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HomeMy WebLinkAboutAgenda - Full - Finance Committee - 04/15/2019 - Finance Administration 215 N. Mason 2nd Floor PO Box 580 Fort Collins, CO 80522 970.221.6788 970.221.6782 - fax fcgov.com AGENDA Council Finance & Audit Committee April 15, 2019 10:00 am - noon CIC Room - City Hall Approval of Minutes from the March 18, 2019 Council Finance Committee meeting. 1. Stormwater - NECCO 30 minutes L. Smith T. Connor 2. Vine/Lemay TCEF Funding 30 minutes C. Crager 3. Parks/Median/Parks Refresh Design /Maintenance Plan Framework 30 minutes M. Calhoon K. Friesen Council Finance Committee Agenda Planning Calendar 2018 - 2019 RVSD 04/05/19 mnb April 15P th P Stormwater - NECCO 30 min L. Smith T. Connor Vine/Lemay TCEF Funding 30 min C. Crager Parks/Median/Parks Refresh Design / Maintenance Plan Framework 30 min M. Calhoon K. Friesen May 20P th P GERP Review 30 min T. Storin EPIC Program Review (energy efficiency loans) 30 min J. Phelan S. Carpenter Development Review Fee Update 30 min T. Leeson N. Curell CEF & Utility Fee Update 30 min J. Poznanovic L. Smith June 17P th P 2018 Rebate Results 20 min J. Poznanovic Mason Place Affordable Housing Fee Waivers 30 min N. Currell S. Beck-Ferkiss 2020 Utility Rate Adjustments 30 min L. Smith July 15P th P 2018 Audit Results 20 min T. Storin 2018 Fund Balance Review 15 min T. Storin Future Council Finance Committee Topics: • New Potential Fees Discussion - TBD • Comprehensive 2019 Fee Update Recommendations - Aug • 2020 Budget Revision – Aug • 2019 Annual Adjustment Ordinance – Sep • Utility LTFP & CIP - Nov Finance Administration 215 N. Mason 2nd Floor PO Box 580 Fort Collins, CO 80522 970.221.6788 970.221.6782 - fax fcgov.com Finance Committee Meeting Minutes 03/18/19 10 am - noon CIC Room - City Hall Council Attendees: Mayor Wade Troxell, Ross Cunniff, Ken Summers, Gerry Horak Staff: Darin Atteberry, Kelly DiMartino, Jeff Mihelich, Mike Beckstead, Josh Birks, Rachel Rogers, Travis Storin, Jennifer Poznanovic, Teresa Roche, Jamie Heckman, Chris Martinez, Laurie Kadrich, Noelle Currell, Tom Leeson, Theresa Connor, Lance Smith, John Voss, Shar Gerber, Katie Ricketts, John Duval, Ginny Sawyer, Carolyn Koontz Others: Dale Adamy, R1ST.org Kevin Jones, Chamber of Commerce ______________________________________________________________________________ Meeting called to order at 10:09 am Approval of Minutes from the February 25P th P Council Finance Committee Meeting. Ross Cunniff moved for approval. Mayor Troxell seconded the motion. Minutes were approved unanimously. A. 2019 Fee Road Map Jennifer Poznanovic, Revenue Manager EXECUTIVE SUMMARY Coordination of Council approved fees began in 2016 to provide a more holistic view of the total cost impact. Previously, fee updates were presented to Council on an individual basis. After the 2019 fee update, fee phasing will be complete with regular two and four-year cadence updates beginning in 2021. 2019 fee updates include: Development Review fees, Electric Capacity fees, Water Supply Requirement fees, Wet Utility Plan Investment Fees and Step III of the 2017 Capital Expansion Fees. GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED 1. Does Council Finance Committee support the proposed 2019 roadmap for fee updates? BACKGROUND/DISCUSSION Since the fall of October 2016, staff has worked to coordinate the process for updating all new development related fees that require Council approval. Development related fees that are approved by Council are six Capital Expansion Fees, five Utility Fees and 45 Building Development Fees. 2 Previously, fee updates were presented to Council on an individual basis. However, it was determined that updates should occur on a regular two and four-year cadence and fees updates should occur together each year to provide a more holistic view of the impact of any fee increases. Impact fee coordination includes a detailed fee study analysis for Capital Expansion Fees (CEFs), Transportation Capital Expansion Fees (TCEFs) and Development Review Fees every four years. This requires an outside consultant through a request for proposal (RFP) process where data is provided by City staff. Findings by the consultant are also verified by City staff. For Utility Fees, a detailed fee study is planned every two years. These are internal updates by City staff with periodic consultant verification. In the future, impact fee study analysis will be targeted in the odd year before Budgeting for Outcomes (BFO). Below is the current fee timeline: Phase I of the fee updates included CEFs, TCEFs, Electric Capacity Fees, and Raw Water/CIL and were adopted in 2017. Phase II included Wet Utility PIFs and step II of CEFs and TCEFs, which were approved in 2018. Development review and building permit fees were originally included in Phase II but were de- coupled from the 2018 update. 3 Due to the concern in the development and building community around fee changes, Council asked for a fee working group to be created to foster a better understanding of fees prior to discussing further fee updates. In August of 2017, the Fee Working Group commenced comprised of a balanced group of stakeholders – citizens, business-oriented individuals, City staff and a Council liaison. The Fee Working Group met 14 times and was overall supportive of the fee coordination process and proposed fee updates. The 2019 phase III update includes Development Review fees, Electric Capacity fees, Water Supply Requirement fees, Wet Utility Plan Investment Fees and Step III of the 2017 Capital Expansion Fees. After the 2019 fee update, fee phasing will be complete with regular two and four-year cadence updates beginning in 2021. Below is the proposed 2019 fee roadmap: DISCUSSION /NEXT STEPS; We will be back to Council Finance in May for deep dive of Development Review and Capital Expansion fees – goal is the same – effective 1/1/20. Outreach targeted for May / June - that may slip out a month or so ACTION ITEM: Ken Summers; 45 Development Review fees. Is there a list? Cost recovery / cost drivers? Appraisal updates for all facilities Mike Beckstead; we will bring a list back in May and be very specific - which is why the outreach may slip out a month - today is more about cost methodology and during the next agenda topic - we are going to share how the methodology used to done and propose a new methodology – gets into exactly what you are asking regarding development fees. Mike Beckstead; each fee has some uniqueness in the methodology used to manage each fee - depends on the fee and the nexus of what the fee is for - this is what drives the inputs to calculating the fee Mayor Troxell; I think the development review and building permit fees were looked at as part of fee stack review. Mike Beckstead; that is correct - we are doing a deep dive – there is a consultant involved - his report came in last week – we are getting that type of guidance on how we might improve the usability and ease of the fees plus the integrity of the fee that we are charging in the first place March April May/June July August 1/1/2020 Capital Expansion Fees CFC Outrech CFC Council Effective Transportation CEFs Electric Capacity Fees CFC Outrech CFC Council Effective Water Supply Requirement CFC Outrech CFC Council Effective Wet Utility Fees CFC Outrech CFC Council Effective Development Review Fees CFC Outrech CFC Council Effective 4 Ross Cunniff; I do support the Fee Roadmap for 2019 with the understanding that we will be diving into development fees then capital expansion fees at the May Council Finance Meeting. Bigger picture was mentioned earlier in the deck – when we didn’t have a roadmap like this we went 10-15 years without an update so when the review finally took place there was an incredibly steep rate of change which was painful for everyone. Trying to avoid that with this more deliberate review schedule. Ken Summers; Fee Roadmap for 2019 is fine but I also look forward to the on-going discussions on how we structure fees, etc. Mayor Troxell; wet utility fees - wet is kind of a jargon - electric capacity fees is descriptive but utility is not necessarily conveying a lot of information - I’m guessing that includes our water, wastewater and stormwater together. What are they actually providing for? Mike Beckstead; they are the plant investment fees a developer would pay for the needed infrastructure- in those three utilities. The methodology for how those fees are calculated are consistent across all three so that is where we came up with the name but I understand and agree that we need a better name to describe what those fees are about. Mayor Troxell; Is it water capacity? Lance Smith; water fees - water supply requirement which is the actual raw water and then separate from that is the plant investment fee which covers the cost of buying into the system Wet Utility includes a water plant investment from treatment plant to tap Wastewater plan investment fee covers treatment from your drain to the river Stormwater covers the infrastructure needed to gather the water to get it to where it needs to go. Mayor Troxell; electric capacity suggests a lot of things to me - that you are actually providing capacity. I think we are providing a broad notion of capacity for the water to and from and water from above. Mike Beckstead; Maybe a Utility Water PIF might work better - we will work on labels and will come back with definition and clarity on what the fee is actually about. We will list them all out. Ross Cunniff; one important difference - it might be useful to split these out when we talk about them at the same time - Stormwater fees apply to the whole city of Fort Collins and others don’t. B. Development Review Fee Update Tom Leeson, Community Development & Neighborhood Services, Director Noelle Currell, Financial Planning and Analysis, Manager EXECUTIVE SUMMARY The City contracted with MGT Consulting Group (MGT) to conduct an in-depth analysis of the City’s development review and building permit fees and to evaluate whether these fees are set at appropriate levels, inclusive for all costs, and consistent with the City’s goals for percent of cost to recover, and how fees compare to other communities regionally. This update to the City’s Development Review Fees is part of the City’s coordinated fee update process that began in 2017. 