Rice.

We should play a game show called The Prices Right.

I think if you're flashing on there, you're we flashing uh we are flashing.

Good afternoon, everyone, and welcome to the City Council Finance Committee for the City of Norman, Thursday, October 16th, starting just after 4 p.m.

Thank you to everyone in attendance and everyone who may be watching online.

We'll go ahead and get into our agenda items.

Number one is a discussion regarding trust structures, including the creation of a parking authority trust.

Okay.

So it's been um a couple of years at least since we talked about this, I think, and maybe even this committee, maybe another committee.

Might have been yours.

Um I wanted to talk a little bit about public trusts generally since we have some new faces, and then talk more specifically about the parking uh trust.

So why do we create public trusts?

Um they exist as legal entities separate and apart from the city that protects the city from liability for the trust activity, the trust activity or the trust is protected from liability for city activity, and that includes financial liability as well.

Um that's why we have, for instance, the hospital operating in a separate authority so that the city and the general fund are not at risk for hospital activities and and vice versa.

Um they exist for the public benefit as a public trust.

You have to act uh on behalf and in furtherance of a public function and a beneficiary.

Uh, you may issue debt.

Uh, there's a constitutional provision that prohibits the city from issuing long-term obligations like debt, and so we use our trust to issue debt oftentimes uh so that we can commit to longer term uh financial obligations.

They can they can uh sell property, exercise the power of an imminent domain, and you'll see I have an indenture I'll pass out in a little bit.

Um the powers that a public trust can engage in are really broad, and what we typically put in these indentures are everything that the statute allows uh a trust to do so that if they ever wanted to do something uh in accordance with the purpose of the trust, they have the authority to do that in the trust indenture.

Um the public trusts operate under the authority of a board of trustees that creates a fiduciary relationship.

The trustees hold the title to the property and act as authorized in relation to the property for the benefit of the beneficiary.

Um they have to file annual financial reports each year with the beneficiary, audits uh with the state auditor, they engage in competitive bidding just like the city would, and they have to comply with the open meeting and open records act just like the city does.

Where the beneficiary comes into play is when they want to issue debt.

And we saw this with Norman Regionals big uh I can't remember the name.

Fire Health, thank you.

I was wanting to say Vision Norman, but that's a different plan.

Um Spire Health a few years ago, they had to come to the city, and the city as the beneficiary had to approve the debt before it could be issued, and and that requires two-thirds approval, so that always gives the beneficiary some control and some some uh influence over that.

But other than that, it operates completely separately from the city.

Uh when we create a public trust, you uh consider a trust indenture, and that's really just sort of like the charter for the trust authority.

Um the council would adopt a resolution approving the trust indenture and accepting the beneficial interest in the trust as the beneficiary.

That also requires two-thirds approval, and then we record the documents with the county, the secretary of state, and uh file a notice with the state auditor's office so they know to expect audits.

If I make that for one thing about that two-thirds approval is whenever you're whenever we're issuing revenue bond debt, that's when you see me getting really nervous about all the council members are here because two-thirds for us is six votes, but in order to waive competitive bidding to issue the debt on a negotiated basis, you have to have three-fourths majority, which for us is seven votes, and it's seven votes, it doesn't matter how many are here.

So that's why you know if there's something on the agenda about issuing revenue bonds, we're gonna pick everybody here.

Um so we have quite a few public trusts as you all know, and the way we agendize it uh for your meetings, you're acting in as trustees of these trusts, except for the hospital, and uh this as a city council, so that items that come before you might be an NUA item, a Norman Utilities Authority item, City of Norman item, uh tax increment finance authority item, all in one meeting.

Uh we have five trusts right now that operate.

Only one is governed differently from the others.

Uh the Norman Municipal Authority, we really use to issue debt uh revenue bonds.

It's used for sanitation and golf course operations.

Uh Norman Utilities Authority is water and sewer projects.

Uh the hospital authority is obviously the hospital system.

Uh the tax increment finance authority is any TIFF revenues or TIFF projects funded with TIFF revenues, and then the Norman Economic Development Authority is one we created back in uh 20, I want to say 14.

Um I think that's right, um, to do citywide economic development projects.

At that time we discussed a permanent funding source that's never really gotten off the ground, but it's still out there and could be available for use if needed.

Um each trust is has its own uh system of governance.

Uh ours are all very similar except for the hospital authority.

They are the mayor appoints the board members with the consent of council, and those operations thankfully are managed entirely by the board for the hospital.

And so you'll see people on that board who are very specialized in hospital operations, financial issues, things like that, uh, because that is such a specialized area.

As a beneficiary, we receive those annual financial reports.

We've, as I said, approve issuance of debt and things like that.

Um, with our other trusts, you all serve as the trustees, and the city manager is the general general manager, the city attorneys, general counsel, city clerk is your board secretary.

So we kind of duplicate everyone's roles uh with most of our trust.

All of our trusts right now, the city is the sole beneficiary.

So if we need to issue debt, the city only needs to, or the trust only needs to get action uh taken by by the city.

Um and they follow the same policies that we use for other things, contracts that go to the trustees for approval, uh competitive bidding, all of those things.

And I want to point out though that what's interesting about this setup is when you put on your, I'm gonna use Anthony's terminology here.

When you put on your Norman Utilities Authority hat, you're no longer thinking about what's the best for the city.

You're thinking about what's best for this business that we're running this utilities authority.

And so you have a duty of care as a council member, but you have a whole separate duty of care as a trustee.

And so that's really uh important when you are acting as a trustee for these um trusts.

Um they they all have different uh revenue sources for NMA, the municipal authority.

We use revenues from the golf course and sanitation operations, uh, revenue bond debt issuances that are backed by dedicated revenue sources.

