HomeMy WebLinkAboutMinutes - Finance Committee - 04/04/2024 -
Finance Administration
215 N. Mason
2nd Floor
PO Box 580
Fort Collins, CO 80522
970.221.6788
970.221.6782 - fax
fcgov.com
Council Finance Committee Hybrid Meeting
CIC Room / Zoom
April 4, 2024
4:00 - 6:00 pm
Council Attendees: Emily Francis, Kelly Ohlson, Mayor Jeni Arndt
Staff: Kelly DiMartino, Travis Storin, Tyler Marr, Ginny Sawyer, Teresa Roche,
Kelley Vodden, Chris Martinez, Jennifer Poznanovic, Lawrence Pollack,
Trevor Nash, Renee Reeves, Monica Martinez, Brian Tholl, Glenn Pease,
Terri Runyan, Victoria Shaw, Dave Lenz, Joe Wimmer, Zack Mozer,
Nina Bodenhamer, Carolyn Koontz
Others: Kevin Jones, Chamber
Meeting called to order at 4:00 pm
NOTE: Staff follow-up included on the last page of draft minutes.
Approval of minutes from March 20th, 2024, Council Finance Committee Meeting.
Kelly Ohlson moved for approval of the minutes as presented. Emily Francis seconded the motion.
The minutes were approved unanimously via roll call by; Emily Francis, Kelly Ohlson.
A. 2025-2026 Budget Process Review
Jennifer Poznanovic, Revenue Manager
Chris Martinez, FP&A Manager
Kelley Vodden, Compensation, Benefits and Wellbeing Director
Lawrence Pollack, Budget Director
SUBJECT FOR DISCUSSION (a short title)
2024 BFO Assumptions for funding availability, expense pressures, salary adjustments, and changes to benefits
costs in the 2025-26 Budget.
EXECUTIVE SUMMARY (a brief paragraph or two that succinctly summarizes important points that are covered
in more detail in the body of the AIS.)
The City will again use the Budgeting for Outcomes (BFO) process to prepare the City Manager’s
Recommended 2025-26 Biennial Budget. Key assumptions are established early in the process and reviewed
with the Council Finance Committee.
1. Funding Sources: The sales and use tax forecast is an important revenue stream necessary to support
ongoing costs. General Fund sales and use tax is allocated across all seven Outcomes, while the voter
approved dedicated tax forecasts are allocated to specific Outcomes where applicable Offers can utilize that
funding, per ballot language requirements. Likewise, in the enterprise funds, utility rate increases are
necessary to address inflationary costs, infrastructure replacement needs, and maintain service delivery.
Available reserves can also be used to fund offers, typically for one-time types of expenses.
2. Expense Pressures are numerous, including the ongoing impacts of significant inflation over the past couple
years. Further, given natural financial constraints, there are challenges to taking care of existing City assets
versus investments in new programs and services that could benefit the community.
3. Salary and Benefits: The 2025-26 Budget includes a preliminary 3.5% average salary pool increase for both
2025 and 2026, which will be reflected in offers. Employee benefit cost changes have also been entered into
the City’s budgeting software and are used to calculate total employee compensation for 2025-26.
GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED
What questions do Committee members have about the assumptions for the 2025-26 Biennial Budget?
BACKGROUND/DISCUSSION
All background information is contained in the attachments and will be discussed in detail during
the meeting.
DISCUSSION / NEXT STEPS
Kelly Ohlson; page 3 Preliminary Unaudited Results (see above)
198% is it all Federal Frants?
Follow up - overbudget by $17.5M
Lawrence Pollack; two lines up $10M over
Travis Storin; transportation - capital expansion – TCEF – street oversizing fee
Payments in lieu of development
Short of $400K hourly fees for parking garage $17.5M
Investment portfolio accounting rules require us to market value.
As interest rates went up last year, it looks that way on paper.
Sales Tax History (see slide #5 above)
The above chart shows sales tax history over time. The dark blue bars represent either the KFCG or 2050
dedicated taxes. The first large jump in the sales tax growth line is the addition of KFCG, the second is the
pandemic, and the third is the addition of the 2050 tax.
