HomeMy WebLinkAboutCOUNCIL - COMPLETE AGENDA - 06/05/2025Fort Collins City Council
Work Session Agenda
4:00 p.m., Thursday, June 5, 2025
300 Laporte Avenue, Fort Collins, CO 80521
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City of Fort Collins Page 1 of 2
City Council
Work Session Agenda
June 5, 2025 at 4:00 PM
Jeni Arndt, Mayor
Emily Francis, District 6, Mayor Pro Tem
Susan Gutowsky, District 1
Julie Pignataro, District 2
Tricia Canonico, District 3
Melanie Potyondy, District 4
Kelly Ohlson, District 5
Council Information Center (CIC)
300 Laporte Avenue, Fort Collins
Cablecast on FCTV
Channel 14 on Connexion
Channel 14 and 881 on Comcast
Carrie Daggett Kelly DiMartino Delynn Coldiron
City Attorney City Manager City Clerk
CITY COUNCIL WORK SESSION
4:00 PM
A) CALL MEETING TO ORDER
B) ITEMS FOR DISCUSSION
1. Remington/Oak Parking Lot Update
The purpose of this item is to review the history and nature of discussions on the property with
Housing Catalyst (HC) to date and provide greater clarity on why and when staff recommend
resuming discussions.
In 2022, the City entered a Memorandum of Understanding (MOU) with Housing Catalyst (HC) to
develop the city owned property at Block 122 (also known as the Remington/Oak Parking Lot).
The MOU outlined the intent to partner on a mixed-income redevelopment of the property that
would include a minimum of 50% affordable housing serving households at 80% AMI or below.
Since the MOU was signed, the City and HC have continued to discuss the redevelopment of the
Site. At the beginning of this year, staff began drafting a Purchase and Sale Agreement (PSA) for
Council to consider. The PSA would have initially been presented to the Council Finance
Committee in April. After delaying the presentation two months, staff chose to pause discussions
with HC until after the conclusion of the ongoing Parking Optimization study
2. 2025 Budget Update / 2026 Revision Process Preview
The purpose of this item is to discuss 2025 year-to-date governmental revenue and expenses,
along with trends and forecasts for 2025 and 2026.
C) ANNOUNCEMENTS
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City of Fort Collins Page 2 of 2
D) ADJOURNMENT
Upon request, the City of Fort Collins will provide language access services for individuals who have limited
English proficiency, or auxiliary aids and services for individuals with disabilities, to access City service s,
programs and activities. Contact 970.221.6515 (V/TDD: Dial 711 for Relay Colorado) for assistance.
Please provide advance notice. Requests for interpretation at a meeting should be made by noon the day
before.
A solicitud, la Ciudad de Fort Collins proporcionará servicios de acceso a idiomas para personas que no
dominan el idioma inglés, o ayudas y servicios auxiliares para personas con discapacidad, para que
puedan acceder a los servicios, programas y actividades de la Ciudad. Para asistencia, llame al
970.221.6515 (V/TDD: Marque 711 para Relay Colorado). Por favor proporcione aviso previo. Las
solicitudes de interpretación en una reunión deben realizarse antes del mediodía del día anterior.
Page 2
File Attachments for Item:
1. Remington/Oak Parking Lot Update
The purpose of this item is to review the history and nature of discussions on the property with
Housing Catalyst (HC) to date and provide greater clarity on why and when staff recommend
resuming discussions.
In 2022, the City entered a Memorandum of Understanding (MOU) with Housing Catalyst (HC)
to develop the city owned property at Block 122 (also known as the Remington/Oak Parking
Lot). The MOU outlined the intent to partner on a mixed-income redevelopment of the property
that would include a minimum of 50% affordable housing serving households at 80% AMI or
below. Since the MOU was signed, the City and HC have continued to discuss the
redevelopment of the Site. At the beginning of this year, staff began drafting a Purchase and
Sale Agreement (PSA) for Council to consider. The PSA would have initially been presented to
the Council Finance Committee in April. After delaying the presentation two months, staff chose
to pause discussions with HC until after the conclusion of the ongoing Parking Optimization
study
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City Council Work Session Agenda Item Summary – City of Fort Collins Page 1 of 6
June 5, 2025
WORK SESSION AGENDA
ITEM SUMMARY
City Council
STAFF
Tyler Marr, Deputy City Manager
Josh Birks, Deputy Director, Sustainability Services
SUBJECT FOR DISCUSSION
Remington/Oak Parking Lot Update
EXECUTIVE SUMMARY
The purpose of this item is to review the history and nature of discussions on the property with Housing
Catalyst (HC) to date and provide greater clarity on why and when staff recommend resuming
discussions.