5 Staff and MGT Consultants also evaluated the methodology for calculating the fees and are requesting feedback on changing the methodology for calculating building permit and plan check fees from using the valuation of a project to using the square footage of a project. The methodology for calculating the development review fees is remaining the same. GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED Is Council Finance supportive of methodology changes for building permit fee calculations? What cost recovery percentage should fees be based upon? BACKGROUND/DISCUSSION City Fee Review Schedule Phase I of the City’s coordinated fee update process included Capital Expansion Fees (CEF), Transportation CEF, Electric Capacity Fees, and Raw Water/CIL and were adopted in 2017. Phase II included Wet Utility PIFs, which were approved in 2018. Development review and building permit fees were originally included in Phase II but were de-coupled from that effort and will move forward with the Electric Capacity Fees this year and will then be evaluated again in 2021. The last comprehensive analysis of development review and building permit fees was conducted in 2008. For many years the City had a policy to recover 80% of fee-related services (with exceptions, i.e., over-the-counter permits), in 2011, staff conducted an internal study of the costs associated with building permit and plan review fees based on City Council direction to change the cost recovery model of collecting 80% of the costs to 100% of the costs (See Attachment 1 for 2011 Study). No changes to the fees, with the exception of annual CPI increases, have been made to the fee schedule since 2011. Purpose of Development and Building Permit Fee Study The City contracted with MGT Consulting Group (MGT) to conduct an in-depth analysis of the City’s development review and building permit fees and to evaluate whether these fees are set at appropriate levels, inclusive for all costs, consistent with the City’s goals for percent of cost to recover, and how fees compare to other communities regionally. Additionally, the consultants were tasked with evaluating if the method of calculating the fee is up-to-date and if there was a different, more efficient methodology. One of the issues raised by applicants during the City’s review of the development review process was the complexity of the current fee schedule and the difficulty of estimating fees. An additional goal of the study was to evaluate the methodology and fee schedule to look for ways to simplify and streamline. Development and Building Permit Fee Approval The City Manager is authorized to set fees based on the costs of providing development and building permit review services, pursuant to City Code Sec. 7.5-2. The Land Use Code (Sec. 2.2.3.D) establishes the cost recovery model for development and building permit fees: (1) Recovery of Costs. Development review fees are hereby established for the purpose of recovering the costs incurred by the City in processing, reviewing and recording applications pertaining to development 6 applications or activity within the municipal boundaries of the City, and issuing permits related thereto. The development review fees imposed pursuant to this Section shall be paid at the time of submittal of any development application, or at the time of issuance of the permit, as determined by the City Manager and established in the development review fee schedule. (2) Development Review Fee Schedule. The amount of the City's various development review fees shall be established by the City Manager, and shall be based on the actual expenses incurred by or on behalf of the City. The schedule of fees shall be reviewed annually and shall be adjusted, if necessary, by the City Manager on the basis of actual expenses incurred by the City to reflect the effects of inflation and other changes in costs. At the discretion of the City Manager, the schedule may be referred to the City Council for adoption by resolution or ordinance. Development Review Fees and Calculation Methodology The fees imposed on development review applications are intended to recover the costs associated with staff time to review and process development proposals, such as (For a complete list of current fees refer to Attachment 2): • Project Development Plans (PDP) • Major Amendments • Overall Development Plans (ODP) • Planned Unit Development (PUD) • Rezoning • Sign Permit • Variances Development review fees were last updated in 2008 and were not included in the 2011 internal fee study, which only updated the building permit and plan check fees. Development review fees are calculated by determining the time spent by each staff member on each development application type (this includes staff members involved with processing the application including City Planners, administrative staff, Building and Development Review Technicians, Engineers, etc.) to determine the costs to the City to process and review. The methodology for calculating these fees is remaining the same; however, the fee schedule is being simplified. Currently the fee schedule includes the application fee as well as the cost of sending out the public notice, which will now be rolled into the application fee. Building Permit and Plan Check Fees and Calculation Methodology The fees imposed on building permit applications are intended to recover the costs associated with staff time to review and process building permit applications. Building permit applications are categorized by building type, such as (For a complete list of current building permit types and fees refer to Attachment 3): • A (Assembly) • B (Business) • E (Educational) • R-1 • R-2 7 In addition to the building type categories mentioned above, there are also “over-the-counter” (OTC) building permit applications for small projects that can be issued quickly with very limited review, such as: • Furnace replacement • Air Conditioner • Pool/spa • Commercial roof replacement Building permit fees are currently calculated based on the valuation, or construction costs, of the proposed project. The building permit fees are calculated from the 2008 IBC Building Safety Journal for commercial/industrial valuation minimums. The residential valuation minimums are also based on the 2008 IBC table, but have been slightly modified to accommodate for local conditions. The valuation method can be difficult to estimate in the early stages of a project because in many cases neither the applicant nor the staff has enough information to provide a valuation, which can lead to big differences in the estimate provided and the actual fee. Furthermore, staff feels there is only a loose correlation between the valuation of a project and the amount of time it takes to review, process the application, and inspect the property. While the valuation methodology is relatively common throughout the country, it is problematic for staff to administer and is difficult for the applicants to understand and estimate. It can be difficult to administer because staff must rely on the information provided by the applicant with respect to the valuation and in most cases the valuation provided is at the very minimum or slightly above, even though staff is aware that the valuation is most likely higher. This can lead to disagreements with respect to the building permit fee and frustration by the applicants. In researching best practices as part of this fee study, staff and the consultants found communities that are changing from using the valuation of a project to calculate the fees to utilizing the square footage of the project. The square footage of a project is not subject to disagreements as it is a definite quantity provided within the application; it is a known quantity in the early phases of a project, so it provides a stronger basis for calculating accurate fee estimates; and has a strong correlation to the amount of time it takes to review and process an application. For those reasons, staff is proposing to change the methodology for calculating building permit fees from the valuation method to utilizing square footage and has asked MGT consultants to calculate the updated fees utilizing this new methodology. It should be noted that the “over-the-counter” permits such as furnace replacement and new air conditioning units, are also currently calculated utilizing the valuation methodology. Since these permit types do not have a square footage associated with them, staff is proposing to charge a flat rate fee based on the average time to process these permit types. The review process for these permit types is relatively simple and there is very little deviation from one permit to the next, so a flat rate fee would be an accurate and efficient method. 8 Engineering Inspection Fees MGT Consultants were also asked to evaluate the City’s Engineering Inspection fees as part of this fee study. The Engineering Inspection fees are intended to recover the costs associated with staff time to field inspect the public infrastructure improvements associated with new developments. The Engineering Inspection fees include such fees as (For complete list of Engineering Inspection Fees, refer to Attachment 4): 9 • Sanitary Sewer Main • Water Main • Pedestrian Ramps • Concrete or asphalt • Sewer manhole Engineering inspection fees are calculated by determining the time spent for each inspection type and are based on the size or length of the infrastructure being inspected to determine the costs to the City. The methodology for calculating these fees is remaining the same. What the Fees are Intended to Cover Development Review and Building Permit fees are intended to cover staffing resources and all associated costs for providing the following services, including:  Plan review for development and building plan submittals  Plan review for minor amendments  Inspections – building, construction/engineering, zoning  Related customer/administrative services o Permit issuance o Fee collection o Licensing o Board Support – Building Review, Planning & Zoning, Zoning Board of Appeals o Records Management Staffing resources and associated costs for providing ancillary, but critical services, from Management Information Systems for the development, configuration and maintenance of our computer systems and technologies are also included. In 2008, it was determined to eliminate administrative costs and those associated with management staff above the level of the direct managers of those providing development-related functions/activities. The fees cover the follow costs/funds: • General Fund – All of Current Planning, Customer & Admin Services, Building Inspection, Plan Check and a portion of Advance Planning and Zoning. • Transportation Fund– All of Engineering