We've used this for public safety sales tax uh debt and Norman forward related debt.

And room tax, yeah.

Um, NUA is the water and sewer ratepayers, hospital revenues for the hospital authority, incremental tax revenues for the TIFF Authority, and then as I said before, for the economic development authority, that we don't really have an identified funding source, but it's still there if we need to do something long term.

So we started talking about a parking trust a long time ago.

Even before before 2014, I mean we did our first parking study, I think in 2003.

Um, but in 2014, the economic development advisory board was created and appointed by council, and they gave them a task list to start with, one of those being come up with some financing mechanisms for some campus corner and downtown parking solutions.

Uh so we took that 2003 parking study, and that was updated and sort of redone by Jacobs Engineering in 2015-2016 with EDAB involved in review throughout, and then the county participating.

Then the county uh hired Kimley Horn to do another parking study in 2017, and the city participated in that, and we accepted that parking study at the end of 2018.

EDAB, uh the Economic Development Advisory Board, as a result of all those efforts, looked at creating a multi-jurisdictional parking authority that would be co-managed by county and city appointees to implement the plan and better manage parking.

At that time, the county was really interested in doing its own parking garage, and so there was this idea that if we put all of these parking structures and resources into one pot, we might be a little more effective at how we can manage it.

Um and EDAP supported that unanimously, but it never really got off the ground.

Um and I don't think that parking garage is the same priority for the current commissioners as it was back in 2015.

Uh, they've had almost complete turnover.

So it's never really gotten off the ground.

We talked about it again probably two years ago, I think, uh, in terms of a parking and potentially transit authority uh when we took on transit and and had an adopted sales tax pass for that, those operations.

We we talked a little bit about it then.

Um so things to consider if we're talking about a possible parking trust.

We want to think about what our purpose is.

Are we going to just plan, develop and administer parking facilities?

Are we going to manage parking lots on street, off-street, um metered parking, things like that?

Um obviously we're going to fund actions related to public parking throughout Norman.

I would recommend, and I'll go ahead and pass these around.

This is the parking authority trust.

Uh thank you.

So make that broad so that you have some flexibility for the different projects that may come up because you really want to think long term when you create a trust of what could be possible.

And then you have to think about uh we need to decide whether we want to include transit or not.

This is the draft I have that doesn't include transit.

We also have a draft that does governance.

Would that be council as trustees or something different?

And then what revenues and expenses would be included within the trust.

Oklahoma City has uh a similar trust called the Central Oklahoma Transportation and Parking Authority.

That was real foreign to us back in 2014.

Now we we all know it well because of NBARC and our relationship with them.

Uh, this is the trust that operates NBAC and uh their parking system within Oklahoma City.

You can see their purpose there, and it says Central Oklahoma and the indenture is written to allow for a regional approach, but they've historically limited their operations to Oklahoma City boundaries only, unless they're contracting for a service, and that's the situation we have with NBARC.

Um and of course, only Oklahoma City is the beneficiary of that trust.

So even if they had a regional approach, uh it wouldn't necessarily mean the city has a say without becoming a beneficiary of the trust.

Uh Matt.

Just quick.

So revenues that we pay into NBARC, do they go to Copta?

Yes.

Okay.

So our local tax revenues go into central Oklahoma.

Yeah.

Okay.

And that we did have a conversation with COTPA regarding uh the development of parking structures in Norman recently, and they recognize their system is designed to do exactly that.

They've got multiple parking structures in operation and revenue flowing through it.

Uh, and they said with the passage of the Oklahoma City Thunder uh new facility uh sales tax that all of their bonding capacity is consumed in building or probably be their biggest parking structure yet.

So they're they were willing, they just didn't have capacity.

And uh now we're staring at at demands coming in for vertical parking, and we we could wait um at council's retreat.

There was interest in moving uh some trusts forward.

Yeah, so on their board of trustees, Oklahoma City does it differently from how the city does it.

Uh they I don't know that they have a single trust where the counts all of council serves as the trustees.

Uh they this is a common approach for them where they'll have three members uh serve on the trust as trustees based on their position.

So whoever's serving as mayor, city manager, and finance director uh in this case, and then five trustees that are appointed by the mayor and approved by council.

In this case, because it is the central Oklahoma authority, one must live outside of Oklahoma City.

Uh, the administrator, much like ours though, is a shared role.

So the administrator of COPA is appointed by the city manager and approved by the trustees, but they also serve as a city employee as the director of Oklahoma City's parking and transit department.

Uh City of Oklahoma City is the sole beneficiary, as I said.

Tulsa also has a parking authority that's been around a long time, similar uh purpose.

And um even a more different uh setup of trustees.

So they have one mayor designee and then four mayoral appointees with council's approval.

They operate only the off-street parking garages and lots, and any meters on street uh metered parking is managed by the city still.

So they've just kind of separated that up differently.

So when you look at what ours could include if we were to adopt a parking trust, these are the parking-related revenues that are in your FYE 26 budget.

It's about 30 $364,600 between the parking lot leases for Grace Street and ASPS ASP Avenue lot, uh the parking meter revenue, and then parking enforcement revenue.

I will say that I think in this year's budget, it's the first time that that we've started combining into one fund, the parking and the transit operations on the budgeting side.

It does not include enforcement uh revenue or expenses.

So that I wanted to give you that number, but make that note that currently that's not being allocated in the same way.

So parking tickets.

Right.

Right.

Um, if we include included transit in the trust, all of those public safety sales tax revenues would go into uh the parking trust, but it would still be accounted for separately because those are really restricted based on the sales tax that was adopted by the citizens.

They can only be spent on transit operations, then of course grants when whatever strings are attached to those.