In 2022, the City entered a Memorandum of Understanding (MOU) with Housing Catalyst (HC) to develop
the city owned property at Block 122 (also known as the Remington/Oak Parking Lot). The MOU outlined
the intent to partner on a mixed-income redevelopment of the property that would include a minimum of
50% affordable housing serving households at 80% AMI or below. Since the MOU was signed, the City
and HC have continued to discuss the redevelopment of the Site. At the beginning of this year, staff
began drafting a Purchase and Sale Agreement (PSA) for Council to consider. The PSA would have
initially been presented to the Council Finance Committee in April. After delaying the presentation two
months, staff chose to pause discussions with HC until after the conclusion of the ongoing Parking
Optimization study
GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED
1. What questions does Council have regarding the status of the Remington/Oak Parking Lot and its
potential disposition?
2. What other feedback do councilmembers have as staff approaches this work moving forward?
BACKGROUND / DISCUSSION
The City of Fort Collins currently owns Block 122 (a.k.a. the Remington/Oak Parking Lot) in Downtown
Fort Collins, bounded by Oak Street on the North, Remington Street on the East, Olive Street on the South,
and Montezuma Fuller Alley on the West (see Attachment 1 - Location Map; the Property). The 1.3-acre
site has functioned as a surface parking lot for several decades.
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Item 1.
City Council Work Session Agenda Item Summary – City of Fort Collins Page 2 of 6
HISTORY
Original financing: In 1976, General Improvement District No. 1 (GID No. 1) issued $1.1 million in General
Obligation Bonds “for the purpose of constructing and installing off-street parking, and street and mall
improvements.” The bonds matured in 1996 and were completely paid off. No additional record exists of
outstanding debt based on GID No. 1 revenue. Approximately $126,000 of the bonds were used in 1977
to acquire the Property. The property has operated as off-street surface parking from shortly after
acquisition to today – nearly 5 decades.
Historic Redevelopment Interest: The Property has received a significant amount of interest over the
years from the private sector and even included a public/private partnership to redevelop the parking lot
as a hotel, which failed due to the 2008 financial crisis. Past discussions have always included a 1:1
replacement of the existing available public parking.
Existing MOU: In April 2022, the City and Housing Catalyst (HC), the City’s housing authority, signed a
Memorandum of Understanding (MOU) outlining the intent to partner on a mixed -income redevelopment
of the Remington lot that would include a minimum of 50% affordable housing serving households at 80%
AMI or below. Since the MOU was signed, the City and HC have continued to discuss the redevelopment
of the site. At the beginning of this year, staff began drafting a Purchase and Sale Agreement (PSA) for
Council to consider. The draft PSA did not require a 1:1 parking replacement.
DISCUSSIONS WITH HOUSING CATALYST
Early Discussions. In late 2021, as information about housing related American Rescue Plan Act (ARPA)
funding opportunities were released, staff from HC, DDA, and the City began to discuss the potential for
partnering on a redevelopment of the Property. At that time, HC was pursuing funding from Operation
Turnkey, a funding program offered by the Colorado Department of Local Affairs, Division of Housing,
Office of Housing Finance and Sustainability and the Office of Homeless Initiatives (collectively DOLA).
The funding program was intended, in part, for the acquisition of land and/or existing properties suitable
for the purpose of providing or developing affordable housing for extremely low to moderate income
individuals and families (DOLA Funding).
MOU Purpose & Additional Details. To pursue the DOLA Funding, HC needed to demonstrate some
form of site control of the Property. To meet this requirement, City staff and HC drafted an MOU, which
was subsequently considered and approved by City Council (Resolution 2022-033, February 15, 2022). In
addition to the items outlined above, the MOU included the following stipulations:
1. Parties (City and HC) acknowledged that DOLA Funding may not be available, or appropriate.
Accordingly, the Parties agree to work in good faith towards identifying and pursuing other appropriate
sources of funding.
2. Parties agreed to work in good faith toward an agreement on the amount and sources of funding for
the potential project.
3. The City stated its intent to provide HC the option to enter into a long -term ground lease with the City
for the Property with a term of ninety-nine (99) years. The lease was to be subject to Council approval
by ordinance.
4. Preservation or replacement of all existing public and permitted parking spaces existing on the Property
– then 152 spaces, along with adequate parking for the proposed development.
5. Allowed for termination under several conditions:
a. HC did not apply for funding in 2022.
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b. Denial of HC’s application(s) for funding.
c. Despite reasonable and good faith efforts, the Parties are unable to reach agreement on any matter
for which the future agreement of the Parties is necessary for completion of the project.
d. Either party is unable to fulfill its obligations under the MOU or otherwise complete the Project as
envisioned in the MOU.
Ongoing Discussions 2022-2024. By late, 2022, it was clear that the additional anticipated DOLA
Funding was not imminently available. By January 2023, HC shifted focus to a different funding source –
Transformational Affordable Housing Funds requiring a submittal by May of 2023. At that time, HC provided
an estimate for replacing parking 1:1 on site that it could cost the project as much as $8.0 million. City staff
began discussions internally about the 1:1 parking replacement. HC did not pursue this funding source.