Development Review and portions of Customer & Admin Services, Engineering Admin Support, Engineering Construction Inspection, Engineering Survey, and Traffic Engineering. • Data & Communications Fund - All of the Development Tracking System, direct support and portions of GIS Cost Recovery Policy As was indicated above, the City had a policy to recover 80% of the costs of development through the collection of fees for many years, and in 2011, staff conducted an internal study of the costs based on City Council direction to change the cost recovery model of collecting 80% of the costs to 100% of the costs. The 2011 internal fee study only evaluated building permit and plan check fees and did not include development review fees. Additionally, the 2011 study appears to have compared overall expenses to provide the review services and revenues generated by fees but did not conduct an in- 10 depth analysis of the actual cost per permit type. As a result, it did not provide a completely accurate analysis of the cost to provide the development review services. The MGT fee study evaluated every permit type offered and interviewed each staff member involved in the development and permitting review process. The costs are calculated using the hourly rate and time spent of staff providing the review, thus providing an accurate analysis of actual costs. It should be noted that neither the development review fees nor the building permit fee calculations include City wide overhead such as Financial Services, Human Resources or the City Attorney’s (CAO) staff. For example, the CAO staff spend a considerable amount of time on development review projects such as the drafting of all development agreements, public hearing support, land use code interpretations, and review of staff reports. Historic Development Review Expenses and Revenues The following table shows the City’s historic expenses and revenues: This graph demonstrates that during times when the economy is good, revenue outweighs expenses; when the economy is in poor health, expense outweighs revenue (this is the expected trend). • Notes on spikes/changes: o 2012:  Fees changed from 80% Cost Recovery to 100% Cost Recovery  Updated tables that are used for project valuation purposes (from 1982 UBC tables to 2008 BSJ tables)  Recession Recovery o 2014:  Major permits pulled – Mall & Woodward 11 Comparison of Peer Cities As part of the fee study, MGT provided a comparative survey of Building Permit and Plan Check fees as a baseline. The fees presented in the comparative study are for the existing City fees. The new fees will be added to the comparative survey once the data and direction on methodology has been finalized. The MGT project staff worked with City staff to create a list of example project fees to be compared with similar fees in select peer cities. The City of Fort Collins provided MGT with twenty receipts from actual work done by the City. The information contained in each receipt was then used to provide example projects to the comparative jurisdictions and to calculate fees where applicable. See Attachment 5 for the complete comparative survey. Next Steps and Public Outreach Based on the direction from Council Finance regarding the methodology of the building permit fees and the cost recovery, staff will refine and calibrate the data from MGT Consultants and propose a final fee schedule. The timeline for this project will parallel the timeline for the Electric Capacity Fees update process, with a Council work session in mid-summer and City Council adoption in the fall. A second Council Finance meeting could be scheduled for early summer as well if necessary. Staff will also engage in a robust public outreach process during the next six months, engaging with such groups as: • South Fort Collins Business Association • Super Issues Forum • Northern Colorado Homebuilder’s Association • Downtown Development Authority • North Fort Collins Business Association • Local Legislative Affairs Committee • Affordable Housing Board • Human Relations Board • Economic Advisory Commission • Board of Realtors • Building Review Board • Housing Catalyst DISCUSSION /NEXT STEPS; Tom Leeson; Water heater flat fee example - easier to calculate and understand – there was an evaluation done on how long it takes to complete each type of permit / inspection and the flat fee rate is based on that. Mayor Troxell; Is there a different type flat fee for each permit type? Is that a long list of things? Tom Leeson; the list is included as an attachment to the AIS which includes 15-20 different types. Mayor Troxell; Is there a process flow? Was it looked at via Lean principle perspective? No missed hand off steps, etc. Tom Leeson; that is part of the calibration we need to look at - The question is could we be more efficient in our processes and are we spending too much time because our processes are inefficient? This is more related to the amount of time an individual employee spends reviewing an application type less pass off time. We are not recovering 100% as we don’t collect fees associated with time spent by CAO, and indirect cost drivers such as HR and admin, etc. Noelle Currell; interesting that a new furnace inspection is valuation based but the time spent by a building inspector is the same no matter type of furnace. For Broadband every place in city will be touched (potholing or boring) we made sure we captured and included those updates. We had to hire some additional engineering inspector staff to handle the additional volume for Broadband - we did hire an additional inspector and we have tentative plans to hire a second inspector to handle the volume. Engineering fees need to be set so we recover costs of inspectors. Mike Beckstead; I look at that chart and see a 15% increase in residential fees and a 50% increase in commercial fees is - the magnitude of the change is a bit concerning. This is very similar to what we did when we did the deep dive on capital expansion fees about 3 years ago - we looked at inputs and methodology - we are ending up with the same kind of results this time 0 if we want to hit 100% cost recovery there will be some fairly significant increase. Darin Atteberry; this is not nor is it intended to be a profit center for the City of Fort Collins. Mayor Troxell; Are any of the peer cities – 4 utility cities? Darin Atteberry; Front Range and national peer cities – most are full service cities - some with university presence - they have been scrubbed but they are not perfect - Front Range data set - we have our standard set of peers that Council has generally accepted - when it comes to fees the local front range peer data is always relevant. Ross Cunniff; our cost of living should be factored into that because that will affect the salaries and cost of staff time. Ken Summers; what is the value of looking at Fort Collins versus peer cities across the nation? Doesn’t mean anything to me relative to whether our fees are in alignment or not - more concerned and interest in the cities around us. 13 Darin Atteberry; Council has been interested in what is happening with our national peer cities - size wise - we were asked to include national peer cities as well - over the years we have tried to include both because it has been an ask of Council - never been a mandate or a driver – only for information Ross Cunniff; educational - if it shows - we are moving from the median to somewhere different so is that really the right direction? Noelle Currell; lots of work from staff - Shar was very involved in requesting copies of actual building permits. Mayor Troxell; Colorado Springs got away from stormwater and called it a rain tax -they got into issues federally etc – regarding how they handled their stormwater. I think they reinstituted it - sometimes there are large political factors that can skew things. Ross Cunniff; big picture driver of all of this is fairness and predictability is part of being fair. We have a set of services that need to be performed because of life safety, compliance with building code, in that framework who is paying for the cost of having inspectors - it doesn’t tell me if we are more or less fair. Ken Summers; Do we have any permits that are issued that do not require a follow up inspection? Tom Leeson; the bulk majority of our building permits do require an inspection - we have planning fees that eventually turn into building permits. Ken Summers; we were erecting a pretty substantial sign at a church in Lakewood which required a foundational base so we called the city to let them know that we were ready for them to come inspect – they said we don’t do that – if your sign falls over that is on you - we paid for a permit just to provide income to the city - we were following the specs from the sign company in preparation - I was shocked by the response. Tom Leeson; We may have permits that don’t require an inspection but we still have staff time involved to process applications – in almost every case zoning reviews the request so there would still be staff time involved in any permit we process. If no inspection is required, it was not factored into the fee. Mayor Troxell; Is there a purpose (purposeful purpose) for each of the fees and permits? (Improve safety, community or other intended purpose). Purposes should be clear. Mike Beckstead; when we come back in May we will bring fee level and clear purpose information. This is not a revenue generator - it is cost recovery. Noelle Currell; Historical Revenues / Expenses - several things have happened after 2011 – in 2018 we flipped and did not generate as much revenue as expense. Tom could speak to the number of conceptuals coming in. The 2014 spike was the Mall and the 2016 spike was Woodward. Larger projects take a lot of staff time such as Montava currently. We have been able to upgrade our permitting system and process - new more user friendly system for customers and staff and has added some great features. Mike Beckstead; when we talk about percentage of cost recovery - part of the direction we are looking for is - Is that by year or by building cycle / economic cycle - If we always had to match expenses to revenues – staff issue 14 based on revenues that come in - support staff we need to do these things - revenue might be a bit higher due to cycle. Much harder to estimate over the cycle. Gerry Horak; this slide indicates a surplus - anyone would ask ‘why are you going to charge more?’ ACTION ITEM: Ross Cunniff; two big spikes were specific projects - it would be interesting to try to filter them out - The concept of one cycle helping to subsidize the next cycle doesn’t sound fair to me. Someone who adds something to their house or builds a new business they are not ongoing customers in the way utility customers are. Utility customers - taking some of these rates and fees to build future capacity - there are future benefits. For a person who pays a one-time fee - they paid 50% more for cost recovery they will not get more value in the future as opposed to utility example. Fairness - we should try to figure out a way to filter out the Mall and Woodward - that would make some sense in trying to present this chart -the blue line and red line should be closer to each other - they would fluctuate due to economic cycle. Gerry Horak; 2014 Mall - the charges we gave to the mall were over what the cost of doing it. Do we change according to scale? How are we looking at scale of projects? Mike Beckstead; in that particular year that is true - this is where the over the cycle metric is key Tom Leeson; NGT study - we are trying to understand the true cost per application type. In order to process a project development plan – it will cost the city this amount because it will take this amount of staff hours - might have more or less revenue because of the number of applications you get but per application type you would have parity. ACTION ITEM: Ross Cunniff; I would like to see this chart - some of this might be related to valuations going up faster than costs. Gerry Horak; moving ahead if you collected over $5M more than it doesn’t sound like a valid argument Mike Beckstead; I agree with the optics - The charge would imply a surplus – that surplus was just part of the General Fund that was used for normal General Fund activity – this is not isolated revenue - we don’t have a fund just for development - Ross Cunniff; we didn’t intentionally use this as a revenue generator Mayor Troxell; as you begin to change your methodology more based on real costs – this is part of leading and lagging – when you are capturing revenue vs. when the time expended - there is some delta that way. Some staff availability time during slow times - the practice has been to contract and let go of contracts based on needs - providing flexibility within the expense side. Trying to dial it in closer so you are more in line with operational staff needed - what is needed to cover those costs. Tom Leeson; we will be coming back to Council Finance in July with more detail. We will be going through a full Fort Collins outreach process - will go through a very robust outreach process (boards, external stakeholders) Lined up for Council adoption toward the end of the year. 15 ACTION ITEM: Gerry Horak; we need to get a stakeholder’s committee together – the Council and community will end up focusing on dollars versus what the question really is; Is the methodology fair? What is the proper recovery? I would recommend that we direct the City Manager to form a stakeholder committee before we get too far down the road. Ross Cunniff; what are development review fees for? Are they fair / what is the recovery rate? Mayor Troxell; build that team into the outreach framework ACTION ITEM: Ross Cunniff; I would support that on consent - this is more than going to groups to explain it I have also been hearing that roofing projects over the last few years - their roof never got inspected – I would like some statistical valid survey of homeowner roofing projects asking are your satisfied with your level of service? The development industry is part of the stakeholders for this – actual consumers are living on the properties. Tom Leeson; we did get behind on the roof inspections because of the numbers of inspections required but we have caught up and are current but we can get this information. Mike Beckstead; I am hearing you are positive with the methodology but let’s vet it with team Ross Cunniff; what are they for? We have city attorney time and overhead time. Those are so indirect for the development fee that it is probably not fair to roll those in - those are completely in control of Council how we staff and budget those. Ken Summers; 100% cost recovery – we need to understand what that means - allocating funds like a cost center accounting sort of thing with departments that are funded already with General Fund monies, Gerry Horak; do folks report their time for that? Are we going to do that in the future? Tom Leeson; various departments have looked at that but we are not moving in that direction. Mike Beckstead; a project breakdown system doesn’t exist today and we don’t currently have a system in place Ross Cunniff; wondering with our new electronic review process - some of that could be automated - you are taking a lot less time or more - Gerry Horak; for the 21/ 22 budget - it would be nice to know the real numbers and be able to provide real data to Council. Record how much time people actually spend on projects - example of working on Montava. Ross Cunniff; one of the things you should discuss with the stakeholder group is your plans for assessing efficiency - feed that into the equation and the discussion. 16 C. URA Project Josh Birks, Director, Economic Sustainability Rachel Rogers, Sr. Specialist Economic Sustainability SUBJECT FOR DISCUSSION City’s Tax Increment Contribution to the Proposed College and Drake Urban Renewal Plan EXECUTIVE SUMMARY The purpose of this item is to review the proposed City property and sales tax increment contribution to the proposed College and Drake Urban Renewal Plan. GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED 1. Does the Committee have any questions about the proposed tax increment contribution by the City in support of the College and Drake Urban Renewal Plan? 2. What additional information does the Committee feel Council will need in order to review this proposal? BACKGROUND/DISCUSSION The City of Fort Collins (the “City”) is considering the adoption of a new Urban Renewal Plan, at the intersection of College Avenue and Drake Road, (the “Plan”) to direct the activities of the Fort Collins Urban Renewal Authority (the “Authority”), pursuant to the Colorado Urban Renewal Law, C.R.S. §31-25-101 et seq. The Plan enables the use of Tax Increment Financing (“TIF”) as a tool to stimulate and leverage both public and private sector development, including redevelopment, to help remedy adverse conditions and prevent the spread of further deterioration. The Plan effort originated in response to two proposals for private development in the area. While these two projects are anticipated to occur in the near term, additional development and redevelopment may occur incrementally over the life of the Plan. In 2014, the Larimer County Tax Increment Financing Study Group (the “TIF Study Group”) was formed of representatives from Larimer County, municipalities in the county currently using urban renewal (Fort Collins, Loveland, and Timnath), five other municipalities, and selected taxing districts and special districts. The TIF Study group:  Acknowledged the positive impact of TIF in providing needed financial support for redevelopment and economic development investments in the County; and  Convened because of concerns about requirements to provide services to the new development created by urban renewal supported by TIF. The TIF Study Group had three primary objectives: 1. Develop a method to qualify and quantify the fiscal and economic impacts and financial risks of TIF proposals; 2. Develop a way to evaluate the indirect impacts of TIF projects and corresponding financial effects on taxing entities; and 3. Establish a framework for formal agreements that balance the benefits and risks among participating entities in Larimer County. 17 To achieve objective three (3) above. The Plan Area Review Committee (the “PRC”) recommends that the Plan include a specific set of improvements to be funded in part or fully by TIF. This list of improvements would then be attached to any intergovernmental agreement (“IGA”) between the Authority and an impacted tax entity. The intent is to provide a clear list of the uses of TIF prior to adopting the plan. Once all improvements on the list are fully funded and constructed the collection of TIF would terminate with revenue reverting back to the appropriate entity. This would apply to all incremental property tax revenue and sales tax revenue. UCity Sales Tax Increment & ContributionU: In 2015, the State Legislature significantly revised the Urban Renewal Law. Aside from adjusting the composition and size of the Board, the changes also required that the Authority negotiation an allocation of property and/or sales tax increment with each impacted entity. Authority staff have held several discussions with the various entities. However, little discussion has occurred with the City directly, which is technically a separate and impacted entity as well. Historically, the City has pledged 100 percent of the property tax increment into all projects. In addition, the City dedicated 100 percent of the sales tax increment associated with the 2.25 percent general fund rate. During discussions between the Authority and the impacted taxing entities a key concept continues to rise to the top of the discussions. That concept is one of equity between the impacted taxing entities. This is central to the County’s desire to include language about the City’s sales tax dedicated in the Intergovernmental Agreement between it and the Authority. As such, staff recognizes that the new landscape of Urban Renewal will require greater City participation than in the past. This participation will need to include sales tax increment as well. The current proposal includes:  50 percent of the sales tax increment from the 2.25 percent general fund rate net of the existing King Soopers sales will be allocated to the Authority;  The agreement would exclude any future increases to the general fund rate, explicitly referring to the current 2.25 percent general fund rate;  Furthermore, the total revenue generated from sales tax increment will be capped at $10,144,496 based on a 2 percent inflation factor, see Table 1 below.  