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HomeMy WebLinkAboutMinutes - Finance Committee - 03/02/2023 - Finance Administration 215 N. Mason 2nd Floor PO Box 580 Fort Collins, CO 80522 970.221.6788 970.221.6782 - fax fcgov.com Council Finance Committee Meeting March 2, 2023 Via Zoom Council Attendees: Julie Pignataro, Emily Francis, Kelly Ohlson, Shirley Peel Staff: Kelly DiMartino, Travis Storin, Rupa Venkatesh, John Duval, Teresa, Roche, Claudia Menendez, Ginny Sawyer, Chad Crager, Blaine Dunn, Jo Cech, Randy Bailey, Renee Callas, Jen Poznanovic, Gerry Paul, Lawrence Pollack, Nina Bodenhamer, Malinda Mascarenas, Kendall Minor, Lance Smith, Gretchen Stanford, Katie Geiger, Mike Calhoon, Victoria Shaw, Meaghan Overton, SeonAh Kendall, Monica Martinez, Dave Lenz, Kerri Ishmael, Sheena Freve, Zack Mozer, Tracy Ochsner, Erik Martin, Brian Hergott, Jeff Rochford, Carolyn Koontz Others: Kevin Jones, Chamber Molly Bohannon, Coloradoan Mark Houdashelt ______________________________________________________________________________ Meeting called to order at 4:00 pm Approval of minutes from the February 2, 2023, Council Finance Committee Meeting. Emily Francis moved for approval of the minutes as presented. Kelly Ohlson seconded the motion. Minutes were approved unanimously via roll call by; Julie Pignataro, Kelly Ohlson and Emily Francis. A. Utility Billing System Appropriation Lance Smith, Sr. Director of Finance for Utilities Gretchen Stanford, Utilities Deputy Director of Customer Connections EXECUTIVE SUMMARY An appropriation ordinance is being brought for your consideration from the utility enterprise funds. These funds are necessary to implement a modern Utility Customer Information System – Customer Self Service Portal (CIS-CX) Solution. Funds from the enterprise reserves are being requested just as the City completes the selection of a solution partner and before professional services are contracted. This appropriation request is necessary to allow the City to secure CIS-CX project management and solution quality assurance services through go-live, provide legal review of professional services contracts, and provide funding for hiring contractual staff throughout the implementation. The total amount being requested for appropriation here is: Professional QA and Implementation Management $1,500,000 Contract Review and Counsel $100,000 Contractual Implementation Staffing $2,650,000 Total $4,250,000 Once the full solution scope for the new CIS-CX is determined another appropriation, expected to be the last, will be requested for the direct solution costs including licensing and hardware. GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED Does the Council Finance Committee support bringing an appropriation ordinance forward for the consideration of the full City Council to support the next phase of the modernization of the Customer Information System – Customer Self Service Portal? BACKGROUND/DISCUSSION Fort Collins Utilities is currently conducting 5 weeks of onsite product demonstrations as the final review of proposals received for a modern Utility Customer Information System – Customer Self Service Portal (CIS-CX) Solution. The proposals were received after a deliberate 12-month process focused on identifying solution requirements, scrutinizing and rating every proposal received, performing reference checks of each solution provider with other utilities that have implemented the proposed solutions, planning the solution implementation schedule, staffing needs and quality assurance milestones, and having employees involved in the solution selection throughout the process and asking questions of the solution providers. This due diligence and deliberation are necessary to ensure that the selected solution partner and their CIS-CX will serve our community well as our community moves toward Our Climate Future and evolving how we serve our ratepayers and enhancing their customer experience with their municipal utilities. Over the next few months, a solution partner will be selected and then a second appropriation will be presented to this Committee before the 24-month solution implementation can begin. It is anticipated that the City will successfully implement the new CIS-CX within 24 months, at which point the existing solution will be retired. The Capital Improvement Plans presented to the Council Finance Committee ahead of the 2023-24 Budgeting For Outcomes included up to $15M for this capital investment including the licensing and hardware. This appropriation is being brought forward at this time to maintain the continuity of the implementation schedule and to ensure that the pricing reflected in the proposals are current and complete. Momentum for this implementation is building as staff are getting opportunities to see the benefits of modernizing and enhancing our customer’s experience as well as focusing on simplifying the architecture and processes behind the customer interface to provide a stable, upgradable platform. There are three categories of funding in this next phase of the CIS-CX modernization. Professional Quality Assurance and Project Management Services While many existing City employees have worked for decades with the current customer information and billing system, operating such a system requires a different skill set than upgrading or implementing an existing system into a new system. The new system may be hosted