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HomeMy WebLinkAboutAgenda - Full - Finance Committee - 06/06/2024 -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 Committee Hybrid Meeting June 6th, 2024 4:00 - 6:00 pm CIC Room Zoom Meeting https://zoom.us/j/8140111859 Approval of Minutes from the May 2, 2024, Council Finance Committee meeting. 1. Municipal Court & 215 N. Mason Facility Options D. Maxwell T. Ochsner Presentation: 30mins. Discussion: 30 mins. NOTE: Memo Attachments: * Follow up from April CFC meeting: HR Comp/Benefits (see page 13) *Water Supply Requirements and Nonresidential Allotment Update prior to July Work Session (see page 17) Page 1 of 45 Council Finance Committee 2024 Agenda Planning Calendar Revised 5/29/24 ts June 6th 2024 Municipal Court and 215 N. Mason Facility Options 60 mins D. Maxwell T. Ochsner July 3rd 2024 General Fund Admin Charge to Other Funds 30 mins L. Pollack CCIP Project List Update 30 mins G. Sawyer T. Storin Intergovernmental Agreement with Poudre Fire Authority 30 mins D. Lenz August 1st 2024 Grocery Tax Rebate Program 20 mins. A Molzer Sept. 5th 2024 Adjustment Ordinance L. Pollack Page 2 of 45 Page 3 of 45 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 May 1, 2024 4:00- 6:00 pm Council Attendees: Emily Francis, Kelly Ohlson, Tricia Canonico Absent Mayor Arndt Staff: Travis Storin, Ginny Sawyer, Rupa Venkatesh, Marc Virata, Andy Smith, Monica Martinez, Lawence Pollack, Randy Bailey, Victoria Shaw, Dave Lenz, Joe Wimmer, Kevin Wilkins, Ryan Malarky, Drew Brooks, Zack Mozer, Jo Cech, Trevor Nash, Moutaz Badawi, Carolyn Koontz, Others: Kevin Jones, Chamber NOTE: Staff follow-up included on the last page of draft minutes. Memo from HR attached as a follow up to the discussion at the April 4th Council Finance Committee Meeting. (see page Meeting called to order at 4:00 pm Approval of minutes from April 4th, 2024, Council Finance Committee Meeting. Kelly Ohlson moved for approval of the minutes as presented. Tricia Canonico seconded the motion. The minutes were approved unanimously via roll call by; Emily Francis, Kelly Ohlson, Tricia Canonico. A. TCEF Reimbursement with a Metro District Marc Virata, Sr. Manager, Civil Engineering Monica Martinez, Sr. Manager, FP&A Andy Smith, Redevelopment Manager SUBJECT FOR DISCUSSION Waters Edge Second Filing Transportation Capital Expansion Fee Major Reimbursement EXECUTIVE SUMMARY The Waters Edge developer has constructed street improvements to Turnberry Road, Brightwater Drive, and Morningstar Way to City standards as part of its development plans and development agreement for Waters Edge Second Filing and permitted for construction under a Waters Edge Third Filing Development Construction Permit. Per Section 24-112 of the City Code, the developer is eligible for reimbursement from Transportation Page 4 of 45 Capital Expansion Fee (TCEF) funds for the oversized, non-local portion for construction. Staff is recommending appropriations totaling $612,027 from TCEF funds. City Council approved the consolidated service plan for Waters Edge Metropolitan Districts Nos. 1-5 by adopting Resolution 2018-084 on September 18, 2018. Staff has identified on the review of this reimbursement request that, as part of the metro district service plan for Waters Edge, the developer may also be eligible to seek reimbursement from the metro districts for these same street improvements that the developer is requesting from TCEF funds. To make clear that the developer cannot seek reimbursement from the metro districts, the Board of Directors of Districts 1 and 2 adopted a joint resolution affirming that the Districts shall not reimburse the developer, for costs reimbursed by the City, and the Districts’ accountant shall ensure that the Districts do not reimburse the developer for costs reimbursed by the City. Additionally, the accountant issued an affidavit to Districts 1 and 2 affirming that Districts 1-5 have not reimbursed the developer, and that the districts cannot reimburse the developer for street oversizing costs that the City has already reimbursed, nor can the districts acquire such improvements. Districts 3, 4, and 5 are presently declared inactive, and are intended for future development east of Turnberry Road, and not associated with the street improvements that the developer is requesting from TCEF funds. GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED • Do Council Finance Committee support an off-cycle appropriation of Transportation Capital Expansion Fee fund reserves to reimburse the Waters Edge developer for its construction of Turnberry Road, Brightwater Drive, and Morningstar Way? • Do Council Finance Committee support TCEF funds being utilized as proposed by Staff, in light of the joint resolution and accountant’s affidavit documentation from the Waters Edge Districts 1 and 2 that the metro districts have not, and will not also reimburse for these same improvements if TCEF funds are used to reimburse the developer? BACKGROUND/DISCUSSION TCEF Program The TCEF Program (formerly Street Oversizing), instituted by ordinance in 1979, was established to manage the construction of new arterial and collector streets, and is an “Impact Fee” funded program. The TCEF Program determines and collects impact fees from development and redevelopment projects. The collection of these impact fees contributes funding for growth’s related share towards City Capital Projects, including the City’s Active Modes Plan, and reimburses development for constructing roadway improvements above the local street access standards. Section 24-112 of the City Code allows for reimbursement to developers for the construction of collector and arterial streets. Waters Edge (marketed as Sonders Fort