HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 08/04/2021 - SECOND READING OF ORDINANCE NO. 091, 2021, AMENDIN Agenda Item 1
Item # 1 Page 1
AGENDA ITEM SUMMARY August 4, 2021
City Council
STAFF
Jamie Gaskill, Sr. Supervisor, Project Management
Gretchen Stanford, Interim Deputy Director
Brian Tholl, Energy Services Supervisor
Lance Smith, Utilities Strategic Finance Director
Cyril Vidergar, Legal
SUBJECT
Second Reading of Ordinance No. 091, 2021, Amending Chapter 26 of the Code of the City of Fort Collins
Related to Water, Wastewater and Electric Rates, Fees, and Charges Applied Under the Income -Qualified
Assistance Program.
EXECUTIVE SUMMARY
This Ordinance, unanimously adopted on First Reading on July 6, 2021, considers a Code amendment to
extend the Income-Qualified Assistance Program (IQAP) pilot rate an additional year (through 2022) and align
it with the Fort Collins Utilities’ rate ordinances that are considered in the fall. Additionally, this item considers
Code amendments that would make administrative modifications to the program’s enrollment process.
STAFF RECOMMENDATION
Staff recommends adoption of Ordinance on Second Reading.
ATTACHMENTS
1. First Reading Agenda Item Summary, July 6, 2021 (w/o attachments) (PDF)
2. Ordinance No. 091, 2021 (PDF)
Agenda Item 18
Item # 18 Page 1
AGENDA ITEM SUMMARY July 6, 2021
City Council
STAFF
Jamie Gaskill, Sr. Supervisor, Project Management
Gretchen Stanford, Interim Deputy Director
Brian Tholl, Energy Services Supervisor
Lance Smith, Utilities Strategic Finance Director
Cyril Vidergar, Legal
SUBJECT
First Reading of Ordinance No. 091, 2021, Amending Chapter 26 of the Code of the City of Fort Collins
Related to Water, Wastewater and Electric Rates, Fees, and Charges Applied Under the Income-Qualified
Assistance Program.
EXECUTIVE SUMMARY
The purpose of this item is to consider a Code amendment to extend the Income-Qualified Assistance Program
(IQAP) pilot rate an additional year (through 2022) and align it with the Fort Collins Utilities’ rate ordinances that
are considered in the fall. Additionally, this item considers Code amendments that would make administrative
modifications to the program’s enrollment process.
STAFF RECOMMENDATION
Staff recommends adoption of Ordinance on First Reading.
BACKGROUND / DISCUSSION
The Income-Qualified Assistance Program (IQAP) was approved by Council and launched in October 2018 in
conjunction with the Time-of-Day (TOD) electric rates. The pilot program was designed to reduce utility costs
for qualifying low-income participants that opt-in to the program by providing a 23% discount on specific rate
components of electric, water and wastewater services. The current pilot and associated discount are set to
expire July 31, 2021, pursuant to City Code §26-724. The Ordinance extends the program beginning August
1, 2021, through December 31, 2022.
Strategic Alignment
Strategic Outcome
o Neighborhood Livability and Social Health 1.3 - Improve accessibility of City and community program to
low- and moderate-income residents and increase participation in service to eligible income-qualified
residents.
Our Climate Future
o Equity-focused implementation seeking solutions that address a spectrum of needs within our
community.
o Next Move EEFB5: Provide focused energy efficiency and indoor air quality incentives for historically
under-served households.
The IQAP is one of five offerings in the Utilities Affordability Programs (UAP) portfolio that is designed to reduce
utilities burdens for low- and moderate-income customers. Utility burden is defined as the percentage of a
ATTACHMENT 1
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household’s income that is spent on utility services such as gas, electric, water, wastewater and stormwater.
Low-income households have been found to have disproportionately high utility burdens when compared to non-
low-income households (ACEEE, 2020; US Water Alliance, 2016).
The UAP includes programs that help reduce a customers’ utilities costs through payment assistance, efficiency
improvements to homes, and education about efficiency practices. There are three programs that focus on
payment assistance and two programs that help make dwellings more efficient.
