MEMORANDUM

Form revised April 1, 2009

2010-2011 BUDGET LEGISLATION FISCAL NOTE

Department:

Contact Person/Phone:

DOF Analyst/Phone:

Seattle Center

Joan Moritz 684-7360

Tom Israel/684-7298

Amy Williams/233-2651

Legislation Title:

AN ORDINANCE relating to the Seattle Center Department; modifying the Director’s authority to negotiate, execute, and amend rental agreements; and amending Sections 17.16.010, 17.16.030, and 17.16.033 of the Seattle Municipal Code.

· Summary of the Legislation:

This legislation amends the Seattle Municipal Code (SMC) to authorize the Seattle Center Director to enter into non-event rental agreements for terms of not more than five years for facilities under the management of Seattle Center. Approval of this legislation will establish the Director’s authority to execute future agreements, and reinstate it retroactively, thereby correcting an inadvertent oversight dating back to December 1995. The legislation also extends the scope of the Director’s authority by replacing the specific term “office space rental agreements” with the more general term “rental agreements” and by authorizing such agreements for all non-event spaces instead of limiting it to specific facilities.

· Background: (Include brief description of the purpose and context of legislation and include record of previous legislation and funding history, if applicable):

Seattle Center generally seeks approval for long-term leases through individual legislation proposed to the Council. Authority for single events is delegated through a facility rates and fees ordinance that is typically submitted as part of the budget process through which the Council establishes parameters under which the Director may rent commercial facilities to promoters and other clientele. These mechanisms handle most rental agreements at Seattle Center’s major facilities, but there are a number of smaller spaces managed by the Center that clients may wish to use as office space, for storage, or for other miscellaneous purposes. Agreements for these spaces are negotiated by the Seattle Center Director and authorized through authority granted under SMC Section 17.16.030.

Language in SMC Section 17.16.030, which was codified in 1986, authorized the Seattle Center Director to enter into rental agreements for Seattle Center’s non-event facilities through December 31, 1995. Due to an inadvertent oversight, this language was never updated. The proposed legislation will remove the date limitation and reinstate the Director’s authority retroactively.

The Municipal Code also currently limits the Director to negotiate office space rental agreements in the Blue Spruce Building and Center House. The proposed legislation replaces the term “office space rental agreements” with the broader term “rental agreements,” and extends the scope of authority to any non-event space in Seattle Center-managed facilities. In addition, the proposed legislation adds language defining the length of agreements the Director may enter into without prior approval by City Council to no more than five years in length and provides for renewal of agreements for additional five-year terms.

While SMC Section 17.16.030 currently includes specific monetary rental rates, the proposed legislation substitute a general provision for “a rate which is commensurate with the quality of the space and prevailing market rates in the vicinity of Seattle Center.” This action will allow the Center to respond to a rapidly-changing, competitive marketplace when renting out its facilities.

· Please check one of the following:

____ This legislation does not have any financial implications. (Stop here and delete the remainder of this document prior to saving and printing.)

__X_ This legislation has financial implications. Please complete all relevant sections that follow.

Summary of Changes to Revenue Generated Specifically From This Legislation: For budget legislation that changes revenue (e.g., fees, taxes, etc.), please provide detail on each revenue-producing item that is being changed, when it was last changed, and how the item’s new overall cost compares with similar costs charged elsewhere in the region.

	Revenue Source	2010 Proposed	2011 Proposed
Seattle Center	Lease Revenue	$140,000*	$140,000*
Total Fees and Charges Resulting From Passage of This Ordinance		$140,000*	$140,000*

Notes: Funds listed in the above table do not represent new revenue to Seattle Center as this legislation simply corrects an inadvertent oversight and omission in the Seattle Municipal Code by reinstating the Director’s authority to execute non-event agreements. As a result, associated rental agreements are already in place with their revenues assumed in the Center’s 2010 Proposed Budget.

Anticipated Total Revenue from Entire Program, Including Changes Resulting From This Legislation:

Fund Name and Number	Revenue Source	Total 2010 Revenue	Total 2010 and 2011 Anticipated Revenue from Entire Program
Seattle Center Fund 11410	Lease Revenue	$140,000	$280,000
TOTAL		$140,000	$280,000

Notes: Seattle Center’s 2010 Proposed Budget includes revenue from leases authorized by this legislation.

· What is the financial cost of not implementing this legislation? (Estimate the costs to the City of not implementing the legislation, including estimated costs to maintain or expand an existing facility or the cost avoidance due to replacement of an existing facility, potential conflicts with regulatory requirements, or other potential costs if the legislation is not implemented)

Specific revenues associated with Seattle Center facilities would need to be obtained through other means or reductions in services.

· What are the possible alternatives to the legislation that could achieve the same or similar objectives? (Include any potential alternatives to the proposed legislation, such as reducing fee-supported activities, identifying outside funding sources for fee-supported activities, etc.)

Offsetting cuts in services could be made due to reductions in rental revenues.

· Is the legislation subject to public hearing requirements? No

· Other Issues (including long-term implications of the legislation):

Please list attachments to the fiscal note below: