HomeMy WebLinkAboutMINUTES-10/20/2009-RegularOctober 20, 2009
COUNCIL OF THE CITY OF FORT COLLINS, COLORADO
Council -Manager Form of Government
Regular Meeting - 6:00 p.m.
A regular meeting of the Council of the City of Fort Collins was held on Tuesday, October 20, 2009,
at 6:00 p.m. in the Council Chambers of the City of Fort Collins City Hall. Roll Call was answered
by the following Councilmembers: Hutchinson, Kottwitz, Manvel, Ohlson, Poppaw, Roy, and
Troxell.
Staff Members Present: Atteberry, Krajicek, Roy.
Citizen Participation
Claire Emeldi, Fort Collins resident, stated the occupancy ordinance should not be amended or
weakened and enforcement of the occupancy ordinance should be increased.
Sally Scrivner, 1236 Constitution, asked Council to strengthen the occupancy ordinance and not to
rezone any residential neighborhoods. Rentals should be licensed to enhance enforcement.
George Bryan, 309 South Sherwood, stated funding for affordable housing gives a large economic
dividend to the city and enables projects to leverage the city funds into large amounts of state and
federal funding. He urged Council to increase funding for affordable housing.
Paul Anderson, 2107 Constitution, stated the occupancy ordinance promotes a "green" city by
decreasing urban sprawl.
Carol Kruse, Fort Collins resident, urged Council not to make any changes to the occupancy
ordinance and not to rezone any neighborhoods.
Stacy Lynne, 216 Park Street, thanked staff for the answers to questions she had asked regarding the
budget. She did not support the changes to the trash pricing structure because the changes have
resulted increased costs to customers.
Sally Lee, 932 Pioneer, asked that the occupancy ordinance not be changed and asked for greater
enforcement of the ordinance. Properties with four or more unrelated individuals tend to degrade
a neighborhood and reducing neighboring home values.
Chris Hardy, 7420 Triangle Drive, stated his support for the occupancy ordinance because it provides
for safer rental housing and improved neighborhoods. The ordinance, in its current form, is
accomplishing its intended purpose and should not be changed in'any way.
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October 20, 2009
Michelle Haefele, 623 Monte Vista Avenue, stated her neighborhood and other older neighborhoods
located around CSU should be protected. The occupancy ordinance should not be revised and
residential zoning should not be amended. A licensing system should be developed for rental
properties in the city.
Shaun Reed, 1700 Heritage Circle, ASCSU Assistant Director of Community Affairs, asked Council
to consider the proposal from ASCSU regarding the occupancy ordinance. The ASCSU proposal
requests an increase of number of occupants per resident to four people, expansion of the time for
correction of violations, and expansion of the choices for extra -occupancy for rentals.
Carrie Gillis, 2213 Timber Creek Drive, encouraged Council to leave the occupancy ordinance
unchanged because it is accomplishing its intent.
Michael Devereaux, 2150 Maid Marian Court, stated the groups P-TAG and Barrier Busters are
willing to assist the City's education efforts regarding wheelchairs in bike lanes.
Greg McMaster, 1409 Skyline Drive, stated licensing of rental properties is a missing component
of the occupancy ordinance and should be enacted to allow for better enforcement and better
education of rental property owners.
Chip Parrish, Fort Collins resident, urged Council not to change the occupancy ordinance.
Kevin Nolan, 1318 Clementine Court, supported the occupancy ordinance as it is currently written.
The number of occupants in a residence should not be increased.
Doug Brobst, 1625 Independence Road, stated the occupancy ordinance should be strengthened with
the addition of licensing of rental property.
Pete Seale, 1837 Scarborough Drive, urged Council to leave the occupancy ordinance as it is
currently written because allowing more people per residence or more boarding houses will not
benefit the neighborhoods. Rental properties should be licensed with the City.
Eric Kronwall, 1613 Barnwood Drive, supported the occupancy ordinance because it is achieving
its intended result. Neighborhoods are more livable with the enforcement of the occupancy
ordinance. The disclosure requirements regarding occupancy limits should be strictly enforced. The
disclosure form should require notarization. Rental licensing is not necessary and hurts the law-
abiding landlords and tenants.
Donna Fairbank, 1712 Clearview Court, supported the occupancy ordinance and she urged Council
not to adopt any changes to the ordinance.
Al Bacilli, 520 Galaxy Court, thanked Council for eliminating vender fees.
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Citizen Participation Follow-up
Councilmember Roy asked if the streetlights on Constitution and the gate for the New Mercer Ditch
have been repaired yet.
Councilmember Ohlson asked staff to respond to Mr. Devereaux regarding education of wheelchair
users in bike lanes. City Manager Atteberry stated staff will respond to Mr. Devereaux.
Agenda Review
City Manager Atteberry stated there was one changes to the published agenda. City Attorney Roy
stated Item #10, Second Reading of Ordinance No. 089, 2009, Amending Section 805 of the Fort
Collins Traffic Code Related to Pedestrians Walking or Traveling in a Wheelchair on a Highway
has the phrase "or travel" added to Sec. 805(1)(b) to make the section consistent with the rest of the
ordinance.
Eric Sutherland, 631 LaPorte, pulled Item #15 First Reading of Ordinance No. 105, 2009,
Appropriating Prior Year Reserves and Unanticipated Revenue in Various City Funds and
Authorizing the Transfer of Appropriated Amounts Between Funds or Projects, Item #19 First
Reading of Ordinance No. 110, 2009, Authorizing the Conveyance of a Utility Easement on a
Portion of the Larimer County Landfill to Poudre Valley Rural Electric Association, Inc. and Item
#21 Resolution 2009-098 Concerning Implementation of Standards Created by Amendments to the
Public Utility Regulatory Policies Act of 1978 and Contained in the Energy Independence and
Security Act of 2007. 1 '
CONSENT CALENDAR
CONSENT NON -BUDGET ITEMS
6. Second Reading of Ordinance No. 094 2009 Appropriating Unanticipated Revenue in the
General Fund for Replacing Radio Network Equipment.
This Ordinance, unanimously adopted on First Reading on October 6, 2009, appropriates
funds received for a joint grant awarded by the U.S. Department of Justice, Office of Justice
Programs (OJP) Bureau of Justice Assistance (BJA) Recover Act Edward Byrne Memorial
Justice Assistance Grant (JAG) Program, in the amount of $444,818. This joint grant was
awarded on behalf of the City of Fort Collins, the City of Loveland and Larimer County.
Cooperatively, an agreement was reached to utilize these grant funds for the replacement of
aging radio network components.
7. ' Second Reading of Ordinance No. 095. 2009, Amending Ordinance No 136 2007
Assessing the Cost of Improvements in the Timberline and Prospect Special Improvement
District No. 94.
The Timberline and Prospect Special Improvement District No. 94 (SID No. 94) made
improvements to the Timberline and Prospect intersection that were necessary for
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October 20, 2009
development in the area to proceed. A certain property owner was inadvertently assessed.
This property owner has two parcels which, upon development, will contribute traffic
impacts into the Timberline and Prospect intersection. However, at this time, the parcels are
just outside City limits. This Ordinance, unanimously adopted on First Reading on October
6, 2009, amends the original assessing ordinance to remove these two parcels.
Second Reading of Ordinance No. 096, 2009, Appropriating Unanticipated Grant Revenue
In the Capital Projects Fund for the East Harmony Road Bridge Replacement Project
This Ordinance, unanimously adopted on First Reading on October 6, 2009, appropriates
funds received from the Colorado Department of Transportation for the replacement of the
East Harmony Road Bridge.
Second Reading of Ordinance No. 097, 2009, Amending Various Provisions of the Fort
Collins Traffic Code.
The Colorado General Assembly amended certain statutory provisions this legislative session
relating to state traffic laws. This Ordinance, unanimously adopted on First Reading October
6, 2009, ensures that the Traffic Code is consistent with state traffic laws.
10. Second Reading, of Ordinance No. 098, 2009, Amending Section 805 of the Fort Collins
Traffic Code Related to Pedestrians Walking or Traveling in a Wheelchair on a Highwa.
This Ordinance, unanimously adopted on First Reading on October 6, 2009, changes the Fort
Collins Traffic Code to allow pedestrians, including wheelchair users, to legally travel in a
bike lane or on a road shoulder if an adjacent sidewalk is in a condition that substantially
interferes with the mode of travel used by the pedestrian.
11. First Reading of Ordinance No 101 2009 Appropriating Unanticipated Revenue in the
Cultural Services Fund to be Used for the Construction of the New Museum/Discovery
Science Center Joint Facility,
The City received a donation of $88,966 from the Isabelle (Judy) Arnold Trust designated
for the Fort Collins Museum. This Ordinance appropriates that donation in the Building on
Basics (BOB) Fort Collins Museum/Discovery Science Center Joint Facility Project.
12. First Reading of Ordinance No. 102, 2009, Appropriating Unanticipated Revenue from the
American Recovery and Reinvestment Act to the Transit Fund.
The City of Fort Collins has received American Recovery and Investment Act of 2009
(ARRA) stimulus funding to purchase six NABI 40-foot Low Floor Compressed Natural Gas
(CNG) replacement buses and several Proximity Card Readers in 2009. The buses will
replace the oldest model vehicles and are a timely addition to an aging fleet. The addition
will increase the CNG fleet component to 10 buses (37%) in an era when sustainability is a
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priority. ARRA stimulus funding was also received to purchase Proximity Card Readers for
the current fleet of vehicles to facilitate the use of CSU student IDs as legitimate fare media.
13. First Reading of Ordinance No. 103 2009 Appropriating Unanticipated Grant Revenue
From the Office of the National Drug Control Policy and the U.S. Department of Justice in
the General Fund for the Northern Colorado Drug Task Force.
The City has received three grants for the Northern Colorado Drug Task Force. The first is
from the Office of National Drug Control Policy for January 1-December 31, 2010, in the
amount of $84,124. The second is from the Office of National Drug Control Policy in the
amount of $24,703. The third is from the U:S. Department of Justice in the amount of
$108,275 for fiscal year 2009. There is no financial impact to the City of Fort Collins and
there are no matching funds required for these grants.
14. . First Reading of Ordinance No 104 2009 Appropriating Unanticipated Grant Revenues in
the General Fund for Police Services and for the Transfer of Matching Funds Previously
Appropriated in the Police Services Operating Budget.
A grant in the amount of $30,000 has been received from the Colorado Division of Criminal
Justice (DCJ) for salaries associated with the continued operation of Restorative Justice
Services. A $3,333 cash match is required and will be met by appropriating funds from the
Police Services operating budget. Restorative Justice is an alternative method of holding
a young offender accountable by facilitating a meeting with the young offender, the
victim/victim representative and members of the community to'determine the harm done by
the crime, and what should be done to repair the harm. By identifying and repairing the harm
caused by the crime, Criminal Justice Officials are optimistic repeat offenses by these youth
will be reduced and the needs and concerns of the victims and affected community will be
addressed. Restorative Justice Services includes The RESTORE Program for shoplifting
offenses, and Restorative Justice Conferencing Program (RJCP) for all other offenses.
15. First Reading of Ordinance No 105 2009 Appropriating Prior Year Reserves and
Unanticipated Revenue in Various City Funds and Authorizing the Transfer of Appropriated
Amounts Between Funds or Projects.
The purpose of this annual "clean-up" Ordinance' is to combine dedicated revenues or
reserves that need to be appropriated before the end of the year to cover the related expenses
that were not anticipated and, therefore, not included in the 2009 budget. The unanticipated
revenue is primarily from fees, charges, rents, contributions and grants that have been paid
to City departments to offset specific expenses. Prior year reserves are primarily being
appropriated for unanticipated operation expenses from reserves that are set aside for that
purpose.
This Ordinance appropriates prior year reserves and unanticipated revenue in various City
funds, and authorizes the transfer of appropriated amounts between funds. The City Charter
permits the City Council to provide by ordinance for payment of any expense from prior year
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October 20, 2009
reserves. The Charter also permits the City Council to appropriate unanticipated revenue
received as a result of rate or fee increases or new revenue sources. Additionally, it
authorizes the City Council to transfer any unexpended appropriated amounts from one fund
to another upon recommendation of the City Manager, provided that the purpose for which
the transferred funds are to be expended remains unchanged; the purpose for which they were
initially appropriated no longer exists; or the proposed transfer is from a fund or capital
proj ect account in which the amount appropriated exceeds the amount needed to accomplish
the purpose specified in the appropriation ordinance.
16. First Reading of Ordinance No. 106, 2009 Amending Section 25-1230 of the City Code
Relating to the Vendor Fee for Collecting and Remitting_ Sales Tax.
This ordinance will eliminate the City's current vendor fee for sales and use tax licensees.
The proposed modification will result in $300,000 of ongoing additional revenue being
available for General Fund uses. Thischange will not increase taxes or fees charged, but
rather eliminate the amount of City sales and use taxes that vendors are allowed to retain in
exchange for the service they provide in collecting City taxes. Currently; vendors are
allowed to retain 1 % of sales and use taxes collected, up to a maximum of $45 per reporting
period.
17. First Reading of Ordinance No. 108 2009 Amending Chapter 14 of the City Code Relating
to the Landmark Rehabilitation Loan Pro ram.
This Ordinance amends the Landmark Rehabilitation Loan Program to in the loan
funding amounts from a maximum of $5,000 to a maximum of $7,500. It also removes
provisions related to the application review schedule to allow for a more flexible, semi-
annual competitive application review process.
18. First Reading of Ordinance No. 109, 2009, Authorizing the Conveyance of a Non -Exclusive
Drainage Easement on the Gustav Swanson Natural Area to Urban Development Partners
LLC.
Urban Development Partners, LLC (the "Developer") is proposing to build an
industrial/office development which is commonly known as the Inverness Innovation Park
(the "Project"), located on East Vine Drive and north of the City's Gustav Swanson Natural
Area (the "Natural Area"). The storm drainage in this area has historically flowed to the
Cache La Poudre River. In the spring of 2009, the Developer requested a small drainage
easement and .access easement on the Natural Area to construct the stormwater
improvements needed for the Project. On April 21, 2009, Council adopted Ordinance No.
031, 2009, authorizing these easements. In that Ordinance, the City reserved the right to
require additional storm water management improvements if further review of the
Development indicated additional storm water improvements were necessary. As the Project
has moved through the City approval process, the need for an additional drainage easement
across the Natural Area has been. identified. As recommended by staff, the Developer is now
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requesting a drainage easement across the Natural Area to allow for stormwater flows in case
of storm events larger than a 100-year flood event.
19. First Reading of Ordinance No. 110, 2009 Authorizing the Conveyance of a Utility
Easement on a Portion of the Larimer County Landfill to Poudre Valley Rural Electric
Association, Inc.
Larimer County has been working for a few years on a project to reduce its carbon emissions
from the Landfill. Larimer County has developed a cooperative partnership with Timberline
Energy, LLC ("Timberline") to recover landfill gas. Last year, these parties entered into a
Landfill Gas Purchase Agreement. Under this Agreement, Timberline will install (at its
expense) a landfill gas recovery system. Timberline will then sell the recovered methane gas
and carbon credits to a commercial energy user.
Larimer County will receive a complete landfill gas recovery system at no cost to Landfill
customers and will also receive a small amount of monthly revenue and a small percentage
of the credit and gas sales. This revenue will be directly reinvested into the solid waste
program at the Landfill.
In order to construct the gas recovery facility and operate the gas recovery system,
Timberline needs electrical power to the site. Timberline is getting its electrical service from
REA. REA has requested a utility easement to lay the electrical line underground to the
facility.
20. Resolution 2009-097 Authorizing the City Manager to Enter into an Intergovernmental
Agreement for Emergency Management of Disasters Related to Broad Ranging Public Health
Emergency Incidents.
The City has a number of intergovernmental agreements with surrounding jurisdictions in
order to enable effective response to and recovery from a wide range of disaster emergencies.
This Resolution authorizes the City Manager to enter into an intergovernmental agreement
between the City, Larimer County, Poudre Valley Health District and City of Loveland to
provide for a joint response to a large scale public health emergency.
21. Resolution 2009-098 Concerning Implementation of Standards Created by Amendments to
the Public Utility Regulatory Policies Act of 1978 and Contained in the Energy Independence
and Security Act of 2007.
The Energy Independence and Security Act of 2007 (EISA) amended the Public Utility
Regulatory Policies Act of 1978 (PURPA) to create four new standards regarding integrated
resource planning, rate design modifications to promote energy efficiency investments, and
smart grid investments and information. EISA also includes a new standard to provide
incentives for recovery of industrial waste energy. EISA requires both regulated (investor -
owned) and nonregulated (municipal and rural electric cooperatives) electric utilities to
consider the standards after notice and public hearing and to make a determination on
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whether or not to implement the standards. The utility may determine that, it is not
appropriate to implement a particular standard and decline to do so as long as it sets forth its
reasons in writing and makes the writing available to the public. The Staff Report lists the
specific EISA standards and the particular practices and policies which address the standards.
Staff believes, and the Electric Board concurs, that the current electric utility practices and
policy are in compliance with the standards.
22. Routine Deed.
Quit claim deed from Kern Homes, Inc., for street purposes, located on Rule Drive, west of
South Lemay Avenue. Monetary consideration: $0.
CONSENT BUDGET ITEM
23. First Reading of Ordinance No. 111, 2009, Appropriating Downtown Development
Authority perating Funds. Debt Service Funds and Fixing the Mill Levy for Fiscal Year
2010.
This Ordinance adopts the 2010 Budget for the Downtown Development Authority (DDA)
and sets the amount of $7,577,054 to be appropriated for fiscal year 2010. This Ordinance
also sets the 2010 mill levy for the Downtown Development Authority at five mills,
unchanged since 2002.
***END CONSENT***
Ordinances on Second Reading were read by title by City Clerk Krajicek.
6. Second Reading of Ordinance No. 094, 2009, Appropriating Unanticipated Revenue in the
General Fund for Replacing Radio Network Equipment.
7. Second Reading of Ordinance No. 095, 2009, Amending Ordinance No. 136, 2007,
Assessing the Cost of Improvements in the Timberline and Prospect Special Improvement
District No. 94.
8. Second Reading of Ordinance No. 096, 2009, Appropriating Unanticipated Grant Revenue
In the Capital Projects Fund for the East Harmony Road Bridge Replacement Project.
9. Second Reading of Ordinance No. 097, 2009, Amending Various Provisions of the Fort
Collins Traffic Code.
10. Second Reading of Ordinance No. 098, 2009, Amending Section 805 of the Fort Collins
Traffic Code Related to Pedestrians Walking or Traveling in a Wheelchair on a Highway.
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Ordinances on First Reading were read by title by City Clerk Krajicek.
11. First Reading of Ordinance No. 101, 2009, Appropriating Unanticipated Revenue in the
Cultural Services Fund to be Used for the Construction of the New Museum/Discovery
Science Center Joint Facility.
12. First Reading of Ordinance No. 102, 2009, Appropriating Unanticipated Revenue from the
American Recovery and Reinvestment Act to the Transit Fund.
13. First Reading of Ordinance No. 103, 2009, Appropriating Unanticipated Grant Revenue
From the Office of the National Drug Control Policy and the U.S. Department of Justice in
the General Fund for the Northern Colorado Drug Task Force.
14. First Reading of Ordinance No. 104, 2009, Appropriating Unanticipated Grant Revenues in
the General Fund for Police Services and for the Transfer of Matching Funds Previously
Appropriated in the Police Services Operating Budget.
15. First Reading of Ordinance No. 10512009, Appropriating Prior Year Reserves and
Unanticipated Revenue in Various City Funds and Authorizing the Transfer of Appropriated
Amounts Between Funds or Projects.
16. First Reading of Ordinance No. 106, 2009, Amending Section 25-123(c) of the City Code
Relating to the Vendor Fee for Collecting and Remitting Sales Tax.
17. First Reading of Ordinance No. 108, 2009, Amending Chapter 14 of the City Code Relating
to the Landmark Rehabilitation Loan Program.
18. First Reading of Ordinance No, 109, 2009, Authorizing the Conveyance of a Non -Exclusive
Drainage Easement on the Gustav Swanson Natural Area to Urban Development Partners,
LLC.
19. First Reading of Ordinance No. 110, 2009, Authorizing the Conveyance of a Utility
Easement on a Portion of the Larimer County Landfill to Poudre Valley Rural Electric
Association, Inc.
23. First Reading of Ordinance No. 111, 2009, Appropriating Downtown Development
Authority Operating Funds, Debt Service Funds and Fixing the Mill Levy for Fiscal Year
2010.
27. First Reading of Ordinance No. 112, 2009, Being the Annual Appropriation Ordinance
Relating to the Annual Appropriations for the Fiscal Year 2010 and Adopting the Budget for
the Fiscal Years Beginning January 1, 2010 and Ending December 31, 2011, and Fixing the
Mill Levy for Fiscal Year 2010.
October 20, 2009
28. Items Relating to Utility Rates and Charges for 2010.
A. First Reading of, Ordinance No. 113, 2009, Amending Chapter 26, Article III,
Division 4 of the City Code Relating to User Rates and Charges for Water.
B. First Reading of Ordinance No. 114, 2009 Amending Chapter 26 of the City Code .
Relating to Wastewater Rates and Charges.
C. First Reading of Ordinance No. 115, 2009 Amending Chapter 26 of the City Code
to Revise Electric Rates, Fees and Charges.
D. First Reading of Ordinance No. 116, 2009, Amending Chapter 26 of the City Code
to Revise Water Plant Investment Fees.
E. First Reading of Ordinance No. 117, 2009, Amending Chapter 26 of the City Code
to Revise Sewer Plant Investment Fees.
F. First Reading of Ordinance No. 118, 2009, Amending Chapter 26 of the City Code
to Revise Electric Development Fees and Charges.
G. First Reading of Ordinance No. 119, 2009, Amending Chapter 26 of the City Code
to Revise Stormwater Plant Investment Fees.
29. Items Relating to the Riverwalk Annexation and Zoning.
A. Second Reading of Ordinance No. 099, 2009, Annexing Property Known as the
Riverwalk Annexation to the City.
B. Second Reading of Ordinance No, 100, 2009, Amending the Zoning Map of the City
of Fort Collins and Classifying for Zoning Purposes the Property Included in the
Riverwalk Annexation to the City.
Councilmember Manvel made a motion, seconded by Councilmember Poppaw, to adopt and approve
all items not withdrawn from the Consent Calendar, including the revision to Item #10. Yeas:
Hutchinson, Kottwitz, Manvel, Ohlson, Poppaw, Roy and Troxell. Nays: none.
THE MOTION CARRIED. .
Staff Reports
Mayor Hutchinson presented City Manager Atteberry with the International City Managers
Association Center for Performance Management's Certificate of Distinction.
City Manager Atteberry noted the Street Department has been selected as a 2009 Bronze level
member of the Colorado Environmental Leadership Program.
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City Manager Atteberry stated Mike Freeman, Chief Financial Officer, was recently selected as a
member of the Creative Economy Panel, a statewide effort to promote the retention and growth of
creative companies in Colorado.
Kelly DiMartino, Communication and Public Involvement Director, stated the Brewfest event will
be significantly changed for next year. A stake holder group of downtown business owners, local
brewery representatives, Downtown Business Association (DBA) board members and Police
Services met several times to develop a new strategy for Brewfest that will allow the event to
continue and reflect positively on downtown. David Short, DBA Executive Director, stated the
changes to the Brewfest event will focus on creating a beer -tasting event and not a drinking event.
