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HomeMy WebLinkAboutMINUTES-11/03/2009-RegularNovember 3, 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, November 3, 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 Edmund Robert, 1923 Linden Ridge Drive, .thanked City staff for the public outreach on the Mountain Vista Subarea Plan adoption. The Plan did not address a solution to solve the congestion at North Lemay and Vine Drives. Eric Kronwall, 1613 Bamwood Drive, stated the three -unrelated ordinance has created many challenging situations for landlords who may not be aware of the City regulations. Stacy Lynne, 216 Park Street, stated concerns with the process used to place on -street bicycle racks in the downtown area. Bruce Lockhart, 2500 East Harmony, expressed concerns with the number of emptybuildings in Fort Collins. He did not agree with ending the vendor fee rebates. Citizen Participation Follow-up Councilmember Manvel stated the downtown bicycle racks are used by residents who shop in the downtown area and encouraged more residents to ride bicycles. Councilmember Troxell asked what process was used to review on -street bicycle racks and if there are plans for more racks. Councilmember Ohlson stated the downtown bicycle racks were installed with corporate sponsorship and he did not support the use of corporate labels for public projects. City Manager Atteberry stated the process to approve the on -street bicycle racks is under evaluation. The decision to enclose a parking space is an administrative decision and does not require Council action. 470 November 3, 2009 Agenda Review City Manager Atteberry stated there were no changes to the published agenda and that Item #16 Public Hearing and First Reading of Ordinance No., 2009, Amending City Code Relating to Utility Billing Errors is a public hearing. Eric Sutherland, 631 LaPorte, pulled Item. #10 Second 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 #16 Public Hearing and First Reading of Ordinance No., 2009, Amending City Code Relating to Utility Billing Errors. Stacy Lynne, 216 Park Street, pulled Item #7 Second Reading of Ordinance No. 102, 2009, Appropriating Unanticipated Revenue from the American Recovery and Reinvestment Act to the Transit Fund and Item #15 First Reading of Ordinance No. 120, 2009, Appropriating Unanticipated Revenue in the General Fund for the Natural Resources Energy Efficiency Community Block Grant. Councilmember Ohlson pulled Item #20 Resolution 2009- Finding Substantial Compliance and Initiating Annexation Proceedings for the Fossil Creek 392 Annexation. CONSENT CALENDAR CONSENT NON -BUDGET ITEMS 6. Second 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 has received a donation of $88,966 from the Isabelle (Judy) Arnold Trust designated for the Fort Collins Museum. This Ordinance, unanimously adopted on First Reading on October 20, 2009, appropriates that donation in the Building on Basics (BOB) Fort Collins Museum/Discovery Science Center Joint Facility Project. 7. Second Reading of Ordinance No. 102, 2009, Appropriating Unanticipated Revenue from the American Recovery and Reinvestment Act to the Transit Fund. This Ordinance, unanimously adopted on First Reading on October 20, 2009, appropriates funds received from the American Recovery and Investment Act of 2009 (ARRA) to purchase six NABI 40-foot Low Floor Compressed Natural Gas (CNG) replacement buses and several Proximity Card Readers in 2009. 8. Second 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. :yfl November 3, 2009 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. This Ordinance, unanimously adopted on First Reading on October 20, 2009 appropriates these funds. 9. Second 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. This Ordinance, unanimously adopted on First Reading on October 20, 2009, appropriates funds from a grant in the amount of $30,000 received from the Colorado Division of Criminal Justice, Juvenile Accountability Block Grant, for the continuation of Restorative Justice Services, which includes The RESTORE program for shoplifting offenses and Restorative Justice Conferencing Program (RJCP) for all other offenses. 10. Second 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 was unanimously adopted on First Reading on October 27, 2009. 11. Second 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. This Ordinance, unanimously adopted on First Reading on October 20, 2009, eliminates 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. This change will not increase taxes or fees charged, but rather eliminates 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. 