Collins) is a development on the west side of Turnberry Road between Douglas Road and Country Club Road built in between the Hearthfire, Richard’s Lake, and Serramonte neighborhoods. This reimbursement is for the Waters Edge developer’s construction above the local street access standards of Turnberry Road (2-lane arterial), Brightwater Drive (collector), and Morningstar Way (collector) as part of the Waters Edge Second Filing and permitted for construction under the Waters Edge Third Filing Development Construction Permit. Portions of pavement, landscaping, and sidewalk for all three streets are eligible for reimbursement and are depicted in the “Waters Edge Second Filing Street Oversizing/Repay Exhibit A” and itemized between City (TCEF) and local (developer/adjacent parcel owner) responsibility in Exhibits B “Street Reimbursement Agreement” and B-1 “Street Reimbursement Agreement City-Developer Cost Breakdown”. Brightwater Drive abuts a City-owned property as a park site and separately, the developer and City Park Planning and Development are working on Page 5 of 45 identifying local costs attributable to the City as reimbursement to the developer as City park street frontage requirements. Staff has reviewed the documentation provided by the Waters Edge developer and agrees that the requested reimbursement meets the requirements under City Code Section 24-112 for appropriation from TCEF funds. There are presently adequate funds in TCEF to reimburse the developer and Staff recommends reimbursement in the amount of $612,027. While this reimbursement is considered routine as part of the Code obligations under the TCEF Program, this request is coming before Council Finance Committee because of the large dollar amount outside of the typical 2- year budgeting process. TCEF reimbursements to development were formerly anticipated and appropriated through the 2-year budgeting process. As part of the process improvements identified first in the 2021 budget, the TCEF Program is now categorizing developer reimbursements as “Major” and “Minor” reimbursements, with “Major” developer reimbursements brought to Council individually rather than predicting what reimbursements are needed on a 2-year basis. This proposed reimbursement is the third request under this process with Council Finance Committee having reviewed Northfield in 2022 and Waterfield in 2023. As part of Council Finance Committee’s input for Northfield, Council Finance Committee supported TCEF reimbursing Northfield instead of Northfield’s metro districts. Part of that reimbursement request included Northfield and its metro districts committing that the metro districts would not reimburse Northfield, meaning that Northfield would not “double dip” and be reimbursed twice for its costs. (Waterfield does not have a metro district.) Similarly to Northfield, Waters Edge has metro districts that were established with City Council approving the consolidated service plan for Waters Edge Metropolitan Districts Nos. 1-5 by adoption of Resolution 2018-084 on September 18, 2018. Staff has identified on the review of this reimbursement request that, as part of the metro district service plan for Waters Edge, the developer may be eligible to seek reimbursement from the metro districts for these same street improvements that the developer is requesting from TCEF funds. The Board of Directors of Districts 1 and 2 adopted a joint resolution affirming that the Districts shall not reimburse the developer, and the Districts’ accountant shall ensure that the Districts do not reimburse the developer. Additionally, the accountant issued an affidavit to Districts 1 and 2 affirming that Districts 1-5 have not reimbursed the developer, and that the districts cannot reimburse the developer for street oversizing costs that the City has already reimbursed, nor can the districts acquire such improvements. Resolutions declaring Districts 3, 4, and 5 as inactive were adopted on December 2019, and are intended for future development (separate from Sonders Fort Collins) east of Turnberry Road. These districts are not associated with the Waters Edge Filings and the associated street improvements that the developer is requesting from TCEF funds. Special district notices declaring the continued inactive status of Districts 3, 4, and 5 were provided to the City in December 2023. GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED • Do Council Finance Committee support an off-cycle appropriation of Transportation Capital Expansion Fee fund reserves to reimburse the Waters Edge developer for its construction of Turnberry Road, Brightwater Drive, and Morningstar Way? • Do Council Finance Committee support TCEF funds being utilized as proposed by Staff, in light of the joint resolution and accountant’s affidavit documentation from the Waters Edge Districts 1 and 2 that the metro districts have not, and will not also reimburse for these same improvements if TCEF funds are used to reimburse the developer? Page 6 of 45 DISCUSSION / NEXT STEPS; Kelly Ohlson; do we charge developers for collector streets? Marc Virata; we reimburse them for building collector streets through the TCEF fund. Kelly Ohlson; I would like to know at some point if other communities in the state charge developers for collector streets – evening a 50/50 split. Marc Virata; when we went through work session, there was some discussion through the fee updates. Collector streets are paid for by the developers in Loveland. Kelly Ohlson; near the end of 3rd page of the AIS (see below) Staff has identified on the review of this reimbursement request that, as part of the metro district service plan for Waters Edge, the developer may be eligible to seek reimbursement from the metro