The 2024 forecast is based on 12 months of the 2050 tax to more accurately project 2025 and 2026. However,
collections for 2050 started in February of 2024. This is because tax due in February is for economic activity
that occurred in January. 12 months of the 2050 tax will still be recognized in 2024 as revenue will be accrued
back to the month in which the tax activity occurred.
Staff recommends 3% growth in 2025 and 2026. Due to coming in under budget in 2023 for sales tax, staff is
currently forecasting 2.9% growth for 2024. However, 3.9% growth is needed over 2023 actuals to reach the
2024 budget.
For use tax, staff recommends $25M for 2025 and $25M for 2026. 2024 is expected to be in line with recent year
actuals and staff is currently forecasting $23M in 2024 (budget is $20M). Flat growth in 2025 and 2026 is expected
based on the updated 2024 forecast.
For property tax, staff is recommending 1% growth in 2025 and 2% growth in 2026. The recommendation is based on
preliminary 2024 valuations and discussions with the Assessor’s Office. The fluctuations in growth rate are based on
the two-year valuation cycles. Given the significant growth between 2021 and 2023, flat growth is expected over the
next two years with new construction being the only anticipated change (subject to change based on any legislative
action).
Personnel & Benefits
BENEFITS – Chris Martinez
We have a very healthy balance in reserves.
Contribution Summary (see below)
Medical / Dental PEPM History (see above)
Step ladder approach to increases - before 2016 we have very low increases and had very
positive plan experience so we felt the need to keep rates low which had a boomerang effect in 2017 and
2018. In 2019, when the pandemic hit, we felt the need to help both the city and the organization, so we kept
medical and dental increases at 0%.
Mayor Arndt; is that a lag as the pandemic was in 2020?
Chris Martinez; we started seeing it then – and still had some lingering effects from the overshot in 2017 and
2018. You see the negative 10.1% in 2020. At the direction of the CFO at the time, we leaned into benefit
reserves to offset some general fund revenues that were not coming in to cover expenses.
Travis Storin; the negative 10.1% was actual experience in clinical utilization as people couldn’t get in during
pandemic. We were working hard to mitigate the impacts of the pandemic with the premium strategy.
Chris Martinez; we used reserves which had an adverse effect - post pandemic, people were healthier – we
were able to extend that out in 2021. In 2022, our consultants recommended a 7% increase because they saw
the medical and dentals fields trying to recoup lost revenues from the pandemic. We applied a 7% increase
and leaned on reserves 2022 and 2023 to help us keep our rates at bay. The organization has a
Really good plan performance so we kept rates at 2% and 4.5%. Now history repeats itself, we worked with
Hub International, our benefit consultant to project out all costs for medical and dental and prescription
coverage out for 5 years to see what ranges we should be adopting now to avoid the 15 - 18% increases.
We landed on a 7%. What we mean by the step ladder is that every year we are not increasing by 8 –
8.5% we are falling behind. We are strategically using our reserves while still increasing our rates so
we can avoid that pendulum. We want to keep things in a steady state, so we don’t fall in that trap again.
Strategically burning some reserves but still keeping reserves in a healthy state with a buffer in there in case
we were to have a bad year.
Benefit rate recommendation slide #17 (see above)
Emily Francis; I thought we weren’t participating in the family program.
Kelley Vodden; we discovered that we had an opportunity to take advantage of the family program through
the state for non-benefit eligible employees. There was a lot of fine tuning before the program went live. We
were able, as an opted-out employer to choose to support employees who wanted to opt in voluntarily. In lieu
of having to opt in and pay for the entire workforce, we pay their contribution individually on their benefits, so
it is no cost to our non-benefited employees to participate in the state program.
Kelly Ohlson; I support the balance of responsibility to staff and to tax and rate payers which is a complicated
juggling act. Outside of utilities transfers, it is our biggest expenditure.
Chris Martinez; benefits represent $44M of city’s budget.