Finally, the agreement between the City and the Authority will several provisions consistent with the other taxing entities: o TIF use will be limited to a list of public improvements within an attached exhibit with the ability to escalate the costs based on the Engineering News Record inflation rate; o The agreement will specify that it does not set precedent for future agreements; and o The agreement will require an annual report be generated updating the City on the progress of the plan. Table 1 Estimated City Sales Tax Increment 18 Total City sales tax increment is estimated to be $677,000 annually or $23.3 million over the plan area period. This represent approximately $13.3 million in time value adjusted dollars (assuming a 4.5 percent discount rate). The current proposal from the Authority pledges 50 percent of the net new increment or approximately $317,000 annually for a total of $10.1 million. This represents approximately $5.8 million in time value adjusted dollars to support the College and Drake Plan. The City will also receive Lodging Tax revenue, which is split between Visit Fort Collins and Fort Fund grant dollars. It is estimated that approximately $110,000 annually will be generated from the proposed hotel for a total of $3.9 million in total or $2.2 million in present value, as shown in Table 2. Table 2 Estimated City Lodging Tax Increment UOther Entity Sales Tax Increment: In addition, other taxing entities including the State of Colorado and Larimer County will receive additional sales tax revenue from the project. Using the same assumptions regarding net new revenue the State will received approximately $560,000 annually for a total of $18.3 million over the 25-year period, as shown in Table 3. The County will receive approximately $155,000 annually split across the Base Tax and Mental Health Tax. City of Fort Collins General Fund (2.25%) Annual Growth Rate 2.00% 2021 TOTAL TOTAL General Fund $13,252,906 $676,654 $23,334,585 TOTAL City Pledged to Project (50% of King Soopers and Spradley Barr) $5,753,078 $316,716 $10,144,496 City of Fort Collins Dedicated Sales Taxes Annual Growth Rate 2.00% Present Value 2021 TOTAL Natural Areas Tax (0.25%)$980,052 $52,874 $1,729,113 Street Maintenance Tax (0.25%)$980,052 $52,874 $1,729,113 Capital - CCIP (0.25%)$980,052 $52,874 $1,729,113 KFCG (0.85%)$3,332,176 $179,771 $5,878,983 Total Other City Sales Tax $6,272,331 $338,393 $11,066,321 TOTAL CITY SALES TAXES $19,525,237 $1,015,047 $34,400,906 Present City of Fort Collins Lodging Tax (3%) Annual Growth Rate 2.00% Present Value 2021 TOTAL Hotel Site $2,226,648 $110,192 $3,939,769 19 Table 3 Estimated Sales Tax Increment, Other Entities UPolicy Implications: On September 30, 2014, the Authority adopted Revised Policies Relating to Financial Management for the Urban Renewal Authority, that defined the way the Authority will reimburse developers using Tax Increment Financing (“TIF”). The current policy stipulates that the Authority should (see Attachment 3 for the full policy):  Reimburse developers over time rather than upfront;  Encourage limiting the contribution to a developer at no more than 50 percent of the anticipated TIF generated by that developer; and  Limit the TIF contribution to no more than 25 percent of a specific development’s cost. While this policy governs the use of TIF by the Authority, and thus has been adopted by that body. No policy exists guiding the City’s contribution of property or sales tax increment to a specific Urban Renewal Plan. This may be a policy that City Council should consider evaluating and adopting. DISCUSSION /NEXT STEPS; Josh Birks; key Dates; Per the email you each received, the April 16P th P Council Adoption has been delayed to some date in the future due to ongoing negotiations. I would like to move forward with the IGAs in the cooperation agreement in good faith - try to get those agreements done. College and Drake Project Increment Limitations All Other Sales Taxes Generated Annual Growth Rate 2.00% Present Value 2021 TOTAL All Parcels State of CO (2.9%)$10,408,544 $560,485 $18,364,826 Larimer County (0.80% total)$9,977,701 $154,616 $5,066,159 Base Tax (0.55%)$1,974,034 $106,299 $3,482,984 Mental Health Tax (0.25%)$897,288 $48,318 $1,583,175 20 Policy Implications - city policy is the missing piece for the future Ross Cunniff; it looks like the sales tax increment is based in part on our revenues. Are they going to be there during this whole time frame? Josh Birks; they are not based on Spradley Barr’s current operation as auto dealer - we have been calling it the Spradley Barr parcel - but we will start referring to it as the project name which is Portico. Those are the revenues going toward the Portico project. The hotel generates both sales and lodging tax. Josh Birks; two things that have guided staff in making this proposal; 1) it is clear that the dedicated tax revenue should be left aside 2) we wanted to be mindful of not pledging sales tax that could be shifting from other parts of the community We took the existing King Soopers out - we used average of all stores to give us a more accurate picture of a traditional King Soopers in a highly functional location. Because King Soopers is not just a grocery store - we are including some of that potential new sales from soft goods / general merch - not food Ross Cunniff; are you taxing food sales to fund capital projects? Answer is no. I wouldn’t ask other entities to dedicate thing – I don’t want to dedicate on our own. I think we should have a city policy and that would help normalize this type of discussion. As you negotiate with the URA over our own increment contribution – you are going off of existing URA policy - it would be useful to have an explicit policy statement. ACTION ITEM: Gerry Horak; whatever ends of being done for the 2.25 - it should be codified to a specific date when each tax was passed – there are three of them. That way it is specific on when each tax changed becuase it could go 21 down also - makes it clear which taxes we are talking about – according to when tax was passed in 19xx and 20xx - says what it is - future council changes things - Josh Birks; clarifying – we will be more clear on the actual tax Gerry Horak; I am all for the policy and I don’t think this is very complicated. Mayor Troxell; does this have anything to do with how we backfill? Josh Birks; The school district has asked if there would be anyone in negotiations that would be willing to guarantee their backfill revenues if that should change at some point in the future - I told them I would ask the question in an open context. Mike Beckstead; I don’t anticipate any backfill obligations on the city’s part for the city’s TIF that goes into this. Ross Cunniff; I don’t think we should be guaranteeing another entity’s backfill. Gerry Horak; I think the URA may be headed to mediation. Josh Birks; any concerns with continuing to move forward with the cooperation agreement in parallel with the policy conversation despite the fact that actual plan adoption may be postponed for several months? Ross Cunniff; whoever we can get agreements with would be good. D. Compensation Report Review Jamie Heckman, Sr. Manager, Compensation Teresa Roche, Chief Human Resources Officer EXECUTIVE SUMMARY The purpose of this item is to present an overview of the City’s compensation philosophy and practices, and a summary of 2019 pay increases. GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED No specific direction is sought. This item is informational only. BACKGROUND/DISCUSSION Total compensation (salary + benefits) comprises approximately 25% of the City’s operating budget. Council approved a 3% budget pool for pay increases for the 2019-2020 budget. With Council approval of Offer 6.10 in the 2016 Budget Revisions and Offer 42.6 in the 2017-2018 Budget, the City launched a multi-year project to improve foundational classification and compensation systems to ensure the City is well positioned to attract, retain, engage, develop and reward a diverse and competitive workforce to meet the needs of the community now and in the future. 22 The information presented in this item includes compensation philosophy, an overview of the job architecture framework, market pricing and analysis methodology, establishment of the Pay Plan, and 2019 compensation increases. DISCUSSION /NEXT STEPS; Darin Atteberry; Thank you to Jamie and Teresa and the team that worked on this - our compensation philosophy and practices continue to improve. SA Directors now manage to their budget and they have guardrails to be accountable to. This is an important practice and a huge part of our budget. I am confident in how it is being implemented and how the SA Directors has responded to these changes in the last few years. Ross Cunniff; very helpful dialog - Do we track off cycle increases from year to year? Jamie Heckman; we have started to track this historically - we had 30-35 off cycle increases in 2017 and 35 in 2018. We expect this number to remain fairly constant. There is a strong business case for each instance. Mayor Troxell; this is really good work - consistent framework throughout E. Revenue Update Mike Beckstead, Chief Financial Officer Year to date Sales and Use Tax revenue and planned actions EXECUTIVE SUMMARY Year to date (YTD) sales tax revenue is slightly behind budget through February and use tax is above budget for a combined sales and use tax above budget. Sales tax is historically volatile in the first quarter. If sales tax growth were to remain at the YTD rate, the revenue shortfall would be about $1.3M with a $750K shortfall to the General Fund. Staff is monitoring revenue to budget and is working to develop a rubric/trigger for when action should be taken and a list of potential actions that could be taken depending on the magnitude of the shortfall. GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED Is CFC in agreement with the proposed monitoring of actual revenue to budget and the development actions referenced above? DISCUSSION /NEXT STEPS; Ross Cunniff; Do we have an understanding of what fraction of the use tax is construction vs other? Mike Beckstead; that information is part of the Sales Tax report – it shows business, construction, auto sales. Mike Beckstead; February is historically a volatile month in fact the whole 1Q is so it hard to react just to February. 1.7% conservative growth rate is we need to hit our budget numbers We have a Monthly Financial Management Report – a slide with an example of data from the report. 23 Actions In Motion: Committee to meet - three meetings are scheduled; Monitor underspend - identify opportunities - develop a rubric of trigger points Will watch closely. By mid-April we should have a good read on the entire first quarter revenue across the city and will be in a much better position to discuss trigger points and actions. ACTION ITEM: Ross Cunniff; what is the right size for that contingency over time? sustain level - analysis reserve / flexible - could be used in event that it is needed. Might be a good idea to include that in future budget cycles. Mike Beckstead; we never had a contingency in place until the 17/18 budget cycle and we used a big piece of it. It might be a good idea to have a revenue contingency fund included and to evaluate what is the right amount to address possible fluctuations. ACTION ITEM: Ken Summer: It would be helpful to have a brief summary update economic report - only a few pages • What is happening in our community / health of local economy - URA • Total output as a community comparison YOY • Revenue update - revenue / expense • Key Developments - 1Q - businesses that close and open / locations / industries • Building Permits YOY and quarterly comparison • Innovations / new energy economy / e commerce updates Mike Beckstead; Josh Birks and I can partner on the requested report. We should have the information for 1Q by mid-April and we will target the first part of May for a Q1 report. Darin Atteberry: Josh, Mike and I have discussed this report before - quick snapshot - a lot of the information exists in the City Manager’s Report Meeting adjourned at noon COUNCIL FINANCE COMMITTEE AGENDA ITEM SUMMARY Staff: Theresa Connor, Deputy Director, Utilities Lance Smith, Utilities FP&A Director Date: April 15, 2019 SUBJECT FOR DISCUSSION Stormwater - Northeast College Corridor Outfall Cost Sharing EXECUTIVE SUMMARY The Stormwater Utility proactively constructed an outfall to serve both existing developed and undeveloped land near Vine and Lemay. The Northeast College Corridor Outfall (NECCO) stormwater system (or NECCO system) was designed to provide an adequate outfall for the area north of Vine Drive and east of College Avenue in order to alleviate existing drainage problems and to facilitate development and redevelopment in the area. The NECCO system is intended to provide a less expensive means of satisfying storm drainage for this area through economies of scale than individual landowners could provide separately. The purpose of this item is for City Council to consider adopting the cost share concept whereby development and redevelopment draining into the NECCO system be allowed to pay their proportional cost share of the NECCO improvements if they choose to use the NECCO system in lieu of constructing separate stormwater facilities. GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED 1. Is the Council Finance Committee supportive of staff bringing forth an Ordinance formalizing the cost sharing opportunity associated with the NECCO system? BACKGROUND/DISCUSSION UProject History The Northeast College Corridor Outfall (NECCO) Project was initiated in response to large development potential north of Vine Drive and east of College Avenue. In 2010 the North College Infrastructure Funding Plan (Resolution 2010-023) was adopted by the City Council. At that time, there was no adequate stormwater outfall for this area of the City, which created a significant hinderance to development and redevelopment. There were also drainage problems in this area from existing development, mainly due to a lack of stormwater regulations when this area of the City originally developed. In response to the development interest in the area, design was initiated on a stormwater system that would help mitigate existing drainage issues in the area, as well as provide an adequate stormwater outfall. The NECCO design was managed by the City’s Stormwater Engineering group and was completed in 2009. Appropriations were made through the 2015-16 Budgeting For Outcomes (BFO) process and further appropriations were made in the 2017-2018 BFO cycle. Construction of the “backbone” storm sewer system occurred in 2016-2017 and the regional pond was constructed in 2018. Other portions of the NECCO system have been completed by development, which were funded partially through the Developer Repay program and partially through the NECCO buy-in paid by the development. Another section of the system is under design and will be constructed as part of Planning, Development and Transportation’s Suniga Road capital project. UCost Share Concept At the time of development, a Developer can choose whether to tie into the NECCO system in order to receive the benefits of the system. If the Developer chooses to connect to NECCO, they pay a proportionate share of the NECCO system cost, as described below. If a Developer chooses not to connect to the NECCO system, then they are required to meet typical stormwater requirements without the benefit of NECCO. Since the NECCO proportionate cost for a development only covers their share of the NECCO stormwater system which serves as a gateway to the City’s stormwater infrastructure, all properties still pay the standard Stormwater plant investment fees (PIFs) in addition to their share of the NECCO cost. In allocating the costs for the NECCO improvements, the impacted area was analyzed to determine which portion of the area was developed and which portion of the area was undeveloped. To define proportionate cost shares, the NECCO system was broken down into individual project components and the cost of each component was divided among the area benefitting from that component (e.g. only those areas receiving a benefit from the regional pond pay for the regional pond). Based on the analyses, it was determined that the City’s share of the NECCO system would be approximately 49% and the appropriate developer share of the Project would be approximately 51%. To date, the City has been constructing improvements and is being re-paid for a pro-rata share of costs for the “developer share” of the Project as development occurs through development and/or repay agreements. The City will stop collecting allocated costs once development’s appropriate share of NECCO improvements has been satisfied. Current costs are based on a combination of estimated future and actual construction costs. The cost for a developer to buy into the NECCO system will be updated to reflect actual construction costs as improvements are constructed. Although the NECCO project has a long history and is partially constructed, the purpose of the proposed ordinance is to formalize the allocation of costs between the City and benefitted development, and the allocation of the developer share of improvement costs among benefitted properties as they develop or redevelop. UProject Costs Attachment 1 - NECCO Cost Breakdown Analysis shows the total estimated cost of the NECCO system to be $13.9M of which development’s share is 51.5% or $7.2M and the City’s share is 48.5% or $6.8M. To date, $7.6M of improvements have been completed and $875K has been received by development buying into the NECCO system. As development and redevelopment continues in this area it is expected that the full $7.2M of the developer share of these improvements will be received into the Stormwater Enterprise. UPublic Outreach Significant public outreach has been completed over the course of the NECCO planning and various capital projects, beginning in 2008 through February of 2019. Outreach has been focused on property owners in the vicinity of the NECCO infrastructure that can be served by the improvements, the North College Citizen’s Advisory Group, and the Urban Renewal Authority. ATTACHMENTS Attachment 1 – NECCO Cost Allocation Analysis Attachment 2 – PowerPoint presentation to Council Finance Committee (April 15, 2019) Attachment 3 – NECCO Area Map Attachment 4 – NECCO Pipe Schematic NECCO Cost Breakdown Analysis Date:1/23/2011 (Updated 4-9-2018 to reflect actual costs for backbone and regional pond) Contributing Total Area Contributing Areas NECCO Improvement Cost (acres)(map color) Pipe Network Into Regional Pond $5,720,000 237.5 Pink, Orange, Blue Regional Detention Pond $1,761,051 187.0 Pink, Orange, Blue Redwood Pond and Outfall $620,000 118.2 Green Outfall From Regional Pond to Vine Drive $5,819,885 647.3 All Total Project Cost = $13,920,936 Pipe Network Into Regional Pond Regional Detention Pond Redwood Pond and Outfall Outfall From Regional Pond to Vine Dr Map Area Cost Cost Cost Cost Developer City Cost Color (acres)Share Share Share Share Share Share per acre PINK GROUP 75.7 1,823,175$ 71,817$ -$ 680,620$ 2,575,612$ 34,024$ BLUE GROUP 68.4 1,040,438$ 879,443$ -$ 614,986$ 2,534,867$ 37,059$ YELLOW GROUP 228.6 -$ -$ -$ 2,055,346$ 2,055,346$ 8,991$ ORANGE GROUP 118.6 2,856,387$ 809,791$ -$ 1,066,335$ 4,732,513$ 39,903$ GREEN GROUP 118.2 -$ -$ 620,000$ 1,062,738$ 1,682,738$ 14,236$ GOLD GROUP 37.8 -$ -$ -$ 339,860$ 339,860$ 8,991$ Totals 5,720,000$ 1,761,051$ 620,000$ 5,819,885$ 7,165,825$ 6,755,111$ 51.5%48.5% Note:Developer share based on undeveloped parcels sharing in cost of the stormwater system City share based on existing development where City is contributing to solve existing infrastructure and flooding problems Cost Allocations Council Finance Committee (4/15/2019) Northeast College Corridor Outfall (NECCO) Lance Smith and Theresa Connor General Direction Being Sought 2 1.Is the Council Finance Committee supportive of staff bringing forth an Ordinance to the full City Council formalizing the cost sharing opportunity associated with the NECCO system? Dry Creek Channel NECCO Project Purpose 3 •Basic purpose is to provide a stormwater outfall for the area north of Vine Drive and east of College Avenue to solve flooding problems and allow for efficient development in the area: •Regional detention and water quality provided for area upstream of Redwood Street •Major outfalls provided for developed areas as well as backbone storm sewer sized to accommodate flows from undeveloped areas •Minimize cost of development through economies of scale •Provides guidance for development criteria in the area Dry Creek Channel NECCO System Schematic 4 •Design and layout of backbone storm sewer as well as major laterals to serve existing developed areas •Preliminary cost estimate for all system components NECCO System Schematic 5 •Backbone storm sewer and regional detention pond constructed as part of Stormwater capital project •Major laterals into detention pond from College and Conifer were constructed as part of development (Aspen Heights, Crowne At Old Town North) and PDT capital project NECCO Area Designations 6 •Defines areas that are served by the specific components of the NECCO infrastructure •Defines development criteria for specific parcels based on what the downstream system provides •Informs cost allocation for any given parcel NECCO Milestones Milestones: •Backbone storm sewer and detention pond construction completed by Stormwater Capital Projects. •Major lateral to Conifer completed as part of Aspen Heights Development. •Major Laterals to College partially completed as part of Aspen Heights and Crowne at Old Town North Developments. Remainder will be completed as part of Suniga Road project. •Cost Spreadsheet updated to reflect actual construction costs. 