The event will be a ticketed, gated event to control capacity and all the alcohol at the event will be
controlled by the DBA and professionally trained servers. Sample size will be limited to four
ounces. The food and entertainment will be upgraded to get a more local flare. Education will be
incorporated into the event. DiMartino stated Brewfest will not be held in Old Town Square but the
location has not yet been determined. The first choice is Civic Center Park because it can be
completely gated to control access.
Ordinance No.112, 2009,
Being the Annual Appropriation Ordinance Relating to the Annual Appropriations
for the Fiscal Year 2010; Adopting the Budget for the Fiscal Years Beginning
January 1, 2010, and Ending December 31, 2011; and Fixing the
Mill Lew for Fiscal Year 2010 Adopted on First Reading
The following is staffs memorandum for this item.
"FINANCIAL IMPACT
This Ordinance represents the annual appropriation for fiscal year 2010, and adopts the total City
budget for fiscal year 2010 at $508.6 million and for fiscal year 2011 at $507.3 million. This
Ordinance also sets the City mill levy at 9.797 mills, unchanged since 1991, for fiscal year 2010.
EXECUTIVE SUMMARY
The Annual Appropriation Ordinance is presented for First Reading. This Ordinance sets the City
Budget for the two-year period of 2010-2011. The approved budget becomes the City's Council
financial plan for the next two fiscal years.
BACKGROUND
This biennial budget represents the work of many dedicated individuals who came together to
participate in the budget process. Since 2005, the City has used the Budgeting for Outcomes (BFO)
process. BFO has a number ofadvantages over traditional budgeting approaches; the BFO process
helps the City meet several important goals, including:
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October 20, 2009
• Create clarity about the overall budget process for the community;
• Allocate revenues to the highest priorities and outcomes citizens want and need;
• Understand the choices for funding programs and services; and
• Emphasize staff accountability, efficiency, innovation and partnership.
Using this approach, City Council and staff worked in close collaboration over the past two months
to build a financial plan, based on revenue available, that will achieve service outcomes which
matter most to our citizens and community. This work has resulted in the development of the Final
2010-2011 Budget. The approval of the Appropriation Ordinance on First Reading represents a
major milestone in this process.
As the budget development process began in April 2009, City Council and staff met on several
occasions to outline goals and assumptions for developing the recommended budget. Council was
actively engaged in the development and approval of the seven Key Outcomes that have shaped this
budget.
Fort Collins has a healthy, sustainable
Economic Health
economy reflecting the values of our unique
community in a changing world.
Environmental Health
Fort Collins promotes, protects and enhances a
healthy and sustainable environment.
Safe Community
Fort Collins provides a safe place to live, work,
learn and play.
Neighborhood Livability
Fort Collins fosters and supports a variety of
quality neighborhoods.
Cultural and Recreational Opportunities
Fort Collins encourages and provides diverse
cultural and recreational opportunities.
Transportation
Fort Collins provides for safe and reliable
multi -modal travel to, from, and throughout the
City.
High Performing Government
Fort Collins exemplifies an efficient, innovative,
transparent, effective and collaborative city
government.
Budget Highlights
The 2010-11 Final Budget is a financial and service plan linked to the seven key outcomes and
results that matter most to Fort Collins citizens. Some key highlights of the City Budget include:
1. The total budget for all Cityfunds for 2010 is $508.6 million and $507.3 million for 2009.
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October 20, 2009
2. The budget includes no tax increase.
3. Sales and Use tax revenue accounts for approximately 55 percent of the General Fund
revenue collected annually. This tax revenue is projected to increase by I % in 2010 with a
slightly larger increase in 2011 of 2%.
4. The projected Utility rate increases for 2010 to fund operations and maintain minimum
reserves are Wastewater a 10% increase; Electric a 9.5% increase; Water a 3% increase;
and, Stormwater no increase.
5. The budget will reduce classified, unclassified, and contractual City staff by a total of 10, 20
full time equivalent positions. The estimated reduction in hourly staff is 12.45 full time
equivalent positions.
Budget Assumptions
V..B.xYrT'ac�aa!•..
Operating $460.3 $429.9 -6.6% $442.3 2.9%
Debt $27.4 $21.0 -23.4% $20.3 -3.3%
Capital
$84.8 $57.7 -32.0% $44.7 -22.5%
otaL.Cit fl=A ro riationsh�;� 5�Z2:�5�,� 508�6x���x.9;1,s2%z��,4 ��� 507.:�3a;d.'�l�it.>���0,30.
Less Internal Service -
Funds -$62.6 -$58.1 -7.2% -$58.9 1.41
Less Transfers to Other
Funds-$114.6 - 99.4 -13.3% -$99.2 -0.2°
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Some of the key assumptions used in developing the Final Budget include:
1. Limited revenue growth for 2010 and 2011
Despite the collective signs of impending recovery, the turbulent economic conditions of
2009 will likely persist into 2010. Most experts agree that the recovery will occur gradually
with sectors of the economy enduring a lasting reduction in output and employment. The
2010-2011 Budget, therefore, employs conservative assumptions of growth that reflect a
cautiously -optimistic outlook for the next two years.
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October 20, 2009
2. Use of reserves
Approximately 52.5 million in General Fund reserves was used to balance the 2010 budget
and 51.0 million in the 2011 Budget. Reserves are used primarily for one-time projects.
At its October 13 Work Session, Council gave staffdirection to include an additional amount
of resources from General Fund reserves in the Appropriation Ordinance being considered
on First Reading. By using approximately 5200, 000 in additional reserves, the balance in
the General Fund reserve accounts would remain above the recommended level of 60 days
Reserve (16. 67% of General Fund expenditures).
3. Public Safety needs, Economic Health and Environmental Health issues are funding
priorities
This budget focuses on the City Council and community priorities. In spite of limited
revenue, this budget maintains funding levels for Police and Fire Services. It also maintains
funding and provides additional staff resources (through the partnership between Natural
Areas and Utilities) for key environmental programs such as the Climate Action Plan
implementation, Climate Wise, and Utilities ofthe2lstCentury. Economic Healthprograms
are also maintained including support for economic clusters, support of the Rocky Mountain
Innovation Initiative, and the nextphase ofthe "one -stop shop "for Community Development
and Neighborhood Services.
4. Employee salary adjustments
No merit -based pay increases are budgeted for City employees in 2010.
Adjustments to the City Manager's Recommended Budget
City Council held its last budget work session on October 13, 2009. At the work session, Council
provided input and direction on budget items that fell into three categories:
1. Items now included in the budget
2. An item included in the budget needing further discussion
3. Items discussed but are not in the budget
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October 20, 2009
ITEMS INCLUDED IN THE BUDGET
RESULT AREA'OFFERTITLE
ENVIRONMENTAL HEALTH
179.4
SOLID WASTE REDUCTION AND RECYCLING:
$55,000
WASTE STREAM SYSTEM STUDY
(funded through General Fund landfill tipping fees
one time)
ENVIRONMENTAL HEALTH
Stop
RESTORATION & REDUCTION
$13,000
Doing
IN AIR QUALITY PROGRAM*
List
(fundeded by savings from Quiet Zone study
— onetime)
NEIGHBORHOOD LIVABILITY
115.1
REINSTATE CODE ENFORCEMENT POSITION*
$67,000
(funded by savingsfrom Quiet Zone study— ane time)
NEIGHBORHOOD LIVABILITY
115.6
HOURLY CODE ENFORCEMENT
$14,000
SAFE COMMUNITY
196.1
NEIGHBORHOOD TRAFFIC MITIGATION
$100,000
(funded through General Fund —one time)
TRANSPORTATION
24.2
LIQUID DE-ICER**
$25,000
(fund through General Fund reserves -- one time)
TRANSPORTATION
156.2
DIAL -A -RIDE PARATRANSIT ENHANCEMENT
$112,019
(funded through General Fund reserves — onetime)
GENERAL r TOTAL
ENVIRONMENTAL HEALTH
179.6
PILOT HOUSEHOLD HAZARDOUS WASTE ROUNDUP
$60,000
2 Times Per Year
(funded through Stormwater — one time)
TRANSPORTATION
24.4
NEIGHBORHOOD STREET SWEEPING
$100,000
- 4Times Per Year
(funded through Stormwater — ongoing)
STORMWATER FUND TOTALi
iii
TRANSPORTATION
156.3
DIAL -A -RIDE PARATRANSIT NIGHT SERVICE
$43,751
(funded through Transfort technology deferral
— one time)
TRANSPORTATION I ,
*The quiet zone rail study offer was originally funded in the City Manager's recommended budget. Staff is
recommending that those funds be used instead to reinstate the Code Enforcement positions and restore cuts from the
air quality program.
**The liquid de-icer offer is fully funded..The budget includes the incremental $25,000 that will be combined with
$80, 000 already budgeted for ice control materials for a total of $105, 000.
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October 20, 2009
Staff is seeking confirmation that City Council wishes to find these items.
ITEM INCLUDED IN THE BUDGET NEEDING FURTHER DISCUSSION
Throughout the budget deliberation process, there have been concerns expressed about the timing
offunding the Advanced Metering Infrastructure (AMI) project, given the rate impact of 2% needed
to fund it. While there have been concerns expressed about the AMI program, there have also been
discussions about how this effort is linked with the Climate Action Plan and is a significant strategy
for assisting in carbon reduction. Staff is prepared to discuss this program in more detail during
the City Council deliberation on the budget. Ultimately, staff is seeking direction on whether or not
City Council supports finding the AMI program in 2010.
Other Items Considered by City Council at its October 13, 2009 Work Session
Additionally, several Councilmembers expressed a desire for further discussion about the following
items:
1. Historic Preservation Planner Position
In order to minimize the impact of reducing one Historic Preservation planner, staff has identified
the following methods to help backfill the loss:
• Train existing staffplanners on the more routine questions
• Devote .2fte of a planning tech to perform research and administrative functions
• Look at reducing the LPC meetings from 2 per month to 1 per month
Additionally, staff is concluding a Historic Preservation Process Improvement Study that is
scheduled for the October 27, 2009 City Council Work Session. Some of the recommendations in
this study include process improvements that will produce efficiencies and assist in freeing up time.
2. Crossroads Safehouse
City Council provided direction to the City Manager to continue to seek funding alternatives for this
critical community service in lieu of including funds within the budget.
3. Affordable Housing Program
At an average subsidy of between $7,500 and $10, 000 per unit, the loss of $200, 000 in the City's
Affordable Housing Fund means a loss ofthe ability to help build/rehab between 20 to 27affordable
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October 20, 2009
housing units. Affordable Housing Fund dollars also help leverage additional financial resources
at ratios that range from 8:1 to 76:1, depending upon the type ofproject.
4. Railroad Quiet Zone Study
The City Manager's recommended budget included Sl00, 000 to conduct a quiet zone study from
Laurel Street to the southernmost boundary of the City. This offer was subsequently not funded so
that Code enforcement positions could reinstated and funds reduced for the air quality program
could be reinstated.
Conclusion
The 2010-2011 Final Budget is a sound financial plan to deliver the services we believe our citizens
value most. Due to limited resources, it does not, however, fully meet the demand for services that
citizens need and expect. However, the Budgetingfor Outcomes process has enabled us to focus and
apply the resources available to key community outcomes. Citizens will receive excellent value for
their tax dollars.
Any final amendments agreed to by Council will be included in the second (and final) reading of the
budget ordinance on November 3, 2009. By Charter, the Budget must be adopted and
appropriations for the 2010 fiscal year must be approved by November 30. "
City Manager Atteberry stated budget reductions for Fort Collins began in 2000 and 2001. Internet
sales began to rise which meant a decrease in sales tax revenue for the City. Regional retail
competition has increased dramatically in the past nine years which has also decreased the City's
sales tax revenue. A significant number of jobs related to technology have been lost in recent years.