in the cloud or a more traditional in-house physical solution with different hardware requirements and interfaces. It may include different modules for a customer portal, social media, bill printing, etc. To effectively implement these new features and ensure that the City is receiving the functionality it is expecting, professional software implementation project management and quality assurance is required. A scope of work has been developed for these services with a maximum fee through the implementation and go-live of the new solution. Because most of this work will be done remotely, travel expenses have been excluded from the not to exceed price for these services. Estimating some travel will be necessary, raises the amount being requested for these services including travel to $1,500,000. Contract Review and Counsel Prior to the City entering into a binding services agreement with the solution provider outside legal counsel may be sought as needed to ensure the final agreement is in the best interest of the City and ratepayers. It is requested that an amount of up to $100,000 be appropriated for this purpose. Contractual Staffing Many of the City’s employees who work in and with the current customer information system will be involved in the implementation of the new solution. This is a best practice to ensure that the proposed solution is consistent with customer expectations and operational requirements. In order to have these employees available to focus on the implementation, staff will be augmented by contractual staff throughout the implementation, and post go-live quality assurance and testing. Based on the staffing plan developed for the solution implementation, the following contractual positions are needed before implementation: 4 Customer Service Providers $288,000 / yr 1 Customer Experience Provider $64,000 / yr 1 Billing & Accounts Receivable Specialist $80,000 / yr 1 Field Service Lead $100,000 / yr 5 Information Technology Solution Providers $575,000 / yr $1,047,000 / yr Because having these additional staff will be advantageous throughout the 24-month implementation with some needed beforehand and some afterward, in total for almost 2.5 years of augmentation it is estimated that contractual staff may require: Contractual Staffing Appropriation = $2,650,000 In addition to the contractual staff discussed above who will backfill employees focused on the implementation, there will be a need for additional staffing for the duration of the project who will focus on leading testing of the solutions, developing training and training employees, implementing organizational change management, reviewing existing business processes and developing business analytics for the future solution. As these additional staff are not needed initially, this staffing need will be a part of the implementation appropriation once the solution partner is selected. Appropriation by Enterprise Fund As the customer information and billing system is needed by each utility to generate monthly operating revenues, each utility requires such a system and therefore should contribute to the upgrade or replacement of such a system. While some rates are more complicated than others and some require meter consumption data to assess, billing for each utility requires much of the same information as any other utility. Because electric monthly charges are more complicated than flat stormwater rates and unmetered wastewater use, there are additional billing components for billing electric customers. Hence, it is appropriate to attribute more of the shared costs to Light & Power. A similar argument applies to Water billing. The annual subscription costs for this system are divided between the four utilities as follows: Light & Power 50.0% Water 25.0% Wastewater 12.5% Stormwater 12.5% This same cost sharing ratio is proposed for the implementation costs. Light & Power $2,125,000 Water $1,062,500 Wastewater $531,250 Stormwater $531,250 $4,250,000 Enterprise Fund Reserve Balances The funds being requested herein would come from available reserves of each utility. These funds are above and beyond funds set aside within the reserves to meet minimum fund balance requirements and any previous appropriations made but not yet spent. As the table below shows, each enterprise fund has sufficient available reserves for both anticipated appropriations related to modernizing the CIS-CX solution. DISCUSSION / NEXT STEPS GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED Does the Council Finance Committee support bringing an appropriation ordinance forward for the consideration of the full City Council to support the next phase of the modernization of the Customer Information System – Customer Self Service Portal? Emily Francis: are we including Connexion in the billing system? Lance Smith, no, when the previous effort did not work, we needed an immediate solution for Connexion. A separate billing system was stood up for Connexion about 1 ½ years ago. Emily Francis; is there no plan to incorporate all into one billing system? Light & Power Water Wastewater Stormwater Available Reserves EOY 2021 $41.4 $41.3 $19.1 $14.5 Mid-year 2022 Appropriations ($26.1)$0.0 $0.0 $0.0 2023-24 BFO Use ($1.0)($29.3)($7.7)($2.3) 2022 Revenues Above Budget $11.2 $3.5 $1.2 $0.2 2022 Expenses Below Budget $1.9 $7.4 $1.8 $2.2 Estimated Available Reserves $27.4 $22.9 $14.4 $14.6 Amount Being Requested ($2.1)($1.1)($0.5)($0.5) Remaining Available Reserves ($M)$25.3 $21.8 $13.9 $14.1 Lance Smith; the real challenge there is that the vendors who built systems for traditional utilities have not gotten into the broadband space so there are really not many solutions that would incorporate broadband as well. Travis Storin; also, although the backend systems probably don’t exist to support the market in the way we would hope right now, there are opportunities to have a more streamlined customer facing experience and there are platforms that can merge bills for presentation purposes and still be processed by staff separately on the backend so a utilities customer who also has Connexion could be presented with one bill. That is further down the road and is carries some level of inefficiencies by virtue of operating the two billing systems on the back end. But if the spirit of your question is around the customer experience, there are some alternative ways we could be approaching that and examining that in the future. Julie Pignataro; can you talk a bit about lessons learned from the previous experience that are feeding into this process? Lance Smith; the previous experience was not successful and so the first lesson is that we were trying to manage an implementation of a software system in house and in house we don’t have that expertise – the first thing we did was procure outside expertise and project management– test things along the way – confirm all works – we tried to do this w/out adding an contractual staffing – make sure this implementation goes well – we can’t ask people to do that – we are bringing resources in to backfill so these folks can focus on this – we are asking outside council to review the contract to make sure it is very clear and tight Gretchen Stanford; the requirements are such an important piece of that – making sure that we are all on the same page about what those requirements are and that QA piece will be very important as well. Julie Pignataro; so, we don’t know who we are going with yet. How much is our IT team involved in this choice because of their expertise? Lance Smith; so, this is not for an RFP. We issued that earlier this year. Before we did that, we brought on a professional management team who helped us write the requirements so we could issue the RFP. We reduced the number of proposals we received down to five who we are bringing in for this week long demo. Each vendor is spending a week here on -site to demonstrate how their system works. We have a team who will be scoring them as they go through this process. The team consists of folks from customer service, billing, metering, rates as well as a large contingent from IT. Collectively, this team is going to score the proposals then we will have our chosen vendor and then will be working with them to negotiate the contract as to exactly what is going to be provided. The first thing will be determining if it will be a hosted system or inhouse and that will determine some of the cost. IT is intimately involved and half of the staffing we are asking for is IT. Julie Pignataro; I had heard that everyone thought the previous (failed) project would be ready to go out of the box. Travis Storin; it was sold as an off the shelf solution. Lance Smith; it was and one of the things we are doing with these demos is – one criteria said that we aren’t going to look at your solution unless it has already been deployed in a market with 100K plus customers. They are going to show us their product, step us through so we can make sure it does what they say it does. Previously we were told it was an off the shelf solution and then we realized no it was not. That was one of the big lessons learned. So, making sure the product is real is key. We will also be doing reference checks with other utilities who have implemented their solutions to make sure it did what they were told and the implementation timing was accurate. Travis Storin; Julie, if you have more in-depth questions, we may need to have an Executive Session because of the ongoing litigation we are involved in. Julie Pignataro; let’s put that on the shelf for now and keep us updated. Kelly Ohlson; I see $13-18M for a new billing system. Is that number close to what we expected as it seems like a ‘take your breath away’ number Lance Smith; it is in the ballpark and there is a pretty wide range $9-14M. That depends on what type of solution we go with, whether it is In house, running on our computers with our IT doing the trouble shooting or it could be on a hosted platform, they run it on their servers. The hosted solution option is the solution we are leaning toward. Our current billing system is about 20 years old, so we haven’t done this in 20 years. The hosted solution would include regular updates 2-3 times per year so we would constantly be upgraded to the current version of the software. We don’t want to have a highly customized system. We want something as close to off the shelf as possible. When I came and talked to you about the debt forecast I was assuming $12M Kelly Ohlson; so, to confirm today we are talking about $4.2M. Lance Smith; yes, that is correct – the total range is $13-18M Result; The Committee approved this to go forward to the full Council on March 21st. B. Connexion – Capital Management Blaine Dunn, Director, Accounting Chad Crager, Broadband Executive Director EXECUTIVE SUMMARY The purpose of this item is to provide Council Finance Committee an update on Connexion’s financial projections, highlight the timing of liquidity needs, and discuss a proposed resolution that will enable flexibility in the usage of funds to be raised in the fall of 2023 from a planned bond offering in combination with Light & Power. GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED Does Council Finance Committee support the recommendation to bring forward a resolution to Council to reimburse Connexion for expenditures through a future bond offering? BACKGROUND/DISCUSSION Both Light and Power and Connexion anticipate needing to borrow money through bond offerings in 2023. The projects for Light and Power and Connexion each have different timelines, so it is expected expenditures for Connexion will occur before the issuance of additional bonds, and exhaust currently available funds. Reimbursement of expenditures with bond proceeds is allowed for soft costs. However, in order to reimburse expenditures incurred for capital costs, an official declaration by Council must be made. Therefore, in order for the City to be able to use the proceeds from the issuance to reimburse Connexion for any expenditures, and at the same time maintain the tax-exempt status of the bonds, the Internal Revenue Service (Treasury Regulation 26 C.F.R. §1.150-2) requires the City Council adopt a Resolution. The Resolution represents the City’s declared official intent to reimburse the applicable City funds for such expenditures with the proceeds from the issuance of the bonds. The declaration of official intent through the Resolution complies with federal regulations. It also provides more flexibility to the City so it can better manage the capital expenditures related to the Projects. With a Resolution, the City can make the capital expenditure prior to issuing the bonds and later reimburse the applicable City fund with the proceeds from the issuance of the bonds. FINANCIAL IMPACTS Staff presented updated financial projections for Connexion at the January 10, 2023, Work Session. In that meeting, the capital project estimate was updated, reflecting a need to access approximately $16 million additional capital to complete the network build-out and customer ramp-up by the end of 2024. An additional $3 – $5 million for excess operating expenses was also estimated to be needed. These estimates remain unchanged. The table below highlights the original Business Plan capital assumptions, approved spending updates, project spending to date and the current project estimate. Connexion’s maximum funding need is expected by December 2024, with 2025 expected to be breakeven before the generation of excess cashflows that will be able to service the L&P reserve usage payback plus new bonding commitments. To date, Connexion has issued $129.6 million of the $150 million voter approved amount to support Connexion’s build. This leaves over $20 million available for additional funding needs. Connexion is contemplating the issuance of new bonds totaling approximately $20 million (in a combined offering with Light & Power’s approximately $40 million requirement). Highlighted below is the current estimate of the projected inflows and outflows for Connexion for the balance of 2023 and full year 2024 (with the assumption of completion of new bonding in the September / October timeframe.) DISCUSSION / NEXT STEPS GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED Does Council Finance Committee support the recommendation to bring forward a resolution to Council to reimburse Connexion for expenditures through a future bond offering? Kelly Ohlson; it says Connexion knows there will be a need for future capital of $20M $16M capital and $4M for operations (see slide below) Blaine Dunn; capital can be used in two different senses; capital can mean cash. The $16M for capital covers expenditures for fixed assets being put into the ground. Fixed assets – the $4M is the soft costs which include personnel, marketing, etc. Julie Pignataro; this is hard because this comes back to us a lot - but my answer is yes. I know we have a new team and more information, but it is very difficult. I just have to acknowledge this is hard to read. I do know you are being very transparent and that is super helpful. Constant updates are helpful. Emily Francis; did we already discuss the $40M in Light & Power that we are bonding? Blaine Dunn; we have not, that is scheduled to come back to this committee in the June timeframe. Lance is still solidifying some of the final numbers. Travis Storin; we have not talked directly about the financing, however, it is part and parcel to the long term capital plan that Utilities updates every 2 years. I believe we talked about Light & Power in December. It is implicit in the cost numbers that we would go for approximately $40M. Blaine Dunn; when Light & Power came to Council Finance the last time, that was the number that was in their presentation. Emily Francis; yes, a hard yes but yes Result; The Council Finance Committee approves this to go forward with a resolution to Council to reimburse Connexion for expenditures through a future bond offering. C. Annual Reappropriation Ordinance Lawrence Pollack, Budget Director EXECUTIVE SUMMARY The purpose of this item is to reappropriate monies in 2023 that were previously authorized by City Council for expenditures in 2022 for various purposes. The authorized expenditures were not spent or could not be encumbered in 2022 because: • There was not sufficient time to complete bidding in 2022 and therefore, there was no known vendor or binding contract as required to expend or encumber the monies; or • The project for which the dollars were originally appropriated by Council could not be completed during 2022 and reappropriation of those dollars is necessary for completion of the project in 2023. Additionally, there may have been sufficient unspent dollars previously appropriated in 2022 to carry on programs, services, and facility improvements in 2023 for those specific purposes. In the above circumstances, the unexpended and/or unencumbered monies lapsed into individual fund balances at the end of 2022 and reflect no change in Council policies. Monies reappropriated for each City fund by this Ordinance are as follows: GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED Does the Council Finance Committee support moving forward with the 2023 Reappropriation Ordinance on the Consent Agenda at the March 21, 2023, Council meeting? BACKGROUND/DISCUSSION The Executive Team has reviewed the Reappropriation requests to ensure alignment with organization priorities and the Budget staff reviewed the requests to verify that all met qualification requirements. The 2023 Reappropriation requests are as follows, by fund: GENERAL FUND Police Services 1) K9 Vests - $3,520 Purpose for funds: $3,520 was donated by a resident for the purpose of buying a protective vest for a K9. This has not yet been purchased and should be reappropriated according to the intent of the gift. Reason funds not expensed in 2022: The reason that the gift was not expended in 2022 was because the dog that it was intended for needed to be returned to the breeder because of behavioral issues. Another K9 has been purchased and the vest will be purchased later in the year when the dog is full grown. 2) Northern Colorado Regional Communication Network (NCRCN) - $300,000 Purpose for funds: The funds are being drawn from NCRCN (Northern Colorado Regional Communication Network) reserves, a restricted portion of the General Fund. These funds were designated for the maintenance and replacement of the radio towers and equipment on top of the hospital and on Tower Road by Horsetooth Rock. Reason funds not expensed in 2022: Because of the complexity of the scope of the project, and conflicting priorities with other projects, the Information Services Division in Police Services is still in the process of developing the RFP to bid out the work. This project will commence in 2023. City Manager’s Office 3) Council High Performing Board - $18,295 Purpose for funds: The previous City Council approved an offer for $30,000 to support Council group and individual development. Strategies such as individual mentors/coaches and conferences are available with General Fund $602,754 Transit Fund 55,750 Transportation Fund 100,000 Water Fund 52,500 Broadband Fund 4,361,774 Data & Communications Fund 86,000 UT Customer Service & Administration Fund 170,848 Total $5,429,626 this funding. It can also be used for other training purposes, as well as participation with associations such as the Colorado Municipal League, National League of Cities, and Water Literate Leaders. Reason funds not expensed in 2022: A portion of this funding was used in 2022; however, City Council did not fully utilize the available budget. A Council workshop in January of this year outlined further training and development needs for Council in 2023. These funds will be used towards those additional opportunities. 4) DEI Principles of Community - $8,000 Purpose for funds: A key deliverable identified by Council to advance the Equity and Inclusion priority was to develop Principles of Community for the organization to foster and enhance a sense of belonging for coworkers and the community we serve. This funding will create the principles of community which developed as a mission, vision, values refresh project. Work was partially completed in Q4 of 2022 after extensive staff engagement. The Communications Department is working on creating a new poster and communications to be shared city-wide in 2023. Reason funds not expensed in 2022: Not all funds were expenses in 2022 as the city-wide roll out of the new Mission, Vision and Values (MVV) was planned for Q2 2023. Messaging and development of the outreach materials is still in progress and expected to be completed and ready for outreach by the end of Q2. These funds will be used to pay for the final printing of materials and promoting the new MVV across all departments in 2023. 5) Land Acknowledgement Funding - $16,065 Purpose for funds: Land Acknowledgement funds have been used to build trust with the Fort Collins Native American community in a land-focused way. Having a strong relationship with a foundation of trust is a crucial first step before we can begin the process of creating a written land acknowledgement. For example, funds have been used to provide space for the Northern Colorado Intertribal Powwow Association (NCIPA) Powwow, space and supplies for NCIPA culture classes, and space and supplies for the NCIPA winter drive celebration. Reason funds not expensed in 2022: It was crucial to establish a strong relationship of trust and reciprocity before beginning the process of creating a land acknowledgment. There was some hesitancy in the Native American community about creating a land acknowledgment without understanding the City’s commitment to the Native community, to ensure that the land acknowledgment was not merely a performative action. Over the last year, we have established that relationship and we now have a solid basis to create a written land acknowledgement in 2023. Quarterly meetings have been set up with the Native American community for 2023, and we are also establishing a Native American Advisory Circle this year. These spaces will be the mechanism through which the land acknowledgment is created. Parks 6) Park Planning & Development Special Project Support - $5,600 Purpose for funds: Special project support funding was appropriated in 2020 for Park Planning & Development staff to conduct site planning and prepare cost estimates for potential donor funded projects, enabling donors to move forward with fundraising efforts. To date, multiple projects have been completed utilizing this funding source, including Veteran's Plaza improvements, Eastside Park improvements, Sugar Beet Park art "The Hand that Feeds", a cyclo-cross training course in Rossborough Park, site planning for a pickleball complex, and a pledge from the mountain bike community to fund a feasibility study for a bike park as part of a GOCO grant. Reason funds not expensed in 2022: Funding partnerships with potential donors are unpredictable. This funding enables the City to be responsive to potential donors when fundraising opportunities arise. The remaining funds will be used to complete projects currently underway. Community Development & Neighborhood Services 7) Mediation and Restorative Justice Services - $4,526 Purpose for funds: These funds were all donations made to support the Mediation and Restorative Justice programs. The programs were founded 22 years ago and provide community-based services to support residents in constructively facing conflict. Community Mediation is used to address all types of conflicts and supports citizens in resolving conflicts collaboratively. Youth (10-22) in our community can be referred to the Restorative Justice programs to take responsibility for, and help repair the harm of, crimes they have committed. Our team of over 50 trained volunteers makes these services free or low-cost and available for our community. Planned uses for these donated funds include additional training and conferences for staff and volunteers; diversifying the Mediation and RJ volunteer pool; funding the RePay program where youth in the RJ programs who owe victim restitution can do community service to help pay the restitution. Reason funds not expensed in 2022: In January 2022, two of the 4-person MRJ team left the organization so efforts were focused on maintaining core services, rather than pursuing special projects. New staff were hired in May 2022 and training, onboarding continued throughout much of the rest of the year. It is expected that these funds will be expended in 2023. Social Sustainability 8) EV Credits - $238,000 Purpose for funds: These funds address the cost differential between current Colorado Housing and Finance Authority requirements and the updated Building Code requirements for Electric Vehicle (EV) infrastructure for affordable developments. The program provides cost-sharing of these additional infrastructure requirements by providing credits of flat fees calculated per project based on eligible parking spaces. Reason funds not expensed in 2022: The City did not receive any requests for EV infrastructure credits from qualifying projects in 2022. The parking standards in the Building Code that will be in place starting 2023 will allow all affordable housing projects to qualify for this credit. Staff expects the first request for a credit to be submitted Q1 2023. Natural Areas 9) West Nile Virus - $8,748 Purpose for funds: The West Nile Virus Program provides proactive mosquito management and seeks to reduce the risk of human contraction of West Nile Virus. The majority of the monies fund two contracts; a contract with Vector Disease Control International provides mosquito larvae control and mosquito trapping, while a second contract with Colorado State University provides for testing West Nile Virus presence. The remaining funds provide for community education through various forms of advertisement and outreach. Reason funds not expensed in 2022: During the budget process of 2023-2024 full funding for the WNV Program was not restored, yet looking ahead, it became clear that the inflation-related contract costs for the fundamental, contracted elements of the program would significantly exceed the budgeted increase for 2023 and 2024. To plan for this short-fall, remaining outreach funds (approximately $5000) were coupled with unanticipated reimbursement money from the Town of Berthoud (approximately $3000) not spent with the intention to carry them over to address the 8% increase in contractor costs. Without carrying these funds forward, the contracted elements of the program are likely to exceed the total program budget by roughly $2000. TRANSIT FUND Transfort/Dial-A-Ride 10) Poudre School District (PSD) & Transfort Collaboration Study - $55,750 Purpose for funds: This funding allows for a study to determine areas of better collaboration for student transportation between Transfort and Poudre School District (PSD). Reason funds not expensed in 2022: Staffing issues, contractor availability, as well as purchasing department capacity led to delays for this project until late November 2022. Staff currently has all of the work in place to sign a contract and begin work as soon as 2023 funding is confirmed. Multiple staff will be actively monitoring and guiding this work in 2023. TRANSPORTATION FUND Traffic 11) Neighborhood Traffic Mitigation Program Project Construction - $100,000 Purpose for funds: Traffic in neighborhoods can affect the quality of life for residents, bicycles, pedestrians and drivers. The Neighborhood Traffic Mitigation Program is a collaborative effort between neighborhoods and City staff to implement traffic calming options. In 2022, Traffic received $130,000 additional funding for medians and/or pedestrian refuge islands, sidewalk curb extensions and traffic diverters in order to achieve a more "complete streets" approach to traffic calming. The offer included funding for professional (consulting) services and funding for the construction of traffic mitigation devices on neighborhood streets. Traffic is requesting $100,000 to be re-appropriated from the 2022 budget to construct these mitigation improvements. Reason funds not expensed in 2022: In 2022, evaluation of locations and public outreach was completed. Due to staffing changes and consultant availability, design of the mitigation improvements for Whedbee and Oak was not started until fall. Survey and design will be completed in the Spring of 2023 and the construction will start in the summer/fall. WATER FUND Utility Water Resources Division 12) Northern Integrated Supply Project (NISP) Response & Engagement - $52,500 Purpose for funds: Since 2008, the City has developed and contributed science-based input to the various planning stages of the Northern Integrated Supply Project (NISP) project with the goal of minimizing adverse impacts on the Poudre River and the Fort Collins community. The City’s efforts have resulted in positive changes to this project which are reflected in the NISP operations and mitigation plan. Funding from this 2022 offer is intended to provide technical consulting and engineering support to inform the City’s engagement in future NISP planning efforts. Specifically, City staff will engage in NISP adaptive management and master planning stakeholder processes; however, additional technical and consulting support will be needed to achieve the desired outcomes. Funds from this offer would support: 1) water resources engineering and analysis to advise the NISP flow operations and ensure the proposed flow mitigation program is realized; 2) advisement for the development of NISP’s proposed Master Plan and Adaptive Management Program; and 3) additional discipline-specific representation on technical advisory groups and input for project infrastructure proposed within the City limits. Reason funds not expensed in 2022: The NISP project Record of Decision (ROD) was not issued until late 2022, which was later than NISP project participants anticipated. Because of this permitting delay and because staff at Northern Water were heavily involved in post-fire recovery from the 2020 East Troublesome Fire, Northern Water elected to postpone the Adaptive Management and River Master Planning discussions with stakeholders until after the ROD was released. Northern Water initiated conversations with potential project stakeholders, including City of Fort Collins, about the intended start of these planning efforts in early 2023. Funds from this budget offer will be used for the original intended purpose of developing science-based input with the assistance from technical and engineering consultants, on how the NISP project impacts should be managed, mitigated and monitored. BROADBAND FUND Broadband 13) Re-Deploy of Broadband Working Capital - $4,361,774 Purpose for funds: Offer 63.1 encompassed the ramp up of Connexion core operations as the network build out was expected to be essentially complete by year-end 2022, and customer acquisition, servicing and network maintenance approached full targeted operating levels. This offer was for all 2022 ongoing expenditures which include personnel, operating costs, cost of goods sold (primarily internet and video content) and debt servicing requirements. This request seeks to reappropriate $4.4 million in unspent 2022 funds into 2023 for completion of the primary network buildout, access to customer premises and continued customer installations. Reason funds not expensed in 2022: Construction of the network, accessing commercial and residential multiple dwelling unit (MDU) accounts, and ramp-up of customer base has taken longer than expected due to supply chain cost increases, build-out complexity and installation labor shortage issues. These conditions have required appropriation of additional capital expenditures for the project by City Council in September 2021 and April 2022 totaling $28 million. An additional $5.4 million in unanticipated working capital savings (primarily from operating cost containment and interest income from the original bond proceeds) was reserved and targeted for re-deployment as part of the updated financing efforts. $1.0 million of this amount was spent in 2022 on network buildout. This request seeks to reappropriate the remaining $4.4 million from the $5.4 million re-deployed amount to meet the increased capital requirements. This does not represent an increase in the capital budget estimate, just the formal transfer of reserved funds. DATA AND COMMUNICATIONS FUND Information Technology 14) Staff Augmentation for Network and Voice Operational Support - $86,000 Purpose for funds: This request will fund additional hardware support and staff augmentation for Network and Voice support that will assist with the Webex rollout, voice enterprise support, Police Wi-Fi upgrades, and other enterprise network tasks and demands. These funds will allow the Information Technology (IT) department to contract with an experienced vendor to help manage operational and project workload. This will also allow time for IT to hire new Network/Voice personnel and get them up to speed, while not losing traction on enterprise support needs, project rollouts, and maintaining a proper work-life balance with an already overextended Network staff. Reason funds not expensed in 2022: These funds were not expensed due to workload capacity, vacant positions, and expertise issues in the midst of the transition of Network and Voice operations between Connexion and the IT department that occurred in mid-2022. Upon transferring ownership of the Network and Voice operations, IT began evaluation of the current status of the operation and prioritized what needed most attention, which was delayed lifecycle switch replacement, ARPA-funded initiatives, and voice strategy which pushed the aforementioned initiatives and operational tasks to late 2022 and into 2023. IT has evaluated, rescoped, and is currently posting the vacant Network positions to better address the needs of the City's Network and Voice systems to keep up with service needs, project demands, upgrades, and expansion. UTILITY CUSTOMER SERVICE AND ADMINSTRATION FUND Utility Technology and Customer Service 15) Utilities Information Technology Minor Capital - $170,848 Purpose for funds: The funds are requested for replacement of departmental firewalls for 1) the Customer Information System (CIS) Utility billing system hosted onsite at Platte River Power Authority (PRPA) and 2) the Utilities Advanced Meter Fort Collins (AMFC) system. The firewalls are currently end-of-life, and thus end-of-support, and need to be replaced. Reason funds not expensed in 2022: The downside to the departmental firewalls is that they are discrete stand-alone installations built as a pair for redundancy. The number of these types of discrete firewall installs across the City creates a large management burden, as well as a large and potentially inefficient use of funds. IT was exploring a new concept in which these disparate firewalls could be combined into a single on-premise redundant virtual environment with the expectation that the new environment would be easier to manage, provide better redundancy, and ultimately be a more cost-effective solution. However, due to other work priorities, the research and analysis into this proposal was not able to be completed in 2022. The research into this new firewall architecture should be completed in 2023, and the funds for these firewalls could be applied towards this new firewall architecture. If the new firewall architecture proves to be unfeasible, the funds would still need to be applied to the purchase of discrete firewalls. FINANCIAL/ECONOMIC IMPACT This Ordinance increases 2023 appropriations by $5,429,626. A total of $602,754 is requested for reappropriation from the General Fund, $4,361,774 is requested from the Broadband Fund, and $465,098 from other funds. Reappropriation requests represent amounts budgeted in 2022 that could not be encumbered at year-end. The appropriations are from prior year reserves. DISCUSSION / NEXT STEPS GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED Does the Council Finance Committee support moving forward with the 2023 Reappropriation Ordinance on the Consent Agenda at the March 21, 2023 Council meeting? Kelly Ohlson; a pervious Council decided that West Nile Virus was a community issue and not a Natural Areas issue and the funding was taken from Natural Areas and put into the General Fund. Now I see it back under Natural Areas. Lawrence Pollack; you are correct that the funding is coming from the General Fund not Natural Areas. But it is managed and the budget is run through Natural Areas. Emily Francis; no questions Julie Pignataro; no questions – Thank you for the great explanations in the packet. RESULT; The Council Finance Committee supports moving forward with the 2023 Reappropriation Ordinance on the Consent Agenda at the March 21, 2023 Council meeting. OTHER BUSINESS; Julie Pignataro; because of the number and nature of the agenda items, does it make sense to do the April 6th meeting in person? We do good work this way – this is a robust agenda and this will be the 5th or 6th time we are talking about how we plan to package our funding shortfalls. Travis Storin; one of the agenda items for the April 6th meeting is Sustainable Revenue Climate and a separate topic regarding our approach to the ballot. Large emitter will be incorporated into that dialog. We will be brining the results of our analysis around the large emitter tax as opposed to a fee. We are at an actionable time as it relates to November ballots. We added more time to allow for that dialog. It was agreed to have the April 6th Council Finance Committee meeting be a hybrid meeting. Meeting Adjourned at 5:10 pm APPROVED BY THE FINANCE COMMITTEE ON APRIL 6, 2023