7 Infrastructure Cost and Allocations 8 Infrastructure Cost and Allocations 9 •Cost share based on proportional costs for areas draining to each section of NECCO system. •Development / redevelopment pay proportionate share of costs when utilizing the NECCO system. •City will stop allocating costs once Development Share of system has been collected. General Direction Being Sought 10 1.Is the Council Finance Committee supportive of staff bringing forth an Ordinance to the full City Council formalizing the cost sharing opportunity associated with the NECCO system? Dry Creek Channel Questions 11 Lance Smith, Utilities Strategic Finance Director Theresa Connor, P.E. Deputy Director, Water Engineering and Field Services Shane Boyle, P.E. Development Review Manager Ken Sampley, P.E. Director, Stormwater Engineering and Development Review AT T A C H M E N T 2 E VINE DR CONIFER ST N LEMAY AVE REDWOOD ST N COLLEGE AVE LUPINE DR JEROME ST BLUE SPRUCE DR FOXTAIL ST L I N D E N W O O D D R E WILLOX LN SITKA ST E SUNIGA RD CAJETAN ST OSIANDER ST 9TH ST CLARK ST PASCAL ST E M M AUS LN RED CEDAR CIR BAYBERRY CIR 10 T H S T BRISTLECONE DR SUGARPINE ST COULTER ST MULLEIN DR G R O U S E C I R LINDEN ST BLONDEL ST 11TH ST NOKOMIS CT N MASON ST HICKORY ST PINON ST HEMLOCK ST A S C O T C T FOREST HILL S LN STEAMBOAT LN QUAIL RUN BREWER DR WOODLAWN DR LOPEZ CT MONTEREY DR HIBDON CT LINDEN CENTER DR P I C A R U N TRUJILLO ST SOL VISTA LN COPPER MOUNTAIN LN LA GARITA LN FIREWEED LN ALPINE ST WALLFLOWER LN YARROW CIRECHO MOUNTAIN LN SANGRE DE CRISTO LN RENEGADE CT MATUKA CT MUDDLER CT /ATTACHMENT 1 COUNCIL FINANCE COMMITTEE AGENDA ITEM SUMMARY Staff: Chad Crager, City Engineer Date: April 15, 2019 SUBJECT FOR DISCUSSION Financing alternatives for the Lemay Avenue realignment project from Lincoln Avenue to Conifer Street. The project also includes a new intersection of Lemay Avenue and Suniga Road, the extension of Buckingham Street, and a grade separated crossing of the Burlington Northern Santa Fe (BNSF) Railway. EXECUTIVE SUMMARY The purpose of this item is to present and discuss potential financing alternatives for this high priority transportation capital improvement project. Staff has recently completed the plans for the 50% design, a majority of the right-of-way (ROW) acquisitions, and construction of the Phase One roadway embankment in collaboration with the Utilities Department. The total current project (design, right-of-way, and construction) cost is estimated at $23.5M. Current project funding includes: The Budgeting for Outcomes (BFO) process, the City’s Transportation Capital Expansion Fee (TCEF) Reserves, and Developer contributions for Local Street obligations. To date, $3.7 M has been appropriated to Phase One of the project and all funds have been expended. Phase Two would be a $9.1 M appropriation from TCEF reserves. The Phase Three funding needed for the project is $10.5 M (in 2019 dollars). GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED Staff is seeking direction regarding an appropriation of the TCEF reserves. Completion of Phase II will allow staff to further refine the proposed construction schedule and stay on track for a project opening date in the next budget cycle. Questions for the Council Finance Committee: • Does the Council Finance Committee support a Summer 2019 appropriation of the TCEF reserves in the amount of $9.1M for Phase Two funding? BACKGROUND/DISCUSSION Realigned Lemay Avenue has been on the City’s Master Street Plan since the 1980’s. This project, along with the grade separation at the BNSF Railway, have been included in numerous Planning efforts over the past few decades. Train switching operations continue to increase in the Vine and Lemay area. The total time that the intersection is blocked to the travelling public has increased 50% from June 2016 to February 2019 (22 hours of blockage per month v. 33 hours of blockage per month). The construction of this project will alleviate existing deficiencies and provide a “key” infrastructure asset for northeast Fort Collins. More specifically, this project will: • Improve quality of life, access, and neighborhood livability for Andersonville, Buckingham, and Alta Vista • Reduce accidents and congestion, and improve emergency services coverage by separating travel modes from BNSF Railway switching operations • Improve air quality by reducing the emissions from idling vehicles, whereby aligning with the goals of the Climate Action Plan • Provide multi-modal connectivity to the new Beet Street Park at the southwest corner of Vine and Lemay • Reduce traffic volumes on Ninth Street (Lindenmeier Road) Over the past few years, staff has given many formal presentations and provided project information at City sponsored events; designed to encourage public participation and collect feedback. Staff is actively addressing community questions and working with nearby residents, business owners, landowners, and proposed development projects. USummary of Public Engagement to Date: • February 2016 - Public Open House (Streets Facility) 122 people signed in for the event • February 2016 - Presentation to the Transportation Board • May 2016 - Presentation to the Futures Committee • May 2016 - Presentation to the Council Finance Committee • August 2016 - Lincoln Neighborhood Ice Cream Social • August 2016 – Council Work Session • November 2016 - Presentation to Alta Vista residents • September 2017 – Open House event for Alta Vista, Andersonville, and Buckingham residents at the Legacy Church (Ninth Street and San Cristo Street) • October 2017 – Presentation at Council Work Session • December 2017 and March 2018 – Fort Collins Area Chamber of Commerce • January 2018 and February 2019 – Transportation Board • February 2018 – Fort Collins Sertoma Club • March 2018 and February 2019 – North Fort Collins Business Association • Project website is available at: 31TUhttp://www.fcgov.com/engineering/vine-lemay.phpU31T Staff will continue public outreach and engagement efforts with stakeholders in 2019. ATTACHMENTS Attachment #1 - Power Point Presentation 1 Vine and Lemay –Council Finance Committee Chad Crager-Engineering April 15, 2019 Questions 2 •Does the Council Finance Committee support a Summer 2019 appropriation of the Transportation Capital Expansion Fee (TCEF) Reserves in the amount of $9.1M for Phase Two funding? Problems to be Solved 3 •Increasing Congestion and Delay (Train Switching, Vehicle Traffic, Emergency Services) •Historic Neighborhood Livability: Pedestrian Safety, Air Quality, and Connectivity Issues •Reduce Traffic Along Ninth Street •Improve multi-modal connections and access to Beet Street Park Project Status 4 •Roadway embankment on north side (~80% complete) •Roadway embankment on south side (~10% complete) •Dry Creek box culvert complete •Plan set at 50% design •Right of Way (ROW) acquisition complete north of Vine Drive Phasing Outcomes Phase One –Funding of $3.7M (current phase -complete) •Started embankments, Dry Creek box culvert, ROW acquisition, 50% design plans, stakeholder outreach Phase Two –Funding of $9.1M (with TCEF funds) •Finalize design, complete ROW acquisition, finish embankment, rock walls and bridge abutments, restore side slopes, Public Utility Commission application, Railroad crossing agreements Phase Three –$10.5M Remaining funding (2019 dollars) •Bridge, intersection work (Lincoln, Buckingham, Suniga, Conifer), Final paving and concrete work, completion of landscaping 5 Project Funding 6 TABLE A –Project Funding Total Project Cost $23.3M* Phase One -Previous Appropriations(All Funding has been Expended)$3.7M Phase Two -Proposed Appropriation from TCEF Reserves $9.1M Phase Three Additional Funding Needed $10.5M* * Denotes 2019 Dollars (Will Inflate yearly with Material Cost Escalation starting in late 2019); Increase in funding need due solely to inflation (Inflation of 5.25% from Fall 2016 –Fall 2018) Why appropriate TCEF money now? 7 1.Completes project one year sooner at lower cost 2.Stakeholders/public continue to see progress 3.Allows for continued coordination with on-going work in the area (A4 Lateral Stormwater Project, Adjacent Landowner’s, Private Developments, etc.) 4.Having full TCEF amount allows efficient delivery vs. multiple small appropriations 5.Allows for restoration and planting of side slopes on embankments 6.Predicted lack of dirt resources Phase Three Timing and Funding 8 Timing of phase 3 TBD (possibly 2021-2023) Funding $10.5M (2019 dollars) expected to increase with inflation Options under consideration: •External financing •Reserves Questions 9 •Does the Council Finance Committee support a Summer 2019 appropriation of the Transportation Capital Expansion Fee (TCEF) reserves in the amount of $9.1M for Phase Two funding? Thank You for Your Time! 10 Back Up Slides 11 Upward Trend in Train Blockages 12 COUNCIL FINANCE COMMITTEE AGENDA ITEM SUMMARY Staff: Chad Crager, City Engineer Mike Calhoon, Director of Parks Date: Monday April 15, 2019 SUBJECT FOR DISCUSSION Streetscapes Standard Review EXECUTIVE SUMMARY It has been over five years since the Streetscapes Standards were updated in 2013. Several projects have been designed and built to these updated standards. While the streetscapes in these projects have been appreciated aesthetically, they do cost more to construct and maintain. These additional costs for capital construction and maintenance do not seem to be sustainable with current funding. Over the last 5 years, it has come to the attention of staff This effort will focus on ways to reduce costs without sacrificing the quality of the streetscapes. This presentation is provided to set the stage for a more robust review in the 4P th P quarter of this year. GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED Does the Committee have any additional questions regarding the need to revisit the Streetscapes Standards? Does the Committee have additional category recommendations the team should consider during its evaluation of the Streetscapes Standards? BACKGROUND/DISCUSSION The Streetscape Standard was last updated in 2013 to enhance the visual