12. Second Reading of Ordinance No. 108, 2009, Amending Chapter 14 of the City Code Relating to the Landmark Rehabilitation Loan Program. This Ordinance, unanimously adopted on First Reading on October 20, 2009, amends the Landmark Rehabilitation Loan Program to increase the loan funding amounts from a maximum of $5,000 to a maximum of $7,500. It also removes provisions related to the 472 November 3, 2009 application review schedule to allow for a more flexible, semi-annual competitive application review process. 13. Second 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"). This Ordinance, unanimously adopted on First Reading on October 20, 2009, authorizes the conveyance of a drainage easement across the Natural Area to allow for stormwater flows in case of storm events larger than a 100-year flood event. 14. Second 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 entered into a Landfill Gas Purchase Agreement with Timberline Energy, LLC for the County's Landfill Gas Project. The goal of this project is to create a complete landfill gas recovery system for the Landfill. 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. Timberline needs electric service for its landfill gas facility, to be provided by Poudre Valley Rural Electric Association, Inc. This Ordinance, unanimously adopted on First Reading on October 20, 2009, authorizes the conveyance of an easement to. REA to lay an electrical line underground at the Larimer County Landfill. 15. First Reading of Ordinance No. 120, 2009, Appropriating Unanticipated Revenue in the General Fund for the Natural Resources Energy Efficiency Community Block Grant. This Ordinance appropriates $1,307,900, received by the City under a Energy Efficiency and Conservation Block Grant (EECBG) Program. 16. Public Hearing and First Reading of Ordinance No. , 2009, Amending City Code Relating to Utility Billing Errors. This Ordinance codifies the Utilities' current administrative policy which addresses utility billing errors. When a customer is overcharged, the Utilities will refund the customer the overcharge for a period not to exceed six years from the time the error is discovered. If a customer is undercharged for services received, the Utility will not back bill the customer, however, should a customer have known about the error and failed to bring the error to the Utilities attention, the customer will be held accountable for the charges for up to six years. No interest will be paid or collected. 473 November 3, 2009 17. First Reading of Ordinance No. , 2009, Repealing Ordinance No. 007, 1975 Relating to the Security of Buildings and Businesses in the City. This Ordinance repeals Ordinance No. 007, 1975, which is now obsolete. Ordinance No. 007,1975 required the Police Department to maintain a register of all commercial buildings and businesses in the city, including emergency contact information for a designated representative for each business and building, and compelled property and business owners to cooperate by providing information. Currently, such information is gathered and maintained by the Poudre Fire Authority as a part of its building inspection program. 18. First Reading of Ordinance No. ,2009, Adopting a Fee Schedule for Grandview and Roselawn Cemeteries and Amending the Rules and Regulations Governing_ Grandview and Roselawn Cemeteries to add the Fee Schedule. This Ordinance amends the Rules and Regulations governing Grandview and Roselawn Cemeteries to add a list of the amounts of fees for 2010 and 2011, and to specify that in future years fees will be increased based on the Denver -Boulder -Greeley Consumer Price Index for all Urban Consumers (CPI-U). If in any year the CPI-U does not increase, fees will remain unchanged for the year. Cemetery fees include not just the cost to purchase a right of interment and the perpetual care fees, but also charges for such services as opening and closing graves, and setting memorials or plaques. The Cemetery Rules and Regulations state that the perpetual care fee and cemetery service charges will be set by the City Council. Rather than bring a resolution to the City Council each time a change in fees is desired, staff would like to have the Council amend the Cemetery Rules and Regulations to state the amounts of all fees and charges, and then have those amounts automatically increase annually based on the CPI-U. In the past, the fees were increased based on a survey taken by the Cemetery. The data was derived from cemeteries along the Front Range, including private and municipal. 19. First Reading of Ordinance No., 2009, Amending the Zoning map of the City of Fort Collins by changing the zoning classification for that certain real property known as the Mountain Vista Subarea Plan Rezoning. This Ordinance is a follow-up implementation action to the September 15, 2009 City Council Hearing adopting the 2009 update of the Mountain Vista Subarea Plan (Plan). In conjunction with this proposed rezoning, the Neighborhood Sign District map is being amended. Concurrent with the adoption of the update to the Plan on September 15, an amendment to the City Structure Plan was adopted to reflect the recommendations from the Plan. The proposed rezoning changes will be consistent with the City Structure Plan. The rezoning involves six areas within the subarea. These involve adjustments to the size and location of Industrial, Employment, Community Commercial, Medium Density. Mixed -Use Neighborhoods, Low Density Mixed -Use Neighborhoods, and Transition Zone Districts. 