The City made across-the-board budget cuts in the early 2000s. The Budgeting for Outcomes (BFO)
tool was first used for the 2006-2007 budget. Greater transparency in City finances and City
operations occurred with performance measurements and benchmarking against other cities.
Through the BFO process, deep and narrow cuts were made to the budget instead of broad across-
the-board budget cuts. The 2006-2007 budget contained 14 pages of "stop -doing" items; $7.2
million in spending was reduced and106 positions eliminated with 77 employees laid off from their
positions. Economic health was an area deliberately targeted with the creation of a new economic
vision, certain industries were targeted and new retail projects were pursued. A second economic
downturn occurred in 2008 with significant reduction in sales and use tax and development related
revenues. In 2009, spending was reduced by $8 million and 36.2 positions were eliminated with 4.2
employees laid off.
The proposed 2010-2011 budget is very conservative, assumes economic conditions will not worsen
and that there will be only marginal increases in economic activity. The budget reflects feedback
from the community and Council input. Police and fire services are kept at current funding levels.
Environmental programs are receiving new funding because they are a priority for Council and the
community. Current funding levels are maintained for economic health. Programs are funded that
continue to focus on improving traffic flow and traffic congestion. The Mason Corridor BRT Project
continues to be funded and will be under construction in the next two years. Reorganizations within
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October 20, 2009
various City departments will lead to greater efficiencies. The cuts made in 2009 are continued in
the 2010-2011 budget. The pavement management program has $2 million removed from the
program. Recreation and parks has significant reductions, and replacement of City vehicles,
computers and building maintenance has been delayed. Employees will not receive any merit -based
pay increases and 22.65 full-time positions have been eliminated.
No tax increases are proposed in this budget. Increased utility rates are proposed with the impact
to an average household of approximately $10 per month. The proposed budget includes a solid
waste reduction and recycling wastestream study, to be funded with one-time funds. City
departments will be charged a tipping fee to send waste to the landfill and some of those revenues
will be used to pay for the $55;000 study. Restoration of an air quality program is proposed to be
funded by savings gained through not funding Phase Two of the Railroad Quiet Zone Study. A pilot
household hazardous waste round -up event to be held twice a year will be funded with one-time
funds through stormwater funds.
The code enforcement position and a seasonal hourly, code enforcement position will be reinstated
and funded through one-time funds. Funding of $100,000 for neighborhood traffic mitigation efforts
has been added back into the budget to be funded through one-time reserve funds. The funding for
liquid deicer has been reduced significantly to $25,000 and is recommended to be funded through
one-time funds. At Council's request, neighborhood street sweeping will be increased to four times
per year, to be funded through stormwater funds. Dial -a -Ride enhancements and night service have
been reinstated in the budget through one-time reserves and by deferring one-time Transfort
technology improvements. '
Ben Blonder, 6308 South Lunar Court, co-chair of the Affordable Housing Board, stated affordable
housing is a critical component of economic health and sustainability of Fort Collins. The Board
requested additional funding of $200,000 for affordable housing because more affordable units are
needed in Fort Collins. Funds invested in affordable housing can be leveraged to greatly increase
the amount of funds available.
Mariya Weeden-Osborn, 3219 Sharps Street, United Way Pathways Past Poverty Coordinator, urged
Council to increase funding for affordable housing and not raise utility rates.
Carl Bruning, 1908 Greengate Drive, stated the camera radar system is too expensive and should be
discontinued.
Lauren Wylie, Matthews House and the Affordable Housing Coalition of Larimer County, requested
increased funding for affordable housing. The mission of the Matthews House is to support youth
in transition who are emancipating from the Department of Human Services, on parole or are trying
to live independently with no family support and more affordable housing is critical to the success
of this population to become self-supporting adults.
Leslie Paris, 1145 Wabash, Crossroads Safehouse Board member, asked for more funding for
Crossroads Safehouse to assist families in need in the area.
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October 20, 2009
Joe Valente, Fort Collins resident, Crossroads Safehouse Board member, urged Council to assist
Crossroads Safehouse because Crossroads is a first line responder in providing support, services, and
a safe environment for women and children who are victims of violence. Increased funding will
enable Crossroads to refurbish an older nursing home donated by Columbine Nursing Care Systems.
This facility would provide for services for more than three times the current number of clients.
Bill Locklear, 7925 Golden Prairie Court, Crossroads Safehouse Board member, requested funding
for Crossroads Safehouse to enable the Safehouse to assist many victims of violence that it currently
must turn away due to lack of space in its facility.
Phil Friedman, 201 South Grant Avenue, asked Council to fund the expansion of the Climatewise
Program and to increase recycling efforts to enable the city to meet its 2012 and 2020 greenhouse
gas reduction goals.
Joe Rowan, 621 Gilgalad Way, Funding Partners Executive Director, stated any increase in utility
rates will adversely affect lower income groups.
Stacy Lynne, 216 Park Street, stated $4, 445,000 has been included in the 2010 budget for rebates
on energy efficient products and services that are not scientifically proven to be energy efficient.
Funding should not be provided for art projects because are is not government business. The funds
budgeted for City employee food -related expenses should be allotted elsewhere.
Kevin Cross, 300 Peterson, Fort Collins Sustainability Group, stated the 2010 budget should be
changed to include funding for additional staff for the Climatewise Program and a new planner for
the solid waste reduction and recycling program. The Climatewise Program and increased recycling
are the two largest contributors to meeting the City's 2012 and 2020 greenhouse gas emission
reductions target.
Shane Miller, 4325 Mill Creek, asked Council to review the long-term costs of not fully'funding the
pavement management program.
Vivian Armendariz, 820 Merganser, thanked Council and the City Manager for reinstating the
funding for Dial -A -Ride. She supported funding for Crossroads Safehouse as long as Larimer
County also contributes. Meals for board and commission members should be provided.
Cheryl Distaso, 135 South Sunset, urged Council to fund affordable housing, the Climatewise
Program and Crossroads Safehouse. Funding should be moved from Police Services and downtown
landscaping to fund these programs.
Eric Sutherland, 631 LaPorte, asked that the budget for the General Fund be separated from the
Utilities budget.
Councilmember Roy asked for clarification of funding for the Climatewise Program and staff for
recycling programs. City Manager Atteberry stated the base level of funding for Climatewise is
included in the budget. Patty Bigner, Utilities Customer Relations Manager, stated one. employee
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October 20, 2009
position will now devote half- time to the Climatewise Program. Existing utility staff will undertake
more administrative support of Climatewise. Utilities is developing an energy assessment program
that will take the responsibilities of assessment currently assigned to Climatewise. These changes
will fund the budget enhancement offers for the Climatewise Program. John Stokes, Director of
Natural Resources, stated one enhancement offer was designed to fund additional staff for the solid
waste program and the sustainability program but the offer was not accepted. Two half-time
positions would have become two full-time positions for the community solid waste program and
a sustainability coordinator for the City's internal sustainability program.
Councilmember Troxell asked if the one-time use of funds will be for one or two years. City
Manager Atteberry stated the one-time funds will be for one year. Staff has proposed to change the
budget cycle so that the next two-year cycle will be 2011-2012 so the budget Council is currently
considering is primarily for 2010, with a few limited exceptions such as street sweeping.
Councilmember Troxell asked for more information on the Railroad Quiet Zone Study that will not
be funded. City Manager Atteberry stated a Quiet Zone Study,. funded by the Downtown
Development Authority, has been completed in the downtown area. Phase Two of the Quiet Zone
Study would have been from Laurel Street south to the South Transit Center. Staff will search for
federal funds to fund this study. Funding for this study will be considered at a later date.
Councilmember Ohlson asked what current resources are being used to promote construction
recycling, commercial recycling and multi -family recycling and if any staff support for recycling has
been reduced. Stokes stated no reductions in staff support for recycling have occurred in 2008 or
2009. New construction of multi -family housing is required. to provide space for recycling but no
other requirements are currently in place to require commercial or construction recycling. Currently,
1.5 staff positions support recycling programs.
Councilmember Ohlson asked for clarification on the amount of funding proposed for rebates for
energy efficient appliances. Bigner stated historically, Utilities has allowed $85,000 for appliance
rebates and the 2010 budget has $328,000 for rebates. The total budget for rebates is $1.65 million
for appliances, lighting, home efficiency and weatherization, and small and large commercial
improvements. The funding is completely from City funds. The 2010 budget also includes $1
million from Platte River to help fund improved efficiencies with the large industrial customers. The
rebate program is designed to reduce the city's energy demand, which reduces the carbon footprint.
Councilmember Ohlson asked for the amount spent on flowers for the downtown area and a
clarification of Art in Public Places dedicated funding. Marty Heffernan, Director of Culture, Parks,
Recreation and Environment, stated the cost of landscaping the downtown area is $90,000. The City
has a partnership with the Downtown Development Authority (DDA) that allows the DDA to
provide flowers and maintenance in Old Town Square. The DDA contributes $114,000 for those
flowers and maintenance of Old Town Square. The DDA spent about $100,000 on flower pots,
equipment and other one-time costs associated with the landscaping of the downtown area. City
Manager Atteberry stated Funding for Art in Public Places is derived from City capital projects with
1% is set aside for art projects. The art project is chosen by a citizen board and Council approves
each project. The funds are designated for art and cannot be diverted for another purpose.
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October 20, 2009
Councilmember Ohlson asked for an update on the efforts to provide funding for Crossroads
Safehouse. City Manager Atteberry stated the request from Crossroads Safehouse for $500,000 did
not go through the BFO process. The City owns the current facility occupied by Crossroads and has
looked into the possibility of selling the current facility and making the proceeds of the sale available
for investment into the new Crossroads facility. He will meet with the Loveland City Manager, the
town managers of Windsor and Estes Park and the County Manager to discuss their financial
participation in this critical program that benefits the region. Diane Jones, Deputy City Manager,
stated the facility occupied by Crossroads Safehouse was purchased with CDBG funds, which places
conditions on any sale of the property. The City will be required to repay the CDBG funds upon sale
of the property. The building will be required to be used for a purpose that meets a CDBG national
objective for ten years after the sale. Staff is reviewing other options, such as utilizing funds from
the spring or fall competitive process for CDBG funds. Council policy currently sets the priority for
those funds on affordable housing. Some of the CDBG funds can be used for public facilities.
Council action would be necessary to reprioritize the CDBG funds.
Councilmember Manvel asked why the CDBG funds used to purchase the Crossroads facility cannot
be transferred to another facility for the same use. Deputy City Manager Jones stated staff is
pursuing the possibility of a transfer of funds but has not received any exception to the requirement
that the CDBG funds be repaid if the current facility is sold.
Councilmember Manvel asked for more information about the use of affordable housing funds and
the ability to leverage those funds into many times the amount of funding the City could provide.
Joe Frank, Advance Planning Director, stated $200,000 would subsidize between 20 to 27 affordable
housing units. The funds can be leveraged into many times that amount with non -city funds. For
2010, the City will most likely receive about $1 million in federal funds for affordable housing, even
without the amount that has been reduced. The Affordable Housing Needs and Strategies Report
is currently being updated and that Report helps to set the priorities of Council.
Councilmember Poppaw stated the reduction in the budget for affordable housing will impact
funding for tenant -based rental assistance. Frank stated tenant based rental assistance is a program
to provide rent assistance to low-income people for up to two years. The HOME Program can be
used for tenant -based rental assistance. CDBG funds cannot be used for tenant -based rental
assistance but can be used for emergency rental assistance up to 90 days. The affordable housing
fund has no federal requirements attached to the funds and has greater flexibility.
