth, Sir Speedy Printing, suggested that additional meetings with the business community may result in a workable solution . H :\GRO UP\BOARDS \ACE\M inut es\2 00 3\ 7-10-2003 .doc 6 • • • Mr. Vasilas discussed the need to increase the promotion of Englewood, and make increased ef- forts to welcome new businesses to the City. He cited efforts expended by Littleton to welcome new businesses. Mr. Vasilas also discussed benefits that are available to Englewood businesses, such as the Catalyst Program that provides financial assistance for improved facades, new sign- age, and other improvements. Mr. Vasilas reiterated that there are many good things in Engle- wood, but the City does not have a good public relations/promotional program. Ms. McDermott suggested that use be made of the banner over Broadway to welcome new busi- nesses. Mr. Panetta asked if Ms. Ackerly had anything to add . Ms. Ackerly stated that at the Govern- mental Affairs Committee meeting, it was clear the membership is opposed to enactment of the OPT. Mr. Panetta asked the pleasure of the ACE membership . Mr. Schalk stated that a message needs to be sent to the City Council regarding the OPT. Schalk moved: Cook seconded: The motion carried . The ACE membership does not support enactment of an Occupational Privilege Tax . VI. COM1\1ENTS AND EVENTS Mr. Panetta stated that the Economic Development Strategies issue will be continued to the Au- gust meeting. The meeting was declared adjourned . Gertrude G. Welty, Recording Se etary Attachment: Document from Governmental Affairs Committee of Greater Englewood Chamber of Commerce H:\GROUP\BOARDS\ACE\Minutes\2003\ 7 -10-2003 .doc 7 • Concerning the Head Tax: • • The Governmental Affairs Committee of the Greater Englewood Chamber of Commerce understands that the City of Englewood is in a financial crunch. We are more than willing to help the City with this problem. However, we strongly feel that whatever solution is implemented should be one that is fair and equitable! The proposed "Head Tax" is not fair and equitable! We would very much like to work with the City and the citizens to formulate ideas that would be more fair and equitable. ~ome possible brainstormed ideas might include the following: Tax services such as those provided by doctors, dentists, etc. Tax grocery sales as does Arvada Raise fees -for example at the Rec Center which has fees much lower than other communities Charge or find corporate sponsors for events such as concerts, the parade, Old Tyme Fair, etc. Find areas where surcharges could be implemented Cut services that are nonessential -for example, deeper cuts in budgets for departments such as Community Developnient rather than deep cuts in Safety Services Make use of the police force to set up speed traps, for example on Hampden/285 Look at possibly doing away with the security service at City Center and combining their duties with the per·son who writes tickets at City Center and/or having the police drive through there more often Impose a surcharge on criminal fines to offset the cost of providing police and the court system Increase the costs of fines Freeze salaries immediately instead of next y0ar The City should be run the same as any business. In order to balance its budget --lay off employees A fair tax would be one that is paid by everyone: residents and businesses The head tax is a bad tax that is unfairly levied, expensive to administer, and subject to abuse Has the City exhausted its ability to cut expenditures? • • • Other cities have found that employers have moved out of their cities where a Head Tax was imposed. Employers here have said that they can and will move out of Englewood Employees have also stated that they will seek employment elsewhere Do not dismiss small cuts since lots of small cuts can add up to large savings Be aware that sales tax revenue picked up last month. That trend may continue negating the need for the Head Tax. Also be aware that because many businesses have laid off a number of employees, your count of how many employees work in Englewood is most probably inaccurate IF the "Head Tax '' is put on the ballot, be sure t here is a Sunset Clause The Head Tax will cause a downward spiral in that businesses will lay off employees, businesses trying to hold on in today's economy will be forced out of business or out of Englewood which means that not only will the city lose the Head Tax from those businesses but will also lose ' sales tax as well. Does this make sense? Council keeps saying that businesses do not pay their fair share of the services in Englewood. Since sales tax from businesses makes up 66% of the City budget, how can they make such a statement? Englewood citizens who work in Englewood will be paying twice for services --once as a citizen and again as an employee The City needs to change its overall philosophy and aggressively work to attract and retain more businesses and customers to the community to increase sales tax revenue The City should encourage higher density for existing commerical areas. The City should plan for the future not just a "bandaid" now Overall, this city needs to become more "business friendly " - not less Whatever is considered to raise additional funds should be a proposal that is voted on and paid for by all -not just the businesses who already pay more than 65% of the City's budget through sales tax and who have no vote in this issue, Only by us all, including the citizens, shouldering this burden --only then can it be a fair and just solution.