That is one eighth percent sales tax, which is why we are able to offer free transit service to our community.

Yeah.

And so all of these are although accounted for in a separate fund, it is still part of the general fund currently.

The expenses unfortunately exceed the income right now or the revenue.

So we're at about 424,000 in annual expenses anticipated.

That includes parking meter, pay station equipment.

We we have to replace some of those uh facilities every so often, and so we've got some of those in the budget and uh maintenance at just under 80,000 a year.

We have our parking enforcement staff.

This doesn't include fuel or vehicles, just salaries and benefits is uh 200 and almost 67,000 a year.

And then this year um we have started allocating uh the staff time between transit and parking because they they're sharing some staff operationally, and so you see that as an expense for parking now, too.

Um obviously, if transits included, we'd be including uh any of those expenses, transit related expenses that are covered by the dedicated sales tax and FTA funding.

You will be talking, those of you who are on CPTC or just plan to attend, you'll be talking next week about updates to the parking management plans, which is going to include um some increases to meter and lease rates, which would help that the revenue uh get a more a little more close to meeting some of these expenses.

Um with the trust, any excess revenue that you have could be used for parking related projects.

And I know for years, going back to our studies, at least in 2015-2016, and I a need was identified for a garage potentially on campus corner or in the vicinity of it, and uh in downtown Norman.

And so as we look at how we can achieve that, you could use the parking trust to issue revenue bonds and the revenues within the trust that aren't dedicated to transit, you know, with the strings attached from the FTA or the sales tax, could be pledged for debt financing.

Um, but we would probably have to structure that debt a little creatively so to minimize payments on the front end because we really need the revenues from the garage to help support that debt.

And so we'd want to do something that's you know, interest only or capitalized interest in the beginning until it's in operation, and then look at uh pledging those other revenues from the garage back to the debt.

Um if this concept is in alignment with council's ideas, during goals and objectives, obviously, but the establishment of the trust is step one.

We did have recent conversation with uh county commissioners about it, you know, is this gonna be a Cleveland county?

Are you in or are you out?

And we are definitely more nimble as a Norman city trust with council members participating as those trustees.

You're just able to make decisions and you don't have to wait for anybody else.

So step two for us would be to bring you what that financing uh would look like.

We've also been in conversation with uh Mr.

David Floyd and some of his associates that all they do is parking structures so they could show you what that financing would look like.

Councilmember Creek.

Yes, and to your point about having to get some money on the front end if there let's say it's the um ASP Street parking lot plus some land, and there are developers who are willing to like pre-lease.

Um does that help us like with getting across the line?

We really think it would, and I that's actually my next bullet up here is those long-term parking leases for majority of the parking spaces might be needed to help back the debt issuance because we don't have parking garages with approving history in Norman.

Uh, it would be really good to have uh long-term leases for a lot of these spaces to take to a bank and say we've got guaranteed revenue that can come in.

Um we do think that would be helpful.

It's important, I think, to understand though that even if they're signing those leases, I would suspect that they're not gonna start to pay for parking that doesn't exist yet.

So yes, we could sell a bank that yeah, we have these long-term leases, but you're still going to have to borrow some money up front to build the garage.

And so you're increasing the amount of debt.

That's what's capitalized interest rate.

So say that we were able to structure it where we had interest only payments for five years or something like that.

Would that the funds from that come out of the general fund to cover the interest only payments monthly, or would we be using the revenue from that would be a decision you all would have to make.

Um I will say historically we have not used the the general fund.

Um I want to say this the right way.

Uh we have we have not um pledged the general fund towards any debt of a trust authority because that's a risk we cannot take.

But there may be a situation if you identify funding within the general fund that you could dedicate towards towards that a finite amount, and that might be something that would work.

We'd need more information on what the financing looks like.

I think one of the reasons we found Shannon was because of her uh previous life in ACOC's equivalent down in uh Dallas Fort Worth.

The ability to um ultimately include our transit operation in the parking and transit trust provides uh more avenues for funding in the world of public transit.

Uh when we talk about things like transit-oriented development, the the transportation side and the parking side go hand in hand to say this is park and ride for Amtrak, and it opens up doors for grant funding and may reduce our or our need to borrow if we if we'll take grants all day long.

So um there will be some strategy we'll bring you in the ultimate uh action to adopt and formalize the trust and we'll show you the pros and cons of what our recommendation is.

But we it there's I think that's why you say in Oklahoma City, it's transportation and parking.

There's there's advantages to doing it that way.

Definitely member Peacock had a question.

Uh, it was more just a comment.

Um that last point I think is what makes made me so interested in this topic today.

Because just you know, in my work as professional, um, I have gathered that there's probably a hundred million dollars worth of construction that is on the precipice, if not for a parking solution.

So, like these projects would be coming online today if they were able to park this.

So they're all housing projects.

We desperately need housing, housing generates sales tax, housing generates people spending money here, and so I would love to see this entire idea, this entire concept fast-tracked, figure out how we can get the trust off the ground and start planning the first garage.

And um I have preferences where that would be, but I um each one would stand the the financing would be financially independent of others, although once in the fund, all of a sudden the available revenue grows and it makes the first one's a little bigger hurdle, the second one city can do them all day long.

Now they've got a wonderful track record.

So uh there is really not a reason other than the construction capacity to say you couldn't have two uh moving simultaneously.

They would have different revenue profiles, um, different designs, different capacities.

Um what we'll do if council says this is the track we're on, um, staff will begin to meet with uh property owners around the two sites identified initially at Aspen, Peters and Gray to start verifying interest in long-term, how many spaces could we count on to that or you to that question?

I think if you had a thousand spaces in a parking garage today, you could lease them today.