Councilmember Poppaw stated the City should provide more funding for rental assistance. Frank
stated the 2009 fall competitive cycle has been completed and the two requests for funding for
tenant -based rental assistance were funded completely with HOME funds.
Councilmember Poppaw noted the funds allocated for tenant -based rental assistance are dedicated
to the Community Dual Disorders Treatment Program and cannot be used for Crossroads clients.
There are many unmet needs for rental assistance.
Councilmember Kottwitz asked if the camera radar program was self-sufficient. City Manager
Atteberry stated the program is not funded by the City.
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October 20, 2009
Councilmember Kottwitz noted the City is not reducing its current funding for Crossroads Safehouse
and she asked if Council could choose to award extra funding to Crossroads at a later date. City
Manager Atteberry stated the City has provided funding for Crossroads since 1979. Council could
always choose to appropriate reserves or make cuts in other areas to provide funding for Crossroads.
Councilmember Kottwitz asked if the $1.6 million budget for utility rebates is funded by utility rates.
City Manager Atteberry stated the rebates are funded by ratepayers and are not provided from the
General Fund. Those dollars cannot be used to fund Police Services or other General Fund services.
Councilmember Roy asked what else the current building occupied by Crossroads Safehouse could
be used for to meet CDBG standards. Deputy City Manager Jones stated the property is zoned NCM
and could be used by other programs supported by HUD or CDBG. Frank.stated the NCM zoning
is neighborhood conservation, medium density for multi -family dwellings. A complete appraisal is
necessary of the building and site to determine any future uses. Steve Dush, Current Planning
Director, stated the NCM zoning allows residential units, up to four units in a structure, and a variety
of community and civic uses such as a child care or adult respite center could be placed on the site.
("Secretary's note: The Council took a brief recess at this point in the meeting.)
Councilmember Roy stated the pavement management program saves the community money and
prevents future problems and it is appropriate to use reserve funds for the. program. He asked if
bonding has been considered as one way to fund the pavement management program. Mike Freeman,
Chief Financial Officer, stated bonds are typically issued when a guaranteed stream of revenue is
available to repay the bonds. The General Fund and the Transportation Fund have decreased
revenues and bonding is not a practical solution to funding the pavement management program.
There is no dedicated revenue stream to repay the bond debt.. Reserve funds are available to use for
the program. .
Councilmember Manvel noted the proposed budget contains $7 million for pavement management
which is about half of the amount needed to fully fund the program for one year. Investment in
pavement management is necessary to prevent costly road replacement at a later date. Spending
reserves for pavement management is a good investment for the future. Jeff Scheick, Director of
Planning, Development and Transportation, stated the pavement management program has been
reduced this year from $10.2 million to $7.7 million to cover some revenue shortfalls in the 2009
budget. Erika Keeton, Pavement Management Program Manager, stated investing $2 million in
reserve funds will provide benefit many years into the future by preventing 31 miles of roadway from
deteriorating into a failing condition in 10 years time, compared to $26 million to replace 31 miles
of roadway. It would take about $14 million in funding each year to maintain the. City's roads.
Mayor Hutchinson asked what the consequences would be if an increase in funding for the pavement
management program were delayed for one year. Scheick stated a one-year delay will not
dramatically change the outcome.
Councilmember Ohlson asked for clarification of the long-term savings the City would see if the
decision is made to invest another $2 million in.pavement management. Scheick stated maintaining
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October 20, 2009
the roadway helps to avoid major repairs and replacement. A certain amount of pavement will go
into failed condition within the next 10 years, if $2 million is not invested this next year. Freeman
stated some economic indicators show the downturn in the economy is lessening and that next year
should be a better year for revenues for the City. Using $2 million of the $5 million in reserves may
not be the best use of reserves because the economic turnaround could take a full year to occur.
Councilmember Manvel noted the amount of funding for pavement management for 2011 could be
far less than the 2010 budget, if the economic turnaround does.not occur. He asked what amount
of funding is dedicated to pavement management. Keeton stated $5.5 million is voter -approved
dedicated funding for pavement management.
Councilmember Ohlson asked if using reserves for pavement management would be a wise course
of action. Freeman stated staff is not recommending the use of reserves for pavement management.
Councilmember Poppaw asked if the price of materials was expected to increase in 2010. Freeman
stated little, if any, price increase is expected because of the downturn in the construction industry.
City Manager Atteberry stated pavement management is an ongoing service and he did not support
the use of reserves for an ongoing service. If $2 million is not spent over the next 10 years, the
impact will be $26 million to replace aging pavement. Delaying additional funding to the pavement
management program for one or two years will not significantly increase costs in years to come. The
negative impact of continuing underfunding pavement management will be felt ten and fifteen years
from now. '
Councilmember Roy asked where $2 million in reserves might be spent if it is not used for pavement
management. City Manager Atteberry state he recommended not allocating the reserves for any area
at this time. Council will consider the 2011-2012 budget next year and if revenues are significantly
lower than projections, reserves will need to be used at that time or services will need to be cut
further.
Councilmember Ohlson asked why the use of $5.7 million in reserves used for the RMI2 project did
not raise as many concerns with staff as the use of $2 million for pavement management. Freeman
stated the funds for the RMI2 project were loaned to the URA and $2.8 million will be repaid at the
end of 2010.
Councilmember Kottwitz asked how much is budgeted for food for Council and staff per year. City
Manager Atteberry stated the information would be provided to Council. Meals for boards and
commissions are a significant part of the food budget.
Councilmember Roy made a motion, seconded by Councilmember Troxell, to adopt Ordinance No.
112, 2009, on First Reading.
Councilmember Roy made a motion, seconded by Councilmember Kottwitz, to amend Ordinance
No. 112, 2009, on First Reading to remove the Advanced Metering Infrastructure (AMI) Program
from the budget.
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October 20, 2009
Councilmember Troxell stated AMI and the ability of end users to see their energy usage will create
up to a 10% savings in energy costs. Steve Catanach, Light and Power Operations Manager, stated
one study shows customers achieve up to an 11 % decrease in energy usage with smart meters that
provide feedback information on individual household energy use. The installation of AMI meters
will take approximately two years.
Councilmember Troxell stated only 2% of the proposed electric rate increase is for the AMI program
and the benefits of consumer savings and reduction in peak load usage will outweigh the increase
in rates. AMI will assist end -use consumers in energy savings and will provide an infrastructure to
enable the City to achieve more energy efficiencies. He supported leaving the funding for AMI in
the 2010 budget.
Mayor Hutchinson asked what other options are available to fund AMI. Catanach stated some
communities use rate recovery and other communities borrow funds and repay the debt with rate
recovery. Using bonds to finance AMI could be an option because interest rates are very low at this
time.
Councilmember Manvel stated even though rates would increase in the short term to put AMI into
place, customers would see lower increases in rates in future years. The average household electric
rate would be raised by $1 per month if the AMI program is included in the budget. The cost to use
bonds to finance the project is high and is not a good use of bonds. AMI will provide savings in
rates and lowered consumption which will help the City meet its environmental and climate goals.
Councilmember Kottwitz stated this year is not the year for a rate increase. Other utility rate
increases are also proposed and the AMI program costs should not be added into those increases.
She did not support the rate increase to fund the AMI program.
Councilmember Poppaw asked what savings residents will see with the installation of smart meters.
Catanach stated the City will have a high initial capital investment to install the AMI system. The
benefits from reduced operating costs will occur once the system is in place in 2012. It will take
approximately 10 years to recoup the high initial capital investment. After 10 years, the cost
reductions become positive in the estimated range of $5 million to $9 million of positive return over
the following five years, which means the $21 million cost of the system plus an additional $30
million of benefits over the 30 year span of the system. AMI will not necessarily reduce costs but
avoids future expenses. It is difficult to estimate the dollar amount of savings to customers because
any savings is dependent on what customers do with the information provided by the AMI system.
Councilmember Poppaw asked how issuing bonds to pay for the AMI system would affect future
benefits. City Manager Atteberry asked Council delay the discussion on borrowing funds to pay for
the AMI program and if the AMI program can be accomplished without a rate increase until Second
Reading of the Ordinance.
Councilmember Poppaw made a motion, seconded by Councilmember Manvel, to postpone the
motion to remove the Advanced Metering Infrastructure (AMI) Program from the budget until
Second Reading on November 3, 2009, to give staff time to provide more information on the use of
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October 20, 2009
bonds for the AMI program. Yeas: Hutchinson, Kottwitz, Manvel, Poppaw, Roy and Troxell.
Nays: Ohlson.
THE MOTION CARRIED.
Councilmember Poppaw made a motion, seconded by Councilmember Roy, to amend Ordinance No.
112, 2009 to add $75,000 to the Affordable Housing Fund.
Councilmember Manvel asked if the funds would come from reserves. City Manager Atteberry
stated staff will examine the possibility of one-time cuts and the impact of using one-time reserve
funds for this addition.
Councilmember Troxell stated affordable housing is important to the community but a broader
discussion is necessary to determine the causes of higher cost of housing. The amendment does not
address the cause of high rents and the lack of affordable housing in Fort Collins.
Councilmember Kottwitz stated reserves should not be used for affordable housing and the funds
should instead come from the funds budgeted for restoration of the air quality program and the code
enforcement position.
Councilmember Poppaw asked if the amendment should state the source of the funds requested.
City Manager Atteberry stated the $133,000 remaining in the affordable housing fund are ongoing
dollars and the $200,000 recommended reduction was in one-time dollars. Council input is helpful
in making the decision about the source of the funds. He will return to Council with
recommendations for the source of additional funding.
Mayor Hutchinson stated the City Manager can provide a recommendation on the source of
additional funding by Second Reading.
Councilmember Manvel stated utility rates will also be increasing and the additional funds proposed
for affordable housing will assist the least fortunate in the community. He supported the
amendment.
Councilmember Poppaw stated the additional funds for the affordable housing fund will aid the most
needy in the community. Affordable housing assistance is a high priority for Council.
Councilmember Troxell made a motion, seconded by Councilmember Kottwitz, to use the Council
and staff food budget funding to offset the additional funding proposed for the affordable housing
fund.
Mayor Hutchinson asked for the amount of the Council food budget. Freeman stated the Council
food budget for 2010 is $22,000. The total food budget is $350,000 and about half is probably for
boards and commissions.
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October 20, 2009
Mayor Hutchinson stated the City Manager should be allowed to determine other sources for the
I
roposed affordable housing funds.
Councilmember Poppaw stated she did not support any determination of funding sources at this time
and the City Manager should be allowed to bring his recommendations on funding back to Council.
Councilmember Ohlson stated board and commission members volunteer their time and give many
hours for the benefit of the City. Providing meals to volunteers seems a small repayment for the
donation of so many volunteer hours. Staff is frequently working after hours at events that involve
citizens and are provided a meal as part of working public events. Councilmembers are provided
dinner before Council meetings which begin at 6 p.m. The food budget has been trimmed to the bare
minimum and no further cuts should be considered.
The vote on the motion to use the Council and staff food budget funding to offset the additional
funding proposed for the affordable housing fund was as follows: Yeas: Kottwitz, Troxell. Nays:
Hutchinson, Manvel, Ohlson, Poppaw, Roy.
THE MOTION FAILED.
Councilmember Roy stated affordable housing is not funded at sufficient levels and adding more
money to the affordable housing fund will help some of the most vulnerable in the community.
Councilmember Poppaw stated $167,000 is currently budgeted for the Community Dual Disorder
Treatment Program for tenant -based rental assistance. Administrative costs are budgeted at $40,000.
Frank stated $113,890 per year is budgeted for affordable housing for 2010 and 2011 with $60,000
budgeted each year for administrative costs.