In June 2023, City staff met again with HC staff. The targeted funding source had shifted to a competitive
tax credit application to be submitted in 2024. All “special” funding sources had now vanished, and the
project was going to need to pursue more typical affordable housing funding sources. To support a
potential competitive application, the Parties agreed to target June/July 2024 for a letter of intent (LOI) to
transfer/lease the property. The LOI would address a minimum affordable housing requirement and refine
the parking replacement expectation.
Significant work began to make an application in 2024. This included the City of Fort Collins Parking
Services conducting some basic parking utilization analysis of the Property. That data was shared with
Housing Catalyst. In addition, HC took several steps to prepare for an application as well.
In January 2024, staff met with HC to get an update on the preparations for an application later in the
year. As part of HC’s due diligence work, they shared the findings from their efforts to redevelop the parking
lot while meeting the 1:1 parking replacement condition. Several headwinds to this approach were shared,
including:
1. Replacing the parking spaces on-site would render the project financially infeasible.
2. Construction of the parking garage would require a complicated condo arrangement (similar to that at
the Firehouse Alley); and
3. The public parking portion of the project would not be eligible to receive Low Income Housing Tax
Credit (LIHTC) funding and would thus only add cost to the project without benefiting the affordable
housing development.
At this time, HC requested a shift in approach to focus on the northern portion of the property only as a
100 percent affordable housing project without a requirement to mitigate the lost parking on-site.
In June 2024, the Colorado Housing and Finance Authority (CHFA) announced a new round of LIHTC
funding that would be non-competitive. The round would run from September to November 2024 and be
rolling, meaning that the sooner an application was submitted the more likely it is to receive the credits.
City staff and HC began to work diligently to prepare to support an application in the 1st or 2nd week of
September.
In July 2024, HC decided not to pursue an application for this LIHTC round. This was based on intelligence
that the accelerated state credits were oversubscribed and highly competitive. Additionally, they were not
able to obtain a letter of commitment from the Division of Housing for a nonaccelerated application. As a
result, the project still faced a significant funding gap of several million dollars.
In September 2024, City staff met with HC to discuss an update to the MOU, which at that point was over
24 months old. The Parties agreed that an update would be in order and should address: (1) geography
(a shift to focusing on only the northern portion of the property), (2) removing the 1:1 parking replacement
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Item 1.
City Council Work Session Agenda Item Summary – City of Fort Collins Page 4 of 6
requirement and instead requiring a parking mitigation plan, (3) update the timeline, and (4) require that
100% of the now smaller property be developed as affordable housing.
Staff began to prepare redlines to the existing MOU with the intent of presenting it to Council for
consideration.
Shift to Purchase and Sale Agreement. In January 2025, Staff met with HC to discuss the ongoing
discussion regarding a revised MOU. During an early meeting, HC presented a new market rate partner
that had an interest in developing the southern portion of the property. This development would include
four (4) middle-income deed restrict condos and a variety of market rate units. The project once again
shifted directions. All agreed that an updated MOU was no longer needed and that give the timeline for a
LIHTC application later in the year it would be appropriate to shift to developing a Purchase and Sale
Agreement (PSA).
Staff in partnership with the City Attorney’s Office (CAO) began to develop the terms of a PSA. At the same
time, Staff commissioned an updated appraisal of the property based on a fee-simple sale of the northern
portion to HC. On March 5, 2025, Staff shared the draft PSA with HC in anticipation of getting feedback in
advance of an April Council Finance Committee (Committee) meeting.
On March 18, 2025, Staff at the request of HC postponed the presentation of the PSA to the Committee
until May. HC wanted to conduct additional outreach efforts before the item was considered by the
Committee.
DOWNTOWN DEVELOPMENT AUTHORITY INPUT & CONCERNS
In January 2025, the Downtown Development Authority (DDA) raised concern regarding the GID No. 1
original purchase of the Remington Street parking lot and its relationships to HC and their private partner
redevelopment concept. The concern focused on the original purpose for the purchase of the property and
its acquisition with GID funds. The CAO reviewed GID statutes, and nothing appears to exist impeding the
legal transfer of this property to HC. Furthermore, nearly 5 decades of off-street surface parking operations
have clearly delivered the original intent of the acquisition.
In February 2025, Staff shared the CAO’s findings and the City’s perspective that DDA, City, and GID all
share multiple aligned and competing interests for Downtown. Parking and Housing being two of the largest
aligned and competing interests. The DDA continued to express concerns regarding the displacement of
downtown parking and the challenges it would present to all of Oldtown, including the small businesses
that own and operate in the area.
STAFF’S EVOLVING PERSPECTIVE
Between February 2025 and early May 2025, Staff continued to reflect on the advancing an affordable
housing development on the Property. Throughout this period, staff received pertinent information
regarding the property, including: (1) a revised appraisal at a significantly higher amount than previously
anticipated; (2) additional input from Parking Services about the changing nature of downtown parking
demand and impacts of displacing parking at the Property, (3) input from a variety of business owners in
Oldtown, and (4) clarification on the timing and output from the Downtown Parking Optimization Study
Parking Study.