All of them that's just with today's demand, not including any future development.

Those are prop projects that land is acquired, plans are already developed, they just are not building them because they don't see if I build 100 units on a property and I can only park 20 of them.

Where you can put the other 80.

And I know we don't have parking requirements in Norman, and that's not really what we're referring to.

It's just the ability of being able to provide every person, every bed a parking space.

The market knows that.

Absolutely.

Totally marketing.

The market is telling us we need to build parking garages.

Yeah, uh housing is a need, but also there are businesses that would like places for their employees, and some businesses might actually rehab an old building and move into it if it had parking available.

Agreed.

So yeah, I think in the con all the conversations we've had about density, this is definitely a missing piece that we have.

Um I really want to see the pros and cons of it just being parking in it or it including transportation, because it seems like I don't know, maybe I have to look at Tuls more, I guess, to see.

Um but I kind of envision this, you know, say Norman is done with parking garages down the road, and um we still have this trust going, we're not dissolving it.

Maybe we can incentivize developers to build more vertically with the parking garages.

We could help put on their structures uh or mixed-use retail at the bottom of the parking structure and housing at the top.

We've seen that in a lot of cities that we've gone to.

Um, and then I would like to go ahead and explore a third site and uh that the young family athletic center.

I think that that is that needs a parking garage really bad right away, and it will turn over a lot, maybe a lot more than the other ones.

Uh that that the connectivity, the inclusion of um transit, the the whole federal transportation authority, the FTA dollar access.

Um what we're talking about is uh very common in cities across the country, and they do access FTA dollars, and that's the primary plus for us is just a whole new portfolio of grant funds to go pursue because uh related but sort of a different topic.

Um we had talked about the idea of parking maximums a few years back, and I'd really like to revisit that because the whole my whole idea behind that was that you put a you put essentially a soft cap.

We say you can only build X amount of parking spaces, but if you want to go over that, you've got to pay a luxury fee.

And to me, a luxury fee would go very much into this as a revenue source.

And so again, as to your point, disincentivizing surface parking lots, but incentivizing vertical structured parking and using almost the carrot as a stick.

So stick with the carrot.

Mayor Holman.

Yeah, so the cost per space to so like maybe on campus corner or downtown, it would be a taller, have more levels to it, but it like the Wi-Fi could just be one deck that's above the parking that's already there, maybe two, but is it that much more expensive to do one deck versus having to do five?

It really is.

It's you know because regardless of how many stories you have to build the footings and the foundation to to carry a bunch of cars and move them.

So it really isn't a question of three stories versus two, or you know, it's it's vertical.

It's vertical scales.

Yeah, at the hospital after two, the price even down after two.

And it's already fire sprinkled and you've already got all the trades involved.

Most of it's pre-fab on site, and then they're kind of yeah, build the erector site.

So like McAllister Oklahoma has new parking garages in their downtown.

Town of 20,000 people.

And they're not like Grotage Mahals, they're very they're clearly built in the 80s, it looks like or 70s, even.

But they're like one deck, so it's a service parking lot with a roof where they're parking on top of it.

And so um, I've always felt like if McAllister, Oklahoma can have the parking garages.

How can Norman not have a single one?

Um that's not a private development or outside of OU.

So uh, but yeah, I'm lean more towards including transit and parking together, even if our transit tax is only for transit, maybe that revenue helps it just being there on paper.

There's revenue we get from transit dedicated, in addition to parking uh revenue that we get.

And like you're saying, there's I mean, there's a four-story commercial building downtown on Main Street that has never had a tenant.

It would if they could lease 50 parking spots right now.

Um, but you know, we we could lease out all of the Gray Street parking lot right now, I'm pretty sure if we wanted to, but then we'd have a public parking lot that has no public spaces on the so I don't think that would go over very well.

But um, but I I do think we are we I don't think we want to see more surface parking lots or buildings be torn down to add more parking downtown or campus corner, but if we can get the parking structures in there, and then we could start getting the vertical development we would want to see.

Well, it's a council member Engels point, you know, when you go to most big cities, the parking garage is not just parking garage, it's ground floor commercial, then four floors parking, then four floors of residential, so it's the whole ecosystem.

Um you start dropping those in places, then you've got some anchors and some things that really drive development investment.

So I guess that was our questions portion.

So uh what we'll do is we'll uh coordinate with uh Mr.

Floyd and his parking structure folks to bring you those concepts as we finalize the indenture document.

We'll probably do uh study session, followed by the adoption of the resolution enacting that trust study session just to see the final document, make sure it it meets all of your daughter dives and cross T's, and uh we'll be working simultaneously on what the structure of the financing looks like.

We'll have an idea about how many uh spaces are in demand before we make our first call to the bone market.

Councilman Government.

Last thing I'll say on this is that we've got two intersecting timelines.

One, the RTA and our ability to provide parking ride with the RTA.

So if the RTA is online before we have a public parking garage downtown, I think we've missed a huge opportunity.

So are there any thoughts on governance?

Would you want to do it like we we do most of other trusts where council serves as trustees or okay?

So this has that exact structure.

Really, the the one that combines parking and transit, it's it's almost identical with just some additional purposes related to transit.

Um if you'll take a look at that and let me know if you have any questions, and we'll bring it back to last year also to a study session.

Well, thank you.

Okay, no further questions.

We'll move on to item two, which is a discussion regarding a potential amendment to the guest room tax ordinance to include recreational vehicle parks.

Again, thank you for scheduling them both on the same meeting.

Um so just for the history here, we've had our our uh room tax since uh 1980, it was approved by the voters and then implemented in July of that year.

