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HomeMy WebLinkAboutMinutes - Finance Committee - 07/15/2013 -_____C .Finance Administration____I 0 215N.Mason—____I I 2~Floor‘-Ort CoLLins Fort Collins,Co 80522 970.221.6788 /_~fl_tt(II%&=iilIIIlIIIøIIPIIIPII__IIIIIIIIIIIml%b_~%.%%.970221.6782 lax Council Audit &Finance Committee Draft of Minutes 7/15/13 10:00 to 12:00 CIC Room Council Attendees:Mayor Karen Weitkunat,Ross Cunniff,Bob Overbeck Staff:Darin Atteberry,Mike Beckstead,Josh Birks,Mindy Pleiger,SeonAh Kendall,Lance Smith,Jon Haukaas, John Voss,Katie Wiggett Others:Dale Adamy,Mike Freeman (RMI),Kevin Jones (Chamber of Commerce),Kevin Smith (McGladrey) Approval of the Minutes of June 17,2013 Ross Cunniff moved to approve the minutes for the June 17,2013 meeting.Bob Overbeck seconded the motion.Minutes were approved unanimously. RMI Review—Status Financing &RMI Performance At the request of council,Mike Freeman,CEO of Rocky Mountain Innosphere (RMI),presented an overview and update of RMI.RMI is a 501c3 non-profit technology incubator formed to accelerate the success of high-impact scientific and technology startup companies and promote the development of a regional entrepreneurial ecosystem.The City has been a key player in RMI’s evolution since its beginning as a small incubator in 1998. RMI is focused on Biosciences,Software and,most recently,Cleantech in the Front Range and Northern Colorado area.The Innosphere works on a nonprofit funding model with many diverse funding partners.Two new funding sources are Cleantech and Powerhouse.Powerhouse is a no-risk leasing deal RMI has made with CSU that will begin bringing in funding in the near future.Councilman Overbeck asked if he could see a breakdown of the contributions RMI receives;Mike Freeman said he would follow up with that information. Mike reported that 95%+of RMI’s new building was leased as of June 2013.They are ahead of budget now,but one major lease is ending soon.RMI expects 90%to be leased by September 1,and will keep the remaining leasing a priority for the 4th Quarter of 2013.RMI is on track to meet adopted budget for net income.RMI’s next steps for the building are (1)to complete the mandatory 7 year New Market Tax Credit Term,(2)either refinance or pay off debt by end of 7 years and (3)see the building become an asset to the nonprofit after year 7. Ross Cunniff said that he would like to see more about RMI’s financing,specifically funding from the City,and feels that financing slides should be shown at the upcoming work session. FCLWD Agreement r City ofFortCoLLins ion Haukaas and Lance Smith presented potential water sharing and capacity sales agreements with Fort Collins Loveland Water District.Jon noted that,for the past year,Utilities Staff has been negotiating with FCLWD to restructure the existing water sharing agreement and amend it to include the sale of excess water treatment capacity.With the current agreement,FCLWD is able to take excess water from Fort Collins Utilities during peak times then replenish the water in the shoulder seasons.Staff is suggesting revising the agreement to insure that FCLWD pays for the water they take on a month by month basis,meaning they will have to pay for the excess water they take during the peak seasson.The suggested revisions to this agreement will benefit the customers of Fort Collins Utilities (FCU)through incremental revenues and the customers of FCLWD by increasing the amount of water that can be delivered through the agreement to them.The Water Board has reviewed the proposed amendments and recommends approval. Darin Atteberry noted that the City has partnered with FCLWD because they have been a good steward of their resources.The revisions to this agreement are for the benefit of both parties. Auditor 2012 Report Kevin Jones of McGladrey presented the 2012 Audit findings.He reported that McGladrey was able to give the City an unmodified opinion,which is the highest opinion it can give. Kevin said that he Compliance Report which deals primarily with grants notes some findings in CBDG, none of which were cost impactful or significant internal control deficiencies.These findings were mailing documentation issues and didn’t affect McGladrey’s final opinion.Mike Beckstead noted that Staff has met with the CBDG twice since the audit to clean up the documentation issues that were listed in the Report.The City has also hired a Grants Compliance Administrator to help avoid any further issues. Kevin reported that audit adjustments were proposed.City Staff did well getting the necessary information into McGladrey’s hands;the bookkeeping was clean,thorough and transparent. Councilmember Overbeck asked if the URA Fund was also audited and if the URA was viewed as a viable instrument.Kevin answered that the URA is considered to be a blended component unit,separate but viable. Calendar Review—What Should Come to CFC? Mike Beckstead asked the Council Finance Committee for clarification on the types of issues and topics that should be brought to Council Finance.Because Council Finance only meets once a month for two hours,staff can only put the most pertinent items on the calendar.The Committee discussed the issue and came up with three categories that items coming to Council Finance should fall into:1)financial and fiduciary policy and status review (i.e.annual fund balance,external audit,GERP,policy changes,etc.) 2)programs and transactions that have a significant financial impact (i.e.initial On-Bill Financing Program,Bond Issuance,FCLWD Share Agreement,etc.)and 3)items of potential controversy that would benefit from a financial discussion. Assistance Package for Local Company SeonAh Kendall and Josh Birks presented Custom Blending’s request for a business assistance package. Custom Blending,Inc.,is a primary employer in Fort Collins and is seeking assistance of $43,500 to aid in expanding their current facility by 34,000 square feet and in making substantial equipment purchases, r ~E~b~Un~Lins representing a total investment of approximately $5.9 million and adding an additional 16 full-time jobs in Fort Collins.The estimated $43,500 package includes $31,100 in manufacturing use tax rebates and $12,400 in personal property tax rebates. City Plan identifies the support of job creation as a priority to enhance the community’s economic base and job creation by focusing on retention,expansion,incubation and recruitment efforts that bring jobs and import incomes or dollars to the community.This Business Assistance Package addresses the Economic Health Office’s goal of facilitating a stronger business support network for existing employers, new businesses,and small business.The EHSP recognizes that the existing employers and small businesses are the backbone of the Fort Collins economy.The Economic Health Office believes that this assistance is a sound investment in strengthening the support network,and diversifying the employment and tax base of the community. Mayor Weitkunat noted that the City does a lot of big packages.This would be a good example of how the City can help small businesses,and this package may help the City establish a strong set of policies for helping such companies in the future.