Evolving Downtown Parking Information. In 2024, Parking Services conducted several windshield
surveys of parking utilization at the Remington/Oak Parking Lot. This suggest ed that utilization at the
Property was primarily tied to Permitted Parking during the day. Similar data was supported by HC’s own
internal parking study completed by Walker Parking. However, it was later revealed that the parking studies
had not evaluated evening, late-evening, or weekend parking fully. The utilization of the Property for
parking is highly variable and depends on the time-of-day and day-of week. Taking a broader perspective
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Item 1.
City Council Work Session Agenda Item Summary – City of Fort Collins Page 5 of 6
indicates that the loss of unmitigated parking could have an impact at certain peak times and days of the
week.
Since 2021, staff have been committed to reaching an agreement with HC that could deliver affordable
housing at the Property. That commitment, unfortunately, led staff to skip over several common steps in a
public/private partnership of this scale: (1) engaging important downtown development partners, such as
the DDA and GID; (2) considering a broad set of opportunities for the use of a key asset site such as the
Property, and (3) not engaging stakeholders early and often. These oversights have resulted in a process
that does not meet City standards for this scale of project and opportunity.
Furthermore, the active Downtown Parking Optimization Study will provide important information regarding
the health both financially and operational of Oldtown parking. This information will be invaluable in
determining the right solution for mitigating the loss of parking by developing the Property.
As a result, staff concluded that a break in the discussions with HC was the most appropriate course of
action. It allows the Downtown Parking Optimization Study to complete providing useful insight.
Additionally, it can allow for implementation of key recommendations from the study to advance and
stabilize before making a significant change in parking inventory through development of the Property.
While this delay means a loss in momentum for the proposed affordable housing project. It does not mean
a reduction in commitment to affordable housing. Ample opportunities to partner with HC and other
affordable housing partners remain available across the community. However, there is only one
Remington/Oak Parking Lot, and any development of the site will be with the community for many decades
to come. It is the view of staff that this is a time to get it right rather than get it done fast.
Housing Catalyst Request. On May 20, 2025, HC presented City Manager DiMartino with a letter
requesting a no-interest loan for the costs incurred related to the Oak/Remington redevelopment project.
The letter cites the City’s decision to withdraw consideration of the PSA, “without sufficient consultation or
resolution” as the reason for the request. However, it should be noted that the City and HC remain engaged
in a MOU. The terms of the MOU indicate: “If either party terminates this MOU, each party shall be
responsible for its own costs related to its performance pursuant to this MOU.” Staff believe this aspect of
the MOU makes it clear that both parties entered the good faith discussions regarding redevelopment,
understanding they each would be responsible for their own costs associated with those discussions. The
City has not taken action to terminate the MOU but would be within its rights under the MOU to do so.
REFLECTIONS
Staff have reflected on how the organization arrived at this point – where significant time has been invested
by both the City and HC on a project that now should be paused for a length of time.
The Key Reflection. Staff is pausing the project as it shifted and changed over time, such as when the
unique funding opportunities of the ARPA- and pandemic-period ceased to be available. 2023, when the
funding did not materialize was the first opportunity to step back and undertake a more wholistic look at
the site, to engage key downtown partners, to evaluate a range of possibilities, to engage stakeholders,
and to consider more deeply the impacts on parking from developing the site. Another key moment was in
2024 when HC indicated they could not mitigate lost parking, which was substantially different from the
then approved Council MOU.
The Lesson Learned. The commitment and passion of staff to achieve a significant affordable housing
project at the Property has driven our engagement with HC. It has also meant that we fell prey to
“spotlighting” – focusing on a singular outcome as the most appropriate and best course of action. Taking
a step back may have led us to a different development strategy. It may have resulted in a better outcome.
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Item 1.
City Council Work Session Agenda Item Summary – City of Fort Collins Page 6 of 6
NEXT STEPS
Staff is pausing discussion with HC until at least when the Parking Study is completed later this year. In
addition, staff is recommending setting specific triggers to define when discussions regarding the
development of the Property should resume. Those triggers include:
1. Review and consideration by staff or Council of the recommendations from the Parking Study;
2. Implementation of the Parking Study recommendations; and
3. Allowing sufficient time for the recommendations to impact the operations of parking in downtown and
resident behaviors, so that we can re-evaluate the impact of developing the Property on parking supply.
It is difficult to estimate when these triggers will occur. However, it is likely to take at least a year and
potentially two before all three triggers occur. In the meantime, staff remain committed to affordable
housing and development partnerships to deliver on this top community and Council priority.
ATTACHMENTS
1. Location Map
2. Presentation
Page 9
Item 1.
Attachment 1 –
Remington/Oak Parking Lot: Location Map
Subject Property
Page 10
Item 1.
Headline Copy Goes Here
Deputy Director, Sustainability
Services
Josh Birks
Deputy City Manager
Tyler Marr
06-05-202
Remington/Oak
Parking Lot Update
Page 11
Item 1.
Headline Copy Goes HereDirection Sought
1.What questions does Council have regarding the
status of the Remington/Oak Parking Lot and its
potential disposition?