The vote on the motion to add $75,000 to the Affordable Housing Fund was as follows: Yeas:
Hutchinson, Kottwitz, Manvel, Ohlson, Poppaw, Roy. Nays: Troxell.
THE MOTION CARRIED.
Councilmember Roy made a motion to amend Ordinance No. 112, 2009 to add $350,000 to assist
Crossroads Safehouse. The motion was denied for lack of a second.
THE MOTION FAILED.
Councilmember Poppaw made a motion, seconded by Councilmember Roy, to amend Ordinance No.
112, 2009, to use $2 million in reserves for the pavement management program.
Mayor Hutchinson noted staff will provide Council with more information regarding any
consequences of delaying more funding for the pavement management program.
Councilmember Poppaw withdrew the motion.
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October 20, 2009
Councilmember Ohlson stated Crossroads Safehouse provides a needed service to the community and
staff must work with federal CDBG officials to determine a way to allow the proceeds of the sale of
the current Crossroads facility to be used for its new facility. If no method can be found to allow the
transfer of funds from one property to another, Council should then consider using reserves to assist
Crossroads. Other communities in the region should also be contributing to this service.
City Attorney Roy clarified the two amendments to the original motion deferred the decision to be
made about AMI until Second Reading and added $75,000 to the affordable housing budget with the
funding source to be determined.
The vote on the motion to adopt Ordinance No. 112, 2009, as amended, was as follows: Yeas:
Hutchinson, Kottwitz, Manvel, Ohlson, Poppaw, Roy and Troxell. Nays: none.
..
THE MOTION CARRIED.
Extension of the Meeting
Councilmember Manvel made a motion, seconded by Councilmember Poppaw, to extend the meeting
past 10:30 p.m. Yeas: Hutchinson, Manvel, Ohlson, Poppaw, Roy. Nays: Kottwitz, Troxell.
THE MOTION CARRIED.
Items Relating to Utility Rates and Charges for 2010 Adopted on First Reading
The following is staff s memorandum for this item.
"FINANCIAL IMPACT
The rate Ordinances are projected to increase the annual operating revenues of the Wastewater Fund
by 10%, the Water Fund by 3%, and the Light and Power Fund by 9.5 %. There are no rate increases
to stormwater monthly rates. The combined utilityfees for a typical single family residence during
the high usage summer months will increase 59.95 per month.
Proposed water, wastewater and stormwater plant investment fees (PIFs) are updated to reflect a
new customer's impact on the system and maintain existing customers' equity in the system.
Proposed electric development fees and charges cover costs of new commercial and residential
development. The financial impacts vary by the size and nature of the development. If the proposed
fees are adopted, water, wastewater and stormwater plant investment fees, and electric development
fees and charges will increase. The combined utility development fees for atypical single family
residence (exclusive of raw water requirements which are not changing) will increase from $10, 696
to 511, 509 or 7.6%.
The proposed fees will be effective January 1, 2010.
EXECUTIVE SUMMARY
435
October 20, 2009
A. First Reading of Ordinance No. 113, 2009, Amending Chapter 26, Article III, Division 4 of
the City Code Relating to User Rates and Charges for Water.
B. First Reading of Ordinance No. 114, 2009 Amending Chapter 26 of the City Code Relating
to Wastewater Rates and Charges.
C. First Reading of Ordinance No. H5, 2009 Amending Chapter 26 of the City Code to Revise
Electric Rates, Fees and Charges.
D. First Reading of Ordinance No. 116, 2009, Amending Chapter 26 of the City Code to Revise
Water Plant Investment Fees.
E. First Reading of Ordinance No. 117, 2009, Amending Chapter 26 of the City Code to Revise
Sewer Plant Investment Fees.
F First Reading of Ordinance No. 118, 2009, Amending Chapter 26 of the City Code to Revise
Electric Development Fees and Charges.
G. First Reading of Ordinance No. 119, 2009, Amending Chapter 26 of the City Code to Revise
Stormwater Plant Investment Fees.
Three Ordinances (A, B & C) establish monthly water, wastewater and electric rates.
Four Ordinances (D, E, F, & G) adopt revised water, sewer and stormwater plant investment fees
and electric development fees. The fees are one-time charges paid by developers or builders for the
cost of the utility infrastructure needed to serve new development. Per Council direction, plant
investmentfees are reviewed on an annual basis and revised during the biennial budget cycle. Plant
investment fees (PIFs) for water, wastewater and stormwater were last updated with the 2008-2009
budget. Electric development fees and charges are updated annually.
BACKGROUND
PLANT INVESTMENT FEES (PIFs)
WATER PLANT INVESTMENT FEES
The water plant investment fees are developed to recover the current value of past investment and
the current value of future growth -related investment through 2040. This method includes
calculating net water system equity, capacity units, and determining the net system equity per unit
as follows:
1. The water system assets are valued at replacement cost adjusted by the construction
cost index as published by Engineering News Record.
436
October 20, 2009
2. The net system equity is determined by subtracting outstanding debt principal from
total replacement costs and adding projected growth related to capital improvement
projects.
3. The result is divided by the future total plant capacity to determine unit cost.
The investment in plant increased only slightly compared to the prior study. Residential and multi-
family usage characteristics remain unchanged, resulting in no recommended increase in PIFs for
2010. Commercial use characteristics increased, resulting in higher PIF charges for 2010.
The following schedule details PIFs for the various customer classes.
WATER PLANT INVESTMENT FEES BY CUSTOMER CLASS
Customer Class/Meter Size
2009 PIFs
2010 Pro used
Peak Day
Usage ( d)
Current
Charge
Peak Day
Usage ( d)
Proposed
Charge
Change
Residential. -
Single Family
Inside Use
191
$ 730
191
$ 730
0%
Outside Use - $/S . Ft.
864
$ 0.36
864
$ 0.36
0%
Mulli-Famil (per unit)
Inside Use
133
$ 490
133
$ 490
0%
Outside Use - $/S . Ft.
263
$ 0.27
263
$ 0.27
0%
Non -Residential (meter size)
J/ inch
1,730
$ 6,970
1,850
$ 7,530
8.0%
]inch
5,110
$ 20,590
5,340
$ 21,730
5.5%
1 % inch
10,300
$ 41,510
11,130
$ 45,300
9.1%
2 inch
16,210
$ 65,330
16,970
$ 69,070
5.7%
3 inch
35,370
$142,540
38,800
$157,920
10.8%
> than 3 inches
Based on specific customer requirements
*differences due to rounding
The impact to a typical single family residence remains at the 2009 rate of S3, 826 (8,600 sq. ft. lot).
• . WASTEWATER PLANT INVESTMENT FEES
The wastewater plant investment fees are developed using a similar method to the water PIFs, by
assessing new customers based on an allocation of the costs of the existingfacilities and the projected
growth -related improvements. While the gallons per day treated decreased slightlyfor most customer
classes, the increased investment in plant resulted in increased PIFs for each customer class for
2010.
The proposed fees are shown in the following tables:
437
October 20, 2009
WASTEWATER PLANT INVESTMENT FEES
Customer Class/Meter Size
Existing 2009
Pro osed 2010
Volume
Current
Charge
Volume
Proposed
Charge
Change
G d
G d
Single Family
321
$ 3,194
300
$ 3,550
11.1
Multi-Family/Per Unit
208
$ 2,069
210
$ 2,490
20.3%
Non -Residential (meter size)
'14 inch
624
$
6,206
600
$ 7,100
14.4%
1 inch
1,644
$
16,361
1,510
$ 17,880
9.3%
1 % inch
2,854
$
28,396
2,660
$ 31,490
10.9%
2 inch
5,122
$
50, 963
4,670
$ 55,290
8.5
3 inch
l2,209
$121,48 .
4
12,680
$150,130
23.6%
4 inch and above assessed on individual basis
Wastewater plant investment fees for atypical single-family residence in 2010 would increase from
$3,194 to $3, 550, or H.1 %.
STORMWA TER PLANT INVESTMENT FEES
Plant investment fees for stormwater are adopted on a citywide basis. All new development must
provide on -site detention as specified in the master plan. Regional elements are sized to handle
existing f ows and to work in coordination with on -site detention in new developments. Stormwater
PIFs pay for a developer's proportionate share of the system infrastructure as it exists at the time
they develop.
The unit of measure used to allocate the value of the existing system between new customers and
existing customers is acres of developed land, adjusted with a runoff coefficient (a measure of how
water runs off various surfaces). Proposed development fees are calculated by dividing the value of
the current system, less outstanding debt, by the total acres of land (existing developed and
developable) in the service area. This number is then adjusted by the average runofffor the system.
The result is the unit value of the existing system per acre of developed land.
Stormwater Plant Investment Fee
2009
2010
Current
Proposed
Change
Fees
Fees
$4 420
$6 313
'42.8
The significant increase in fees is due to the large investments in stormwater infrastructure over the
last few years. A typical single family residential stormwater PIF would increase from $749 to
$1, 069, or $320.
438
October 20, 2009
ELECTRIC PLANT INVESTMENT FEES
Electric development charges include the allocated and actual costs to the utilityfor each commercial
or residential development. The two components of these charges are the Electric Capacity Fee for
the off -site electric system, and the Building Site Charge for the on -site electric costs. The electric
development charges are typically increased annually to adjust for inflation and cost increases.
Increases average from I % for residential and 1.9% for commercial development in 2010.
The following tables compare current fees with proposed fees for residential and commercial
development for customer electric loads served by the utility where the Utility owns the transformer:
ELECTRIC DEVELOPMENT FEES AND CHARGES - RESIDENTIAL
Cate oty
Charre
2009
2010
% Inc
Per square foot
$0, 04919
$0.04968
1.0%
Per lineal front foot
$9.77
$9.90
1.3%
n
150 amp Single
rn w
Family (Non Elec
= a�
Heat)
$1,262
$1,278
1.3%
20 amp Single
U0
Electric
Family (& Elec
Capacity Fee*
Heat 150 am
$2,143
$2,165
1.0%
150 amp Multi -
Family (Non Elec
Heat)
$842
$852
1.2%
200 amp Multi -
Family (& Elec
Heat 150 am
$1,505
$l 520
1.0%
Building Site
Secondary
1/0
$658
$666
1.2%
Charges
Service
4/0
$817
$823 1
0.7%
ELECTRIC DEVELOPMENT FEES & CHARGES
COMMERCIAL
Calegmy
Charge
2009
Existing
2010
Proposed
%
Change
Per square foot
$0.04919
$0.04968
1 %
Per lineal frontfoot
$37.64
$38.20
1
Electric
Capacity Fee*
Service
Entrance
(per 100
amps) Utility
Owned
Transformers
208V I - ph
$1,202
$1,238
3%
240V ]-ph
$1,386
$1,429
3%
208V3- h
$2,081
$2,145
3%
240V3- h
$2,401
$2,475
3%
1 480V3- h
$4,803
$4,950
3%
Building Site
Primary Circuit l phase
$8.90
$8.90
0%
Charges
Primary Circuit phase
$19.12
$19.00
-1%
Transformer Install / phase
$1 257
$1 317
5%
Transformer Install 3 phase
$2 335
$2 409
3%
*Qility Owned Transformer
439
October 20, 2009
The impact to a typical single family residence (8,600 sq. ft. lot, 150 amp service) is an increase of
$37 from $3, 027 to $3, 064, or 1 %.
In addition, when the customer owns the transformer, the proposed kVA service charge is reduced
by $10. l0per kilovolt -amp (kVA) ofservice load ratingfor electric capacityfeesfor customer electric
loads served by the utility. Proposed revisions to code language also identify the applicable kVA
service charge for the utility to receive customer generation in excess of the customer's electric
service provided by the utility. Since the Utilities do notprovide substation capacityfor this customer
owned generation, the kVA service charges are reduced by $11.24 per WA.