districts for these same street improvements that the developer is requesting from TCEF funds. The Board of Directors of Districts 1 and 2 adopted a joint resolution affirming that the Districts shall not reimburse the developer, and the Districts’ accountant shall ensure that the Districts do not reimburse the developer. Additionally, the accountant issued an affidavit to Districts 1 and 2 affirming that Districts 1-5 have not reimbursed the developer, and that the districts cannot reimburse the developer for street oversizing costs that the City has already reimbursed, nor can the districts acquire such improvements. Resolutions declaring Districts 3, 4, and 5 as inactive were adopted on December 2019, and are intended for future development (separate from Sonders Fort Collins) east of Turnberry Road. These districts are not associated with the Waters Edge Filings and the associated street improvements that the developer is requesting from TCEF funds. Special district notices declaring the continued inactive status of Districts 3, 4, and 5 were provided to the City in December 2023. Why are they eligible? Why aren’t we taking that out? Double dipping - there is no way in 4 years the city has gone back and checked. I am still wounded over Provincetown, which was an affordable housing, but we had for profits buying them and selling them because the city didn’t have a system to check. Also, no punishment for doing so. I am using this as an analogy – not the same thing as it is an affordable housing project. With the How are we ever going to really know that they haven’t gone back six years from now and charged people for things that they have already been reimbursed for? Also, if we did discover they had double dipped, what is the penalty? Andy Smith; I am responsible for going back every September when the deadline comes for every metro district to submit their financials for review. I haven’t gone through that exercise yet, but plan to over the next couple months. A double audit in advance of September’s deadline for last year. Your point is valid and well taken about having a system in place that continues in the future - past my time. We will provide you with a written response that addresses your concerns. Kelly Ohlson; why do we have to go through this every time? Page 7 of 45 Marc Virata; the way these metro districts are set up, developers are utilizing these as a funding tool. They can reimburse for these improvements, just as much as TCEF - some protection for them in case there is not the ability for TCEF to reimburse. TCEF is subject to appropriation. Why don’t’ we just take it out, so it doesn’t say that. We are not going to go back on our word to give them money. I understand that they want protections to be able to go back and charge people who live in the metro district. Travis Storin; monitoring that was mentioned earlier by Andy, is our most effective technique. Affidavits and resolutions are helpful to the extent that the people running these special districts know there is an established and documented expectation, but the monitoring is always going to be our very best way of making sure there is no funny business. Some of our most recent, (going to blur between Metro Districts and Urban Renewal) we have instances in North College, Foothills Mall, Prospect South as well as the Woodward assistance agreement, where even after multiple generations of staff turnover, we still have annual monitoring in place that has survived multiple people and remained attached to a desk. The Prospect and I25 metro district reflects that as well. Ryan Malarky; Northfield did get a TCEF reimbursement for public improvements. In those district service plans, we put language that says to the extent that the city reimburses the developer for public improvements that the district would not reimburse the developer for those same improvements. The metro district being presented today predates when we identified this as an issue. I believe we are adding language to address this issue going forward. In terms of what our recourse might be, I believe there is a legitimate legal argument that for a district to reimburse a developer for something they have already been reimbursed for by the city would be in violation of special district law so, there are some legal restrictions there. In terms of us taking some action, we could make a claim for unjust enrichment but that is something I need to give more thought to. Kelly Ohlson; I am kind of done approving anything to do with metro districts. I don’t trust them, and I don’t think they will end up well. Travis Storin; we have seen some past councils that had a delineation in that perspective depending on whether it was a residential or commercial metro district. It would be helpful for staff to know if your comments apply to the tool in all its forms or if your concerns are limited to one or the other. Kelly Ohlson; residential is my concern. Approved to proceed to go to the full Council. B. Appropriation for Compliance with HB21-1110 Rupa Venkatesh, Assistant City Manager Jan Reece, Lead Equal Opportunity Compliance Specialist Appropriation Request to Develop a Digital Accessibility Roadmap EXECUTIVE SUMMARY The purpose of this item is to request an appropriation of $150,000 in General Funds in order to work with a consultant to develop a comprehensive and actionable Digital Accessibility Roadmap. The purpose of this Page 8 of 45 roadmap is to provide a strategy for compliance with both Colorado and federal laws and regulations pertaining to digital accessibility requirements, including both the Americans with Disabilities Act and Colorado House Bill 21-1110. GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED What questions