Payment Assistance:
o The IQAP provides income-qualified customers a reduced rate on specific utility services.
o The Medical Assistance Program (MAP) provides reduced rates for income-qualified customers who
require the use of medically necessary equipment and/or require medically necessary air conditioning
during the summer billing months.
o The Payment Assistance Fund (PAF) allows qualified households with a current past-due notice to
receive financial assistance once per 12-month cycle on their utility bill.
More Efficient Dwellings:
o Larimer County Conservation Corps (LCCC) Water and Energy Program
o The Colorado Affordable Residential Energy Program (CARE)
o Both programs are designed to provide no-cost retrofits to homes to make them more efficient and
comfortable.
Although Fort Collins Utilities is not a regulated public utility and is not required to follow the direction of the
Public Utility Commission (PUC), Utilities often examines PUC recommendations for best practices in the
industry. Under the current PUC rules 3412 (electric) and 4412 (gas), investor-owned utilities that serve Colorado
retail customers “shall provide low-income energy assistance by offering rates, charges and services that grant
a reasonable preference or advantage to residential low-income customers,” as permitted by state statute (§ 40-
3-106, C.R.S.). The UAP offerings are in alignment with the PUC recommendations.
Current IQAP Program Design
Utilities partners with the State of Colorado Department of Human Services (CDHS), who administer the Low-
Income Energy Assistance Program (LEAP), for income-eligibility verification for IQAP. LEAP eligibility is based
on household size and an income threshold of 60% of State Median Income (SMI). Utilities customers that are
enrolled in the current or past LEAP season are eligible to complete an application to “opt-in” to participate in
IQAP. Utilities sends bulk invites via mail or email to LEAP-enrolled customers annually to encourage them to
apply for participation in IQAP. Customers can also fill out an application at any time during the year to be
enrolled in the program, provided their LEAP enrollment can be verified. Applications can be completed online
or via a paper form. Once an application is received by Utilities staff, the customer’s LEAP enrollment is verified
and their rates are changed for the applicable services.
In addition to receiving the reduced rate on services, IQAP participants are encouraged to participate in no-cost
conservation programs, such as LCCC and/or CARE, to make their dwelling more efficient and to help reduce
utility costs further. They also receive the monthly Utilities Insights newsletter that provides low- or no-cost tips
and tricks for reducing utility use and costs.
Initial IQAP Pilot Results
The IQAP was launched in October 2018 and results discussed here are based on the first two full calendar
years of the program (2019 and 2020). The following were used to analyze program impact for participants and
overall ratepayer benefits, as required in Article XII, § 6 of the City Charter:
Program enrollment numbers
Reduced rate benefit to customers/utilities revenue impact
Actual customer utility use (year one)
Customer surveys
o Pre- and post-program surveys annually
o In-depth customer engagement survey (year one)
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Aggregate residential ratepayer utility benefits, including reduced system consumption, increased
engagement by program participants in conservation education and retrofit programs, and improved
consumption behaviors.
When IQAP was approved in 2018, participation was projected to be 2,000 customers annually based on
census data and expected LEAP enrollment. For the first two years of the program the actual average annual
enrollment was 717 customers, or 36% of what was projected. Additionally, the projected benefit to customers
was $441,000 and actual average annual benefit to customers was $141,944, or 32% of what was projected.
The actual annual utility bill savings per customer was approximately $200. Table 1 summarizes program
enrollment and the annual benefit to customers.
Table 1: IQAP Planned and Actual Participation and Annual Customer Benefit
Participation Annual Customer Benefit
Planned* 2,000 $441,000
Actual** 717 $141,944
*Council approved in 2018
**Average annual participation and benefit for 2019-2020
Encouraging energy and water conservation through dwelling modifications and behavior change education has
also been a focus of the IQAP pilot. Customers are invited to participate in programs such as LCCC and CARE.
Table 2 summarizes IQAP customer participation in each program in 2019 and 2020. Due to the impacts of
COVID-19, in March 2020 LCCC and CARE were put on hold because contractors were not able to do in-home
assessments. As an alternative, customers were invited to request conservation kits to be sent to their homes.
Kits contained do-it-yourself products that customers could install in their homes to reduce energy and water
use. Approximately 85 IQAP customers have received kits since September 2020.
