IDB fees and chargebacks dominate council finance committee discussion Tuesday

Members of the Edmonds City Council Finance Committee, city staff and the downtown Business Improvement District discuss the IDB’s mission and finances during a remote meeting Tuesday night.

Whether the city should charge the downtown Edmonds Business Improvement District (BID) a fee for processing paperwork and providing other services became a point of contention during the Tuesday night meeting of the Edmonds City Council Finance Committee. Edmonds.

The topic was raised as part of a general discussion about the IDB, also known as the Edmonds Downtown Alliance, or ED! — that included how to address the more than $38,000 in back dues owed by member companies.

Noting the costs involved in monitoring and collecting those fee payments, along with other services the city provides, City Administrative Services Director Dave Turley suggested that the city charge a fee to the IDB, which ranges from $6,000 to $8,000 per year.

The BID was formed with the approval of the city council in early 2013 and includes an area in downtown Edmonds bounded on the north by Bell Street, on the east by Durbin Street, on the south by Homeland Drive, and on the west by Sunset Avenue South. and Railroad. Street.

The IDB operates with an annual budget of approximately $80,000 and all income comes from dues collected from members, currently $30 to $90 per quarter. Through these assessments, the IDB finances programs such as beautification, marketing, and parking.

How to enforce payment of those dues has become a constant topic during recent meetings of the council’s finance committee. While a task force was formed in January to develop policy, Turley noted that there are still questions. Among them: How to collect more than $38,000 in back fees owed by businesses, whether the city should continue to charge 12% interest on accounts that are past due, and whether it should continue to send businesses to collections when they fall behind?

Councilman Will Chen asked for background on why businesses don’t pay their dues. Rogue Boutique owner Kimberly Koenig, who serves as president of ED! board, replied that the reasons are two. “I think some businesses have had issues with COVID and I think some are choosing not to pay.”

As of Monday, 32 of the 400 IDB member companies are in default.

Koenig added that the number of people who choose not to pay is “not growing”, but it is the same business owners who have opposed the IDB from the beginning.

Councilwoman Diane Buckshnis noted that in 2019, the council decided not to approve a city proposal to suspend the business license of any downtown business delinquent on their payments to the IDB. The council’s inaction simply delayed the problem and it’s time to address it, she said.

“This dichotomy has existed for all these years (with respect to the IDB),” Buckshnis said. “That will be one of the most important problems that we have: determining that the establishment of the IDB was good and that everything was good.”

Historically, Turley said, the city has started sending IDB members to collections when they are six months behind on their dues, but hasn’t seen much of a return on that effort.

Responding to the question of what actions business improvement areas are taking in other communities to address non-payment of fees, Director of Community Services and Economic Development Todd Tatum said “some of them cancel, some accept that there is an amount that they are not going to pay, some send them to collections like us,” said Tatum. “It’s really just a policy issue of how much we accept into the system.”

As for the city’s proposal to charge ED! for administrative services, both Koenig and ED! Administrator Carrie Hulbert said she was concerned that the proposed fee would represent a large part of the organization’s budget and would force them to cut programming.

Tatum also shared an infographic that outlines what other cities are doing in terms of chargebacks to their business improvement area. The City of Spokane, with a budget of $1.2 million to $1.4 million, charges $8,000 annually but is also a member of the Business Improvement Area and pays dues; Everett, with a budget of $1 million, has no chargebacks; The City of Seattle does not charge for the University District and Pioneer Square business improvement areas.

Bottom line, Tatum said, “There are some chargebacks and … those chargebacks are generally low as a percentage of total revenue.”

The City of Poulsbo, with a budget for the business improvement area of ​​$80,000, charges $3,000. Koenig noted that “they (Poulsbo) really see the increased sales tax revenue and increased tourism and what we (businesses) bring into the city as a way to offset staff time and expense. , basically saying that the value of the marketing we are doing for our city center and the sales it generates compensate for what the city in partnership is helping us”.

But Turley rejected those claims, noting that the purpose of ED! “It is to benefit the microcenter. You are absolutely using the city’s resources and we are here to benefit the entire city,” Turley said. “And so you’re bringing in resources for a very small part of the city. It’s a bit unfair to say you’re helping the city, so we should be providing services to you for free.”