Our original ballot question imposed an excise tax of four percent on rents received from the occupancy of hotel rooms, set up the whole structure for that collection of that tax, payment of that tax, exemptions and things like that.

Uh it was all about the four percent on the occupancy of hotel rooms.

Um and in the ordinance that was adopted by council and and part of this was uh limited the use of those receipts for encouraging promoting and fostering the convention and tourism development of the city.

It also explicitly says uses in park development and in promotion of arts and humanities encourage promote and foster the convention and tourism development.

So those are also purposes uh of the for the revenues of this uh from this tax.

The original proposal in 1980 was two percent would go to the chamber of commerce for the promotion of conventional tourism, one percent of the tax would be for arts and humanities, and one for capital expenditures and administration related to parks.

Um we the council at that time adopted an initial contract with the chamber.

This was before we had a visit Norman or uh Norman Convention Visitors Bureau, and so the chamber administered that tax uh for a number of years uh for the promotion of convention and tourism.

Um our contract our code also requires you to contract with someone for that service.

Uh so it was never envisioned to be done in-house that we would contract with a not-for-profit to administer those funds for that to uh for that purpose in 1989.

The Norman Arts and Humanities Council, which is now the Norman Arts Council, uh, was first contracted with for 25% of those uh remaining room tax revenues and those initial contracts.

We took a three percent uh cut off the top to cover the administration of the tax, and then the remainder of it was split between uh the Norman Arts Council later with uh visit Norman who received 50% of the remaining room tax revenues, and then 25 the remaining 25 percent uh was allocated to the parks department.

We've only increased it twice.

Uh 2013 it went from four to five percent, and then in 2023 we increased it from five to eight percent.

And 2023 that really changed the allocation uh because the reason for the increase was to fund the sports commission part of visit Norman.

And so we came to council back then once it passed and and got uh revised contracts adopted by council.

We increased the amount to cover the city's administrative costs to four percent, and so up the remaining 96%.

You see some funky percentages in here, but uh this is just kind of how ended up initially they wanted to take percentages at the additional three percent.

We'd had to kind of do some math to work out what that means for the remaining 96% when you kind of bring that down to the full 8% of the tax.

Uh so it's 59.375% allocated to visit Norman of that a little less than 16%.

It's dedicated to the promotion of sports tourism and improvements to Norman Sports Facilities specifically.

Norman Arts Council still gets 25%, and the remainder, which is 15.6%, is allocated to the parks department.

It's levied upon the gross proceeds or gross receipts derived from all rent for every occupancy of a room or rooms in a hotel and Norman enlisted rent is less than three dollars a day.

I don't know where we might have rent less than three dollars a day at this point.

Um, but certainly wouldn't want to add anything on top of that.

You need something that cheap.

Uh, there are some exceptions.

So Norman residents do not pay this tax.

Uh federal, state, local, and tribal government, if it's paid for directly by the government or the tribal nation, they're exempt from this tax.

And then nonprofit organizations would pay directly by the organization.

And that was modified back in 2021 to include tribal governments and also to make sure it's not just you know, hey, I work for the city, I'm here for vacation, I don't have to pay.

We want it to be governmental events or nonprofit events uh that is necessitating the stay in order to exempt them from the tax.

Hotel is defined very broadly.

Building structures, trailers, other facilities where you can rent sleeping accommodations, includes hotels, tourist homes, houses, courts, motels, it goes on and on.

It covers a lot of things.

Uh, it does not include permanent resident facilities, which are uh rentals for more than 30 days that matches with our short-term rental ordinance.

It's not a short-term rental if it's more than 30 days either.

Mayor Home.

So does a university visiting basketball team playing OU and stays the night at Mbassy Suites.

Are they paying the visitor tax?

No, they're government and they're not employees of the government.

So is the university itself paying.

Technically speaking, like if the coach is an employee of the university, which sometimes they are, sometimes they aren't, and paying with a university credit card sort of thing, then the coach might be.

But because the players are not employees, they would not be.

Yeah, we think the athletic department and the school because they're separate entities that wouldn't benefit, right?

What about in the NIL area?

And I will tell you the employee.

That question has never come up.

Yeah, yeah, I'm just wondering, like, yeah, well uh who we got next week.

Whatever.

Uh they'll probably not stay in Norman, I assume.

But if they were staying in Norman at the embassy suites, the whole openness football team.

The university itself or the athletic department is the one renting the rooms out and paying the bill on them, not the players, but it's usually the athletic department, which usually is a separate entity.

It's usually and would be.

And federal or they don't receive any federal or state funding like the university does.

Mainly are we always trying to tell the hotels when in doubt collect the tax.

Okay.

And if someone wants to contest it, then they can.

Okay.

Okay, so assuming it probably might apply more to base or basketball and softball or other sports besides football, perhaps.

But since the smaller teams are more likely to probably stay in a hotel in Norman.

But uh, yeah, I was wondering, are we collecting the main point being are we collecting visitor tax from all the visiting sports teams that cover Norman?

That are university affiliated.

So when I read through the definition, you probably noticed it doesn't say anything about renting parking spaces for recreational vehicles.

So those are not currently included in the tax rate or the application of the room tax.

It would require an amendment to the code, section 12-502 to add uh a levy of eight percent upon spaces occupied by any recreational vehicle overnight in the city.

Um it would also require voter approval because it is an expansion of the tax.

And this this particular section was the ballot question.

Uh, so we would have to go to voters to get approval for that.

And I looked around and I was surprised that we we only have two RV parks.

I'm obviously not driving around in RV and Norman, I guess, looking for one, so it was surprising to me.

But they're both at uh governmental facilities, basically.

They have 270 spaces.

University properties generally going to be exempt from taxation, but this is a tax paid by the person renting this space.

And so we need to work with the university if this were to go through and make sure that that's getting collected and remitted correctly.

But I looked up to see how much it would cost to rent a space there for the old miss game.

This is without uh electric connection.

That's all that's left if you're interested in a space.

Uh from Friday, October 24th at noon through Sunday at noon, it's 300.

So to break that down for the room tax, 24 dollars would be the room tax per space rented, and then you could see the breakdown there for each of the um groups that receive some of that tax.

Uh if every space was rented for the week weekend, it would represent uh six six thousand four hundred and eighty in room tax revenue.

Um non-weekends, they rent them out for sixty-five dollars a night.

Uh so same example, but for two nights.

It's a ten dollar and forty cent room tax uh remittance, and then you see how it would be split between the various entities there.

We also have the Cleveland County Fairgrounds, which has 51 spaces.

Uh again, same issue, county properties generally going to be exempt from taxation, but this is paid by the person bringing the space, so we'd work with them to make sure that that's gonna be uh administered, collected and remitted to us.

Uh that's a $35 per night rental rate, and you can kind of see some of how that would be um broken down between the various entities.

The only other one I'm aware of is the Liberty Point RV Resort and Adventure Park.

I know they're undergoing some revisions to the PUD that'll come to you at some point uh in the near future.

So I don't know the timeline for that.

I pulled the preliminary plat and a site development plan, and I couldn't figure out they have RVs, cabins, um the lamping and some other things they provide.

I'm not sure how much of that is for recreational vehicles, and of course, there aren't any rates posted yet.

So I don't know what kind of revenue we'd be looking at there potentially, but it is a very large development with a lot of spaces if it moves forward.

So that that's the other uh location that we know of that that could be impacted if that project continues to move forward.

So I think that was it.

And it wasn't long ago when Airbnbs weren't part of our vernacular and the RBOs and all that kind of stuff.

And now we've got I'm trying to remember the last number Jeannie gave us, but there's a bunch of them, and it really is advantageous to help close the gap between the demand and the hotel rooms available in Norman.

It's new hotel projects are coming out of the ground.

Um, and this is just the next, I think, one of those spaces that helps helps us make up for our hotel room deficit.

Councilmember Dixon, I think you um I don't know if there's spots for them in Canadian shores over on Main Street or at the mobile home park at um over by Whittier on Brooks.

But um fun fact um I used to live for two years in college in a 32-foot fifth wheel travel trailer.

Um at the I don't remember the name of the park, but it's now where the Walmart is.

One point my address was 7A Street, and then it changed to a couple different ones, and it was 2601 Class and lot 7A.

But um and I drove a four torus, I couldn't even move the thing if I wanted to.

Um I think I don't know if these have spots, but if there's you know, somebody and I people are living in Fifth Wheels these days.

So I I would think maybe if it's gonna be you know longer than 30 days, kind of like with the actual hotel you know tax where an Airbnb doesn't qualify or I'm confusing myself as I'm talking, but would we do the same rate on somebody's RV that's there greater than 30 days or 60 or 90?

It's I think if it's considered uh longer, if it's longer than 30 days, it's considered to be a long-term rental and not a hotel, subject to not a hotel or in this case recreation vehicles subject to the tax.

That bears a question that was in my mind about okay.

So there's a distinction between RVs and mobile homes here, right?

Where there's a lot of mobile home parking.

That's not what this addresses, correct?

Right.

This is just RVs.

Um, I wanted to, and if you guys have some ideas, please tell me.

I started thinking about all these uh camper vans and uh sprinter vans that people convert and and does recreational vehicle really um cover all those, so we probably want to add a definition of recreational vehicle to the code just to make it clear what would it apply to, but we want to capture all of those that are being used for travel.

Um I played around with some language, you know, for sleeping vehicles that have sleeping accommodations in them, and then as I'm Googling, well, a lot of cars advertise their sleeping accommodations that are not recreational vehicles or not camper vans or things like that.

So like Scottsport tours.

Don't use the term transient lodging, I think, in some sections of the code because room tests.

Yeah, and in that definition of hotel, it's it's explicitly says it does not need permanent resident facilities over 30 days.

So we would want to include that in the uh recreational vehicle definition too.

Councilman Green.

Um heard from Norman Arts Council community and others um that they would support that.

Uh and one person I'm thinking of specifically with the round table was like, you need to get this on the ballot now.

So um, so yeah, I'm favorable to and I also like the idea of sussing out what a recreational vehicle is, and also to say that Norman residents are exempt from this.

So if you're long-term living in something that could be considered a recreational vehicle, it still doesn't apply to you.

And even um when we were discussing rates in the 2023 election, Oklahoma City, they said we're gonna watch you, we're gonna see how you guys do, and if you guys are successful, we're gonna raise ours.

Well then they raise theirs higher than ours.

I'm thinking, huh?

So I think they're I don't know if they're at nine.

Um, but it's it's it would not be unheard of to think we should be the same uh here in Norman.

So something to consider when that ordinance comes forward.

Something else I'd like to consider just because we are talking about uh parking garages and things like that with the new trend of like sprinter vans and things being converted.

Maybe we have lighter hookups and parking garages where people can have spaces for the vans that are covered and still have hookups and things like that.

I don't know if that all if that all can jive, but then you would have kind of a destination around those.

If you're already doing active street frontage, all your utilities are already in.

Councilmember Dixon.

Just to piggyback on that, if if we're gonna I mean, if we're gonna put a Tesla charger and in any of these, super easy to you know, just add a 30 amp or 50 amp RV hookup.

I mean, it costs an extra 50 bucks, probably to me, nothing to do.

Um I like the idea of hookups in the garage, and I was just thinking about Gray and Peters.

If you're having a festival like Norman Music Fest, and you've got people coming in, uh vendors especially, yeah, that's not a bad idea.

This is going to that's why we have these little notes.

Is your next slide question?

Yes.

So uh explore the feasibility of that and can we get it on a ballot?

Uh Catherine's recovering from Tommy John's surgery.

She's been throwing that knuckleball far too often.

Sorry.

So Councilmember Peacock, did you have to do that?

I was just gonna say very much like Council Mr.

Grant said we've got we were trying to fill a ballot for April with items.

I think this you know makes perfect sense to throw on a ballot with potential charter changes and street band spawn potentially.

I don't know if you're overloading it at that point, but would you rather have it overloaded or would you rather go 17 times to the polling place?

That's a good qu I holdman's talked about this a lot about you know when we did our last charter provisions, charter election.

First page ballot, all the questions get filled out, and then you flip it over, and it's like 80% filled it out, 60%.

Like the further you get down the questionnaire, the less return you have on answers.

So I don't know that I gotta well and and our ability to try to figure that out.

I think Oklahoma City had 11 questions 75 to 85 percent all the way down.

So fast if the if the percentage of yeses and no's doesn't change.

Is I wonder from question one to question 11.

We do find the difference.

I don't know the answer to that either, but I can tell you that they don't care.

Right, just go, baby.

Yeah, yeah, yeah.

Yeah, yeah.

But I think we're thinking about like four or five more.

No further questions on this topic.

Uh we will move to Mr.

Francisco for his report.

And in the interest of your time, I will just you know try to respond to any questions that you have.

Um you've seen the October sales tax, and I would just remind you that the October sales tax was reflective of August with the adjustment for the um supposed credit to our sales tax for the sales tax holiday weekend, um, which I'm never hate.

Yeah, well, first that I hate, but second, I'm I'm uncertain about what how they do that credit.

It might actually work to our benefit.

I just don't know.

And I've never been very comfortable with that.

So but we're still flat, amazingly flat.

0.01% on negative.

Again, we budgeted for flat, so we're on budget, but still um one of the things, and in you know, I'll tell you you'll always hear from your finance director always here, city manager, or you know, job one protect the general fund, and in these times of insanely flat sales tax revenue, and it's not just Norman.

I mean, it's we're talking to all of our metro partners, and when the sales tax report shows up, there's a tab for every city across the bottom, so you get to see everybody else uh year to year, and uh you know, month over same month prior year and all that stuff.

So um all the city managers in the metro, we we sat around and scratched our heads and thought, what where's it where's it going?

Um activity appears to be at all-time highs.

I mean, our restaurants are busy, we know our you know, national pastime is baseball and going out to eat, darn it.

Uh the mall's busy, um UNP is busy.

Uh the university population continues to grow, and we kind of conclude, well, you know, there's only three individuals for the entire state of Oklahoma that go around and make sure everybody's paying their taxes on time.

So is there not really an incentive to be that speedy with your reporting and your filing?

Uh statistically speaking, however many points of sale there may be in the state of Oklahoma.

You got three people watching to make sure your returns are coming in and the checks are attached and all that kind of stuff.

So it we know with all the experience Mr.

Francisco has tracking this thing uh in the state of Oklahoma specifically, it's so different all the time.

I don't know if 30 years' experience really even gives you an edge at this point, just the way that's a good idea.

Well, I know we're all have a lot more auditors, so there's a tax commission used to have a lot more auditors than we do now, and that was a budget cut, several budget cuts.

Um which reduced revenue to the state of Oklahoma.

I mean, though that's a position you shouldn't be getting.

They're still doing quite a few audits every month, though, specifically.

I mean, in all cities, but in Norman, I see like 10 audits a month.

We'd love to see AI maybe play a role for the state in that.

Uh Mr.

Francisco um and Kim, they put together a report.

Uh we're pulling data on a on a per pay period basis.

Um, and in order to uh ensure that that we stay uh well within budget.

Um, we've slow played filling vacancies and uh take into account of you know vacation buyout for a retiree, that kind of thing.

And I think um as per last payday, and I'll Kim she can hit me in the back of that.

This is right, we were about 38% of the payroll budget year completed, and we were like 30.8 percent of the budget spent, and that's because those vacancies aren't getting filled immediately, so that's kind of our control rod.

Council adopts a budget, the ability to slow down the hiring, and slows down the expenditure, and it's 80 plus percent of what makes up the budget is bodies, so um, we we're watching that not just monthly, but every pay period running that report, and everybody's plowing in to see how we're doing.

And usually we let our department directors when the water hits their lower lip and they're just about ready to go under, then we might squeeze through a recruitment, but we make them sweat it out pretty good before they uh get one through.

Mayor Holman.

The unrestricted sales tax graph is the one that I really want to encourage residents and all of us to pay attention to when thinking about the context of our budget situation.

So August is the fourth best month we've ever had on record, and uh is the best month we've had so far, FYE 2026.

It is down compared to the highest last October was the highest October we've have on record.

Because anything prior to 2019 isn't to the levels that we're bringing in now, at least as far as I know.

Correct.

And so we're comparing it like when we say that we have negative 1.08%, but that's compared to the highest month we've ever had.

Yeah, or highest October we've ever had, which was last October.

Because it last August, I guess.

Yeah, when you look at that graph and you go back far enough, we we we had a relatively steady slow growth rate, and then this seven and a half, eight million dollar jump to a new plateau.

Yeah, and uh, I mean, we were counting how many people bought Pelotons instead of went on vacation during COVID, and you know, then CARES Act money and ARPA and those kinds of things, which are now pretty well dried up in the economy, and that that may be keeping downward pressure on what that growth looks like.