Table 2: IQAP customer participation in LCCC and CARE
2019 2020
LCCC 90 27
CARE 7 1
In addition, IQAP participants were sent the monthly Utilities Insights newsletter via email or mail. The newsletter
contained seasonal tips, tricks and programs for saving energy and water and ways to make homes healthier,
with the goal of making this information more digestible for customers. Insights newsletters were offered in
English and Spanish. (Attachment 1) Approximately 50% of participants received the newsletter via email. Open
rates on the email version of Insights were significantly higher than the industry average and summarized in
Table 3.
Table 3: Open rates and click rates for emailed version of Utility Insights newsletter compared to industry
averages.
Open Rate Click Through Rate
Utilities Insights E-Newsletter 48% 9.5%
Government Agency or Services Industry Average* 29.98% 11.22%
*Industry average according to Constant Contact data
In an effort to examine impacts of conservation efforts associated with IQAP participation, staff engaged Apex
Analytics, a Colorado based evaluation and analytics firm, to conduct an initial billing analysis for year one of the
program (October 2018-September 2019). The analysis compared 538 IQAP participants to a control group
(utilities customers that were enrolled in LEAP but not IQAP). The billing analysis found there to be no statistical
change in water use and a 5% increase in energy use. (Attachment 2).
Apex Analytics also designed a customer survey that was utilized to understand how IQAP benefited
participants and impacted customer engagement and awareness of conservation programs. Survey invitations
were sent to 527 IQAP participants and 175 customers completed the survey (33% response rate).
Highlights from the findings from the IQAP participant survey include:
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76% of survey respondents have participated in or are aware of conservation programs.
76% of survey respondents report increased comfort in their home.
86% of survey respondents report being more secure in their ability to pay their utility bill.
For additional survey findings, please see the attached Apex Analytics memo (Attachment 2).
The first two full calendar years of IQAP implementation provided valuable information about program design
and execution. Utilizing the “opt-in” application-based enrollment resulted in participation rates that were
significantly less than what was projected. Enrollment moderately increased across the two years.
The COVID-19 pandemic beginning in March 2020 coincided with the second full calendar year of the IQAP
implementation. COVID-19 did not appear to significantly impact program enrollment in 2020, however, it did
impact the conservation component of IQAP. For example, customers were not able to participate in LCCC or
CARE after March 2020 because both programs were suspended due to COVID-19. The suspension
significantly impacted participation rates which was apparent in the sharp decline in participation from 2019 to
2020. The effects of COVID-19 on this and other components of the program have made overall assessment of
program effectiveness and sustainability difficult to determine. The pandemic’s continuing effects on customer
behavior is one of the factors driving staff’s recommendations to extend the program pilot.
Issues for Consideration
The IQAP pilot rate is due to expire July 31, 2021, as stated in City Code §26-724. Staff recommends extending
the rate pilot an additional year (through 2022) and aligning the rate with the annual Fort Collins Utilities’ rate
ordinance that is considered by Council each fall. With the extension staff will:
1. Continue targeted engagement with low-income community members. Staff will utilize findings from
participant surveys to tailor methods of engagement to make them more effective.
2. Build on existing enrollment and seek to enroll 1,300-1,500 customers annually.
3. Continue to promote participation in conservation programs and educate program participants about
efficiency practices.
4. Analyze program impact (e.g., financial impacts and conservation impacts) for customers and the utility.
5. Conduct additional research on low-income programs offered by other municipal utilities to learn about the
utility benefit of the programs.
6. Using updated census data staff will evaluate the 23% rate reduction to determine if the amount of the
reduction is still appropriate for this customer group.
7. Analyze the estimated impacts of allowing customers to qualify for IQAP via other avenues in addition to
LEAP.
Staff also recommend that consideration be given to changing the program from an application-based/opt-in
program to an auto-enroll/opt-out program. An auto-enroll program would eliminate the need for customers to fill
out an additional application beyond the required LEAP application and is expected to significantly increase
participation in the program. In addition to removing participation barriers for customers, auto enroll would
decrease the amount of staff time required to administer the enrollment process and would allow staff to spend
more time engaging directly with customers. Figure 1 illustrates how this would affect program processes and
the customer experience.
