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HomeMy WebLinkAboutEconomic Advisory Commission - Minutes - 01/21/2015MINUTES CITY OF FORT COLLINS ECONOMIC ADVISORY COMMISSION Date: Wednesday, January 21, 2015 Location: CIC, City Hall Time: 11:00am–1:30pm For Reference Karen Weitkunat, Mayor & Council Liaison 416-2154 Josh Birks, Staff Liaison 221-6324 Dianne Tjalkens, Minutes 221-6734 Commission Members Present Commission Members Absent Michael Kulisheck (Mike) Michael Rechnitz Denny Otsuga Ann Hutchison (arrived 11:40) Linda Stanley Sam Solt, acting Chair Glen Colton (via phone) Ted Settle Kim Dale Staff Present Staff Absent Josh Birks, Economic Health Director Dianne Tjalkens, minutes Ginny Sawyer, Policy and Project Manager Travis Paige, Community Engagement Manager Guests Eric Sutherland, citizen John Little, Platte River Power Authority Brad Decker, Platte River Power Authority Meeting called to order at 11:04am. Logistics Welcome of New Commission Members: Kim is Dean of Instruction at FRCC, and part of a team of deans that represents the campus at large. Ted was Head of Economic Development at Virginia Tech and is now retired. Review and Approval of December minutes Linda moved and Mike seconded a motion to approve the December 17, 2014 minutes as amended. Motion passed unanimously, 7-0-0. Ann arrived after vote. Correction: Sam was present by phone. Public Comment—Eric Sutherland: On first reading Loveland City Council passed an ordinance to dedicate $2.9 million sales tax grants to a developer bringing in a Sprouts grocery store. In the ordinance it was clear the intent was to take sales tax revenue from Fort Collins, as they did not previously have a natural grocery store. It is extraordinary that the City of Fort Collins did not have a reaction to that. Fort Collins should have taken legal action to prevent that. It will probably go to court anyway, by other grocers and locals. At last night’s Loveland City Council meeting many objected to the deal. Municipal policy and actions are geared toward generating sales tax. It will probably become a net loss for Loveland. They will cannibalize sales tax. The Loveland tax payers will get a bad deal out of this whole thing. Governments should not engage in this type of manipulation of the free market. Fort Collins has other mutual interests with Loveland, and since we will be injured, Fort Collins can file an injunction. Fort Collins and Loveland are violating state law to perform these economic development activities. The policies are out of whack. If the commission had a say in the government, it would evaluate that. Are we cutting our own throats when we do these things? The commission should be urging Council to take legal issue with this. • Sam said he would like to follow through on this topic. • Linda requested Eric send a link to the financial agreement. Eric said the information is available online. • Eric said TIF is the issue of the deal. • Linda said the governor will probably veto everything. • Eric said the City should go through the mall, Woodward Governor and North College URA deals to make sure its own house is in order. • Sam added that some are strategic investments and some may not be. This commission may be able to play a role in determining if the City’s investments are strategic. • Linda said it is hard to do that analysis for the long run. She thinks TIF is overused. • Glen said having been on the Planning and Zoning Board and looking at land use, etc., he sees what Loveland did in declaring blight when it was actually productive farmland, then turning the area into an urban renewal district to collect TIF for 25 years was a terrible use of land and planning. Loveland will get $325 million in TIF that should be going to public schools. It funded Centerra, Costco and Walmart, so those retail establishments can take money away from Fort Collins. Those actions and the one with Sprouts are impacting tax payers to an extent they will never really understand. We may wonder why these things are not contested. • Mike said these are all really interesting comments on how and when to use TIF, but he is concerned when people talk about this as a legal discussion rather than a policy discussion. It is a distraction to turn it into a conspiracy theory. • Josh said that we have looked at the legal issues quite in depth and staff has a different legal opinion than that shared by Mr. Sutherland. There is a healthy and reasonable conversation to have around policy. He believes Fort Collins is very judicious with TIF. We have good solid legal founding, but he is happy to resource a conversation around the policy of TIF and how it is used. Our approach to TIF has gotten more refined over time. • Kim asked how she can learn more about TIF. Josh said Renew Fort Collins and DURA (Denver Urban Renewal Authority) websites are good sources of information. He explained that TIF allows incrementally increasing tax income to be reinvested. There is also an annual URA report on the website. • Linda said county governments don’t like TIF because they do not get the extra valuation on the land, so they are the ones being hurt. Cities operate on sales tax, and the county operates on property tax. As opposed to going to the library, PSD, etc., the extra money goes to the City. The idea is that if the money hadn’t been given to the private developer, then the land would not have been developed and increased the property tax revenue. • Mike said you have more ability to direct the kind of development that happens when public financing is used. • Josh added that a portion of the funding for Foothills includes an activity center and an underpass for pedestrians and bikes that is separated from vehicular traffic and connects to Max. There is debate on how the financing works and who benefits. • Ted said one theme of Eric’s is stealing revenue from Fort Collins. Is that a common complaint? That feels like “close the walls” and not recognizing the anchor for the region. • Josh said the City is heavily dependent on sales tax, which is true for many municipalities in the region. It creates an environment where the municipality is trying to determine how to capture the retail sales tax from its residents. Loveland could claim that we are trying to take Loveland income with the mall and we could argue the same with Centerra. There are many citizens who want better options for retail in Fort Collins. It’s about choice. The Front Range is failing in terms of carbon in total production and per capita. There is a growing need to commute for services, retail, and jobs. There is a dynamic conversation to have around land use choices and economic health, in particular around climate action. • Linda said whenever Loveland gets something of their own Fort Collins gets indignant. They should have their own natural food store. • Josh added that Sprouts is not going to open a store thinking they are going to cannibalize their own stores. The retailer thinks there is enough demand in that location. Commission Member Updates • Denny noted that CSU is hosting Ag Innovation Summit March 18-20, focused on industry and investment in agricultural startups. • Kim said yesterday FRCC opened a new building on its campus. It is for automotive, manufacturing and energy technology, etc. She would like to invite commission members to see the new building. The next phase is to change the old building into the new creative arts and design building, to be completed in August. A commission meeting could be held there. • Denny said his organization moved to the south end of the campus, and would be happy to host a meeting there as well. Staff Updates—MOR— • Josh gave the following updates: o We have had five disbursements on the mall. They are about 48% leased. o NCEDC (regional economic development organization) is in argument with a private group, NCEA, about how they provide value. o Continuing broadband analysis and discussing what role private and public sectors should have in providing service. There will be community engagement and may convene a technical advisory committee. Staff will put the question before Council in a March work session to request direction after more information is gathered.  Ann added that it is important for the commission to be engaged in this conversation and finding a solution to the roles of public and private sectors. o Josh added that Nature in the City would like to present to the commission.  Ann agreed that they have an economic impact.  Denny requested specific economic information and input.  Linda requested read-before materials to avoid a long presentation.  Josh would like to move the commission into a direction of having a read-before packet and the staff presenters can come with specific questions for input.  Mike said one process item to consider is to standardize public comment and timing allowed. Three minutes would be reasonable. AGENDA ITEM 1— Election of EAC Chair and Vice Chair Discussion/Q & A: • Sam is interested in being chair, but there will be times he cannot be here as he travels. He suggests there is technology for virtual interaction. Linda moved and Mike seconded a motion to appoint Sam as Chair of the Economic Advisory Commission. Motion passed unanimously, 8-00. Linda moved and Ann seconded a motion to appoint Mike as Co-chair of the Economic Advisory Commission. Motion passed unanimously, 8-0-0. AGENDA ITEM 2—Climate Action Plan Update, Lucinda Smith, Environmental Services Director and Travis Page, Community Engagement Manager Travis said Fort Collins has a history of focus on climate action including ClimateWise, Energy Policy, etc. He presented a graph that shows how emissions and population can decouple. The energy policy programs, ClimateWise, FortZED, and waste diversion have saved the community millions of dollars, support the local economy, and create jobs. Challenges and opportunities include predictions for 6° F higher temperatures in our region by 2040, increasing costs of fossil fuels, risk management benefits of diversifying the energy portfolio, and the aging population that brings changes in mobility needs. Staff organized a Citizen Advisory Committee and have presented at many advisory boards and public stakeholder groups. Electricity, ground travel, and natural gas are the main sources of GHG emissions. Lucinda showed a graph of emissions from 2005 forward. Our emissions are just now levelling and starting to drop off after a long history of increases. There is increase in projected emissions due to increasing use of air conditioning in a hotter climate and increased population; however, the fleet will turn over to more efficient vehicles, and there are potential reductions from Platte River with its integrated long term resource plan that will change the energy supply. The adjusted business as usual projections, with these things taken into account, shows decreasing emissions, but still not enough to reach the goals. Strategy areas for more reduction include green building and major redevelopment— moving toward net zero new construction by 2030. Changes may need to be incentivized to encourage mixed use and higher density, as outlined in City Plan. Providing access and opportunity for all modes of travel, retrofitting existing homes, increasing renewables at the utility scale, and increasing solar adoption are all potential tactics. Heating loads currently come from natural gas— but there are different ways to heat homes as changes are made to the generating system. Platte River did modelling for Fort Collins to see what changes would be necessary to bring the electric supply to 80% reduction by 2030. Necessary actions would be lowering the load, retiring coal fired units at Craig and Rawhide, increasing natural gas generation, increasing total purchases made outside the system, and increasing hydro and wind. Discontinuing the use of coal is not currently feasible for Platte River. Platte River has already significantly increased its renewable portfolio. The future costs are challenging to estimate. One major objective is to expand the transportation system, which will require more capital funding. Road to Zero Waste was adopted. The waste stream can be optimized by increasing recycling and removing organics from the waste stream. The City can implement neighborhood scale pilot programs. In order to achieve a goal like this the costing and finance tools will be different than what we have now. By 2020 there would be a net cumulative cost, but by 2030 there would be net cumulative savings that increase thereafter. The challenge is finding financing mechanisms to lessen the upfront costs. Staff will visit Council Finance Committee as well. There will be checks and balances along the way as changes are implemented. Likely immediate actions include piloting the utility service model, the bike/ride/car share program, Georgetown Energy Prize, etc. The role of the goal is to make a statement which may attract outside capital and innovation. Discussion/Q & A: • Mike asked about air travel emission numbers. Lucinda said they get data from DIA and Fort Collins-Loveland Airport on travelers from Fort Collins. • Linda noted that if we get everything made somewhere else, that other place gets charged with our greenhouse gasses. You have to account for our stock. For example, what does it take to build a house? • Lucinda said there is a bubble around Fort Collins in the modelling, but our electricity is produced outside of our community. There is another approach, which is consumption based. It is a more complex process. Portland and Seattle have consumption based inventories. The CAC talked about this and decided that the City will probably focus on the model we have now, but the public outreach will discuss the carbon footprint of products. • Linda said communities that have manufacturing will have higher emissions, but the products they make are ones we are buying. • Mike asked about source of purchased energy. Brad answered that it is hard to determine. It would be energy for sale and could include coal fired, as well as renewables. • Ann said if we switch from coal to gas, isn’t that an equal trade? Lucinda said the changes would be accounted for in the electricity modelling. The emissions factor changes as a function of the portfolio. Natural gas burns cleaner, but has methane emissions associated with the production. Members of the CAC have raised these issues and we want to acknowledge them. Staff looked at overall emission of various sources. From a carbon standpoint, natural gas is cleaner than coal. • Denny asked the bottom line request from the commission. • Lucinda welcomes general feedback and questions on the concept and where it is going. • Josh said Council will consider the framework plan on February 17. Economic Health and many other staff will participate in implementation. There will be more discussion as strategies get vetted. The Guiding Principles for the Climate Action Plan Financing document was provided in the commission packet. Staff is considering breaking the consumer/end use principles into business and residential. These principles could become quantified. This document is a place for the commission to provide feedback. • Ann said one of the principals is maintaining competitive rates, but there is no analysis of costs for turning Rawhide off over night. You can’t keep the lowest rates without Rawhide. • Josh said staff is honing in on that numbers. Also, one challenge we face is the assumption in the model that coal will become more expensive in the future. This analysis is not on today’s rates, but on our best understanding of future rates. There is still cost on energy production, but the savings comes from using less energy as well. • Lucinda added that even within the guideline Platte River has set, there is headroom to allow them to remain the lowest wholesale power provider. We anticipate rates will increase anyway. To move to 80% reduction will include a rate increase. • Ann said a moderate increase may be very significant to a household. She is also concerned about the green building requirements. The unintended consequence of today’s codes is much higher cost of building. • Lucinda said changes to building requirements add to the hard cost of construction; however, it is important to look at the overall cost of living, which includes transportation and utility costs. We need to find ways to mitigate impacts to those on fixed and low income and businesses. The Utility is considering a low-income utility rate. It is important to keep stakeholders involved throughout the process. • Linda said staff has done a great job, considering the boundaries. The costs will be going up and we need to get in front of that. We are cooking our planet. We can choose to continue to do that or get on the other bandwagon. We have not been charging for negative externalities. Oil and coal have been subsidized more than solar or wind. Changes will have to be made on a national level. We should be on the front end, and that will give us a long-term advantage in keeping our costs down. It will be hard, but much harder if we don’t do anything. • Denny asked if staff is at the stage of formulating a plan, or are plans set and looking at implementing. • Lucinda said Council asked for a plan that shows what it would take to meet the accelerated goals. There has been a lot of input and refining of assumptions. Staff has a sense that there is a way to get there, but there is still a gap. We are close to having a feasibility framework. It is not a prescription, but an idea of what it would take to reach the goal. Staff will ask Council about developing an implementation