Well, in this October chart, too, um the bar graphs going back to FYE 2022 are just almost a straight line all the way across last October being the higher, but in all the other months, there's a little bit of more variation, but this October one shows almost a straight line across the top uh for whatever reason.

But um, and then like I've said before, last January, when you look at it on this chart, reflecting November, I guess the best month we've ever had on record in sales tax revenue, and that was bumping up to almost eight million dollars collected in one month compared to uh FYE 2019 through 21.

You're looking at right at six million dollars.

So we're bringing in almost two million dollars more per month in revenue compared to where we were at five years ago.

So that the rate's not declining, it's just relative to the rate.

The rate is declining.

The rate really increased in fiscal year 21.

Right.

The coming out of COVID and the and the inflation factor was built in that year, and it's kind of as Mayor Holm says it was kind of stayed flat from there.

August, October sales tax has become the second largest month of the fiscal year, period.

That's moving on, yeah, yeah.

February is not nearly what it used to be, tracking December.

Um November is tracking now as the second biggest month.

So it's the when you're comparing one month to the same month in the prior fiscal year, um, the trends start to play themselves out.

Okay, but the trends of that, you know, COVID.

Well, that's what I was just about to say.

What we you know, what is really and I'm you know, I have this bad habit of drawing grass with my hands.

But but I I hope that I can demonstrate what I'm talking about.

Yeah, absolutely.

I think what I was really trying to say is that it's it's still relative to historic growth.

I mean, it's still higher than we produced in 2019, 2018, 2017 years ago back.

So to say that we say that Norman's in decline, I think is a misnomer.

Say that Norman is in revenue decline is a bit of a misnomer.

Norman is flat.

Yes, but from recording from record highs again.

We really should start to show some grass like that for expenditures because again, well, that's good.

That's that was about to follow that up with.

Yeah, yeah.

Um prices have got up, buying power stay the same.

Future reports and prices of goods should come down.

And when we look when we look at all of our neighboring agencies, and you'll see some of the smaller agencies, and while we're flat in the metro, one of our smaller neighboring agencies will see this huge jump.

And you can call them and ask them what happened.

Oh, we open a Chick-fil-A.

I mean, and they'll tell you exactly the store, and it changes the entire revenue picture for uh one of those communities.

So um there is in in the smaller agencies, it's easier to identify those change activities.

I I'm kind of thinking about man, with a federal shutdown, what what might happen in Midwest City with so many tinker uh residents uh there, and that you know, they're we're gonna start tightening up the belts in anticipation of not getting a paycheck for a while, and you know that that's just kind of the it it weighs on you mentally when you're preparing to go out and spend council member beacon.

To the point of all these metro cities are kind of in the same boat, everybody's seeing the same numbers.

Uh what's different about those cities and us is they can raise utility rates.

So I think that's just uh something else to keep in mind as we look at flat, we have no other mechanism to raise like other cities do.

So we are operating at a disadvantage because I just put a chick-fil-a in every parking garage.

Yeah, so this is sales tax.

So when we're building like housing, are we regenerating sales tax off of that?

Yes, to the extent that the whoever is building up the structures, you know, having their lumber delivered here or having the shingles delivered here.

Yes, we didn't.

Yeah, taxes.

Depending on where they're delivered.

Yeah, to me, it's always been a bit of a mystery what change activities actually impact us because I know some of the things I think probably like downtown having a art walker, it's like a drop in the bucket compared to the rest of the city.

So it's kind of curious to like like when the new when the new super target opens down south, it'll be interesting to see.

I mean, it's just anecdote.

But but how much business will go from the existing super target to that one versus how much business will come from no one?

I'm just about saying that.

So there and we recognize that Target does all kinds of data analytics to determine we need a second store, we're overshopped.

If they were only going to consume their existing store, they wouldn't show out 14 million dollars and build another one.

I think they're gonna double it.

So they they recognize the the demand is there and continues to grow.

So um we it's really hard for us to second guess you know corporate investment.

Um they they don't miss very often.

Well, I think it's the same kind of activity you see with North Park is there's nothing really like that in between here and Artmore Denton.

So what's the furthest south target from the metro?

I don't think Target I don't think Armor has one.

Oh, I thought you meant like what's the furthest up south target like people.

There may be people in Ada that are in person.

I don't know if it's a super bowl.

There may not be anybody from ADA that's ever gone to Target because it's too far away, and we may get it a little closer.

So when we see jumps, could we kind of guess where it's coming from?

Whether it's a new store opening, when we see jumps in revenue, yes.

We we have the ability to track revenue by by permit by individual store.

But how do we determine what caused this jump is a separate question?

Um, so and and as Darrell says, it's much harder to move the Titanic of Norman than the paddle boat of Slaughterville.

You know, they put in a Chick-fil-A in you know an Isabel.

We put in a Chick-fil-A in here.

We put in a Chick-fil-A.

I mean, you know, it's franchise Mark.

Uh also the city, the city comparison to again, all these numbers are compared to whatever their numbers were last year.

I don't know what those are, but every city except for Tulsa has a negative in front of their number, and like Edmund negative 5.4 percent, more negative 3.5, yeah.

Oklahoma City negative 1.87, us negative 1.8.

So Tulsa was just a plus 1.02 percent.

So and then state hasn't reported since the August, and that they were down negative nine nine point seven eight percent, negative nine percent overalls you know uh Norman City Council, the reason for all those cities being sure.

Oh, but is that their grocery sales tax reduction?

If only we had taken the Warren Theater, all of uh all these cities would have higher sales taxes.

Are there any other questions for Mr.

Francisco or his staff?

This meeting is adjourned.

Thank you.

Thank you, yeah.

Um, and just note with uh