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Page 1 of 5 Ogden City Council Meeting: August 22, 2017 UNION STATION – FISCAL YEAR 2018 BUDGET AND ORDINANCE AMENDMENTS Actions: 1. Adopt/Not Adopt Ordinance 2017-___ Budget amendment for Union Station operating budget 2. Adopt/Not Adopt Ordinance 2017-___ Ordinance amendment for Union Station to operate within CED Executive Summary The Administration is proposing that the city dissolve its existing agreement with Union Station Foundation and reassume internal management of Union Station. The proposal includes having Union Station housed as a division within the city’s Community and Economic Development (CED) department, and appropriating $567,000 to Union Station’s annual operating budget. Background August 8, 2017 - Council Work Session A work session was held to receive an initial overview of the proposal. The Administration described that this proposal originated at the request of Union Station Foundation. The Administration is working closely with the foundation to coordinate a transition and is still navigating various parts of this process, including options to maintain the 13 full-time and part- time Union Station employees and possible opportunities to purchase the land for Union Station. The Administration described it is now undergoing a 90-day assessment to meet with the foundation and current employees and review infrastructure needs and transitions for Union Station. The Administration anticipates bringing back additional items for Council consideration relative to setting a fee schedule, defining a staffing structure and clarifying grant funding. The Administration is currently looking to address general facility maintenance and upkeep, functional needs, such as electrical and plumbing, and exterior and interior improvements. ---PAGE BREAK--- Page 2 of 5 Ogden City Council Meeting: August 22, 2017 The Administration is recommending that CED is the best place to house Union Station due to its involvement with redevelopment efforts and also because of the potential to further involve city arts and events staff in efforts with Union Station. The foundation will continue to serve as a resource for the museums and provide information regarding effective museum operations. There are also efforts being made to again secure a restaurant lease within the facility. There is no current recommendation to reform a city committee for Union Station, but there is discussion to involve the Union Station Foundation Board, Downtown Alliance and Ogden Arts Committee to advise this effort. January 1, 1976 Union Pacific Railroad Company and Southern Pacific Transportation Company donated the Union Station depot, annex and buildings to Ogden City, with underlying land ownership retained by the railroad companies. The initial term of this agreement is 50 years, expiring January 1, 2026, with options to negotiate an extension. July 1, 2003 For several years, Union Station operated as a division of the city’s Public Services Department. Staffing for the station included six full-time positions (a manager, museum coordinator, three maintenance workers and a senior office assistant), along with funding for part-time support. The annual operating budget for FY2004 was $650,744. July 1, 2004 The city signed an operating and lease agreement with Union Station Foundation, a non-profit organization formed to protect and support Union Station. The city turned over the operation, management and development of Union Station to the foundation with an intent to preserve, develop and enhance Union Station, along with all of its associated museums, collections, artifacts and surrounding grounds. This was a 10-year agreement extending to June 30, 2014. ---PAGE BREAK--- Page 3 of 5 Ogden City Council Meeting: August 22, 2017 During the first five years of the agreement, the city paid $50,000 to the foundation annually. As part of the ongoing agreement, all revenue (rentals, fees, admissions, etc.), donations or other raised funds were provided to the foundation for Union Station. The foundation was also given sole authority to set admission prices, lease rates and room rental fees, while also being responsible for all expenses, costs and losses. The foundation also retained the ability to request additional funding from the city for significant capital improvement projects. During this agreement, the city funded various capital projects, including: boiler replacement, roof and window repairs and asphalt replacement. July 1, 2015 - Current The city and foundation began operating under the 2004 agreement on a month-to-month basis. On December, 28, 2016, a new lease and operating agreement was signed that extended to June 30, 2018. Proposal The Administration has determined, through coordinating with the foundation, that it is best to terminate the existing lease and operating agreement. These changes are being recommended as the facility is currently in need of major repair and renovation. Upon the city reassuming management and operation of Union Station, the Administration has expressed an intent to maximize internal efficiencies and cost saving measures to eventually operate Union Station as a self-sustained entity. Ordinance The Administration is proposing an ordinance outlining changes to Ogden Municipal Code § 2-4-13 and 2-4-14, to transfer supervision and maintenance responsibilities of Union Station from the Public Services department to the Community and Economic Development (CED) department. Budget Amendment The Administration is requesting that the Council approve a Fiscal Year 2018 budget amendment to appropriate $567,000 into the CED department budget for the management and operation costs of Union Station. ---PAGE BREAK--- Page 4 of 5 Ogden City Council Meeting: August 22, 2017 This budget amendment takes into account prior operational costs, and incorporates anticipated revenue and other funds originally designated for Union Station utilities. This proposed amount funds two full-time positions (a manager and assistant to the manager) and allocates funding for part-time support as well. Summary of Proposed Budget Amendment Account Revenue Expenditures Community & Economic Development Room bookings $150,000 Lease revenue $ 27,000 Admissions $ 40,000 Fund balance $350,000 Full-time wages and benefits $145,000 Part-time wages $ 75,000 Office supplies $ 10,000 Building and gallery supplies $ 65,000 Utilities $ 25,000 Contracted services $ 75,000 Insurances $ 50,000 Building repair and maintenance $176,000 Non-Departmental Union Station utilities 54,000) Total Appropriations $567,000 $567,000 Further Considerations This budget is being proposed based on prior expenses and revenues. Staffing levels, program revenues and expenditures, and ongoing funding costs for Union Station are not fully known at this time. The Administration anticipates that over the next several months additional actions will be brought to the Council, including: fee schedules, staffing documents and appropriation of grant funds. Attachments 1. Administrative Transmittal – Budget amendment 2. Administrative Transmittal – Ordinance to transfer Union Station administration to CED 3. 2016 agreement with Union Station Foundation ---PAGE BREAK--- Page 5 of 5 Ogden City Council Meeting: August 22, 2017 Administrative Memos Prepared by: Administrative Contacts: Lisa Stout, Comptroller, [PHONE REDACTED] Brandon Cooper, CED Deputy Director, [PHONE REDACTED] Bob Geier, Supervisor, [PHONE REDACTED] Mara Brown, Chief Deputy City Attorney, [PHONE REDACTED] Council Staff Contact: Amy Sue Mabey, (801)629-8629 ---PAGE BREAK--- ---PAGE BREAK--- This budget is being established using $353,000 in general fund balance. Currently there is sufficient fund balance to appropriate this amount for use in funding Union Station expenditures for FY18. Staffing levels, program revenues and expenditures and ongoing funding costs for Union Station or not fully known at this time. The City’s legal office is currently working to revise the agreement with the Foundation to outline their ongoing role and participation at Union Station. The City’s human resources office is currently working with the interim manager to determine staffing levels, ranges and titles. The City’s finance office will begin working with the interim manager to determine what grants have been awarded to the Foundation and how these grants can be used going forward. This budget is being proposed based on historic expenses and revenues in an effort to allow the City to take over operations. It is intended that the City will formalize fee schedules and staffing documents over the next several months. As these decisions are investigated and made, the City Administration will return to seek Council approval. Ultimately the goal is to make Union Station a self‐sustaining operation. There is a risk the City will need to fund an ongoing loss at the Union Station until that objective can be reached. All of these appropriations are outlined in greater detail in the attached Summary Appropriation Schedule. Background Council action is required for appropriation. Proposal Review and adopt ordinance. Fiscal Impact An increase to the City Budget of $567,000. ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK---