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Home My WebLink AboutMinutes - Finance Committee - 01/12/2015 -Finance AdministrationCitof215N.Mason StreetF..r ‘DoLLns 970.221.6788 970 221 6782 -tax fcgov corn Council Audit &Finance Committee Minutes 01/12/15 10:00 a.m.to 12:00 Noon CIC Room Council Attendees:Ross Cunniff,Bob Overbeck,Mayor Karen Weitkunat Staff:Darin Atteberry,Mike Beckstead,Josh Birks,Tauny Gilmore, Bruce Hendee,Sam Houghteling,Jeff Mihelich,Lucinda Smith,John Voss, Others:Dale Adamy,Jason Licon-Airport,Kevin Jones-Chamber Approval of Minutes The December 15,2014 minutes were amended to read that;the City should have funds set aside and allocated for the Fossil Creek irrigation system should it become a catastrophic event. The following sentence in the minutes was deleted;Ross said that after the April election,the new Council should have a say on how these revenues are spent. Bob Overbeck motioned to approve the minutes;a second to the motion came from Mayor Weitkunat. The amended minutes were approved unanimously. Airport Financials Jason Licon presented an overview of the Fort Collins/Loveland Airport financials providing the following information: •Airport Statistical Snapshot &Comparables with Airports in the Region •Airport Funding &Its Financial Needs •Airport Investment Summary 2004-2013 •Operations &Maintenance Revenue Sources &Expenditures •Capital Revenue •2015 Budget Appropriation The airport is a jointly owned and operated through the City of Fort Collins and the City of Loveland. Operations at the airport include on-site training for three flight schools including helicopter training, o o City ofFortCoLLins local and transient general aviation,diverted flights,charters,corporate jets,military,fire,and medical transfers. The Fort Collins/Loveland airport receives revenue from federal and state grant monies,airport generated revenue,plus contributions from both the City of Fort Collins and the City of Loveland. Jason stated that starting in 2015 a reduction of revenue sources will impact the overall operation of the airport,noting a portion of this significant reduction in federal grant dollars is from $1 million dollars annually to $150,000 due to the declassification from a primary commercial service airport to a non- primary commercial service airport. Jason noted that all airports compete for dollars.Grants require a local match and must comply with federal grant regulations.FAA grants are 90 percent with a funding match of 10 percent.State grants are the same 90/10. Airport generated funding can come from: •Land and Building Leases •Privately Owned Hangars •Sales Tax and Fuel Flowage —a primary revenue source Jason provided an overall summary of the total airport investment from 2004—2013. $30,680,000 Total Airport Investment: •57%Federal Contributions •26%Airport Revenue •11%State Contributions •6%City Contributions Jason Licon’s presentation illustrated the 2015 Operations &Maintenance budget which includes snow removal,insurance,utilities,personnel,professional services,vehicle and equipment maintenance,and administrative.Jason noted that the maintenance costs went up in 2015 because they are doing some of the work themselves,for example repairing crack seals. •Operations &Maintenance Expenditures =$845,000 The Council Finance Committee asked if fuel purchasing contract negotiations is possible and recommends having a dialogue about locking in fuel pricing when it is low,not only for the airport needs but for fuel purchasing needs for the City of Fort Collins fleet.Can a purchasing contract be set for two years at lower fuel rates? Mike Beckstead stated he would like to have the Council Finance Committee have a conversation about hedging and its complexity for clarification purposes. Jason Licon stated that the largest capital project is the runways.He noted that they are currently in good shape and have an estimated performance time of 20 years.He did state that the smaller taxi ways and pavement to the hangars are not included in this estimation.The airport needs to have revenue for these paved areas from a capital project fund. 2 City ofFortCoLLins Ross Cunniff stated his concern for capital shortfall dollars. Jason noted that most airport fees are already written into their contracts however;he is optimistic that land leasing (example of a solar farm),generating more hangar space,and other opportunities can be developed. Jason outlined to the Council Finance Committee the 2015 budget appropriation which has a shared amount of equal contribution totaling $355,000 from the City of Fort Collins and the City of Loveland. Airport revenues and grants total $687,000. Climate Action Plan —Macro Financials Josh Birks stated that the premise of the Climate Action Plan is to develop necessary steps to reduce community greenhouse gas emissions through an accelerated timeline,efficiently and cost effectively. He noted today’s presentation to the Council Finance Committee would be an overview of the revised draft Climate Action Plan Financing Guiding Principles,and to seek the committee’s comments and/or suggestions.It was noted that on February 9th this committee will discuss in further detail,the framework of the guiding principles,and to evaluate if there is sufficient information provided for City Council consideration to discuss implementation and funding of the Plan at their February 17th meeting. Josh provided a draft set of guiding principles for future City investments in Climate Action Plan initiatives: •No significant adverse impact on the City’s balance sheet •No adverse impact on the City’s credit rating •The City’s investment should catalyze investment in strategies by end-users and the third parties •Internally the City’s priority is utility rate revenue before general fund revenue Josh identified potential funding mechanisms which may support implementation: •Business Financing/Private Sector!Philanthropic •Individuals/Household •Government Financing/Grants •City Revenue Sources/Utility Josh outlined the financing needs and major outcome areas: •Buildings •Electric Supply •Road to Zero Waste/Land Use •Transportation The strategy is to invest in energy efficiency business models that will address the needs of businesses and individuals.The upfront investment has the capability to leverage a future return of savings. Feedback and wordsmith editing of the Guiding Principles for the Climate Action Plan Financing document was provided to Josh Birks from the Council Finance Committee: 3 0 0 City ofFortCoLLins •Mayor Weitkunat commented that she feels there are some missing key pieces that would enhance the understanding of the information provided.This would enable us to keep moving forward •The Committee acknowledged that there is always assumptions and risk involved with projected costs and savings that will change over the years ahead •Discussion from the Council Finance Committee included the question of how much debt would the City be willing to take on in their investment.How would borrowing impact/jeopardize the City’s AAA rating •Bob Overbeck asked for an outline of what a 25 year impact spreadsheet may look like.How many point differentials is there between AAA and AA rating.Mike Beckstead will provide more information •Mayor Weitkunat would like to include information on different levels of government investment i.e.,federal,state,city •What does the public Transit infrastructure investment look like •Bob Overbeck asked what alternatives can be done now...recycling,etc. •Mayor Weitkunat stated that it is very important to include the Platte River Modeling Analysis Caveats.She would like this noted as related financial factors •Transparency needs to be included Josh Birks stated that he will incorporate updates,answers,case studies,and further strategies to the Climate Action Plan Financing materials for review and discussion at the next Council Finance Committee meeting on February 9th~ The Council Finance Committee noted that we are moving in the right direction. Bruce Hendee wanted to publicly recognize the positive relationship between the City and Platte River Power Authority.They have been a great partner. Meeting Adiourned