2.What other feedback do councilmembers have as
staff approaches this work moving forward?
Page 12
Item 1.
Headline Copy Goes HereOriginal Acquisition & Financing
3
•Acquired in 1977 from proceeds of a
GID No. 1 bond issuance
•Purchase price ~ $126,000
•Bonds matured in 1996 and
were completely paid off
•Has operated as surface parking for
nearly 5 decades
Significant redevelopment interest
e.g., 2008 public/private partnership to redevelop as a hotel
Page 13
Item 1.
Headline Copy Goes HereExisting MOU
4
Approved by Council: February 2022
Executed: April 2022
Parties: Housing Catalyst (HC) & City of Fort Collins
Key Aspects:
Included entirety of the Remington/Oak Parking Lot
Envisioned a mixed-income redevelopment
Required a minimum of 50% affordable housing at or belolw
80% Area Median Income
Required 1:1 preservation or replacement of all existing and
permitted parking spaces (approximately 152 space)
Allowed for termination if:
o Housing Catalyst did not apply for funding in 2022
o Their application for funding was denied
o The parties were unable to reach agreement on any matter
o Either party is unable to fulfill its obligations under the MOU
Page 14
Item 1.
Headline Copy Goes HereOngoing Discussion Highlights
5
•January 2023 –HC shifts focus to Transformational Affordable
Housing Funds after ARPA-& Pandemic-period funding did not
materialize (HC did not ultimately pursue this funding source)
•June 2023 –HC and City staff shift towards more traditional Low
Income Housing Tax Credit (LIHTC) funding –targeting a 2024
application (HC later decided not to pursue this funding)
•January 2024 –HC shared findings of their efforts including
several headwinds:
•Replacing parking spaces would render the project financially infeasible
•Construction of the parking garage would require a complicated
partnership
•Public parking is not an eligible expense under LIHTC funding
•September 2024 –Staff and HC discuss updating the MOU
•January 2025 –HC presents new approach to the site including
a new market rate development partner; Work on a Purchase and
Sale Agreement Begins
•March 2025 –Staff postpones PSA presentation to Finance at
HC’s request (HC indicates a desire to do additional
engagement)
Page 15
Item 1.
Headline Copy Goes HereDDA & Business Input & Concerns
6
Two Primary Concerns:
1.Can the City sell property to private entity purchased with GID
No. 1 funds?
Legal review did not reveal any limitations to sell
All bonds have matured and been paid off
Property has served intended purpose for 5 decades
2.Lack of replacement parking will negatively impact downtown
parking capacity.
Significant difference of perspective related to utilization
Parking analysis of evenings, weekends, & late evening
reveals a different type of utilization pattern
Request to consider findings of ongoing Downtown Parking
Optimization Study
Many businesses echo these concerns
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Item 1.
Headline Copy Goes HereEvolution of Staff Perspective
7
Additional Information
•Revised appraisal –significantly higher value
•Refined understanding of parking demand and impacts
•Input from DDA & Business Stakeholders
•Clarification on Parking Study timing and output
Evolved Thinking
•Utilization of parking different than originally understood
•Missed opportunities to engage stakeholders and follow
common City practices when contemplated major partnerships
•Usefulness of Parking Study output to understanding both
financial and operational health of Downtown Parking
•Narrow focus of efforts since 2022 –myopic approach to
redevelopment focusing on the City’s affordable housing priority
without considering other City/community priorities/goals
•Operating in isolation –not leveraging downtown partners
Page 17
Item 1.
Headline Copy Goes HereReflections
8
Key Reflection:
•Staff should have paused when the project
shifted/changed
•Multiple points where we could/should have stepped back
Lesson Learned:
•Commitment and passion can overshadow process
•Need to work to actively avoid “spotlighting”
Page 18
Item 1.
Headline Copy Goes HereNext Steps
9
Next Steps:
1.Review and consider the Parking
Study when complete
2.Implement Parking Study
recommendations
3.Allow time for recommendations to
impact parking demand and
operations
In the meantime:
•Continue supporting affordable housing
•Improve disposition/ redevelopment
processes for City owned property
Page 19
Item 1.
Headline Copy Goes HereDirection Sought
1.What questions does Council have regarding the
status of the Remington/Oak Parking Lot and its
potential disposition?
2.What other feedback do councilmembers have as
staff approaches this work moving forward?
Page 20
Item 1.
Headline Copy Goes Here
Thank you!
11
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Item 1.
File Attachments for Item:
2. 2025 Budget Update / 2026 Revision Process Preview
The purpose of this item is to discuss 2025 year-to-date governmental revenue and expenses,
along with trends and forecasts for 2025 and 2026.
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City Council Work Session Agenda Item Summary – City of Fort Collins Page 1 of 3
June 5, 2025
WORK SESSION AGENDA
ITEM SUMMARY
City Council
STAFF
Caleb Weitz, Chief Financial Officer
Lawrence Pollack, Budget Director
Jennifer Poznanovic, Sales Tax & Revenue Director
SUBJECT FOR DISCUSSION
2025 Budget Update / 2026 Revision Process Preview
EXECUTIVE SUMMARY
The purpose of this item is to discuss 2025 year-to-date governmental revenue and expenses, along with
trends and forecasts for 2025 and 2026.
GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED
This item is informational only.
BACKGROUND / DISCUSSION
Economic conditions have changed since the 2025-2026 recommend budget. Given economic uncertainty
at the national, state and local level, Fort Collins is anticipating budget shortfalls in revenue due to
economic activity and expense overages through the first quarter in 2025.
Sales & Use Tax
Sales and use tax revenue is approximately 50% of city governmental revenue and the largest
governmental revenue stream. Sales and use tax revenues are generally the most flexible revenues for
the provision of City services.
2024 Results
In 2024, sales tax was 2.1% under budget ($3.7M) and use tax was over budget by 13.2% ($3.0M).
Combined, sales and use tax was 0.3% ($700k) under budget. In 2025, the use tax budget was rightsized
to be in line with prior year actuals. For the 2025 budget, sales tax growth from the 2024 budget is 3% and
flat growth for use tax.
April Year-to-Date 2025 Results
For a direct comparison of year-to-date results (the 2050 tax was effective January 2024 with collections
starting in February 2024), taxable sales are up 0.5%. As sales tax came in under budget in 2024, 4.2%
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Item 2.
City Council Work Session Agenda Item Summary – City of Fort Collins Page 2 of 3
instead of 3% growth is needed to hit the 2025 budget. Year-to date through April, growth is softening
across the majority of sales tax categories except for categories with a majority of online retailers.
Year-to-date through April, sales tax is $600k under budget and use tax is $3.1M over budget. Sales and
use tax combined is $2.5M over budget. The favorability is largely driven by a strong start to the year with
volatile one-time revenue for audits, voluntary disclosure agreements and building permit use tax.
The April year-to-date sales tax budget is down 1%, excluding one-time revenue the sales tax budget
would be down 4%. The April year-to-date use tax budget is up 37%, excluding one-time revenue the use
tax budget would be up 25%.
Sales Tax Trends
In 2024, taxable sales in Fort Collins were up 2.4%. The 2025 budget was based on 3% growth off the
2024 budget. However, based on 2024 actuals, 4.2% growth is needed in to hit the 2025 budget.
According to the Colorado Business Economic Outlook 2025, Colorado retail sales growth is projected to
be 1.9%. In the State’s March 2025 Economic & Revenue Forecast, Colorado sales tax revenue is
expected to grow by 2.7% in 2025, down from expected growth of 3.4% from the December 2024 Forecast.
Across the Front Range and in Norther Colorado, many cities are realizing budget shortfalls.
2025 and 2026 Sales and Use Tax Projections
For 2025, staff are currently projecting 2% growth based on 2024 actuals. This is a 2% budget shortfall for
2025. The total anticipated revenue shortfall is $3.8M with the General Fund shortall portion at $2.5M. The
2025 forecast is driven by significant year-to-date one-time revenue in 2025. Without one-time revenue
April year-to-date sales tax would be down 4% instead of 1% under budget.
Staff are currently forecasting 2% growth in 2026 from the 2025 forecast. The 2026 Forecast of 2% growth
is negative 3% growth compared to the original 2026 budget, a $5.7M shortfall. If economic conditions
deteriorate, the impact in 2026 could be larger. Therefore, staff is anticipating a reductions budget for the
2026 Budget Revision process.
Other Revenues
Speed Corridors:
Transportable units to support Vision Zero goals have been delayed in deployment, with a total budget of
$2 million. Red light speed citations are down 50% from December 2024 levels, with reductions in citations
a revenue shortfall of $1.0M to $1.5M is expected.
Expenditure Pressures
Increased budget accuracy since COVID, along with inflationary pressures, has significantly reduced the
amount of unspent budget each year. Although this is good at not letting City funds sit idle, it does directly
impact the availability of reserves. As such, an increased focus on financial monitoring is necessary.
Since personnel costs are a large portion of the City’s budget, total compensation costs are budgeted at
less than 100% so as to not lock up budget that will go unused, like for position vacancies. This year the
City has experienced a sharp decrease in turnover, driven by the City’s employee engagement strategies
and economic concerns and uncertainty. These realities are the main drivers of the personnel overspend
being experienced so far this year.
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Item 2.
City Council Work Session Agenda Item Summary – City of Fort Collins Page 3 of 3
Actions to Date
A hiring ‘pause’ has been implemented to directly address personnel costs.
Expense reductions are planned for the 2nd half of 2025, primarily focused on more discretionary
spending like training, travel, food and supplies.
Rolling forecasts for both revenue and expense are being implemented for better, real-time
understanding of the City’s financial position; especially within the governmental funds.
Executive management is fully expecting the 2026 Budget Revision process to be one of reductions
and contraction.