SUMMARY OF PIF CHANGES AND COMPARISONS
The following table shows the overall impact of the proposed Plant Investment Fees and Electric
Development Charges on a typical single family residence.
Impact on Single Family Residential
Current
2009
Proposed
2010
Change
Water*
$ 3,826
$ 3,826
0.0%
$ 0
Raw Water**
$ 5,203
$ 5,203
0.0%
$ 0
Wastewater
$ 3,194
$ 3,550
11.1 %
$ 356
Stormwater***
$ 749
$ 1,069
43.0%
$ 320
Electric*
$ 3,027
1 $ 3,064
1 1.0%
$ 37
Total
$15,999
1 $ 16,712
1 4.6%
$ 713
*Typical, based on lot size of 8,600 sq. ft., 70 foot frontage, 150 amp service
**No increase for Raw Water
***8, 600 sq. ft. lot plus estimated 6, 156 sp. ft common area and right-of-way, light runoff coefficient
Comparison to other utilities is difficult due to differences in customer use patterns, the unique
capital needs of each utility, and different policy direction from governing bodies. The question of
how Fort Collins Utilities compare to other area utilities often arises. The graph below compares
water, wastewater, and stormwater PIFs and raw water requirements for a single family residence
for some neighboring communities.
*Assumptions and data sources:
a. Building Type: Single Family Residential
b. Building Square Footage: 2,200 sq. ft.
c. Dwelling units: 1
d. Lot Size: 8,600 sq. ft, (Stormwater at 14,756 sq. ft. gross)
e. Water Tap Size: 114 " residential
f Does not include the cost of tap and meter fees or development review fees
g. Data obtained from city web sites and/or staff of each city.
Note: Greeley drainage fees vary by basin. High is $704, Low is $69, Median is $280, Mean is $227. Raw water is
dedicated prior to development.
MONTHLY RATES
..R
October 20, 2009
The City contracted with Red Oak Consulting to conduct a cost of service study for the water and
wastewater rates. Cost ofservice is a process to determine a customer class's proportionate share
of a utility system's annual costs. Best practices within the water utility industry recommend
performing cost ofservice analysis on a regular basis to ensure proper cost recovery from the various
rate classes.
Water Rates
Ordinance No. 113, 2009, proposes to increase the water utilityfund's revenue by 3%. The increase
includes a cost ofservice adjustment and varies by customer class. With the proposed rate, a typical
single family residential customer's monthly bill will increase from $60.90 to $63.22 or $2.32 per
month in 2010. This is based on atypical single family residential summer usage of 21, 000 gallons.
During lower use in the winter (5,000 gallons per month), the average bill will increase
approximately $0.86. The rate increase is needed to generate revenues to fund capital replacement
projects. The chart below shows the impact of the cost of service adjustments to the proposed rate
increase by customer class:
WATER UTILITY
Customer
Class
2010
Proposed Revenue
Adjustment
Cost of Service
Adjustment
Proposed(1)
Rate Increase by
Customer Class
Residential
3.0%
0.8%
3.8%
Duplex/Multi-
family
3.0%
(2.9)%
0.0%
Commercial
3.0%
(1. 3)%
1.7%
(1) Adjustments are cumulative
Wastewater Rates
'Ordinance No. 114, 2009, proposes to increase wastewater revenue by 10%.. The increase includes
a cost of service adjustment and varies by customer class. With the proposed rate, a typical single
family residential customer's monthly bill will increase from $24.48 to $27.28 or $2.80 per month
in 2010. This is based on a system average of 5,200 gallons per month winter quarter average
(WQA) water use. Council approved monthly wastewater rate increases in 2008 and 2009 at 12%
and 11 %, respectively, to fund wastewater operations and meet the increase in long-term debt service
obligations for a major capital project to replace the tricklingfilter, make odor control improvements
and prepare for future regulation -based improvements at the Mulberry facility. A 9% increase is
proposed for 2011 and 8% in 2012 to maintain.reserve requirements, meet debt service, and continue
operations and maintenance functions. The following table shows the impact of the wastewater cost
of service adjustment by customer class:
WASTEWATER UTILITY
441
October 20, 2009
Customer Class
2010
Proposed Revenue
Adjustment
Cost of Service
Adjustment
Proposed (1)
Rate Increase by
Customer Class
Residential
10.0%
1.30%
11.5%
Duplex/Multifamily
10.0%
(20)%
9.80%
Commercial
10.0%
(2.5) %
7.30%
(1) Adjustments are cumulative
Electric Rates
The Utilities are proposing an electric rate increase of 9.5% in 2010 for all customer classes and
8. 6% in 2011. The rate increase is made up of the following components.
Recommended Retail Electric
Rate Increase
2010
2011 '
Purchase Power
4.79%
4.71 %
Purchase Power — Renewables
0.82%
0.00%
Energy Services
1.81 %
1.81
Advanced Metering Infrastructure (AMI)
2.08%
2.08%
Total Electric Rate Increase
1 9.50%
1 8.60%
Platte River's increases are due to several factors:
• Capital investments S335 million over tenyears: transmission approximately $149million,
production approximately $179 million, general at approximately $7 million (cost of
materials is increasing, underground transmission).
• Craig coal costs have increased.
• Reserve requirements increasing.
• Xcel Energy is beginning to charge for ancillary services.
• Surplus sales are decreasing (the margin from surplus sales subsidizes the rate to the
municipalities) as municipal energy consumption increases.
• Interest income has decreased due to lower interest rates.
Platte River's wholesale premium charge for renewable energy will increase from $0.012 per kWh
to $0.019 per kWh. The increase is due primarily to increasing the amount of generation plant
compared to renewable energy credits as directed by Platte River's Board approved, Renewable
Policy. This increases Fort Collins annual cost to purchase renewable energy by $708, 000 per year.
The Energy Services increase will fund additional conservation programs and customer initiatives
to support Energy Policy goals.
The Advance Metering Infrastructure (AMI) project is estimated to cost $21.5 million, with Light and
Power's share at $17.5 million. In order to fund the AMI project and keep reserves at minimum
442 .
October 20, 2009
policy levels, a 2.08% rate increase in retail electric rates is required for both 2010 and 2011. Each
2.08% rate increase is projected to generate approximately $1.66 million of revenue per year - not
the full cost of the project. AMI will also be fimded through depletion of the reserves. While long
term savings from the A1VII project are projected,. the initial cash flows require a rate increase to
maintain reserves at minimal levels over the next five years. Federal stimulus funding is also being
pursued and, if obtained, the rate impact would be reduced.
Electric Rate Options
The chart below provides Council with the projected rate increases given the following
considerations:
Option .1 - 9.501o, Recommended Budget
Option 2 - 7.42%, Budget without AMI
Electric Rate Options for 2010
Cost for 700 kWh -
Residential Rate
$ Increase
from 2009
% Increase
from 2009
2009 Rate
$50.66
Option I - 9.5%
$55.48
$4.82
9.5%
Option 2 - 7.42%
$54.43
$3.77
7.4%
The Electric Rate Ordinance included in the recommendation is based on Option 1.
Monthly Rate Summary
The following table summarizes the impact of the proposed rate increases on a typical single family
residential customer's monthly utility bill. In total, a "typical " customer's summer bill will increase
$9.94 per month.
Typical Residential Customer - nthlV Uti!! Bill
Current
Proposed
$
%
2009
2010
Increase
Increase
Electric
700 kWh per month
$ 50.66
$ 55.48
$4.82
9.5%
Wastewater
5,200 gallons/month
$
winter quarter use
24-48
$ 27.28
$2.80
11.5%
Stormwater
8,600 s . t. lot, light runoff
$ 14.26
$ 14.26
$0.00
0%
Water
January 5,000 gallons
$ 22.56
$ 23.43
$0.86
3.8%
July 2 1, 000 gallons
$ 60.90
$ 63.22
$2.32
3.8%
Total January Month! Utility Bill
$111.96 1
$120.45
$8.49
7.6%
Total JulvAlonfitIV Utifitv Bill
$150.30 1
$160.24
$9.94
6.6%
443
October 20, 2009
Customers can reduce their monthly bills through conservation. A 10% reduction in usages for
a typical residential customer would impact their monthly utility bill as follows:
Typical Residential Customer - Monthly Utility Bill
(With and Without 10% Reduction in Use)
Current
Proposed
$
%
Proposed
$ Increase
% ncrease
2009
2010
Increase
Increase
2010
(Decrease)
(Decrease)
from
from
from 2009
from 2009
2009
2009
No change in use
10% reduction in use*
Electric
700 kWh per
month
$50.66
$55.48
$4.82
9.5%
$50.36
$0.30
-0.6%
Wastewater
5,200
gallons/month
winter quarter
use W A
$24.48
$27.28
$2.80
11.5%
$25.91
$1.43
5.9%
Stormwater
8,600 sq.ft. lot,
light runoff
$14.26
$14.26
$0.00
0.0%
$14.26
$0.00
0.0%
Water
January - 5,000
gallons
$22.56
1 $23.43
$0.86
3.8%
$22.40
$0.16
-0.7%
July - 21,000
gallons
$60.90
$63.22
$2.32
3.8%
$57.55
($3.36)
-5.8%
Total January Mo.
Utility Bill
$111:96
$120.45
$8.49
7.6%
$112.94
$0.98
0.9%
Total July Monthly
Utilitv Bill
$150.30
$160.24
1 $9.95
6.6%
$148.08
$2.22
-1.5%
* 10% reduction in
use:
Electric 630 kWh per month
Wastewater 4,680 Winter Quarter Gal/Mo
Water: January 4,500 gallons, July 18,900 gallons
No change to Stormwater
Terri Bryant, Utilities Finance/Budget Manager, stated electric rates are proposed to be increased by
9.5%, which includes funding for the Advanced Metering Infrastructure (AMI) program. Water and
wastewater rates include a revenue adjustment and a cost of service adjustment. A cost of service
adjustment is an adjustment that identifies and defines the cost shifts between customer classes. The
rate increases applied to water and wastewater will vary by customer class. The water revenue
adjustment is 3%, which translates into a 3.8% increase for residential class. Wastewater revenue
adjustment will be 10%, which translates into 11.5% increase for residential class. No monthly rate
increases are proposed for sormwater. The utility rates for Fort Collins are average when compared
E]
October 20, 2009
to other communities along the Front Range. Water, wastewater and stormwater plant investment
fees are reviewed annually and are revised biennially during the budget process. These fees are
related to the impact of new customers on the City's systems. Electric development fees are also
reviewed annually and revised, as needed. The fees recover allocated and direct costs related to
development. The City is below average in its plant investment fees when compared to other cities
along the Front Range.
Eric Sutherland, 631 LaPorte, urged Council not to vote for AMI because it will not save utility
customers any money. Public notice of the proposed rate increase was not given correctly.
Shane Miller, 4325 Mill Creek, asked if the electric rate structure will be changed with the installation
of the AMI program in order to achieve savings to motivate people to conserve more energy and what
the yearly return on investment will be if AMI is installed this year or next year.
City Attorney Roy stated Council can consider removing the rate increase for AMI without being
required to give another 30 days notice of a different rate increase. The state law requiring the Utility
to give 30 days notice of a hearing on rate increases applies only to out -of -city customers. Under the
state constitution, neither the Public Utilities Commission or the state legislature has the authority to
regulate municipally owned utilities to the extent that they are providing electric service to customers
within the city. The City, as a home -ruled municipality, by law, has the authority to regulate its own
municipally -owned utility to the extent it operates within its jurisdictional limits. The City follows
its Charter with regard to notices and publications for in -city customers.
Councilmember Manvel asked if the wastewater rates should include a flat rate as well as metered
rate. Bryant stated the flat rate is a carry-over from previous years and could be removed for Second
Reading.
