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Water Board Minutes
April 21, 2016
Fort Collins Utilities Water Board Minutes
Thursday, April 21, 2016
Water Board Chairperson City Council Liaison
Rebecca Hill, 970-402-1713 Wade Troxell, 970-219-8940
Water Board Vice Chairperson Staff Liaisons
Brett Bovee, 970-889-0469 Carol Webb, 970-221-6231
ROLL CALL
Board Present: Chairperson Rebecca Hill, Vice Chairperson Brett Bovee, Board Members
Duncan Eccleston, Alexander Maas, Michael Brown, Lori Brunswig, Andrew McKinley, Kent
Bruxvoort, and Jason Tarry.
Board Absent: Board Members Steve Malers and Phyllis Ortman
Board Member Alexander Maas left the meeting at 6:57 p.m.
OTHERS PRESENT
Staff: Carol Webb, Lance Smith, Chris Donegon, and Katherine Martinez.
Members of the Public: None
Meeting Convened
Chairperson Hill called the meeting to order at 5:29 p.m.
Public Comment
None
Approval of March 17, 2016 Board Meeting Minutes
Board Member Kent Bruxvoort moved to approve the March 17 meeting minutes. Board
Member Andy McKinley seconded the motion.
Vote on the motion: It passed unanimously, 4-0, with 5 abstentions.*
*Chairperson Rebecca Hill and Board Members Lori Brunswig, Michael Brown, Duncan
Eccleston, and Alexander Maas abstained due to their absence at the March meeting.
Staff Reports
(Attachments available upon request)
Volunteer Appreciation
Water Board members were presented with small gifts from the City Clerk’s Office as a gesture
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of appreciation for their volunteer service: two guest passes for any City recreation facility and
an insulated bag decorated with the logos Fort Collins Volunteer and City of Fort Collins.
Water Resources Monthly Report and Legislative Update
Information included in meeting materials only. No verbal reports.
Bi-Annual Financial Update
(Attachments available upon request)
Utilities Strategic Finance Director Lance Smith gave an overview of the financial report for the
end of 2015 and began a discussion to engage the Water Board in the 2017-18 Budgeting for
Outcomes (BFO) process. Topics covered included:
• 2015 Year End Financial Trends Review
• 2016 Capital Improvement Planning (CIP) Planning Process
• 2017-2018 Budgeting for Outcomes (BFO) Offer Overview
The financial report provides a perspective on operational revenues and expenses for 2015
relative to previous years (Water Fund, Wastewater Fund, Stormwater Fund) and the 2015
budget ahead of the final audited financials being available with the publication of the
Comprehensive Annual Financial Report in June 2016.
An overview of the utility planning process was also provided to set the context for how the
2017-18 budget offers are being determined. The 2017-18 BFO process began in March and will
continue through October. Water Board will provide communication to the City Council ahead
of the Work Sessions beginning in August 2016.
Revenues were higher than budgeted because of development fees (Plant Investment Fees)(PIFs)
(Development Fees). More was spent in 2014 due to capital projects such as Rigden Reservoir.
Discussion Highlights
Board members inquired about various aspects of the financial reports, including terminology,
philosophy, capital expenditures, reserves, unexpected capital projects (such as the 2015
landslide that damaged the Michigan Ditch pipeline, which will be repaired this year), issuing
debt vs. paying cash, rate increases, and how strategic financial planning and Capital
Improvement Planning fit into Fort Collins Utilities’ master plan process. Operational objectives
include safety, reliability, regulatory compliance, sustainability, customer satisfaction, and
product quality.
Mr. Smith also outlined capital needs for each fund for the next 10 years as identified in the
Capital Improvement Plans (CIP). The 10-year CIP for the Water Fund includes the construction
of Halligan Reservoir in 2019-20, an additional treated water storage facility in 2022, and
significant renewal costs for the Poudre Pipeline in the Poudre Canyon potentially starting in
2018. It also includes significant investment in the distribution system throughout the City (with
a focus on downtown’s aging distribution system) as the renewal rate for the distribution assets is
increased. Significant investment has been made in the Water Treatment Facility since its
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expansion in 1999 allowing for more attention to be given to the source of supply and
distribution systems over the coming decade.
In reply to board members’ inquiries about spending and capital projects, Water Resources and
Treatment Operations Manager Carol Webb commented that staff plans as best they can for
capital projects, but the wildfires and floods of recent years are examples of factors contributing
to unexpected costs.
The 10-year CIP for the Wastewater Fund consists of increased funding for replacement of the
collection system assets over the next decade and some significant investments in asset
improvements over the next few years at the Water Reclamation Facility. Costs associated with
additional nutrient removal regulations are anticipated just beyond the next decade but are
anticipated to cost between $70-90 million soon thereafter. This expense will be included in the
financial analysis.
The 10-year CIP for the Stormwater Fund reflects several large infrastructure projects yet to be
built, including over $100 million in a four-year timespan (2019-2022). It is unlikely that
Utilities’ financial position will accommodate such spending over four years; further analysis
must be completed and operational impacts of delaying some of this investment analyzed further.
Of six neighboring communities, Colorado Springs is at the top of the list for total monthly
residential utility expenses, $194.55 (electric, water, wastewater, stormwater) and Fort Collins is
second compared to Boulder and Greeley, which are nearly at the same level as Fort Collins
($161.11 total monthly). Loveland and Longmont are closing the gap due to recent rate
increases.
Stormwater Fund CIP includes replacement of existing infrastructure, rehabilitation of streams,
and three major infrastructure projects: Magnolia Street Outfall (2 phases), Oak Street Outfall,
and Myrtle Street. Next steps for the Utilities strategic financial plan include:
• Analyze the anticipated capital expenses into the long-term financial models
• Perform scenario analyses to understand cash vs. debt funding impacts on rates, reserves,
debt capacity and the financial position of each Enterprise Fund
• Develop recommendations on rate increases and debt issuances to meet the expected
needs of the fund
Staff will go to Council within the next 90 days with a recommended Strategic Financial Plan.
City Budget “Budgeting for Outcomes”(BFO) Process
Mr. Smith summarized the timeline for the City budget approval process, which has begun and is
scheduled to conclude on November 1. Public hearings on the budget are planned for the City
Council meetings on September 20 and October 4.
Budgeting for Outcomes (BFO) is the biennial budget cycle for the City of Fort Collins. The
approach taken in the City’s budgeting process is to identify Strategic Objectives for the City
first and then to have each Service Area within the City write budgeting offers that address one