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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 03/16/2021 - SECOND READING OF ORDINANCE NO. 037, 2021, APPROPR Agenda Item 4 Item # 4 Page 1 AGENDA ITEM SUMMARY March 16, 2021 City Council STAFF Tim McCollough, Deputy Director, Utilities Light and Power Cyril Vidergar, Legal SUBJECT Second Reading of Ordinance No. 037, 2021, Appropriating Prior Year Reserves and Making Supplemental Appropriations for the Utilities Locating Department. EXECUTIVE SUMMARY This Ordinance, unanimously adopted on First Reading on March 2, 2021, is to provide supplemental resources in the 2021 budget for the Utilities Locating Department. Utilities has a regulatory obligation to fulfill underground facility locating requests within 48 hours of notification and the current volume of locating requests exceeds the normal capacity of Department resources. This appropriation will provide additional resources to contract for third party services to meet locating request obligations in 2021. STAFF RECOMMENDATION Staff recommends adoption of the Ordinance on Second Reading. ATTACHMENTS 1. First Reading Agenda Item Summary, March 2, 2021 (w/o attachments) (PDF) 2. Ordinance No. 037, 2021 (PDF) Agenda Item 8 Item # 8 Page 1 AGENDA ITEM SUMMARY March 2, 2021 City Council STAFF Tim McCollough, Deputy Director, Utilities Light and Power Cyril Vidergar, Legal SUBJECT First Reading of Ordinance No. 037, 2021, Appropriating Prior Year Reserves and Making Supplemental Appropriations for the Utilities Locating Department. EXECUTIVE SUMMARY The purpose of this item is to provide supplemental resources in the 2021 budget for the Utilities Locating Department. Utilities has a regulatory obligation to fulfill underground facility locating requests within 48 hours of notification and the current volume of locating requests exceeds the normal capacity of Department resources. This appropriation will provide additional resources to contract for third party services to meet locating request obligations in 2021. STAFF RECOMMENDATION Staff recommends adoption of the Ordinance on First Reading. BACKGROUND / DISCUSSION In Colorado, and most states, it is the law to “call before you dig.” Damage prevention laws have two primary goals: to protect life and to protect infrastructure. Fort Collins Utilities (Utilities) is defined as a facility owner under Colorado’s “One-Call” utility locate law and nearly all utility infrastructure in Fort Collins is underground. Therefore, Utilities is legally obligated to mark all facilities in any proposed excavation area within 48 hours of being notified so excavators can avoid hitting and damaging the infrastructure. The level of service Utilities must provide to the community is defined by the One-Call law and is set by the amount of construction happening in our community. Utilities has historically provided this service with its internal Utility Locates Department. In 2020, the Department marked or cleared 117,773 facilities from locate requests with a 99.995% accuracy rate. The Department locates all City utility infrastructure for Utilities and Connexion, in addition to providing services to some areas of the general fund that have underground infrastructure. The staffing levels of the Department have increased over the last two budget cycles. Prior to the start of Connexion construction, staff projected an increase in locate volume and a need to add resources to the Department. In 2018, the staffing levels were eight full time employees. In FY2019/20, two contractual employees were added to the Department. In FY2021, two additional contractual employees were added to the Department. In 2020, Connexion hit full stride in construction activities and for some of the year the resources in the Department were adequate to keep up with the regulatory obligations. As the summer construction season progressed, the additional contractual staff anticipated in the 2021 budget were added early to keep up with ATTACHMENT 1 COPY Agenda Item 8 Item # 8 Page 2 increasing locate request volumes. Figure 1 depicts three years of locate volumes for Utilities. There was a 50% increase in overall locate volume from 2019 to 2020. In the second half of 2020, locate volumes exceeded the resource capacity. Figure 1: Utility Locates Monthly Production, 2018 through 2020 In 2021, it is anticipated that locate request volumes and resource demands on the department will exceed those experienced in 2020 due to several factors, including:  Similar levels of Connexion construction;  A growing fiber optic system that needs locating;  A significant increase in small cell installations in Fort Collins, each of which will generate one of more locate requests;  Economic recovery that will bring forward other types of development work. Early indications show there is a full slate of development related projects in the pipeline for 2021. The current lack of resources to meet the needed level of service is a risk to our community and municipal organization for several reasons:  A missing or late locate ticket can lead to dig-ins that put lives and essential services at risk.  It is also an ongoing risk to the Connexion build out. A locate request is one of the early enablers to allow the start of construction for vault and conduit installation and every service drop once service is available and requested.  It is a key enabler for nearly every City service that involves building or maintaining infrastructure or that requires excavation. There are several strategies currently in place to help mitigate the impacts of the resource constraints. These strategies have worked to a degree but are not adequate for the volume of locates expected in 2021 and are not sustainable in the long term. These strategies include staff coordinating closely with all excavators to prioritize locate request tickets that are past due and bringing in staff from other departments who have previous locating experience to assist with locate request volumes. ATTACHMENT 1 COPY Agenda Item 8 Item # 8 Page 3 Staff recommends adding a supplemental locates contract with an external locating firm to resolve the resource constraints through the remainder of the Connexion construction. This external contract would allow for some flexibility in staffing levels to handle peak volumes. To expedite contracting if funded, staff intends to leverage another community’s procurement process. In addition, the City Manager is recommending the transfers as provided in this Ordinance from the utility enterprise funds to the Utility Customer Service and Administration Fund, and has further determined that the purpose for which they are appropriated from said enterprise funds, which is to fund utility locates as required by law, will remain unchanged as also appropriated in Ordinance for expenditure from the Utility Customer Service and Administration Fund to secure by contract supplemental utility locate services. CITY FINANCIAL IMPACTS The funding model of damage prevention locating services is that the facility owner pays for the locating service. The person or entity requesting the excavation locate bears no cost for the services. Regardless of what is driving the higher volume of locating services required, the facility owners with infrastructure in the ground bear the cost of providing the services. The current total budget for the Utility Locating department in FY2021 is approximately $1.2 million. Based on the current projections, an additional $500,000 is needed in 2021 for a supplemental locates contract. The ongoing needs for this supplemental resource will be evaluated throughout the year. Funding for 2022 would be requested through the upcoming budget process. Additional funding is proposed to be split equitably across the utility enterprise funds using the same allocation method as the current funding. Fund allocations are determined based on the ratio of facility types located by the department. The electric and stormwater service territories are larger and therefore the allocation is larger for those funds. Broadband’s contribution will continue to grow as the fiber system grows. The funding source for this appropriation is proposed to be reserves from each enterprise fund. Table 1: Proposed funding and allocation by utility enterprise fund. FUND ALLOCATION FROM RESERVES Electric 26% $131,000 Water 20% $99,000 Wastewater 20% $99,000 Stormwater 26% $131,000 Broadband 8% $40,000 100% $500,000 BOARD / COMMISSION RECOMMENDATION The Council Finance Committee considered this item at its January 25, 2021, regular meeting and approved this item to be brought to the full Council for consideration as requested by staff. (Attachment 1) The Energy Board considered this item at its February 11, 2021, regular meeting and provided unanimous support for this supplemental appropriation to be considered and adopted by Council. The Energy Board provided feedback that the approach proposed by staff is prudent given the temporary nature of the increased demand. (Attachment 2) The Water Board considered this item at its February 18, 2021, regular meeting and provided unanimous support for this supplemental appropriation to be considered and adopted by Council. (Attachment 3)  ATTACHMENT 1 COPY Agenda Item 8 Item # 8 Page 4 ATTACHMENTS 1. Finance Committee Minutes Excerpt, Janaury 25, 2021 (draft) (PDF) 2. Energy Board Minutes Excerpt, February 11, 2021 (draft) (PDF) 3. Water Board Minutes Excerpt, February 18, 2021 (draft) (PDF) ATTACHMENT 1 COPY -1- ORDINANCE NO. 037, 2021 OF THE COUNCIL OF THE CITY OF FORT COLLINS APPROPRIATING PRIOR YEAR RESERVES AND MAKING SUPPLEMENTAL APPROPRIATIONS FOR THE UTILITIES LOCATING DEPARTMENT WHEREAS, Colorado’s “One-Call” law (Colorado Revised Statutes Sections 9-1.5-101 et seq.) requires individuals to contact a state agency (Colorado811) prior to commencing excavation work, in the interest of protecting life and preventing damage to underground utility infrastructure; and WHEREAS, nearly all utility infrastructure in Fort Collins is located underground, including the City’s traditional electric and water utilities, and Fort Collins Connexion (Connexion) broadband facilities; and WHEREAS, to assist excavators avoid damaging underground facilities, the One-Call law requires Fort Collins Utilities to register City facilities with Colorado811 and to mark all facilities in proposed excavation areas within 48 hours of receiving notice from Colorado811; and WHEREAS, facility owners of underground infrastructure bear the cost of providing locate services and Fort Collins Utilities has historically performed locates through the Utility Locates Department, which in 2020, marked 117,773 facilities with a 99.995% accuracy rate; and WHEREAS, facility locate volumes and resource demands are anticipated to significantly increase in 2021, due to several factors, including continued deployment of Connexion facilities and the extensive fiber optic system installed in 2020, increased rates of small cell installations, and increased private development work as projects delayed in 2020 recommence; and WHEREAS, Utilities staff evaluated strategies to maintain current service levels and prepare for anticipated demands in 2021, including closer coordination with excavators to prioritize locate requests and utilizing staff from other departments with locating experience to assist Utility Locates’ services; and WHEREAS, staff’s evaluation concluded the most efficient strategy to meet projected resource demands through the remainder of 2021 and Connexion construction is to contract for supplemental third party locate services, which will allow for flexibility in Utilities staffing and the ability to quickly scale up service capacity to handle peak seasonal volumes; and WHEREAS, Utilities staff recommended an appropriation and transfer of $500,000 pro rata from the respective utility enterprise fund reserves for expenditure from the Utility Customer Service and Administration Fund, in order to secure by contract the supplemental utility locate services; and WHEREAS, this appropriation benefits public health, safety and welfare of the residents of Fort Collins and serves the utility purpose of enabling timely locating and protecting of City - owned underground utility infrastructure, which reduces the need for costly repairs to City utility systems and avoids service outages; and -2- WHEREAS, Article V, Section 9 of the City Charter permits the City Council to appropriate by ordinance at any time during the fiscal year such funds for expenditure as may be available from reserves accumulated in prior years, notwithstanding that such reserves were not previously appropriated. WHEREAS, Article V, Section 10(b) of the City Charter permits the City Council, upon recommendation by the City Manager, to transfer any unexpended and unencumbered appropriated amount from one fund to another fund provided the purpose for which the transferred funds are to be expended remains unchanged; and WHEREAS, the City Manager is recommending the transfers as provided in this Ordinance from the utility enterprise funds to the Utility Customer Service and Administration Fund and has determined the purpose for which they are appropriated herein from said enterprise funds, which is to fund utility locates as required by law, will remain unchanged as herein appropriated for expenditure from the Utility Customer Service and Administration Fund to secure by contract supplemental utility locate services. 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. That there is hereby appropriated from prior year reserves in the Light & Power Fund the sum of ONE HUNDRED THIRTY-ONE THOUSAND DOLLARS ($131,000) for expenditure from the Light & Power Fund for transfer to the Utility Customer Service and Administration Fund and appropriated therein for expenditure to secure by contract supplemental utility locate services. Section 3. That there is hereby appropriated from prior year reserves in the Water Fund the sum of NINETY-NINE THOUSAND DOLLARS ($99,000) for expenditure from the Water Fund for transfer to the Utility Customer Service and Administration Fund and appropriated therein for expenditure to secure by contract supplemental utility locate services. Section 4. That there is hereby appropriated from prior year reserves in the Wastewater Fund the sum of NINETY-NINE THOUSAND DOLLARS ($99,000) for expenditure from the Wastewater Fund for transfer to the Utility Customer Service and Administration Fund and appropriated therein for expenditure to secure by contract supplemental utility locate services. Section 5 That there is hereby appropriated from prior year reserves in the Stormwater Fund the sum of ONE HUNDRED THIRTY-ONE THOUSAND DOLLARS ($131,000) for expenditure from the Stormwater Fund for transfer to the Utility Customer Service and Administration Fund and appropriated therein for expenditure to secure by contract supplemental utility locate services. -3- Section 6. That there is hereby appropriated from prior year reserves in the Broadband Fund the sum of FORTY THOUSAND DOLLARS ($40,000) for expenditure from the Broadband Fund for transfer to the Utility Customer Service and Administration Fund and appropriated therein for expenditure to secure by contract supplemental utility locate services. Introduced, considered favorably on first reading, and ordered published this 2nd day of March, A.D. 2021, and to be presented for final passage on the 16th day of March, A.D. 2021. __________________________________ Mayor ATTEST: _______________________________ City Clerk Passed and adopted on final reading on the 16th day of March, A.D. 2021. __________________________________ Mayor ATTEST: _______________________________ City Clerk