474 November 3, 2009 The total combined proposed rezoning acreage within the subarea is less than 640 acres, which requires this quasi-judicial hearing process as defined in the Land Use Code. 20. Resolution 2009- Finding Substantial Compliance and Initiating Annexation Proceedings for the Fossil Creek 392 Annexation. The applicant, Larry Gilleland, for the property owners, VPD 392 LLC and Peter Prato, has submitted a written petition requesting annexation of 28.9 acres located on the south side of Carpenter Road (County Road 32), at the southwest corner of Interstate 25 & Carpenter Road. The property is undeveloped and is in the AP - Airport District in Larimer County. The requested zoning for this annexation is C - Commercial. The surrounding properties are currently zoned POL — Public Open Lands in the City to the north, C — Commercial and T — Tourist in Larimer County to the north, AP - Airport in Larimer County to the west and south, and C - Commercial in the Town of Windsor to the east. 21. Resolution 2009- Adoptingthe he City's 2010 Legislative Polio eg nda. Each year the Legislative Review Committee (LRC) develops a legislative agenda to assist in the analysis of pending legislation. The Legislative Policy Agenda is used as a guide by Council members and staff to determine positions on pending legislation and as a general reference for our state legislators and congressional delegation. 22. Second Reading of Ordinance No. 111, 2009, Appropriating Downtown Development Authority Operating Funds, Debt Service Funds and Fixing the Mill Levy for Fiscal Year 2010. This Ordinance, unanimously adopted on First Reading on October 20, 2009, 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. 23. Items Relating to Utility Rates and Charges for 2010. A. Second 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. Second Reading of Ordinance No. 114, 2009 Amending Chapter 26 of the City Code Relating to Wastewater Rates and Charges. C. Second Reading of Ordinance No. 116, 2009, Amending Chapter 26 of the City Code to Revise Water Plant Investment Fees. 475 November 3, 2009 D. Second Reading of Ordinance No. 117, 2009, Amending Chapter 26 of the City Code to Revise Sewer Plant Investment Fees. E. Second Reading of Ordinance No. 118, 2009, Amending Chapter 26 of the City Code to Revise Electric Development Fees and Charges. F. Second Reading of Ordinance No. 119, 2009, Amending Chapter 26 of the City Code to Revise Stormwater Plant Investment Fees. Ordinance No.113 and 114, 2009 establish monthly water and wastewater rates. Ordinances No. 116 through No. 119, 2009, 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 investment fees 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. These Ordinances were unanimously adopted on First Reading on October 20, 2009. 24. First Reading of Ordinance No. 2009, Authorizing the Appropriation of 2010 Fiscal Year Operating and Capital Improvement Funds for the Fort Collins -Loveland Municipal Airport. The 2010 annual operating budget for the Airport totals $711,600, and will be funded from Airport operating revenues, contributions from the Cities of Fort Collins and Loveland ($85,000 from each city), and interest earnings. This Ordinance appropriates the City of Fort Collins' contribution, which is a 50% share of the 2010 Airport budget and totals $355,800. This Ordinance also appropriates the City of Fort Collins' 501/o share of capital funds, totaling $608,500 for the Airport from federal and state grants; contributions from Fort Collins and Loveland; and the Airport General Fund. The 2010 Airport capital funds, totaling $1,217,000, will be used to continue runway improvements. 25. Resolution 2009- Adopting a Revenue Allocation Formula to Define the City of Fort Collins' Contribution to the Poudre Fire Authority Budget for the Year 2010 for Operations and Maintenance. This Resolution establishes a Revenue Allocation Formula between the City of Fort Collins and the Poudre Fire Authority to contribute funding for maintenance and operating costs of Poudre Fire Authority. ***END CONSENT*** Ordinances on Second Reading were read by title by City Clerk Krajicek. 6. Second 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. 476 November 3, 2009 7. Second Reading of Ordinance No. 102, 2009, Appropriating Unanticipated Revenue from the American Recovery and Reinvestment Act to the Transit Fund. 8. Second 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. 9. Second 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. 