ACTION ITEM:
Kelly Ohlson; I would like to request a general breakdown of dental /medical / prescription /
Salaries / retirement in real dollars and percentages so we can get a contextual feel to help when we make
decisions.
Benefit Rate Recommendations (see slide 17 above)
For 2025 and 2026, we are kicking in 7% and employees are getting a 5.5% increase to catch up to where we
need to be. Annual increases 7-8.5% for the employer. We are not deciding what the employee pays now
since this is a 2-year budget.
Chris Martinez; this is to come in subsequent years to avoid the boomerang we felt in 2017.
This might be helpful for context – in 2020 – negative 10.1% to the city side – that is the reason the city is
having to pay more back because we didn’t take that negative to employees – trying to make that up. We are
managing to a 70/30 split - when we take in total costs (premiums and out of pocket) we are currently at a
72/28 split. The 70/30 is a legacy number and an industry standard plus there is collective bargaining for PFA
and Police – there are statutes we must follow. Our employees should not be paying more than 30% of the
cost share of their medical and dental.
PFA and Police do pay in the benefit plans. I believe there is language in their plans for single and family that
we have to be in compliance with – their total costs must be no more than 30% of the total plan costs. On the
single side, we are in compliance, however, on the family side we are running very close at 29.5% for Police
and PFA.
Travis Storin; this is a lot of predictive work since we are self-funded and it is based on how much people
actually utilize medical services. That 70/30 can be thrown out of balance if we see a big spike in physician
visits, prescriptions, etc.
ACTION ITEM:
Kelly Ohlson; Could we look at peer communities data on benefits?
Chris Martinez; we can and we have had that conversation with Hub International. It is hard to get
apples to apples comparisons because you would have to have self-insured funds that have the same plan,
mechanisms and co pays. It is rather difficult to get a pure apples to apples comparison so we look at it more
in a percentage frame. What percentage of their plan is medical, do they pay on co-pays for pharmaceuticals
and for specialty drugs. We look at it more in that regard, but we do monitor it.
Kelly Ohlson; great to know that you do monitor. We want to be a really good employer but not over
the top.
Chris Martinez; we are not Cadillac. We did make an adjustment to our specialty pharmaceuticals because the
plan previously allowed for $0 deductible for super expensive drugs when there was a generic available which
was not fiscally prudent. What is the industry standard? What co-pay would be standard? This process
educates the consumer as well regarding available lower cost alternatives.
Slide #19 (see above) reflects the employer side of the calculation.
Breakdown of Medical for 2025
$30M Medical & Pharmaceuticals
$2.1M Dental
$2.8M For Stop Loss
Balance is Wellness, City Care and admin, life insurance.
$5M Not a city expense – this is a pass through - employees paying for voluntary life insurance,
daycare reimbursement health savings accounts, Aflac, which are not a city expense - we just
take them through our books.
$44M TOTAL
ACTION ITEM:
Chris to provide a more detailed breakdown of the above.
Kelly DiMartino; follow up to Emily Francis’ question earlier regarding the state family program. We had to
opt-out but we made a commitment to Council to bring an alternative as a public council action.
COMPENSATION – Kelley Vodden
Current Compensation Assumptions (see slide above)
Deeper dive with Q2 data later this summer – look at external data, pay equity study, cost of living,
retention. We do this work every year in advance of compensation planning.
Mayor Arndt; what determines a step employee versus a range employee?
Kelly Vodden; utilities is an example of step positions as they are required to reach a certain level of
skill to advance to the next step / level. Open range does not have that requirement.
Kelly DiMartino; it is really based on how the market attaches the position. Most of our Police
positions are almost all step positions because that is how the industry benchmarks those positions.
We have a few areas right now as that market is changing are looking at revisiting that and change to
open positions.
Kelley Vodden; we also have areas such as Parks who are curious and looking at using stepped
positions as well.
Kelly Ohlson; referenced the Current Compensation Assumptions (see slide on previous page)
Now you are saying that the 3.5% may go up to 4.25%. I just want to make sure I understand.
Kelley Vodden; the reason is twofold, we didn’t have final 2023 data published to do our typical full
analysis so we looked a lot at projections and trends to determine what our comfort level was and if
there was any movement this year so we would have room to respond and continue to be
competitive. You will notice that for 2024, we have a salary budget of 5% in total. Merit takes 4.5%
exclusively and .5% is for any off cycle talent movements.
Kelly Ohlson; so, we can look forward to seeing something between 3.5% - 4.25% in the final
document.
Travis Storin; I wouldn’t set that 4.25% in stone as this is best guess territory and we get the market
data in earnest late this spring. So, July is when we will start to develop the final recommendation to
Council.
Kelly Ohlson; 2.5% pay range movement at the bottom of the slide – don’t you add that too?
Kelley Vodden; pay range movement - recommendation for movement.
We move our pay ranges in our open pay plan 2.5% based on what the market is driving.
Our min / mid / max pay ranges are all shifting 2.5% for open positions. We don’t compensate our
current employees for that pay range movement.
Kelly Ohlson; for clarification -Council gave a total 5% increases for salaries for 2024 but that wasn’t
7% or 9%.
Travis Storin; the 2.5%, if you think about it being a band for a given job with a minimum of $50K and
maximum of $75K. An employee might be hired anywhere in that $25K range. The 5% budget
applies to their compensation within that range. Every year we evaluate the pay plan and those
boundaries of $50K and $75K is what moves by 1.5%. No impact to the employee’s pay, but the
market is moving –
ACTION ITEM:
Kelley will provide something more illustrative per request from Kelly Ohlson.
A one pager illustration together for the full Council for understanding of the percentages.
Kelly DiMartino; recent changes have added a little confusion, but I believe it is for a very good
reason.
The pay range movement, we used to do cost of living adjustments. As the pay ranges moved, so did
the salaries. This is a challenging thing for the organization to understand, because their pay range is
moving which means the market is moving but we don’t automatically adjust their pay so they may
feel like they are falling behind. What we have said is that within the merit increase allocation, that
part of that factors in how the range is moving and performance along with a variety of things.
The reason there is a difference between 5% and the 4.5% and this is new. Historically in the
organization, we have allocated merit increases for a two-year budget - there is no way we can
always get it right as people move and positions are reallocated. We never had money allocated for
that, we always took it out of underspend. So, budget after budget, we would start with a chronic
deficit because of personnel moves that happened. Last cycle, our budget lead team said we have to
change this. So, we are now saying, here is your total salary budget. A part of that we are always
going to set aside to account for these exceptions and things that happen over the course of the two-
year budget and we are doing it with salary dollars not underspend.
Kelly Ohlson; I have had more confidence in city organization around these things in the last 5 years
than every before. We try to be transparent and to look out for rate payers, taxpayers, and our
employees.
Lawerence Pollack; wrapping up with a review of Key 2024 BFO Dates (see slide below)
First Reading would be on Election Day. I understand ELT was discussing a possible new date for that
meeting. The budget has to be adopted by November 30th. We may need to choose a different day
to meet that week as we don’t have meetings on election day. Maybe Thursday or Monday
B. EPIC Home Loan Bank Renewal
Brian Tholl, Sr. Manager Mechanical Engineering
Glenn Pease, Mechanical Engineer II
SUBJECT FOR DISCUSSION: Renewal of Epic Homes Loan Program Third-Party Capital Agreements
EXECUTIVE SUMMARY
The purpose of this item is to update Council Finance regarding the capital sources for Utilities on-bill loan
financing component, Epic Homes Loan, and to seek support for presenting US Bank and Vectra Bank capital
agreement renewals to the Electric Utility Enterprise Board for approval. The blended public and private
capital strategy of Epic Loans supports the Our Climate Future plan and the council priority of reducing climate
pollution and air pollution through electrification.
The existing US Bank agreement expires on May 31, 2024, and staff is proposing to renew the Vectra Bank
agreement in parallel to reduce administrative efforts and to continue success with program participation.
Staff recommend renewal of the proposed US Bank and Vectra Bank capital agreements as a key component
of the ongoing implementation of Epic Homes Loan.
GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED
• What questions does Council Finance Committee have on the Epic Homes Loan program?
• Does the Committee support bringing the proposed third-party capital agreements to the Electric Utility
Enterprise Board for approval?
BACKGROUND/DISCUSSION
Epic Homes
Epic Homes is a comprehensive program to help Fort Collins Utilities customers achieve more efficient,
comfortable, and healthy home living environments for homeowners and renters alike. The program
encompasses various offerings, including:
• Discounted home energy assessments
• Equipment rebates on home upgrades and renewable energy projects supporting the Our Climate Future
goals
• Participating contractors
• Quality assurance
• Attractive on-bill financing options (Epic Homes Loans)
• Certificates that document energy improvements
In October 2018, Fort Collins became a winner of the 2018 Bloomberg Mayors Challenge and the associated
$1M prize. The 2018 Bloomberg Mayors Challenge involved over 300 cities proposing ideas to address
important issues in their community. The City’s proposal was selected as a winner for its innovative approach
to providing health and equity benefits to residents, specifically for low-to-moderate income renters, by
improving the energy efficiency of homes. Residential property owners can take advantage of Epic Homes’
easy, streamlined steps to make their homes more comfortable, healthy, and efficient. Partnering with
Colorado State University, Fort Collins also established a research study which links the health and well-being
indicators of improved indoor environmental quality from efficiency upgrades.
Epic Homes provides non-energy benefits in addition to efficiency, such as increased comfort, health, and
safety.
Epic Homes Loan
Epic Homes Loan is Fort Collins’ Utilities on-bill finance program. It is a component of the program portfolio
which supports community priorities for energy efficiency, renewables, electrification, reduced greenhouse
gas emissions, and increased equity and well-being for residents. Providing a simple, low-cost financial tool
with Epic Homes Loan helps to meet these objectives by helping property owners undertake comprehensive
efficiency improvements. This is especially important for older, less efficient rental properties, which make up
a significant percentage of the City’s housing stock.
Detailed information regarding the Epic Homes Loan program and loan terms can be found at
https://www.fcgov.com/utilities/epicloan. The program operates under authorization in Code and the
Financial Officer’s Rules and Regulations, as updated periodically. The program operates with a neutral
balance sheet impact as the obligations to the third-party capital providers are balanced by the obligations of
customers to repay on their monthly utility bills.
The original on-bill finance program started issuing loans in 2013. The program was then paused in 2016 when
the program’s success resulted in reaching the cap of maximum outstanding loan balance funded through
Light & Power reserves ($1.6 million). Building on this success, on-bill finance was revitalized as Epic Homes
Loan in August 2018 during the Champions Phase of the Bloomberg Mayors Challenge. The City was awarded
grants from the Colorado Energy Office ($200,000) and from Bloomberg Philanthropies ($688,350 of the $1M)
for the Epic Loan Program.
One of the workstreams of the Bloomberg Mayors Challenge project was to secure third-party capital as a
strategy to enable scaling of the program. In 2019, the Utilities entered into a $2.5M line of credit loan
agreement with U.S. Bank to provide up to 10-year capital for the Epic Homes Loan Program. This line of credit
termed out in December 2021 and will again in May 2024. In 2020, an additional $2.5M line of credit loan
agreement was signed with Vectra Bank Colorado to provide 15-year capital. This line of credit is nearing its
cap but will not term out until July 2025. A revision to the agreement to increase the limit is being proposed
to sustain the growth of the program. Both of these agreements are structured as lines of credit which are
periodically converted into fixed rate term loans. (See Table 1 for a summary of the program’s capital stack.)
Through 2023, Fort Collins Utilities has serviced 536 on-bill loans to support energy efficiency upgrades in
residential homes and to help property owners overcome financial barriers for making these important
upgrades. The blending of zero cost capital (reserves and grants) with low interest third-party capital is what
enables the program to offer attractive and competitive interest rates and terms for Utilities customers. With
the enterprise fund as the borrower, the program is able to extend the benefits of the high credit rating of the
organization to individual customers. These rates are periodically adjusted based on the blended cost of
capital. See Table 2 for current interest rates and Table 3 for program results.