NEXT STEPS
Staff will continue to monitor revenue and expenses ahead of the 2026 Budget Revision process that
begins in early fall of 2025. Based on the current 2025 revenue and expenditure outlook, it’s anticipated
that the Budget Revision process will be a reduction process to align expenditures with anticipated
revenues.
ATTACHMENTS
1. Presentation
Page 25
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Caleb Weitz
Jen Poznanovic
Lawrence Pollack
Council Finance
Committee
2025/2026 Budget
Update
06-05-2025
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2
Agenda
Update is informational for City Council, no action currently requested
Agenda:
•Economic indicators
•Revenue update
•Expense update
•Actions taken and next steps
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3
National Economic Trends & Indicators
•University of Michigan Consumer Sentiment fell for 4th straight month with April
down significantly from March by 8% and down 32% since January.
•Federal Reserve Meeting 5/6-5/7 -Interest rates are not changing.Article
•US GDP contracted: -0.3% in Q1. Article
•Uncertainty in National Policy: Drivers are International Trade Tariffs & Federal
Budget.
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4
Colorado Economic Trends & Indicators
•Unemployment expected
to tick upward slowly;
Colorado Rate was 4.6%
at the end of Quarter 1 of
2025, up from 4.0% at the
end of Quarter 4 of 2024.
•University of Colorado Leeds Business School reports job openings are down
and job postings per unemployed person are fewer. Article
•Coloradoans are saddled with high levels of consumer debt.
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5
Economic Trends & Indicators –Key Takeaways
•Economic Conditions have changed since 2025-2026 Recommended Budget.
•Consumers are worried; they are spending less.
•Market conditions remain volatile; no Federal Reserve rate cut in May.
•Uncertainty around trade policy and tax cuts creates a pull back in spending.
•Unemployment is expected to increase in Colorado.
•High levels of debt for Colorado households; they must spend less.
•Economic indicators point to a relatively stagnant Q2 2025, likely similar or worse
in performance to Q1.Possible improvement mid-to-late Q3, if there is clarity with
trade policy.Page 30
Item 2.
Headline Copy Goes HereRevenue –Areas of Concern
6
•Sales and Use Tax
•Speed Corridors
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7
Governmental Revenue
Sales & Use Tax:
Approx. 50% of City
governmental revenue
Sales & use taxes,
49.8%
Charges for Services, 11.5%
Property taxes, 10.6%
Intergovernmental not restricted to
programs, 7.5%
Operating Grants and Contributions,
7.5%
Capital Grants and Contributions, 6.8%
Other, 2.0%
Occupational privilege taxes, 0.6%
Lodging taxes, 0.6%
Investment earnings, 3.3%
2024 Revenue by Source -Governmental Activities
$408.8 million
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8
2024 Adjusted Actual to 2025 Budget
•2024 actual adjusted to reflect 12 months of 2050 tax collections to allow apples
to apples comparisons between 2024 and 2025.
•Original 2025 budget 3% growth.
•Based on 2024 sales tax shortfall, 4.2% growth is required to hit 2025
Budget.
•Taxable sales up 2.4% in 2024.
2024 Actual Adj.2025 Budget % Δ $ Difference
Sales Tax 176,049,379 183,392,521 4.2%7,343,142
Use Tax 25,560,807 25,000,000 -2.2%(560,807)
Total 201,610,186 208,392,521 3.4%6,782,335
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Headline Copy Goes HereYTD April 2025 Results
9
Budget to Actual
Sales Tax $600k under budget
($2.4M under without one-time revenue)
Use Tax $3.1M over budget
($2.1M over budget one-time revenue)
Combined $2.5M over budget
($300k under without one-time revenue)
•Strong start of the year for audits, voluntary disclosure
agreements (VDAs) and building permit use tax.
•Volatile revenue streams
•Taxable sales are up 0.5%. However, if we net for
audits/VDAs, taxable sales are down 1.2%. Growth of
4.2% needed to hit 2025 budget.
•Softening across majority of sales tax categories except
for online retailers.Page 34
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$0
$10
$20
$30
$40
$50
$60
$70
$80
Budget Actual Actual w/o One-Time
Mi
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n
s
April YTD Budget to Acutal
Sales Tax Use Tax
YTD April 2025 Results
10
4%0%
37%25%
-1%-4%
Sales Tax
•YTD April sales tax
budget is down 1%.
•Excluding one-time
revenue, the sales tax
budget would be down
4%.
Use Tax
•YTD April use tax budget
is up 37%.
•Excluding one-time
revenue, the use tax
budget would be up 25%.
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11
Fort Collins Net Taxable Sales
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Fort Collins Net Taxable Sales
(revenue trends and comparisons)
City Pop % of County City % of County SalesPage 36
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12
Trends & Projections: Front Range Cities Sales Tax Growth
•Most Front Range cities are realizing
budget shortfalls.
•Some cities like Commerce City,
Westminster and Aurora are seeing
growth.