10. Second 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. 11. Second 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. 12. Second Reading of Ordinance No. 108, 2009, Amending Chapter 14 of the City Code Relating to the Landmark Rehabilitation Loan Program. 13. Second 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. 14. Second 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. 22. Second Reading of Ordinance No. 111, 2009, Appropriating Downtown Development Authority Operating Funds, Debt Service Funds and Fixing the Mill Levy for Fiscal Year 2010. 23. Items Relating to Utility Rates and Charges for 2010. A. Second 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. Second Reading of Ordinance No. 114, 2009 Amending Chapter 26 of the City Code Relating to Wastewater Rates and Charges. C. Second Reading of Ordinance No. 116, 2009, Amending Chapter 26 of the City Code to Revise Water Plant Investment Fees. 477 November 3, 2009 D. Second Reading of Ordinance No. 117, 2009, Amending Chapter 26 of the City Code to Revise Sewer Plant Investment Fees. E. Second Reading of Ordinance No. 118, 2009, Amending Chapter 26 of the City Code to Revise Electric Development Fees and Charges. F. Second Reading of Ordinance No. 119,2009, Amending Chapter 26 of the City Code to Revise Stormwater Plant Investment Fees. 29. Second Reading of 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 Levy for Fiscal Year 2010. 30. Hearing and Second Reading of Ordinance No. 115, 2009 Amending Chapter 26 of the City Code to Revise Electric Rates, Fees and Charges. - Ordinances on First Reading were read by title by City Clerk Krajicek. 15. First Reading of Ordinance No. 120, 2009, Appropriating Unanticipated Revenue in the General Fund for the Natural Resources Energy Efficiency Community Block Grant. 16. Public Hearing and First Reading of Ordinance No. 121, 2009, Amending Chapter 26 Article XII of the City Code Relating to Utility Billing Errors. 17. First Reading of Ordinance No. 122, 2009, Repealing Ordinance No. 007, 1975, Relating to the Security of Buildings and Businesses in the City. 18. First Reading of Ordinance No. 123, 2009, Adopting a Fee Schedule for Grandview and Roselawn Cemeteries and Amending the Rules and Regulations Governing Grandview and Roselawn Cemeteries to Add the Fee Schedule. 19. First Reading of Ordinance No. 124, 2009, Amending the Zoning Map of the City of Fort Collins by Changing the Zoning Classification for that Certain Real Property Known as the Mountain Vista Subarea Plan Rezoning. 24. First Reading of Ordinance No. 125, 2009, Authorizing the Appropriation of 2010 Fiscal Year Operating and Capital Improvement Funds for the Fort Collins -Loveland Municipal Airport. Councilmember Roy made a motion, seconded by Councilmember Manvel, to adopt and approve all items not withdrawn from the Consent Calendar. Yeas: Hutchinson, Kottwitz, Manvel, Ohlson, Poppaw, Roy and Troxell. Nays: none. THE MOTION CARRIED. November 3, 2009 Consent Calendar Follow-up Councilmember Troxell asked for the status of undergrounding the power line on Cathy Fromme Prairie. Steve Catanach, Light and Power Operations Manager, stated Poudre Valley REA will be responsible for undergrounding the power line and the time table to place the power line underground is unknown. The power line could be quickly undergrounded if the City was willing to pay the costs. Councilmember Roy asked for the cost of undergrounding the Cathy Fromme Prairie power line. Councilmember Troxell stated ending the vender fee rebates will create a hardship for small businesses. Staff Reports City Manager Atteberry noted the recent snow storm dumped almost two feet of snow on the city and was well -managed by the Streets Department, with 13,638 miles of streets plowed. City Manager Atteberry stated a multi -agency DUI sobriety saturation patrol occurred on October 30th to reduce the number of intoxicated and impaired motorists being involved in collisions and resulted in 85 arrests. Councilmember Reports The Mayor stated the Platte River Power Authority Board discussed the possibility of a citizens' advisory board composed of citizens from the four member cities. The City's Electric Board should be consulted for suggestions on ways to improve citizen involvement. 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 Levy for Fiscal Year 2010, Adotated on Second Reading The following is staff s memorandum for this item. "EXECUTIVE SUMMARY The AnnualAppropriation Ordinance ispresentedfor SecondReading. 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 nest two fiscal years. 