appearance of the intersections, medians and parkways on the arterial streets throughout town. When roads and/or intersections are improved by Engineering these new standards are utilized to guide the design. In addition, when monies are available through the Budgeting for Outcomes process, the streetscape renovation projects managed by the Parks Department are also upgraded to these standards. While these streetscape standards have been appreciated aesthetically, they have increased landscaping capital costs by as much as 300% and maintenance costs by as much as 500%. As a result of these increase costs staff is focusing on cost drivers and ways to reduce costs while still providing aesthetically pleasing streetscapes. The results of this staff review are anticipated to be complete by the 4P th P quarter of this year. ATTACHMENTS Power Point Background 1 •New Standards Adopted in 2012, Implemented in 2013 •Establish higher standards along City’s arterial streets and intersections •Establish Gateways •Anticipated continuous monitoring and adjusting •Gathered data for five years •Refinement is needed •How to refine without sacrificing expectations? Current Standards •Median Landscaping is the focus •Perennials, shrubs, trees, boulders •Higher quality maintenance expectations •Cost is 5x greater than previous standards •Greater initial capital cost •Landscaping ~2-3x greater than previous standards 2 North College Avenue Median 3 Median Example East Harmony Road -Pre 2013 Standards East Harmony Road -2013 Standards Median Example 4 West Horsetooth Road -Pre 2013 Standards West Horsetooth Road -2013 Standards Data Driven Refinement of Standards 5 Cost Drivers to be Reviewed •Design Costs •Installation Costs •Maintenance Costs •Specialized Staff •Traffic Control & Safety •Specialized Equipment •Frequency •Sustainability •Types of Plants •Irrigation •Economic Impacts North College Avenue Implementation Schedule •Approval of Revisions –End of 2019 •Design updates start in 2020 •Capital Projects Implementation •‘21/’22 BFO •Maintenance Savings Realized •‘23/’24 BFO 6 COUNCIL FINANCE COMMITTEE AGENDA ITEM SUMMARY Staff: Kurt Friesen, Director of Park Planning and Development Mike Calhoon, Director of Parks Date: Monday April 15, 2019 SUBJECT FOR DISCUSSION Park Design and Maintenance Review EXECUTIVE SUMMARY The design and level of service expectations for parks is evolving. The community expects a higher level of service for typical features (i.e. playgrounds, ballfields, water features) along with new design features that help to tell the story of the site. These expectations come with additional financial impacts associated with construction and maintenance of these sites. The intent of this review is to assure high quality designs for parks while minimizing the long-term maintenance costs of these sites. GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED Does the Committee have any additional questions regarding the need to revisit park design and maintenance? Does the Committee have additional category recommendations the team should consider during its evaluation of park design and maintenance? BACKGROUND/DISCUSSION Maintenance costs have been increasing about 4% per year over the last several years. The days of minimal maintenance (i.e. mowing, trash collection, weed whipping) and then heading home no longer exist. The technical aspects of maintaining a variety of sites throughout the community require a specialty skill set that ranges from turf management to public health and safety. Design elements have been introduced that have shifted the requirements of the maintenance operations to assure safe and accessible sites for the community. The best example of this has been the addition of interactive water features that require water testing 3X per day. The employees now must be trained and licensed to perform tests, recognize non-compliance of standards and perform corrective actions so the system can be returned to service. The additional design features and level of service evolution are not unexpected. The requirements have changed over the years for park design (i.e. American with Disabilities Act, Playground Safety Standards). In addition, tying the history of a site through the design requires creativity and imagination that at times adds additional elements in a park setting that creates interesting maintenance challenges. The goal of this review is to identify cost drivers to the ongoing maintenance costs and attempt to limit these for the long-term financial health of the organization. This should be done without sacrificing the creative design aspects that separate the City of Fort Collins’ park system from the region. ATTACHMENTS Power Point Background •Fort Collins’ park system includes 50 parks •Seven Community Parks. •43 Neighborhood Parks. •Build Out adds an additional ~15 parks •Two Community Parks •~13 Neighborhood Parks 1 Maintenance Cost Tracking Resource Allocation Measurement System 2 ESTIMATE CITY FOSSIL TWIN PARK CREEK AVERAGE SILO SPORTS FIELDS/STRUCTURES 90,260$ 50,900$ 70,580$ 53,500$ RESTROOMS 30,000 47,000 38,500 35,000 PLAYGROUNDS 11,500 16,000 13,750 40,000 SHELTERS 7,500 7,000 7,250 7,000 WATER FEATURES - 15,000 15,000 - DOG PARK - 10,000 10,000 10,000 TURF/IRRIGATION 164,000 206,000 185,000 145,000 BOTANICAL 62,000 29,000 45,500 65,000 TRASH/RECYLCING 75,000 46,000 60,500 60,000 EQUIPMENT REPAIR/LEASE 20,000 25,000 22,500 21,000 INFRASTRUCTURE REP/VANDALISM 50,100 68,000 59,050 70,000 EVENTS/SITE MGMT,TRAINING 31,700 43,500 37,600 33,500 SNOW REMOVAL/ICE RINK 22,000 16,500 19,250 20,000 Total 564,060$ 579,900$ 584,480$ 560,000$ COMMUNITY PARK FEATURES 4 YEAR AVERAGE COSTS Current Standards •National standards have changed •ADA •Playground safety standards •Greater initial capital cost •Create character and local identity •Higher quality maintenance expectations 3 Fossil Creek Wooly Mammoth 4 Lifecycle Example Lee Martinez Park Before After Lifecycle and New Design 5 Twin Silo Playground Lee Martinez Playground Data Driven Refinement of Standards 6 Cost Drivers to be Reviewed •Design Costs •Installation Costs •Maintenance Costs •Specialized Staff •Specialized Equipment •Frequency •Sustainability •Types of Plants •Irrigation •Economic Impacts Fossil Creek Shelter Park System Development Strategy 7 Quantitative and Qualitative Approach •Even park distribution •1 community park approximately every 4 square miles •1 neighborhood park approximately every 1 square mile •Equal access to park amenities •Quantity of recreation components based on population •Impact fee requires new parks to be comparable to other fee funded parks Primary Cost Components of New Parks 1. Land 2. Raw Water 3. Design/Entitlement/Fees 4. Construction 8 Typical Park Elements 9 Neighborhood Parks •Multi-purpose Green/Fields •1 Small/Specialty Recreation Facility •1 Restroom •1 Shelter •Playground •Walks •Raw Water Irrigation Pond (if feasible) •5-10+ Acres Typical Park Elements 10 Community Parks •Large Recreation Facilities •Small/Specialty Recreation Facilities •Dog Park •Destination Playground •Multi-Purpose Fields •Passive Green Space •Restrooms •Shelters •Walks/Trails •Raw Water Irrigation Pond •Naturalistic Features •Unique Elements •Parking/Drives •80-100+ Acres Typical Community Park Elements 11 Twin Silo Spring Canyon Fossil Creek Rolland Moore Edora Lee Martinez City Large Recreation Facilities 3T, 2B 3T, 2B 5T, 2B 4T,2B 6T,2B 4T,2B 3T,2B Small/Specialty Recreation Facilities BMX, 4 PB 3BB, SP, 2 SV, VB, MBP, BMX 2BB, 1 SP, Hockey 5BB, 1PB, 4SV, 2H, 3R 35H, Disc Golf, SP 3BB BB, 2H Dog Park 1 acre 2 acre 1 acre None None None None Destination Playground 1 1 1 1 1 1 1.5 Multi-Purpose Fields 10.4 acres 18.3 acres 6.3 acres 16 acres None None 6 acres Passive Green Space 6.2 acres 8 acres 8.7 acres 1.8 acres 5.5 acres 18 acres 23.3 acres Restrooms 2 3 3 2 2 2 1 Shelters 1G 5G, 3P 2G, 1P 4G 1G, 3P 1G 7G, 3P Walks/Trails 2.7 miles 2.5 miles 1.3 miles 1.5 miles 0.5 miles 1.8 miles 1.5 miles Raw Water Irrigation Pond 3 acres 1.5 acres 11 acres 2 acres 1.5 acres 9.3 acres 14.5 acres Naturalistic Features Creek Play, Native Areas Native Areas Native Areas Creek Edge Creek Edge Native Areas Lake Edge Unique Elements Harvest Room, Orchard, Trellis, CG Spray Park Water Feature CG CG Fitness Stations Pool, Fitness Stations, Train Parking / Drives 232 + 729 (school)439 spaces 453 spaces 418 spaces 427 spaces 73 spaces 756 spaces Legend: T-Tennis B-Ballfield BB-Basketball SP-Skate Park SV-Sand Volleyball PB-Picklelball R-Racquetball MBP –MtnBike Park H-Horseshoe BMX –Bike Race CG-Community Garden G-Group Shelter P-Picnic Shelter 12 ($000’s)Twin Silo Spring Canyon Fossil Creek Large Recreation Facilities $1,642 $879 $1,524 Small/Specialty Recreation Fac.476 723 602 Dog Park 176 198 45 Destination Playground 1,326 1,095 564 Multi-Purpose Fields 803 1,630 889 Passive Green Space 775 1,839 867 Restrooms 1,150 894 965 Shelters 325 545 412 Walks/Trails 708 1,482 1,262 Raw Water Irrigation Pond 235 414 195 Naturalistic Features 708 728 195 Unique Elements 820 201 444 Parking/Street Improvements 2,150 2,181 1,298 PARK ELEMENTS TOTAL $11M $13M $9M Community Park Element Construction Costs Spring Canyon and Fossil Creek Park values are based on 2016 estimated replacement costs Twin Silo Park values are actual construction costs Recent Park Cost Saving Strategies 13 Strategy Cost Savings Implementation Utilize high quality raw water sources Reduce maintenance & irrigation costs associated with poor water quality Raw water shares purchased for NE Community Park in lieu of utilizing low water quality available from local wells Reduce turf areas Reduces irrigation cost over park life. Native/natural areas require increase in initial establishment costs. 25%-40% native areas in recent parks such as Twin Silo & Crescent parks Utilize customized pre-manufactured park structures Reduces construction costs Pre-fabricated structures in Sugar Beet Park Reduce or simplify water features Reduces ongoing/daily maintenance Twin Silo Park utilizes natural creek in lieu of traditional water play features Distributed parking Reduces large lot construction cost by maximizing existing streets and drives for on street or shared parking with adjacent facilities Twin Silo Park provides distributed parking around entire park perimeter. Overflow parking at Fossil Ridge High School Review Schedule •Approval of Revisions –End of 2019 •Design updates start in 2020 •Park Projects Implementation •‘21/’22 BFO •Maintenance Savings Realized •‘23/’24 BFO 14