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Figure 1: IQAP Application-based Enrollment Processes Versus Auto-Enroll
Changes to the enrollment process will also integrate with citywide efforts to streamline income-qualified
programs across the organization. For example, LEAP-enrolled customers that move into the Utilities service
area outside of the auto enroll months (December - May) will be able to apply for IQAP via the online or mobile
portals that are currently in development in partnership with Code for America. (Attachment 3).
Should Council approve the change to an auto-enroll program, staff proposes starting the auto-enroll format with
the 2021-2022 IQAP season that begins October 1, 2021. Staff will analyze the impacts of switching to auto-
enroll and will report findings to Council in fall 2022.
Extending the IQAP Rates and adjusting the IQAP Program enrollment, as described in the proposed Ordinance,
will continue support for the utility purposes originally outlined for the pilot, including benefiting the rate payers by
improving conservation practices through outreach and education; improving the rate of on-time payment of utility
bills and reducing billing operation expenses, consistent with the purposes of Article XII, § 6 of the City Charter.
CITY FINANCIAL IMPACTS
Changing the IQAP enrollment format is projected to potentially double the community participation in the
program which could increase the annual cost of the discount from $141,944 (0.1% of total utility operating
revenues) to $272,342 (0.2% of total utility operating revenues). The costs for this program are included in the
cost-of-service models for each utility. Table 4 illustrates the projected impact on overall participation and annual
customer benefit and Table 5 illustrates the projected revenue impacts for each utility.
Table 4: Projected Impact of Making IQAP an Auto-Enroll Program
Participation Annual Customer Benefit
Planned* 2,000 $441,000
Actual** 717 $141,944
Projected with Auto Enroll*** 1,372 $272,342
*Council approved in 2018
**Average annual participation and benefit for 2019-2020
***Based on estimated 98% auto enrollment of all LEAP-enrolled customers
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Table 5: Projected revenue impacts by utility of making IQAP an auto-enroll program
Utility Planned* Actual** Projected***
Electric $348,000 $105,782 $215,423
Water $39,000 $17,041 $23,149
Wastewater $54,000 $19,121 $33,770
TOTAL $441,000 $141,944 $272,342
*Council approved in 2018
**Average annual revenue impact for 2019-2020
***Based on estimated 98% auto enrollment of all LEAP-enrolled customers
BOARD / COMMISSION RECOMMENDATION
The Affordable Housing Board, Energy Board, Water Commission recommends extending the IQAP rate pilot
an additional three years and making the program an auto-enroll/opt-out program. (Attachment 4-6)
Staff presented to the Council Finance Committee on June 16, 2021 and incorporated their feedback (meeting
minutes are not yet available).
PUBLIC OUTREACH
The Affordable Housing Board, Energy Board, Water Commission and Council Finance Committee meetings
were noticed and open to the public. Additionally, staff utilized feedback from IQAP participant surveys to inform
proposed program extension and changes. Second Reading of the Ordinance has been scheduled for August
4, 2021, to allow for mailed and published notice of the hearing on the Ordinance thirty days in advance.
ATTACHMENTS
1. Utilities Insights Newsletter (sample) (PDF)
2. Apex Analytics Memo (PDF)
3. Digital Access and Equity Outreach Update Memo (PDF)
4. Affordable Housing Board Minutes (draft) (PDF)
5. Energy Board Minutes (PDF)
6. Water Commission Minutes (draft) (PDF)
7. Powerpoint Presentation (PDF)
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ORDINANCE NO. 091, 2021
OF THE COUNCIL OF THE CITY OF FORT COLLINS
AMENDING CHAPTER 26 OF THE CODE OF THE CITY OF FORT COLLINS
RELATED TO WATER, WASTEWATER AND ELECTRIC RATES, FEES, AND CHARGES
APPLIED UNDER THE INCOME-QUALIFIED ASSISTANCE PROGRAM
WHEREAS, the City Council is empowered and directed by Article XII, §6 of the Fort
Collins City Charter, to by ordinance from time-to-time fix, establish, maintain and provide for
the collection of such rates, fees or charges for utility services furnished by the City as will produce
revenues sufficient to pay the costs, expenses, and other obligations as set forth therein; and
WHEREAS, the current rates, fees or charges for utility services set forth in Chapter 26 of
the City Code are necessary to produce sufficient revenues to provide the utility services described
herein; and
WHEREAS, the revenue from the rates, fees or charges for utility services as proposed for
adjustment herein shall be used to defray the costs of providing such utility services as required by
the Charter and the City Code; and