do Committee members have about this request? Does the Committee support staff bringing an appropriation ordinance for consideration at the May 21, 2024, Council meeting? BACKGROUND/DISCUSSION (details of item – History, current policy, previous Council actions, alternatives or options, costs or benefits, considerations leading to staff conclusions, data and statistics, next steps, etc.) House Bill 21-1110, Colorado Laws for Persons with Disabilities, as amended by State Bill 23-244, relates to all technology, hardware, and software, that is both public-facing and internal-facing. This includes any technology provided by or procured by a government entity that is used by the public or used by a government entity employee. This technology includes but is not limited to websites, applications, kiosks, digital signage, documents, video, audio, and third-party tools. By July 1, 2024, all local governments need to be compliant. Part of this work includes conducting an inventory survey, classifying, prioritizing, and accessing all applicable Information and Communication Technology (ICT) as defined by the state and goes beyond just web content. A citywide survey has been completed, which revealed that staff needs additional expertise to assist in determining the accessibility of the City’s current ICT portfolio. Therefore, a Request for Proposals (RFP) was issued to hire a consultant to provide the City with an assessment and roadmap. A consultant selected from the RFP process will assist in the following: • Conduct a comprehensive review and analysis of the City’s digital technology, on-line services, websites, and third-party software applications to develop a prioritized Digital Accessibility Roadmap • Analyze the current usage level for City webpages, software applications, and online services as part of development of prioritized mitigation strategies and Digital Accessibility Roadmap • Provide an evaluation of the time and cost needed to remediate non-compliant content on both the City’s website and third-party service delivery platforms • Develop a strategy and action plan to drive compliance with Colorado’s digital accessibility laws and regulations Future phases of this work may include ongoing services to ensure future digital content is compliant with accessibility standards, including but not limited to, processes to validate that newly created content is in compliance with accessibility regulations; provide training for City staff to ensure that they have knowledge and skills to maintain compliance; and recommendations for modifying existing City procurement processes and documents to ensure that new or renewing third party software and digital services comply with applicable accessibility regulations. GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED What questions do Committee members have about this request? Page 9 of 45 Does the Committee support staff bringing an appropriation ordinance for consideration at the May 21, 2024 Council meeting? DISCUSSION / NEXT STEPS; $150K to secure a vendor to drive compliance with this new law. Skillset needed to evaluate our ICT inventory to see if it is compliant with the new state law. This would include 160 hours of analysis of asset usage, what it would take to remediate and an action plan to help drive compliance. Not included in the $150K would be any ongoing work including training for city staff. Emily Francis; will there be a budget offer for on-going? Rupa Venkatesh; we don’t really know what the next phase costs will look like. That is part of the strategy development we want this vendor to look at. What would it look like for training? What would it look like in terms of building a long-term strategy map? Emily Francis; do we need to be in compliance by July 1st or just making progress? Travis Storin; we have seen administrative rules published that augment the bill and indicate that the Legislation be extended to 2025 – trajectory based. Rupa Venkatesh; there is legislation to extend it to 2025, but regardless of anything passing, we need to be in good faith. Emily Francis; if this was passed in 2021, why are we doing this now? Why haven’t we started? We have had three years. Rupa Venkatesh; there are other things in the law not related to the ICT that we have been working on. Updating our website, having an accessibility statement, accessible forms. Most cities across Colorado will not be in compliance by July 1st which is by there is the pending legislation to extend the deadline. Travis Storin; a good example is the PowerPoint presentation you are looking at now which was created using the new standard. ADA (in the physical space) would be the most direct comparison. It is a constant and a multi decade prioritization investment and effort. The rule that I just referenced that allowed it to be based on a good faith effort versus being 100% compliant by July 1st. That rule was just released a month ago. Rupa Venkatesh; part of the struggle of it being released in 2021 - there wasn’t much guidance as to what this ICT involved and that wasn’t released until this year. Tricia Canonico; contractors in Colorado Travis Storin; we have just received news today that the Feds are looking at standards that very much overlap with this. Regarding what you are referring to Councilmember Canonico, there are software publishers and for the last year we have asked ‘will you be compliant with this bill?’ They say we have 49 other states that don’t require us to do this so… Emily Francis; It would be helpful to understand what are we trying to comply with and where we are in compliance? I support this, but it feels a little late in the game. So, maybe just an overview of where we are. Rupa Venkatesh; there is a lot of opportunity for cities to comment on rulemaking, so that is part of the piece that we and several other cities mentioned to the state in terms of we have been trying to get these vendors – what do we do if they say no? That was part of the rules that came out a couple months ago. There is an ability for us to say, this is the only piece of software that we can use for city meetings, so we are asking for an exception. There are exceptions that the state put into rulemaking based on the comments they were getting from cities. Page 10 of 45 Kelly Ohlson; I support Emily and reinforce her comments. We are almost halfway through 2024 and this was 2021 - all of sudden it is hurry up. Rupa Venkatesh; would it be helpful for the May 21st Council meeting to do a status update? Travis Storin; of course, it will be up to LPT if this goes via consent or not – generally something of this amount would be consent but we will hold for their decision. Meeting adjourned at 4:41 pm. Staff Follow ups from previous meetings; May 2nd Council Finance Committee Meeting TCEF Reimbursement with a Metro District Follow up from the discussion that took place on the May 2nd CFC pertaining to the Waters Edge TCEF reimbursement. Councilmember Ohlson raised several questions and I’m understanding that procedurally at CFC, discussion specific to an agenda item discussed at CFC are addressed in an AIS when the item goes to Council. Discussion more generic not specific to the agenda item are included in the CFC minutes. I had a meeting/debrief with Andy, Ryan, and Monica, and we have these overall takeaways from the discussion with Councilmember Ohlson: - We don’t believe any of the questions or discussion were specific to Waters Edge itself, and as a result did not need to be addressed in the AIS for the Council item on first reading this evening. - Councilmember Ohlson did ask whether developers pay for collector streets as part of our Transportation Capital Expansion Fee and asked how this compares to other communities. I provided feedback how our capital expansion fee inherently does collect for reimbursement of collector streets and contrasted this with City of Loveland where developers fully pay for the cost of collector streets. Kelly indicated that he would want more information to understand other communities but wasn’t in a hurry. I will investigate this further. - Most of the discussion with Kelly centered around metro districts. Inquiries were made as to why we ask the question on CFC supporting TCEF reimbursing instead of the metro district with the documentation from the metro district, how do we ensure a double-dip does not occur in the future, and what are the implications on if a double-dip were to occur. We believe the responses from Andy and Ryan addressed Kelly’s concern and did not need additional follow up. Page 11 of 45 Page 12 of 45 MEMORANDUM DATE: May 30, 2024 TO: Council Finance Committee THROUGH: Travis Storin, Chief Financial Officer FROM: Jen Dial, Water Resources Manager RE: Water Supply Requirements, Water Allotments, and Excess Water Use Surcharge Bottom Line: Staff continues to refine pricing and methodologies for both the Water Supply Requirement (WSR) fee and the assignment of water allotments. The data and analysis on cost adjustment factors for existing water rights that was anticipated for the June 6, 2024 Council Finance Committee is not complete. Staff is submitting this update memo in place of a full discussion and will bring this information to the full Council at the July 9, 2024 work session. Background and Continuing Work to Date: At the April 9, 2024 Work Session, staff presented options and a recommendation for the methodology for determining a WSR fee. There was general support for the hybrid, cost-based methodology. This method uses a cost-based, buy-in approach for all existing water (what the Utility paid with an over-time adjustment factor) and a market-based, incremental approach for new water supply needs (water rights and infrastructure). This hybrid approach has been implemented since 2018. The current hybrid approach applies a market-based approach to both the buy-in component and the incremental component. Staff is currently analyzing a cost-based approach for the buy-in component which more appropriately reflects the cost for water rights that were purchased early on and a market- based approach for the incremental component. Work is currently underway to explore and solidify the appropriate adjustment factor to apply to existing water rights within the buy-in side of the hybrid approach and update the market-costs of future water rights for a proposed updated WSR fee. This work is not fully complete. The recommended approach also includes a 30% contingency factor which is meant to cover uncertainties in the cost of future water rights and infrastructure. This contingency is not applied to the “buy-in” portion of the WSR fee. A 20% safety factor is also included. This is intended to address uncertainties in future water supply and demand unknowns such as climate impacts and rate and type of development/redevelopment that may or may not occur. A 20% safety factor is not a standard among other water providers, however most water providers apply some sort of risk factor or methodology to account for potentially lower water supplies. Some of these include building a buffer into dedication requirements, relying on drought response plans to adjust in low water years, or contingency factor for needing to purchase additional storage if current storage Page 13 of 45 2 plans do not come to fruition. Staff do not consider the 20% safety factor and 30% contingency to be redundant and have included both in the WSR fee. The total WSR fee