An ongoing and attractive financing structure to support energy efficiency retrofits is a critical element for
success moving forward. The low rates and scalability of these third-party agreements align with the
programmatic objectives and financial requirements of the City.
Table 1. Summary of Proposed Epic Homes Loan Capital Stack
Capital
Type
Provider Term Rate Amount
Internal &
Grant
Previously authorized
Light & Power reserves
Ongoing 0% $1,600,000
Bloomberg Philanthropies Grant 0% $688,350
Colorado Energy Office –
Grant
Grant 0% $200,000
Internal Subtotal $2,488,350
External
Market
Colorado Energy Office –
Loan
15 year 0% $800,000
U. S. Bank 5 & 10
year
LOC: 1-Month SOFR + 1.05%
Term: COF + 1.65% for 3 yr or
COF + 1.85% for 8yr
(Currently 6.88% and 7.14%)
Up to
$2,500,000
Vectra Bank Colorado 15 year LOC 10y T note + 2.75%
(Currently 6.89 %)
Term 10y T note
(Currently 4.14%)
Up to
$3,500,000
External Subtotal $6,800,000
Total $9,288,350
Table 2. Customer Interest Rates
Loan Term Customer Rate
(Effective June 2023)
3 or 5 years 5.25%
7 or 10 years 5.55%
15 years 5.95%
Note: Customer interest rates are evaluated at a minimum of every 6 months, but usually quarterly when in a
rate changing market
Table 3. Program Results
Number of Loans Issued 536
Number of Outstanding Loans 355
Number of Loans Paid in Full 181
Total Amount Funded $8,994,010
Amount Outstanding $5,634,529
Total Amount of Interest Payments $580,428
Median Loan Amount $14,985
Median Monthly Principal Payment $102.50
Median Monthly Interest Payment $35.84
Third-Party Capital Agreement Summaries:
• The terms of the previous US Bank agreement, concluding on May 31, 2024, include:
• Amount: Up to $2,500,000
• Length: 10-years inclusive of draw period
• Draw period: Up to 2 years, with draw timing and amounts based on program / customer demand.
• Line of Credit rate: 76% of the Prime Rate (6.46% as of March 2024); Rate set at time of loan closing.
• Term rates: Cost of funds (COF) plus 1.65% for 3-year terms, and COF plus 1.85% for 8-year terms.
• Collateral: None
• Pre-pay: The loan may be prepaid, in whole or in part, at the option of the Enterprise with no penalty.
• Repayment position: Senior pledge on customer loan repayments and subordinate position on Electric
Utility revenues, after the more senior pledge held by revenue bondholders.
US Bank agreement, revised terms for extension to conclude in November of 2025:
• Line of Credit rate: 1M Secured Overnight Financing Rate (SOFR) + 1.05% for 1 –1.5-year term or 1M SOFR
+ 1.68% for 2-2.5 year term. (Currently 6.36% and 6.99% respectively
• Term rates: Cost of funds (COF) plus 1.65% for 3-year terms, and COF plus 1.85% for 8-year terms.
• Remaining terms carryforward from existing agreement.
The terms of the previous Vectra Bank agreement, which concludes in July 2025, include:
• Amount: Up to $2,500,000
• Length: 15 years inclusive of draw period
• Draw period: Up to 2 years, with draw timing and amounts based on program / customer demand.
• Fixed rate: 10 yr Treasury +2.75%. Yr 1 $1,012,000 at 5.56%; Yr 2 6.908%
• Collateral: None
• Pre-pay: City may pre-pay in whole or in part after 2027 with no penalty. No prepayment is allowed prior
to 2025, and between 2025 and 2027 there is a 1% prepayment fee.
• Repayment position: Senior pledge on customer loan repayments and subordinate position on Electric
Utility revenues, after the more senior pledge held by revenue bondholders.
The proposed revisions to the Vectra Bank agreement will be:
• Amount: from up to $2,500,000 to up to $3,500,000
• Expiry Date: From July 2025 to July 2026
*Vectra Agreement still under internal review at Vectra and is subject to change. US Bank and Vectra
Agreements. Pending review and recommendations from City Attorney's office
Next Steps
• Staff seeks support from Council Finance Committee to proceed with Electric Utility Enterprise Board
consideration of the proposed agreements.
• If supported, staff will finalize agreements and associated term sheets.
• Staff will present the agreements at soonest possible Council meeting.
• Continue with program operations and financial transactions.
• Continue to explore strategies for scaling the program to present to Council as part of seeking expansion
of program limits in Fall of 2024
GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED
• What questions does Council Finance Committee have on the Epic Homes Loan program?
• Does the Committee support bringing the proposed third-party capital agreements to the Electric Utility
Enterprise Board for approval?
DISCUSSION / NEXT STEPS
Mayor Arndt; I am fully supportive and love the on-bill financing program. This program is a win win.
This is something government is good at. Minimizing risk
Travis Storin; this is one of the most innovative programs we have developed. We are leveraging our
institutional borrowing power and extending it to the consumer level in a way that drives our climate goals.
We have had zero defaults in 10 years which is amazing.
Mayor Arndt; this failed at the state level, but it is a perfect role for government.
Kelly Ohlson; are these ten-year agreements with the banks?
Brian Tholl; they are actually two-year agreements with the enterprise board of the city. The terms are 5 years
with US Bank and a 15-year term with Vector Bank. The debt service and how we are paying the loans back is
over a varied timeline.
Kelly Ohlson; I am so supportive of this program. Do we get good deals on the rates?
Travis Storin; yes, this is a creative instrument and I have to commend our two lending partners on this as they
took some risk here with the idea of a two-year window where we can draw down the funds and extend it to
our customers. At the end of the two years, it locks for a 5-, 10- and 15-year period. It is a variable rate
product for the two-year window and then we lock in a rate for those intervals. It is an innovative and
creative product.
Emily Francis; is the customer rate changing with these new agreements?
Brian Tholl; we don’t anticipate that these new agreements would drive any changes to the customer rate.
Emily Francis; do we still partner with Larimer County to do the assessments?
Brian Tholl; that is a slightly different program – there are two different programs.
Mayor Arndt; there is no assessment just for HVAC, right?
Brian Tholl; due to the nature of emergency replacements, we don’t require an audit in order to be eligible for
incentives such as the loan product itself.
Glenn Pease; you do need to have an assessment which is required for installation for HVAC and solar.
Harris is the company that does the assessments.
Kelly Ohlson; do we help in any way if someone gets a bum contractor?
Brian Tholl; part of the requirements for receiving the incentives, are that our contractors go through a series
of trainings on the requirements for the program which include quality assurance standards for the
Installers. We require photo documentation of the installation as well. We assist by ensuring quality and
providing training. This is a closed program, which means we have a relationship with the contractors as well.
Kelly Ohlson; we don’t’ want residents to be taken advantage of.
Meeting Adjourned
Staff Follow Up from Lawrence Pollack:
Question: What drove the significant increases in 2023 actual revenue in the categories of Transportation Fee
revenue and Utilities Other Miscellaneous revenue?
Response: 2023 Transportation Fee revenue was $4.7M over budget, primarily driven by Transportation
Capital Expansion Fees of $3.5M. Another $765k was from Payments in Lieu of Development and $375k from
hourly garage parking revenue. Utilities Other Miscellaneous revenue was over budget by $1.1M split across
the Utility Funds as follows: Light and Power $512k, Water $39k, Wastewater $31k, Stormwater $52k. and
Customer Service & Administration (CS&A) $512k. Of the two larger amounts, Light and Power’s other
miscellaneous revenue was primarily comprised of $225k in repair charges (one of which was over $100K for
one of the switch cabinets), as well as warehouse revenue of just under $300k for heighted transactional
volumes. For CS&A, the amount over budgeted revenue was mostly driven by late fees of $390k and
reconnect charges of $50k.