WHEREAS, on May 1, 2018, City Council adopted Ordinance No. 054, 2018, creating the
Income-Qualified Assistance Program (“IQAP Program”) including eligibility, components,
requirements, and discounted utility service rates for residential water, wastewater, and electric
services furnished by respective enterprises of the City (the “IQAP Rates”), as codified in Articles
III, IV, and VI of Chapter 26 of the City Code; and
WHEREAS, the initial IQAP Rates were adopted for a limited period of time expiring July
31, 2021 such provisions require extension to remain in effect after that date; and
WHEREAS, Fort Collins Utilities staff has identified provisions of Chapter 26 of the Code
where consolidation and clarification of IQAP Program eligibility and practices are required to
better align with City Council priorities, market efficiencies and utility practices; and
WHEREAS, the City Manager and Utilities staff have also recommended to the City
Council that City Code be clarified to align the applicable period for IQAP Rates with the
applicable periods for other City utility rates; and
WHEREAS, the Energy Board considered proposed City Code adjustments for the IQAP
Program and Rates at its May 13, 2021, regular meeting and recommended approval of the
proposed adjustments; and
WHEREAS, the Water Commission considered the proposed City Code adjustments for
the IQAP Program and Rates at its May 20, 2021, regular meeting, and recommended approval of
the proposed adjustments; and
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WHEREAS, the City Council Finance Committee considered the proposed City Code
adjustments for the IQAP Program and Rates at its June 16, 2021, regular meeting and staff
included the Committee’s feedback in the final adjustments proposed herein; and
WHEREAS, the proposed extension of the IQAP Rates and adjustments to the IQAP
Program benefit the public's health, safety and welfare and serve a utility purpose that benefits the
rate payers by improving conservation practices through outreach and education; improving the
rate of on-time payment of utility bills and reducing billing operation expenses, consistent with
the purposes of Article XII, §6 of the City Charter; and
WHEREAS, based on the foregoing, City Council desires to amend Chapter 26 of the City
Code to adjust customer eligibility for the IQAP Program and IQAP Rates for electric and water,
and wastewater services as set forth herein.
NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT
COLLINS as follows:
Section 1. That the City Council hereby makes and adopts the determinations and
findings contained in the recitals set forth above.
Section 2. Section 26-724(b), (c) and (d) of the Fort Collins City Code are hereby
amended to read as follows:
Sec. 26-724. - Residential income-qualified assistance program.
. . .
(b) Qualification. As set forth in this Section, a an opt-out discount on certain components of
City utility service rates applied under this Chapter shall be available for qualified customers who
satisfy the following criteria:
. . .
(c) Enrollment. Customers may begin receiving the discounts described in this Section
through the following methods:Applications. Applications for discounts under this Section must
be submitted annually in accordance with an administratively established schedule available from
the Fort Collins Utilities.
(1) Auto enrollment; opt-out. Customers identified by the Utility as qualified based on
subsection (b) above shall be automatically enrolled in the program on an annual basis and
receive the discounted service rates set forth in subsection (d) below. The Utility may rely
on current enrollment in LEAP to qualify customers without requiring a program-specific
application. Any customer who does not wish to receive such discount may contact the
Utility customer service office to request removal from (i.e. “opt-out” of) the program
created by this Section; and
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(2) Application. Customers not otherwise automatically enrolled may enroll in the
program via an application, provided the customer’s enrollment in LEAP can be verified.
(d) Rates. The discounts applied to monthly base and volumetric rates for qualified IQAP
customers shall be as set forth in Sections 26-127(a), 26-280, 26-464(c), and 26-465(c) of this
Code on meter readings during the period of August 1, 2021, through July December 31, 2022
(beginning October 1, 2018 and ending July 31, 2021).
. . .
Introduced, considered favorably on first reading, and ordered published this 6th day of
July, A.D. 2021, and to be presented for final passage on the 20th day of July, A.D. 2021.
__________________________________
Mayor
ATTEST:
_____________________________
City Clerk
Passed and adopted on final reading on this 4th day of August, A.D. 2021.
__________________________________
Mayor
ATTEST:
_____________________________
City Clerk