11IIM November 3, 2009 FINANCIAL IMPACTS This Ordinance represents the annual appropriation for fiscal year 2010, and adopts the total City budget for fiscal year 2010 at $497.9 million and for fiscal year 2011 at $497.8 million. This Ordinance also sets the City mill levy at 9.797 mills, unchanged since 1991, for fiscal year 2010. BACKGROUND Please note that the only changes are to add $75,000 for Affordable Housing and remove $10, 759, 455 for AML 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 BFOprocess helps the City meet several important goals, including: • 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 Collinspromotes, 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. M'1 November 3, 2009 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 citi=ens. Some key highlights of the City Budget include: 1. The total budgetfor all Cityfiinds for 2010 is $508.6 million and $497.9 million and $497.8 million for 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 1 % 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 7.4% increase; Water a 3% increase; and, Stormwater no increase. November 3, 2009 otal. Ci 'A ro nations $572.5 :$508.6_ :. ' -1.1:2% $507 3 . ... 0.3° Less Internal Service Funds $62.6 -$58.1 -7.2% -$58.9 1.4% Less Trans ers to Other Funds -$114.6 -$99.4 -13.3% -$99.2 -0.29 7V6r Czrv`RzzrloPt <: 53.95 3 .351 1 :. 11:2% .. -�349 2= _ -0.5° Total Budget (in millions) 2009 2010 % Change 2011 Chan e Operating $460.7 $430.9 -6.5% $442.7 2.7% Debt $27.5 $21.3 -22.5% $21.1 -0.9% Capital $84.8 $45.7 -46.1 % $34.0 -25.6% Total City Appropriations $573.0 $497.9 -13.1 % $497.8 0.0% Less Internal Service Funds -$62.6 -$58.1 -7.2% -$58.9 1.4% Less Transfers to Other Funds -$114.6 -$97.7 -14.7% -$99.1 1.4% Net Citv Budget $395.8 $342.1 -13.6% $339.8 -0.7% 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 ofgrowth that reflect a cautiously -optimistic outlook for the next two years. 2. Use of reserves Approximately $2.5 million in General Fund reserves was used to balance the 2010 budget and $1.0 million in the 2011 Budget. Reserves are used primarily for one-time projects. J November 3, 2009 At its October 13 Work Session, Council gave staff direction 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 ofthe 21st Century. Economic Health programs are also maintained including supportfor economic clusters, support of the Rocky Mountain Innovation Initiative, and the next phase of the "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 483 November 3, 2009 ITEMS INCLUDED IN THE BUDGET RESULT AREA ' OFFER TITLE1 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;0Ot1 Doing IN AIR QUALITY PROGRAM* $8,000 (funded by savings from Quiet Zone study List — one time) NEIGHBORHOOD LIVABILITY 115.1 REINSTATE CODE ENFORCEMENT POSITION* $67,000 (funded by savings from Quiet Zone study — one time) NEIGHBORHOOD LIVABILITY 115.6 HOURLY CODE ENFORCEMENT $14,000 NEIGHBORHOOD LIVABILITY 116.4 AFFORDABLE HOUSING + $75,000 I 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 —one time) TOTALGENERAL FUND i 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 - 4 Times Per Year (funded through Stormwater — ongoing) STORMWATER i i iii TRANSPORTATION 156.3 DIAL -A -RIDE PARATRANSIT NIGHT SERVICE $43.751 (funded through Transfort technology deferral — one time) TRANSPORTATIONi *The quiet zone rail study offer was originally funded in the CityManager'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. Further, between first and second reading, staff identified savings that resulted in an increase of only $8, 000 for the Air Quality Program for 2010. "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. Other Items Considered by City Council at its October 13, 2009 Work Session Additionally, several Council members expressed a desire forfurther discussion about thefollowing item November 3, 2009 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 staff planners 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 seekfunding 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 of the ability to help build/rehab between 20 to 27 affordable 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 of project. Please note that between first and second reading of the budget, the majority of the City Council requested that an additional $75,000 be added to the offer. 4. Railroad Quiet Zone Study The City Manager's recommended budget included $100,000 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. 5. Advanced Metering Infrastructure (AM!) Given City Council's sensitivity to the rate increase forAMI and the viability ofdebt financing, staff recommends that City Council not consider AM[ as part of the budget ordinance and direct the City Manager to come back with a proposal to formally consider debt financing for the AM[project. Staff expects that we can present a debt financing proposal in December. At Council's direction, any proposal that staff considers will not be dependent on an additional rate increase for AMI in 2010. 