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Home My WebLink AboutMinutes - Finance Committee - 03/16/2009 -•Finance Administration I 0 215N.MasonFortCoLLins 970.221.6782 -fax fcgov corn Council Finance Committee Minutes 03/16/09 10:30 a.m.12:00 p.m. Council Attendees:Mayor Doug Hutchinson,Councitmember Ben Manvel City Staff Attendees:barth Atteberry,Mike Freeman,Chuck Seest,Carrie Daggett,John Voss,Jeremy Reese,Terri Bryant, Heather Shepherd Others:David May,Chamber of Commerce;President from Larimer County HeaLth Services. Approval of the Minutes from the February meeting. Ben Manvel moved to approve the February minutes and Doug Hutchinson seconded the motion.The Council Finance Committee approved the February minutes. Larimer Center for Mental Health—Tax Exempt Revenue Bonds Overview of the Organization: •21 locations (3 in Fort Collins) •220 employees •7,500 people served each year •65%of people served are from Fort Collins •Served Larimer County for 52 years •12.5 million budget for 2008 One building currently used by LCMH is a Fort Collins City owned building.It will be displaced by the amphitheater and they are planning to move out by September 2009.There are plans for new location at 125 Crestridge Street. The building at the new location will be used for some current programs that need more space. •Spirit Crossing—learning skills—daily classes •Domestic Violence Program •Administration/Offices The budget for this project is approx.$1.8 million. The Purchase Price $1.8 million and renovations will be about $600,00. Financial Plan: •Bonds to be purchased by First National Bank. •Approx.$315,000 savings through interest savings. •Minimize costs of issuance. F~ttoLLins •Bond documentation includes tn-party financing agreement between City,FN Bank,and Larimer Center. These bonds either have to be issued through the City or the County,and City already has a mechanism already in place so it will be a more simplified process. Doug Hutchinson asked if staff is supports this plan.City staff recommends that this be brought to Fort Collins City Council for approval. Continuation of Financial Services Summary Transportation Fund John Voss stated that the main reasons for a spike in the (chart) •3 years of deficit spending •2005 CDOT money $13.7 million for Harmony maintenance Without significant modification to the 2009 budget,it is projected that all Transportation fund balances,other than the Harmony reserve,will be depleted by end of 2009. Personnel ACTION:Show Overtime hours by service area.Bring this information/chart to a future Council Finance Meeting. Utilities Revenues •Electric revenue decreased 0.7%over 2007 Residential &Commercial Sales are down Industrial Sales increased slightly YTD kWh billed customers decreased 0.9% •Stormwater revenue 3.0%higher than 2007 due to growth in customer base •Wastewater increased 10.5%-rate increase in 2008 was 11.0%to all rate classes •Water revenues are down 2.2%compared to 2007 Light and Power —Utilities Expenses •YTD Purchased Power increased 1.5%after a 3.5%rate increase from PRPA Probable impacts included energy conservation,DSM programs,economy,and weather •Operating &Maintenance Expenses -up 11.0%(will continue to rise) Maintenance costs to distribution system Additional program costs for Energy Services •Overall operating expenses increased 3.7% Water &Wastewater Water: •2%increase in operating expenses —transfer to Utilities Customer Service Fund; increased contribution costs to GERP •Overall operating expenses increased 2.1% Wastewater: r Cf F&t°coLLi ns •7.0%increase in operating expenses —additional GERP and employee liability insurance costs Water Reclamation up 3.0%-chemicals &supplies Trunk and Collection costs rise 5.7%-construction materials •Overall operating expenses increased 7.0% Stormwater •2008 payments decreased 94.0%due to 2007 Bond Refunding costs (will be amortized over the remaining life of the bond) •Increase of 7.0%in Engineering over 2007 due to filling personnel vacancies;consulting costs (Best Management Practices) •Overall operating expenses increased 4.7% Budget Calendar Review for 201 0-2011 Mike Freeman reviewed the process for planning and implementing the 2010-11 City Budget. •The Budget Lead Team has met several times •Overall schedule has been developed •Communications staff is finalizing public input plan •Boards and Commissions are being better utilized Issues for 2009 •Revenue for 2009 is projected to be flat •Revenue in Transportation and Development Review will be significantly down •The Consumer Price Index is expected to drop •There will be conservative budgeting for 2010/2011 •Sufficient revenue to maintain existing services •Be proactive in 2009: Managing vacancies Controlling spending Making targeted cuts in Transportation &Development Review Mayor Doug Huntchinson stated,and Darin Atteberry agreed,that the BFO process is a good, flexible tool the City already has in place to help manage some of these issues. Darin Atteberry said in 2009 the Mall’s performance will be declining further which will mean less revenue in 201 0-2011. A calendar of key dates has been set up to chart the progress of BFO,ending with presentation/adoption of the 2010-11 Budget at City Council Meeting in October 2009. Mayor Doug Huntchinson stated that the City is more proactive with budget planning this year which is good.Mike Freeman said that it likely has to do with the budget office now being fully integrated into the Finance Department,and Jeremy Reese’s position being redefined as ‘Revenue Manager’. Sales Tax Policies—Proposal John Voss reviewed 2 changes related to recording Sales Tax proposals: A.Revise current policy 1.Record Sales &Use Tax directly into the receiving funds. 2.End the policy dedicating a portion of vendor fee savings for economic development. 3.Why? a.Streamline administration b.Financial reports easier to understand c.Little to no benefit having separate ‘Fund’ d.Recommended practice is to have as few funds as necessary The Committee agreed this would be a good step toward more clearly understanding revenues coming in. B.Dedication of Vendor Fee Savings •Why? All vendor fee savings would go into the general fund Streamline administration Financial reports easier to understand Next Steps •Move forward and not require a Sales &Use Tax Fund. •Move forward and dedicate all vendor fee savings to general purposes. The Committee agreed with these recommendations,but encouraged staff to ensure that the explanation to Council Members is very clear. Briefing on Refunding of $9 million in water bonds. •Bond Ordinance will be presented to City Council and the Water Utility Enterprise Board on April 2l~~2009 •After the Second Reading on May 5th,2009,the bonds will be scheduled for sale. •The transaction should close by the end of May. The Committee approved implementing the steps John Voss outlined,and Darin Atteberry said he appreciates the Finance Department being proactive in doing these things that save the City money.