Councilmember Manvel asked for clarification of the difference in wastewater rates for duplexes and
larger, multi -family buildings. Bryant stated the larger, multi -family buildings have a lower base rate
because the cost of service study showed multi -family dwellings were overpaying and should have
lower rates. Duplexes are considered in the residential category and are charged a higher rate.
Councilmember Roy asked if the price of technology for AMI will decrease in the near future. Steve
Catanach, Light and Power Operations Manager, stated the Department of Energy has projected that
by 2012, 52 million smart meters will be installed across the country. It is likely that prices for the
meters will stay stable or possibly decrease with the pressure of competition. The meter price will
probably not decrease in the next year or two.
Councilmember Roy asked what rate structures were in place in other locations where AMI meters
have been installed, what savings the City would see if AMI is put into place in the next year and if
any grant funds will be lost if Council decides not to proceed with AMI this year.
Mayor Hutchinson noted staff will provide the answer to those questions before Second Reading of
the electric rate ordinance.
October 20, 2009
Councilmember Ohlson asked why wastewater rates have increased 50% over the past five years and
why better planning did not occur to spread the increase over a longer period of time. Brian Janonis,
Utilities Executive Director, stated staff planned to replace the trickling filter at the Mulberry
Wastewater Treatment Plant in 2020, but the filter failed in 2002 due to an illegal dumping of
materials. Rebuilding the trickling filter and upgrading the Mulberry Plant is now underway. Utilities
is currently undertaking an asset management program to determine future capital projects for the
next 40 years or more by examining the expected life of the infrastructure and replacement in a timely
fashion.
Councilmember Ohlson asked why plant investment fees had not been raised for three years. Bryant
stated when plant investment fees were updated for the 2006-2007 budget cycle, wastewater plant
investment fees were high and the decision was made to phase those fees in over a three-year period.
The plant investment fees are updated and revised along with the budgeting process on a biennial
basis. Electric fees are revised annually. Water, wastewater and stormwater fees are revised with the
budget.
Councilmember Ohlson asked the wastewater rates are much higher in Fort Collins than other cities
in Colorado. Bryant stated the wastewater fees have increased primarily due to the debt service
incurred for the Mulberry Plant. Janonis stated the City is upgrading a wastewater treatment plant
and other cities may not be at the point of needing to upgrade yet.
Councilmember Manvel asked why the water rates in Loveland are lower than Fort Collins or
Colorado Springs. Janonis stated Loveland is close to reaching plant capacity and will probably need
to do a substantial upgrade in the near future. Colorado Springs is in a major capital improvement
project and has a projected rate increase for 2010 of 10%, with 12% increase per year until 2016.
Councilmember Roy made a motion, seconded by Councilmember Manvel, to adopt Ordinance No.
113, 2009, on First Reading. Yeas: Hutchinson, Kottwitz, Manvel, Ohlson, Poppaw, Roy and
Troxell. Nays: none.
THE MOTION CARRIED.
Councilmember Manvel made a motion, seconded by Councilmember Roy, to adopt Ordinance No.
114, 2009, on First Reading. Yeas: Hutchinson, Kottwitz, Manvel, Ohlson, Poppaw, Roy and
Troxell. Nays: none.
THE MOTION CARRIED.
Councilmember Roy made a motion, seconded by Councilmember Manvel, to adopt Ordinance No.
115, 2009, on First Reading with the understanding that the City Manager will bring forward
additional information regarding the removal of AMI from the rate increase to be considered on
Second Reading. Yeas: Hutchinson, Kottwitz, Manvel, Ohlson, Poppaw, Roy and Troxell. Nays:
none.
THE MOTION CARRIED.
October 20, 2009
Councilmember Roy made a motion, seconded by Councilmember Manvel, to adopt Ordinance No.
116, 2009, on First Reading. Yeas: Hutchinson, Kottwitz, Manvel, Ohlson, Poppaw, Roy and
Troxell. Nays: none.
THE MOTION CARRIED.
Councilmember Manvel made a motion, seconded by Councilmember Roy, to adopt Ordinance No.
117, 2009, on First Reading. Yeas: Hutchinson, Kottwitz, Manvel, Ohlson, Poppaw, Roy and
Troxell. Nays: none.
THE MOTION CARRIED
Councilmember Roy made a motion, seconded by Councilmember Manvel, to adopt Ordinance No.
118, 2009, on First Reading. Yeas: Hutchinson, Kottwitz, Manvel, Ohlson, Poppaw, Roy and
Troxell. Nays: none.
THE MOTION CARRIED.
Councilmember Manvel made a motion, seconded by Councilmember Roy, to adopt Ordinance No.
119, 2009, on First Reading. Yeas: Hutchinson, Kottwitz, Manvel, Ohlson, Poppaw, Roy and
Troxell. Nays: none.
THE MOTION CARRIED.
City Manager Atteberry thanked Terri Bryant for her work with Utilities and noted she has accepted
a new position with the City of Greenwood Village.
City Manager Atteberry suggested postponement of pulled Item # 15 First Reading of Ordinance No.
105, 2009, Appropriating Prior Year Reserves and Unanticipated Revenue in Various CityFunds and
Authorizing the Transfer of Appropriated Amounts Between Funds or Projects and Item #21
Resolution 2009-098 Concerning Implementation ofStandards Created by Amendments to the Public
Utility Regulatory Policies Act of 1978 and Contained in the Energy Independence and Security Act
of 2007. Pulled Item #19, First Reading of Ordinance No. 110, 2009, Authorizing the Conveyance
of a Utility Easement on a Portion of the Larimer County Landfill to Poudre Valley Rural Electric
Association, Inc. is time -sensitive and needs to be considered now. The Urban Renewal Authority
meeting needs to go forward to accommodate the applicant's time table. The General Improvement
District No. 1 meeting should go forward.
City Attorney Roy noted it is Council's prerogative to postpone consideration of any items on an
agenda.
Suspension of Rules
Councilmember Roy made a motion, seconded by Councilmember Poppaw, to suspend the rules and
extend the meeting past 12:00 a.m.
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October 20, 2009
Councilmember Troxell stated he did not support a suspension of the rules because good decisions
are not made at such a late hour and public participation is limited.
Councilmember Ohlson stated extending the meeting past 12:00 a.m. is not good governance and
should not be allowed unless Council is dealing with an emergency situation.
Councilmember Roy stated the items needing Council consideration need to be addressed and Council
should complete consideration of the items on the agenda.
Councilmember Poppaw stated she did not support extending the meeting past 12:00 a.m. because
good decisions are not made at such a late hour.
The vote on the motion was as follows: Yeas: Hutchinson, Manvel, Roy. Nays: Kottwitz, Ohlson,
Poppaw, Troxell.
THE MOTION FAILED.
Ordinance No. 110, 2009,
Authorizing the Conveyance of a Utility Easement on a Portion
of the Larimer County Landfill to Poudre Valley
Rural Electric Association, Inc., Adopted on First Reading
The following is staff's memorandum for this item.
"EXECUTIVE SUMMARY
Larimer County has been working for a few years on a project to reduce its carbon emissions from
the Landfill. Larimer County has developed a cooperative partnership with Timberline Energy, LLC
("Timberline') to recover landfill gas. Last year; these parties entered into a Landfill. Gas Purchase
Agreement. Under this Agreement, Timberline will install (at.its expense) a landfill gas recovery
system. Timberline will then sell the recovered methane gas and carbon credits to a commercial
energy user.
Larimer County will receive a complete landfill gas recovery system at no cost to Landfill customers
and will also receive a small amount of monthly revenue and a small percentage of the credit and gas
sales. This revenue will be directly reinvested into the solid waste program at the Landfill.
In order to construct the gas recovery facility and operate the gas recovery system, Timberline needs
electrical power to the site. Timberline is getting its electrical service from REA. REA has requested
a utility easement to lay the electrical line underground to the facility.
BACKGROUND
The Larimer County Landfill is located at 5887 South Taft Hill Road. The southern half is owned
solely by Larimer County. Ownership of the northern half of the property is divided three ways: City
October 20, 2009
of Fort Collins has 50% ownership; City of Loveland has 25% ownership; and Larimer County has
the remaining 25% ownership. Under an Intergovernmental Agreement between the City of Fort
Collins, the City of Loveland, and Larimer County, Larimer County is the operating manager of the
Landfill.
As the operating manger of the Landfill, Larimer County entered into a Landfill Gas Purchase
Agreement with Timberline for the County's Landfill Gas Project. The goal of this project is to
create a complete landfill gas recovery system for the Landfill. Currently, the Landfill vents the
methane gas directly into the atmosphere. Under this Agreement, Timberline will operate a facility
at the Landfill to collect the methane gas. Once collected, Timberline will sell the gas, to be used to
generate electricity, and carbon credits to a commercial user in the area.
The location of the gas recovery facility and equipment is in the north half of Section 9, of which the
City has 50% ownership. Timberline needs electric service for its landfill gas facility. REA is
installing the electrical line to the new facility. In order to install this electrical line, REA has
requested an easementfrom all three owners. The new electrical line will be installed underground"
City Manager Atteberry noted a fee of $1000 has been charged by the City to cover the cost of the
work done by Real Estate Services but no fee has been charged for the easement itself. The City of
Loveland did not charge a fee because its Real Estate Services Department is funded through its
General Fund while the City's Real Estate Services is a fee -for -service model.
Eric Sutherland, 631 LaPorte, requested Council waive the fee charged by Real Estate Services
because the project will help the City accomplish some of its climate action goals. The interpretation
of the notification of rate increase by the City Attorney is incorrect and Council should not proceed
with any consideration of the rate increase until 30 days notice is provided to all utility customers.
City Attorney Roy clarified that the City Charter does not require that the rate schedule be published
seven days before Second Reading. The Charter requires that the Ordinance, as approved on First
Reading, be published by title only seven days before Second Reading. The full text of the Ordinance
as it was proposed to the Council has been available on the City's website and will continue to be
available.
Councilmember Troxell asked if the above -ground power line that crosses Cathy Fromme Prairie will
be the feed for the project and when the power line will be undergrounded. Helen Matson, Real
Estate Services Manager, stated the easement for the power line was granted quite a while ago and
no process is underway to require the placement of the power line underground. Steve Catanach,
Light and Power Operations Manager, stated the power line is most likely the feed for the project.
Councilmember Troxell asked what steps have been taken to have the power line placed underground.
Catanach stated the City has no ability to require Poudre Valley REA place the power line
underground. The City could pay for the undergrounding but the cost would be high. The above
ground lines located in the Southwest Annexation area will be placed underground in the future. City
Manager Atteberry noted the City places power lines underground as properties are annexed into the
City limits.
11BU
October 20, 2009
Councilmember Roy made a motion, seconded by Councilmember Poppaw, to adopt Ordinance No.
1105 2009 on First Reading. Yeas: Hutchinson, Kottwitz, Manvel, Ohlson, Poppaw, Roy and
Troxell. Nays: none.
THE MOTION CARRIED.
Adjournment,
Councilmember Manvel made a motion, seconded by Councilmember Troxell to adjourn the meeting
to 6:00 p.m., October 27, 2009, to consider Item # 15, Item # 15 First Reading of Ordinance No. 105,
2009, Appropriating Prior Year Reserves and Unanticipated Revenue in Various City Funds and
Authorizing the Transfer of Appropriated Amounts Between Funds or Projects and Item #21
Resolution 2009-098 Concerning Implementation of Standards Created by Amendments to the Public
Utility Regulatory Policies Act of 1978 and Contained in the Energy Independence and Security Act
of 2007 and Item 929 Items Relating to the Riverwalk Annexation and Zoning, and any other
business. Yeas: Hutchinson, Kottwitz, Manvel, Ohlson, Poppaw, Roy and Troxell. Nays: none.
THE MOTION CARRIED.
The meeting adjourned at 12:05 a.m.
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