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 November 3, 2009 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 mz�st be adopted and appropriations for the 2010 fiscal year must be approved by November 30. City Manager Atteberry gave an overview of the process used to develop the 2010-2011 budget. The budget does include solid waste recycling and the wastestream study, restoration of the air quality program, a pilot program to encourage households to recycle hazardous waste, reinstatement of a code enforcement position, neighborhood traffic mitigation, a liquid deicer facility, and more neighborhood street sweeping. Tess Heffernan, Policy and Project Manager, stated the request from Crossroads Safehouse has been considered by staff. One possible solution is to sell the current Safehouse and give the equity to Crossroads. The building appraisal is underway. A certain amount of the sale funds must be refunded to CDBG, but the amount is not yet known. The City is working to secure a waiver of the repayment of CDBG funds, but the process is very complex and takes about six months. Another option would be for Crossroads to apply and compete in the 2010 CDBG competitive process which starts in the spring. The funds would not be available until October. Federal funds have strict requirements that would greatly increase the cost of rehabilitating the new facility. The City Manager is also reviewing other revenue streams to what other funds might be found. Steve Catanach, Light and Power Operations Manager, stated the City has received a grant from the Department of Energy through the American Recovery and Reinvestment Act for development of a smart grid (AMI). The total grant awarded through the City is $18.1 million and the City will receive $15.4 million of those grant funds.' The City partnered with Loveland, Longmont and Fountain to apply for the federal grant. Staff recommends the AMI project not be funded in the budget because the grant will pay for a large portion of the project. Diane Jones, Deputy City Manager, stated the City will be able to treat 14.5 miles of streets with no additional investment in the pavement management program in 2010. Adding another $2 million to the current budgeted amount of $7.1 million will enable the City to treat 18.7 miles of street. If $2 million is not invested in 2010, but is added to the 2011 budget, it will take another $250,000 to treat 18.7 miles of streets. If the $2 million is left in reserves, it will earn about $40,000 in interest which will offset some of the extra $250,000 cost. If the investment in the pavement management program remains at $7.1 million over the next 10 years, 145 miles of streets will be treated or maintained. After 10 years, the City will have an estimated 271 miles of failing pavement. If an additional $2 million is invested each year for 10 years, 187 miles of streets will be treated and the City would have 237 miles of failed pavement. City Manager Atteberry stated Council requested an additional $75,000 for affordable housing at the First Reading of the Ordinance but asked staff to determine where those funds would come from before officially adding the extra funds to the budget. The Air Quality Program offer was mistakenly 486 November 3, 2009 listed for $13,000 and has now been corrected to $8,000 and that $5,000 difference will be added to the affordable housing budget. Staff has determined that a $20,000 payment related to the Civic Center Parking Garage does not have to be made. Staff recommends the remaining $50,000 come from reserves. The budget has $8 million in reductions and many City jobs have been cut. Hill Grimmett, Be Local Northern Colorado co -director, thanked Council for its support. Be Local is now sponsoring more winter farmers' markets and is a growing organization. Shane Miller, 4325 Mill Creek, stated residential appraisals are coming in below the actual market and a lower appraisal might adversely affect the sale of the current Crossroads Safehouse. Use of bonds should be considered to finance the ANTI project and pavement management. He supported additional funding for affordable housing. John Albright,1606 Dogwood Court, urged Council to restore the historic preservation position that has been cut from the budget. Chadrick Martinez, 1303 West Swallow, CareHousing, Inc., asked Council to restore affordable housing funding. Candace Mayo, Habitat for Humanity Executive Director, stated affordable housing is an important component of economic health and she urged Council to increase the funding for affordable housing. Eric Sutherland, 631 LaPorte, supported cutting the appropriation for energy efficiency projects for 2010 because the proposed appropriation will not be effective in promoting energy efficiencies. The funds currently used to purchase renewable energy credits should instead be used to promote energy efficiencies. Stacy Lynne, 216 Park Street, stated the funding for City employee and elected official's food should be removed from the 2010 budget. Funding should not