Turley also questioned the comparison of Edmonds with associations located in Seattle, where the city of Seattle probably has “200 accountants and can absorb the time it takes to manage something like this without even realizing it. I have like six (counters). These are really unfair comparisons as far as I’m concerned.”

While stating that he valued Turley’s opinion, Koenig reiterated the large percentage of the Edmonds IDB budget that would be affected by Edmonds’ proposed fee. He then asked “if there’s a number you could be more comfortable with other than $8,000, would that be a reasonable question?”

Buckshis then suggested that Turley and Tatum “might get together and determine a range” that would be acceptable to all.

Regarding the 12% charge on delinquent accounts, Council President Vivian Olson, who was part of the working group formed to discuss issues related to the IDB, explained that since the 12% is not capitalized annually, “it ended up being a really small amount,” especially when compared to late fees on other bills.

IDB-related topics will be discussed later when ED! presents its work plan to the city council on October 25.

During the Council’s Parks and Public Works Committee, councilmembers considered a variety of issues. Among them:

— A discussion of options for providing sufficient electrical power for the Civic Center Playfield. The Snohomish County PUD has applied for an easement to replace an existing pole-mounted transformer with a new pad-mounted transformer, but the easement may affect an easement for the Edmonds Boys and Girls Club, which plans to build a new facility on the property. Discussions about solutions will continue, Parks, Recreation and Human Services Director Angie Feser said.

– An update on the professional services agreements for the design/right-of-way phases for the next two phases of the Highway 99 Revitalization Project. Plans for the Highway 99 renovations have been in the works since the City Council of Edmonds approved a subarea plan for the freeway and surrounding neighborhoods in 2017. The changes are intended to address concerns about liveability and traffic and pedestrian safety on the portion of the freeway that runs through Edmonds. .

Transportation engineer Bertrand Hauss, right, second from bottom, reviews before-and-after photos of the center median installation during work on Highway 99’s stage 2.

The city is now working on Stage 2, which includes construction of a landscaped center median and dedicated left-turn lanes from Southwest 244th to 210th Streets, and is expected to be completed early next year. Stage 3 will involve the segment from SW 244 to 238 streets and Stage 4 will focus on SW 224 to 220 streets. Both stages will include capacity improvements as well as the addition of planter strips on both sides of the street, new sidewalk, new street/pedestrian lighting, improved stormwater management, specific utility replacements (water/sewer), possible overhead utility burial (could cost up to $11 million) and softscape treatments.

This graphic shows a cross section of Highway 99. The improvements that would be added in Stages 3 and 4, including new sidewalks and a strip of planters on both sides of the roadway.

The city issued a request for qualifications to select the design consultant for stages 3 and 4 and received a response from the SCJ Alliance. SJC, which also worked on the design phase of the Stage 2 Highway 99 project, was selected for the job. The city is still working with SCJ on a cost estimate for the project and will share it with the council when it becomes available.

– Consideration of a parking agreement between the Port of Edmonds and the City of Edmonds related to last year’s installation of the tsunami warning siren at Beach Place. The agreement, which will be included in next week’s consent agenda, clarifies that the city is responsible for providing power to the siren and replacing the batteries.

– A report from Jon Greninger, Snohomish County Solid Waste Superintendent, on the county’s Comprehensive Hazardous and Solid Waste Management Plan. Greninger noted that the plan still needs to be approved by the Snohomish County Council and must also be reviewed by the state Department of Ecology. It includes technical reports that cover, among other topics, planning for climate change and sustainability, waste prevention, recycling and waste collection. The committee agreed to place a resolution to adopt the county plan on next week’s consent agenda. However, the councilmen agreed, in consultation with the new Director of Public Works, Oscar Antillon, that it would be a good idea for Greninger in the future to provide an educational presentation to the public about the county’s solid waste management efforts.

– Review of a contract addendum for the Driftwood Players lease at the Wade James Theater. Antillon noted that the lease, in place since 2017, expires at the end of the month and the Driftwood Players wanted to renew it for another five years. Although Edmonds does not charge the nonprofit theater company rent for using the theater, the city is responsible for maintaining the building’s exterior, grounds, and parking lot. After discussing what would happen if the Driftwood Players decided to sublease the facility to another tenant, committee members Neil Tibbott and Dave Teitzel requested that language be added stating that any profit resulting from such a sublease would be split 50/50 with the city.

— By Teresa Wippel

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