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HomeMy WebLinkAboutMinutes - Finance Committee - 05/19/2014 -Finance AdministrationCity021pN.Mason t 2~FloorrPCBox580 Fort Collins CO 80522 970.221.6768 970 221 6782 fax fcgov corn Council Audit &Finance Committee frMinutes 5/19/14 10:00 am.to 12:00 noon CIC Room Council Attendees:Ross Cunniff,Bob Overbeck,Mayor Karen Weitkunat Staff:Mary Atchison,Darin Atteberry,Sue Beck-Ferkiss,Josh Birks, Andres Gavaldon,Jeff Mihelich,Lawrence Pollack,John Voss, Katie Wiggett Others:Dale Adamy;Kevin Jones,Chamber Approval of the Minutes Bob Overbeck asked that the word deal in the first paragraph of the April 21 minutes be changed to yield.The sentence should read:“The interest rate environment is positive due to a shortage of high yield paper in the market.” Bob Overbeck moved to approve the minutes from the April 21 meeting as amended.Mayor Karen Weitkunat seconded the motion.Minutes approved unanimously. Budget Policy Review Lawrence Pollack explained that the previous budget policy evolved as part of the Budget document.In that context it focused on explaining budget concepts rather than setting policy.In updating the policy, staff looked at other municipalities’budget policies and found a wide-range of formats.Staff chose to use a structure based on recommendations from the Government Finance Officers Association (GFOA) and added specific linkages to the budget in City Charter to the policy. When staff reviewed this document,it was determined that it is administrative in nature with many references to City Code and City Charter.Staff proposes this policy no longer require periodic City Council review and approval.Rather,future reviews would be handled administratively. This being his first budget process,Bob said he was not comfortable changing the policy to administrative without more information.Ross asked what changing it to administrative would fix. Lawrence answered that,because the document will be static going forward and any changes to it would require a change in Code or Charter,it is not the best use of Council’s time to review it annually going forward.Karen said that she supports the change to administrative. Council Finance recommends adopting the new policy but makes no recommendation on whether the policy should be changed to administrative.This policy will come before Council in a package of administrative policies in late August or early September 2014. F~ttoLL ins Long Term Financial Planning Work Scope Andres Gavaldon presented the scope for Long Term Financial Planning (LTFP)that Council requested.The City has never developed such a Plan,so Staff researched potential methodologies and is now proposing a process for this new project built on GFOA recommendations.The proposed process improves on the City’s current “5-Line”analysis used in the budget process and takes an approach which can be completed within the current fiscal year with existing resources. Initially,Staff envisioned a robust plan with a 30 year forecast;however,because the City is a multi-faceted organization,this approach is very complex and would require extra time and resources.Staff consulted Bob Eichem,President of GFOA and CFO for the City of Boulder.Bob directed Staff to a more high-level approach.This model is directional rather than a forecast meaning that it will help reveal possible funding gaps in the future and how to avoid them rather than projecting a number for 2030. In 2005,the City implemented a 5-line review which addressed key funds for the BFO Process.This review looks 4-5 years out;whereas,the Long Term Financial Planning will look 20-30 years out.The new plan would leverage the 5-line Review,adding some more drivers and lengthening the timeline.It would also apply different growth rates by expense line items. Ross asked for more clarity on how this tool would be used.Andres gave the example of the Plan examining the potential of KFCG ending,looking at the impact of such an event and possible directions Staff could take. Andres explained that if Council approves the “5-line”method,Staff should be able to bring this item back to CFC in December 2014 or January 2015.Karen said that Council has been supportive of GFOA processes and will likely continue to follow their direction. Karen asked what boards and commissions will be involved in creating and approving this plan.Darin said that he didn’t see this as Board and Commission intensive,but rather an administrative process.Once the plan begins to affect policy,then it will be brought to Boards and Commissions.Karen asked if there was a way to clarify in the name of the project that it is more administrative;“Long Range Financial Plan”makes it sound like an external issue.Andres said that the name is actually “Long Term Financial Planning”and we could clarify by adding Process to the end of the name. Council Finance supports the 5-Line approach to Long Term Financial Planning. Affordable Housing Sue Beck Ferkiss presented on the Housing Affordability Policy Study the City commissioned to determine what tools and funding strategies are appropriate to our housing market and could be used to encourage the production of affordable housing in Fort Collins. Staff is looking into this because it is important to citizens and Council,as well as because the recent Foothills Mall redevelopment agreement gives a December 1,2014 deadline for Staff to work toward for creating an affordable housing impact fee. A technical team of City staff was created to assist our consultant,Economic &Planning Systems (EPS). Representatives from Economic Health,Finance,Environmental Services,Planning,City Attorney’s Office,Communications and Public Involvement,as well as Social Sustainability serve on that team. Three Stakeholder Workshops were held to inform the study. F~t°bo[L ins Staff has presented,or will present,information about this study to several City Boards and Commissions including the Affordable Housing Board,the Senior Advisory Board,the Planning and Zoning Board,the Economic Advisory Commission,the Community Development Block Grant Commission and the Council Finance Committee.Staff has also presented,or plans to present,to outside groups such as the Fort Collins Board of Realtors,Vida Sana,Circles Leaders with the Education and Life Training Center,and the Fort Collins Chamber of Commerce.It is anticipated that multiple presentations may be needed at different stages of this study.One public open house was held on May 14,and another public open house is scheduled for May 21. EPS found that generally our housing system is healthy,but there are distressed populations that do not have adequate housing choice.Also,there are trends that suggest housing costs are escalating which is translating into higher purchase prices and rents.With current low vacancy rates,rents have increased causing more Fort Collins residents to pay more than 30%of their income on rent.According to the Social Sustainability Gap Analysis,59%of renters and 28%of home owners are rent burdened. Bob asked Sue if she can provide the State’s numbers for comparison when she gives numbers for Fort Collins and Larimer County.Sue said that she can add that to future presentations.Ross asked that the wording “average housing cost”be changed to “average housing price”to be more accurate.Staff will make that correction. Sue explained that EPS looked at both home ownership and rental markets.They found seniors,people with disabilities,homeless individuals and people with household income less than $25,000 to be distressed populations.First time home buyers are also having trouble finding affordable homes.This is aggravated by the lack of inventory for for-sale attached products such as condominiums and town homes. EPS analyzed data about our community and tried to estimate the impact of students on our overall housing inventory.Bob asked if we can get a sense of how numbers compare in different areas of the community,i.e.communities close to CSU vs.communities in south Fort Collins.Bob explained that he’s not trying to take the students out of the equation;however,students’renting lifestyles differ greatly from long-term renters.Sue explained that it is hard to isolate all students since their circumstances vary greatly.Bob said that he understood the difficulty,but he wanted to make sure that that we tried to pinpoint the population drivers as much as possible. Ross added that he would like CSU to solve the student housing problem,and would like to know better what impact the lack of student housing has on housing affordability.Karen suggested adding two slides,one for student housing in Fort Collins and one for non-student low-income residents because these are two different major discussions.Sue agreed,though she reiterated the difficulties of separating the students.She said that she believes they can distinguish between short-term residents and long-term residents. Bob asked if ESP works with other college communities;and ifso,can Staff ask them for numbers from those other town for comparison.Mary replied that the report should include some comparison numbers from surrounding communities.Staff can ask about other communities. r City ofFortColLins Darin asked that Sue define “distressed population”in the slides.Bob asked if we could see the average housing costs for mobile homes.Sue answered that she’d want to distinguish between mobile homes and manufactured homes.Ross added that it might also be helpful to research zoning regulations for mobile homes.Karen agreed that the land use code that restricts mobile homes should be part of this discussion. Sue said that EPS has provided options to be considered by the City to address the needs of the identified distressed populations and create more housing choice for all residents.These options fall into the following categories: Legislative: Fix Construction Defects Law Approve the State Low Income Tax Credit Program Pass state wide funding measure for affordable housing Bob asked why we would be involved in fixing the Construction Defects Law.Ross said that that item is on the work plan because the law is depressing the market for condos and town homes.Sue agreed, noting that a lack of condos and town homes is a problem.Bob Overbeck suggested that there may be federal programs that can help and be very lucrative through new market tax credits.Josh Birks noted that that is one of the many funding options Staff will look into. •Cost Reductions Fee Waivers for Affordable Housing Streamline Process for Affordable Housing Adjust Marginal Cost Structure of Fees (reduce fees for smaller units) Reduce/remove minimum size for homes •Regulatory Relax the 3-unrelated Rule Incentive Policy Ordinance Evaluate Land Constraints Address Manufactured Housing •Alternative Funding Sources Excise Tax Dedicated Sales Tax Time Limited Property Tax Land Bank Program Because this study is still underway and the consultants have not issued a report,Staff would be pleased to return to Council Finance after receiving guidance from City Council.Staff has not formulated recommendations at this juncture,nor has the City Attorney’s Office reviewed all these options. Ross said that,overall,this is a huge task and the City will have to be creative as we look for solutions. Undoing certain policies would lead to a large community discussion.Sue agreed,saying that Staff recognizes the sensitivity of certain solutions which is why they are doing so much community outreach. Ross suggested focusing on long term residents in the solutions. C F~t°CoL[ins Fund Balance Review John Voss presented the status of the City’s fund balances and working capital,information that will be used in the BFO process.His presentation summarized availability by each fund in the City Budget.The balance within each Fund was categorized into Non-spendable,Restricted,Committed and Assigned.Within each of these categories,funds were further broken down by Appropriated or Scheduled,Available but with Some Constraints and Available for Nearly any Purpose. Ross noted that,when the school district had a mill levy for staffing,the district only used half of the funds,setting the other half aside to act as a buffer.Why don’t we do the same with KFCG funds?John answered that Staff has been directed not to build up the fund.Ross said that that was probably best since KFCG is a percentage of sales tax,not a set amount like a mill levy.