plan for 2020 that would lead to budget offers. • Kim asked what RMI is. • Lucinda said they are an energy think tank, which works on researching innovations in energy. They have written a book, Reinventing Fire. Their role here is researching best practices. • Kim asked if we have more resources to tap into here with the Power House. Lucinda said the Power House, FortZED, Colorado Clean Energy Cluster and the private sector all have value to add. • Josh added the TBL analysis recognized the downsides to costs in implementation, but also looks at the benefits of innovation that can happen locally. There are economic development opportunities. Staff will complete an economic benefit analysis. There is opportunity for business formation, etc. • Denny asked Platte River’s business model, specifically around reduced volume and rates. The business plan cannot be to make less money in 20 years. Where is their sustainability as a business going to come from? Will the production be at such a lower cost that the profit on the smaller amount will be more? Or is the plan to automate and employ fewer people? • Brad said first there will not be a big drop in the energy the Platte River community needs to serve. There will be less energy Platte River needs to produce, as the communities will produce more of their own energy (DSM programs). Between those efforts and Platte River reducing its generation, the overall generation may remain constant over time. Platte River has similar goals to this plan. They want to reduce emission, add renewables, and increase diversification. They have a strategic plan of their own and are supporting the CAP by modelling what would be necessary to meet the CAP goals. • John added that Platte River is a not for profit organization owned by the four cities. Their job is to meet the needs of the four cities. • Brad said right now Platte River does not have any commitment relative to the CAP, but are a partner and major player in the process. They must work toward mutual goals. They are a partner but have different planning objectives at this point. He encouraged members to look at the strategic plan on their website (http://www.prpa.org/sources/strategic-plan/). • Denny said impact comes from large entities. If there is too much diversion from what is planned or proposed and what CSU and Platte River are doing, then it won’t work. • Brad said right now these are guidelines, and what will happen is we will follow three implementation plans. • Josh added that Council asked staff to map out how we might go about achieving these goals and determine feasibility. Staff feels they have answered the question at that level, and there is a lot more work to be done to achieve the goals. Council will tell staff whether or not they feel comfortable with beginning implementation in February. Staff is hoping Council tells them to get started. • Linda said Fort Collins is a voting member of Platte River, and helps create the strategic plan. • Brad said the four cities have equal ownership and voting rights. • Lucinda said there are questions about the actual feasibility about achieving that level of change. In terms of building wind, what is the timeframe and transmission capability? • Denny said it seems like if this is about general direction from point A to B, make sure that accounts for the three other cities that own Platte River. If they are going in a different direction, then Fort Collins is really going to point C. • Josh said the reps from the four communities have agreement on the four items related to Platte River listed in the financial guidelines document. • Glen has been pushing to address the population element all along. This plan includes growing from a population of 150,000 to 250,000. How is that included? How have growth rates and population been accounted for? If we add another 100,000 people, but say we can get to carbon neutral, how can that happen when the vast majority of our products are produced elsewhere? Our solar panels and wind turbines have embedded energy in production. We can’t have such a huge disconnect between models, so that we push off our consumption emissions on other communities. One of our strategies could be to have different levels of population growth accounted for. • Lucinda said the model has an opportunity to turn up or down the population growth rate. • Linda said you have to be really clear about consumption versus production. We will just not be carbon neutral if we don’t look at consumption. • Lucinda said it’s important to point out the embodied emissions in production. • Sam asked if we have considered nuclear energy. • Brad said the question has come up. Right now for our generation needs, there is no nuclear generation that can work at our scale. There are things under development that may be good options in the future, but other than being a partner in a large reactor there are not opportunities right now. In the current political climate, it is also unlikely to be accepted. Platte River is keeping their eyes on that technology, but it is not a viable option at this time. • Josh added that there is an open house tomorrow at the Lincoln Center. • Ann asked if staff would ever come back with a mid-range goal. Lucinda said that is a potentiality, but Council would have to give that direction. • Linda said the implementation will be where changes may be made. AGENDA ITEM 3—Other Business February Agenda • Nature in the City • Economic Health Strategic Plan: Josh will provide the latest draft before the next meeting. Members should have read the document and be prepared to offer input. 2015 Work Plan • Sam and Josh will continue developing the Work Plan. May present a strawman at the February meeting for feedback. Review City Council’s 6-Month Planning Calendar/Agenda Planning • Not discussed. Announcements • None. Meeting Adjourned: 1:33pm Next Meeting: February 18