paid is based on the cost per acre foot of water and the required water dedication, which depends on the water supply needs of the development. It was noted at the Work Session that dedication requirements vary by water providers in the region and within the City Growth Management Area. Of note, approximately 80% of the city’s population, or 60% of the area within city limits, is served by Utilities. The amount of dedication required is based on a development’s characteristics (e.g. square footage, business type). In general, the fee varies such that lower-water-use developments pay less, while higher-water-use developments pay more. Utilities water dedications are based on analysis of existing accounts’ actual consumption. Using this method, it was determined that restaurants generally use more water than other businesses and this is why Utilities has a higher dedication compared to other water providers that use different calculation methods (tap credit or peak water use, differing time range of historical use, etc.) Based on the actual consumption analysis, staff are confident in the dedication requirements for each business category. Assignment of Pre-1984 Non-Residential Allotments Staff also provided a history of assigning allotments on April 9, 2024. It was noted that there are approximately 1,000 pre-1984 non-residential accounts (commercial accounts) that do not have an allotment. Staff recommended assigning allotments to these customers for consistency, fairness, and more conservation opportunities. There were four methodologies presented for calculating an allotment with staff recommending a hybrid methodology. The hybrid approach calculates an allotment using the greater of the 1989 tap credit and a 5-year historical average use. Utilizing a 5-year average helps to reflect the most recent history and the most recent ownership should businesses have changed owners or uses over time. By assigning the higher allotment value of the tap credit or average use, the aim is to minimize overages and the incurrence of an excess water use surcharge fee. Staff estimated potential excess water use surcharge impact by comparing the account’s proposed allotment to the maximum annual consumption for that account in the last five years. Of the approximately 150 accounts potentially impacted, over half fall into three business categories: irrigation, mixed use (strip malls) and restaurants. It is likely that many accounts potentially subject to surcharges would benefit from conservation programs. Office hours throughout the next several months will allow customers and staff to discuss Page 14 of 45 3 specific water needs and any conservation opportunities that may be a good fit for a particular account or customer. Additionally, staff does anticipate some unique account types including City Parks accounts, large healthcare accounts, and some HOAs that may experience more negative impacts and require more in- depth analysis and customer outreach. Staff has confirmed between five and 11 City Parks accounts that have an allotment have gone over their allotment in any given year between 2016 and 2023. Total annual surcharges ranged between $2,790 and $60,400 during this time period. Staff also estimated potential excess water use surcharge impacts for City Parks accounts without allotments by comparing the accounts proposed allotment to the maximum annual consumption for that account in the last five years. Of the approximately 98 accounts potentially impacted, approximately six accounts would go over for a total annual surcharge of $24,800. Next steps: Staff is moving forward with targeted outreach to customers that may be signed an allotment as well as appropriate Boards and Commissions including the Economic Advisory Commission and the Water Commission. The July 9, 2024 work session will include in-depth analysis of the adjustment factor, other potential revisions to the methodology, rationale, and impacts to the water fund which will inform the setting of a final WSR fee. Page 15 of 45 Page 16 of 45 Page 17 of 45 Page 18 of 45 Page 19 of 45 Page 20 of 45 Page 21 of 45 Page 22 of 45 Page 23 of 45 Page 24 of 45 Page 25 of 45 Page 26 of 45 Page 27 of 45 Page 28 of 45 COUNCIL FINANCE COMMITTEE AGENDA ITEM SUMMARY Staff: Denzel Maxwell, Assist City Manager Tracy Ochsner, Operation Services Director Jill Hueser, Chief Judge – Municipal Court Date: June 6, 2024 SUBJECT FOR DISCUSSION: Municipal Court update and expansion options. EXECUTIVE SUMMARY In 2007, the City of Fort Collins Municipal Court, moved from the Larimer County Justice Center and has occupied about half of the 1st floor of the facility. Since that time, minimal renovations have been done to address security and additional staffing in the current space. In 2022, Council approved funding $700K to address their urgent needs for next 3-4 years. In 2023, $1.5 million was appropriated to fund space planning, programming, and design to accommodate the Court and Prosecution needs for the next 15 years. The study indicates that the space available for the 15-year Court build out is not adequate. Further, the initial construction estimates have a higher cost than originally anticipated. Staff desires to update the Council Finance Committee and present three options to provide Municipal Court and Prosecution operational space needs for the future. GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED Does Council Finance Committee prefer to continue designing the entire 1st floor of the 215 N Mason facility along with including some 2nd floor space to meet the updated 15- year space programing needs for Municipal Court? OR Does Council Finance Committee support a smaller renovation project to address Municipal Court needs for next 5 years to allow time to explore the potential of a Larimer County Justice Center expansion? OR Does Council Finance Committee prefer to design a new Municipal Court building just north of their current space at 245 N Mason St. ADDITIONAL BACKGROUND The purpose of this discussion item is to consider at least three options at this stage of the project. The three options are: Option A - Continue the 15-year plan to utilize the entire 1st floor at 215 Mason and a part of the 2nd floor for City Attorney (Prosecution) Option B – Look at an Urgent Needs Phase II which would be a larger renovation to get them by for the next 5-years to explore the possibility to partner with Larimer County to include a municipal court as part of a Justice Center expansion. Page 29 of 45 Option C – Construct a new facility purposely designed and constructed for current and long- term municipal court operations (A short term renovation would still be necessary) As part of the original 15-year design discussion, the HVAC system in this building has reached the end of its useful life. Staff is currently in the process of using the City’s Integrated Design Assistance Program (IDAP) to identify options for replacement. At least three systems are being considered and modeled for energy efficiency and staff would like to update the Council Finance Committee on this item and inform what the next steps would be for a future funding and timing discussion. Page 30 of 45 Headline Copy Goes Here Assistant City Manager Denzel Maxwell Municipal Court update and expansion options Council Finance Committee 6/6/24 June 6, 2024 Tracy Ochsner Operation Services Director Page 31 of 45 Headline Copy Goes HereDirection needed from the Council Finance Committee •Does Council Finance Committee prefer to continue designing the entire 1st floor of the 215 N Mason facility along with some 2nd floor space to meet the updated 15-year space programing needs for Municipal Court? OR •Does Council Finance Committee support a smaller renovation project to address Municipal Court needs for next 5 years to allow time to explore the potential of a Larimer County Justice Center expansion? OR •Does Council Finance Committee prefer to design a new Municipal Court building at 245 N Mason St. Page 32 of 45 Headline Copy Goes Here 3 History 2007 – Municipal Court moved into its current location at 215 N Mason 2007 – 2021 Minimal renovations done primarily for safety and security needs 2022 – Council Finance supported appropriating $1.5m to fund space planning/ programming and design for a 1st floor renovation to meet Municipal Court 15-year needs.⎻Included design to relocate Parking Services and Emergency Preparedness and Security⎻Included design to replace the end-of-life HVAC & Controls systems for the entire building⎻Ordinance 005-23 approved on 1/17/23 2023 – Small renovation completed to address urgent needs – $700k funded through 2022 General Fund reserve appropriation. Page 33 of 45 Headline Copy Goes Here 4 What have we done so far on the 15-year plan •Selected a general contractor, design firm, and energy modeling firm •Completed updated space planning/programing for Municipal Court, Parking Services and Emergency Preparedness & Security •Space planning/programing results indicate that the 1st floor is not adequate for a 15-year Municipal Court program and City Attorney Prosecution staff •Updated General contractor rough cost estimate is $20m ($23m - $29m with HVAC) •HVAC high level costs estimates -$3m to $9m depending on system selected •Completed the first Integrated Design Assistance Program (IDAP) charrette for HVAC replacement •Energy modeling team is running the selected HVAC systems through the energy model for comparison •Identified potential office space to be utilized for City Attorney (Prosecution) on 2nd floor. •Identified space for relocating Parking Services to the Civic Center Parking Structure with minimal renovations Page 34 of 45 Headline Copy Goes Here 5 Recent Developments •Determined 1st floor space at 215 Mason is about 2,000 sf short after completing updated space programing. The space/ programming plan identified that 21,000 sf would is required. •Opinion of cost for 15-year plan is high – we originally thought $18m - now $20m due to inflation and construction escalation. Doesn’t include HVAC replacement. •High level estimates indicate a new building may cost around $30m •Relocating Parking Services into Civic Center Parking Structure •Larimer County expressed a desire to still partner with the City if a Justice Center expansion is funded. •Should know if this is feasible in 2-3 years Page 35 of 45 Headline Copy Goes Here 7 Summary of options? •Option A - Continue the 15-year plan to utilize the entire 1st floor at 215 Mason and a part of the 2nd floor for City Attorney (Prosecution) •30-year plan included an addition to the 215 N Mason facility to the north •Option B – 5-year renovation with the possibility to partner with Larimer County to include a municipal court as part of a Justice Center expansion •Option C – Construct a new facility purposely designed and constructed for current and long-term municipal court operations •5-year renovation would be still be necessary Page 36 of 45 Headline Copy Goes HereOption A: Continue with 15-Year renovation 8 •The 15-Year Plan is a Municipal Court expansion that utilizes the entire 1st floor, and part of the 2nd floor of 215 N Mason •Parking Services, Emergency Preparedness and Security (EPS) departments, and Wellness gym will relocate as part of this plan •Anticipated Cost: $20m plus HVAC Pros: •Construction completion in late 2025 or early 2026 •Does not impact timing and need for a parking garage Cons: •Multiple phases of construction •Updated programing identifies need for space beyond what is available on 1st floor •215 N Mason is not well suited for future expansion needs •2 & 3 floors egress issues •Court & staff operate and moves during construction •Location for EPS and Wellness gym has not been identified Page 37 of 45 Headline Copy Goes HereOption B: 5-Year renovation with possible Larimer County partnership 9 •This plan includes Municipal Court expansion using most of the 1st floor of 215 Mason and a portion of the 2nd floor for City Attorney Prosecution •Parking Services will relocate to Civic Center Parking Structure •Anticipated Cost: TBD Pros: •Allows time to consider a potential partnership with Larimer County at the Justice Center expansion •Cost sharing with Larimer County •The Justice Center is in an ideal location adjacent to the City Civic Center campus •Emergency Preparedness and Security will remain at 215 N Mason Cons: •Delays long term solution •Escalation •Design & Construction start: TBD •Larimer County expansion cost: TBD •Any compromises associated with a partnership versus a City-owned solution •Funding uncertainty Page 38 of 45 Headline Copy Goes HereOption C: New Municipal Court Building 10 •New Municipal Court building at 245 N Mason St (North of 215 Mason) •Anticipated Cost: ~$30m Pros: •Build to suit Municipal Court and Prosecution needs •No project phasing •Municipal Court operates in 215 N Mason as normal until complete •Allows for sale of 281 N College when new facility is completed •Option to build with no interior finish for future City growth on additional floors Cons: •Higher initial cost •2027 completion •New solicitation for Design and General Contractor •Could impact location for a future parking garage. (Civic Center Master Plan) •Some changes will be needed to accommodate increased staff until the construction is complete (5-year renovation) Page 39 of 45 Headline Copy Goes Here Option C: New Municipal Court BuildingOption A: 15-Year Renovation Option B: Possible County Partnership Recommendations and Direction 11 •Anticipated Cost: TBD •Renovation of a portion 215 N Mason including the1st floor and some space on the 2nd floor to suit Municipal Court and Prosecution needs for about 5-years •Parking Services moves to Civic Center Parking structure •Allows time to determine feasibility of a Larimer County Justice Center partnership or other future direction •Anticipated Cost: $30m •Standalone 1-3 story building with a 75-year life that would be purposely built for court operations •Allows for department relocation and could accelerate future sale of 281 N College (Civic Center master plan) •EPS remains at current location •Permanent Municipal Court •Parking Services moves to Civic Center Parking structure • 5-year renovation still necessary •Anticipated Cost: $20m •HVAC $3m – $9m •Construction of 215 N Mason entire 1st floor and some space on 2nd floor to suit Municipal Court and Prosecution needs for about 15-years •EPS and wellness gym moves (location TBD) Which of the three options below does Council Finance Committee support? Page 40 of 45 Headline Copy Goes HereDirection needed from the Council Finance Committee •Does Council Finance Committee prefer to continue designing the entire 1st floor of the 215 N Mason facility along with some 2nd floor space to meet the updated 15-year space programing needs for Municipal Court? OR •Does Council Finance Committee support a smaller renovation project to address Municipal Court needs for next 5 years to allow time to explore the potential of a Larimer County Justice Center expansion? OR •Does Council Finance Committee prefer to design a new Municipal Court building at 245 N Mason St. Page 41 of 45 Headline Copy Goes Here 13 Any Questions? Page 42 of 45 Headline Copy Goes HereUpdate 15 •Anticipated Cost: $4.5m – $9m •3 different systems with a range of cost •All options align with Our Climate Future •Modeling all systems to consider all pros & cons as part of the Integrated Design Assistance Program (IDAP) •Anticipating the new system will not require any natural gas, but we can’t confirm until modeling is complete •If natural gas is necessary, we hope to source renewable natural gas (RNG), and it will only be used during severe cold weather (-10 or lower). •Anticipated Cost: $3m •Does not align with Our Climate Future goals •Not recommended Fully Electrified or Dual Fuel HVAC SystemsReplace HVAC with “like–for-like” system The HVAC system at 215 Mason consists of two rooftop gas-fired units that are 24-years old, inefficient, and have reached the end of their useful life. Page 43 of 45 Headline Copy Goes Here 16 Electrified HVAC System under consideration •Option 1 - Existing rooftop units will be replaced by water-sourced heat pump rooftop units •Heat and cool the building •Uses current electric reheat units in smaller zones •Minimal impact to occupants during construction •Add condenser water plant to system •Future geothermal bore field tie-in possible •Option 2 - Existing rooftop units will be replaced by air-sourced heat pump rooftop units •Same as option 1 except condenser water plant not necessary •Should be the least expensive electrified option •Partial future geothermal bore field tie-in possible •Option 3 - Evaporative rooftop units •Same as option 1 and condenser water plant still not necessary •Future geothermal bore field tie not possible •May need additional roof structural support •Uses more water and increases maintenance than the other options •Evaporative cooling works well in our climate Page 44 of 45 Headline Copy Goes Here 17 Next Steps •Complete IDAP process – 60 days •Develop system recommendation •Update Council Finance Committee for funding and timing discussion Page 45 of 45