* Fort Collins budgeted growth was 3.0%. Due to 2024 sales tax shortfall, 4.2% growth is
needed to hit budget
** 2025 budget figure is for both sales and use tax
*** 2025 YTD April or most recent data available
City 2025
Budget
2025
YTD***
Commerce City 6.2%**8.4%
Westminster 5.4%4.8%
Aurora 4.5%4.7%
Boulder 0.0%**2.0%
Thornton 2.5%0.6%
Fort Collins 4.2%*0.5%
Lakewood 3.4%-0.3%
Centennial -1.2%
Greeley 5.5%-2.0%
Englewood 0.0%-2.3%
Longmont -2.4%
Loveland 3.5%-5.0%
Windsor 5.0%-6.1%Page 37
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13
2025 and 2026 Forecasts
2025:
•To hit the 2025 budget 4.2% sales tax
growth is needed.
•2% growth forecast, anticipated 2%
shortfall of $3.8M.
•2025 Forecast driven by significant
YTD one-time revenue in 2025.
2026:
•2% growth forecast, anticipated 3%
shortfall of $5.7M.
•Anticipating a reduction budget in the
2026 Budget Revision process.
2025 Budget & Forecast
2025
Budget
2025
Forecast % Δ $
Difference
Sales Tax 183,392,521 179,570,367 -2%(3,822,154)
Use Tax 25,000,000 25,000,000 0%0
Total 208,392,521 204,570,367 -2%(3,822,154)
2026 Budget & Forecast
2026
Budget
2026
Forecast % Δ $
Difference
Sales Tax 188,894,296 183,161,774 -3%(5,732,522)
Use Tax 25,000,000 25,000,000 0%0
Total 213,894,296 208,161,774 -3%(5,732,522)
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$0
$50
$100
$150
$200
$250
2025 Budget 2025 Forecast 2026 Budget 2026 Forecast
(2% Growth)
Mi
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s
Sales Tax Use Tax
14
2025 and 2026 Forecasts
•2025 Forecast of -2% would
be a $3.8M shortfall compared
with the 2025 Budget.
•2026 Forecast of -3% would
be a $5.7M shortfall compared
with the 2026 Budget.
•If economic conditions
deteriorate, 2026 impact will
be larger.
-2%5%-3%
-2%5%-3%
0%0%0%
2025 & 2026 Forecasts
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15
Revenue –Other Areas of Concern
Speed Corridors
•Transportable units to support Vision
Zero goals have been delayed in
deployment –Total budget of $2
million.
•Red light speed citations down 50%
from December 2024 levels (1st full
deployment month). Budget modeled
a 70% reduction.
•$1.0 to $1.5 million revenue shortfall
expected.
•Some offsetting expenditure savings.
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Item 2.
Headline Copy Goes HereUtilities YTD April 2025 Results
16
Budget to Actual
Revenue
Light & Power + 1.9% over budget
Water + 3.7%
Wastewater + 3.1%
Stormwater + 3.4%
Expense
Light & Power –4.2% under budget
Water –1.0%
Wastewater –4.4%
Stormwater –1.9%
•Utility enterprise funds experiencing strong Q1 results for
development fees.
•Slightly exceeding revenue forecasts for ongoing
operating revenues.
•Personnel expenses 2.0% below budget YTD.Page 41
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17
Expense Areas of Focus –Unspent Budget Authorizations
•Since COVID, departments
continue to utilize a greater
percentage of their budgets each
year.
•Increased budgeting accuracy is
good; however, it reduces unspent
budget each year and the amount
that falls to fund balance (i.e.,
reserves).
•Greater financial monitoring is
necessary to ensure spend does
not surpass the budgeted amounts
by fund authorized by Council.
General Fund Unspent Budget
$20M
$5M
$0
$10M
$15M
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18
Expense Areas of Focus
•Personnel Costs are a significant portion of the City’s budget and, thus, total
compensation costs are budgeted at less than 100%.
–Maximizes budget availability for programs and service delivery
•Lower than expected turnover puts additional pressure on Personnel Costs.
–More effective recruiting
–Economic uncertainty may also be contributing to lower attrition
–Employee retention strategies may also be contributing to reduced turnover
•Overtime and Hourly expenses are also being monitored and managed.
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Expense Areas of Focus
*Data through Q1 2025Page 44
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Actions Implemented to Date & Next Steps
Actions to date
•Hiring ‘pause’ to help address budgeted Personnel Costs.
•Expense reduction proposals discussed in quarterly service area reviews.
•Decisions starting in June as to where to reduce, as necessary for 2025
•2025 reduction examples: training, supplies, holding open vacancies
•Reimplementing rolling forecasts for real time inputs for year-end
projections for both revenue and expenses.
•Communication and transparency.
Next Steps
•2026 Budget Revision process.
•Reductions expected based on the current financial picture
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2026 Budget Revision Process -Timeline
Date Process
Sept. 4 Council Finance Committee meeting
Sept. 23 Council Work Session #1
Oct. 14 Council Work Session #2
Nov. 3 1st Reading of the 2026 Annual Appropriation
Nov. 18 2nd Reading
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