be provided for Art in Public Places, energy efficiency programs and rebates, or downtown landscaping. Utility rates should not be raised. Jennifer Jones, Crossroads Safehouse Sustainability Director, urged Council to provide $500,000 to enable Crossroads Safehouse to move into a better facility that will enable Crossroads to serve a greater portion of the community. Laura Williams and Megan Schafer, Crossroads Safehouse, urged Council to provide greater funding for Crossroads Safehouse. Bruce Lockhart, 2500 East Harmony, stated funding should not be provided for the solid wastestream study and Crossroads Safehouse should not receive more funding. Councilmember Kottwitz asked for more information concerning the benefits from the AMI project and asked what the Department of Energy grant will be funding. Catanach stated as part of the grant application, the City committed to exploring opportunities for different rate structures. The Electric Utility will undertake a cost of service study for the electric utility rates which identifies the specific 487 November 3, 2009 costs for each customer class. Different types of rate structures will be discussed after the study is completed. City Manager Atteberry noted staff recommends the funding for AMI not be included. Councilmember Kottwitz asked why closed captioning will not be provided for Cable 14 broadcasts. City Manager Atteberry stated Cable 14 solicited public input into the use of closed captioning and received no public response, so the funding to continue closed captioning was removed. Fort Collins is the only city in Colorado that does closed captioning. Councilmember Kottwitz asked if `Be Local" will be receiving funding in the 2010 budget. City Manager Atteberry stated funding for 2010 has been provided. Councilmember Manvel asked if more information about the federal grant for the AMI project will be provided. Catanach stated staff will provide many details about the grant, the project and potential sources of funding the remaining costs in a few months. Councilmember Ohlson noted it may take six months to work with the federal government to find a solution for the Crossroads Safehouse and. he asked if anything could be done to speed up the process. Heffernan stated the Denver HUD office has been very clear that it cannot help the City resolve the issue of CDBG funds. Staff has contacted the Washington, D.C., HUD legal staff to work on the problem. The Colorado legislators will be asked to be of assistance once it becomes clear how the federal regulations will be interpreted and exactly what the City is asking. Councilmember Manvel asked if Crossroads will be able to move into the new facility if funds from the sale of the current facility cannot be used. Heffernan stated it does not seem likely that CDBG funds can just be transferred from one facility to another. The current facility needs to be sold first. Staff is attempting to get a CDBG waiver on returning any portion of the funds used to purchase the current facility. An appraisal of the property has been ordered, but it will take about a month to complete. City Attorney Atteberry stated the property has City equity and CDBG funds. Other sources are also being sought. Councilmember Manvel asked if the appropriations ordinance contained the proposed additional $75,000 for affordable housing. Mike Freeman, Chief Financial Officer, stated the additional funding has not yet been included in the 2010 budget because a motion by Council is needed to add the additional funding. Councilmember Roy asked if emergency appropriations have been considered to provide the needed funding for Crossroads Safehouse. City Manager Atteberry stated Council must direct staff to bring an emergency appropriations ordinance for its consideration. He did not recommend the use of emergency appropriations. He did not know if there was any immediate deadline for Crossroads to acquire the needed funding for the new facility. Vicki Lutz, Crossroads Safehouse Director, stated Crossroads has submitted $1.7 million in grant proposals to various foundations. Crossroads has received a $50,000 grant, but will lose the funding if 100% of the funds are not raised by October 2010. Another $1.1 million in pledges and actual dollars has been raised. It is unknown if the other grant proposals that have been submitted will be November 3, 2009 awarded because of the difficulty caused by the economy. Construction costs for remodeling the new facility will continue to increase with any delay in funding. Crossroads must have the upfront funds to start the project before it can receive any grant funds. Crossroads would like to secure $1.638 million in funding to be able to begin the project as soon as possible. Councilmember Roy noted the pavement management program could see savings of between $250,000 and $340,000 if $2 million in reserves is approved for the 2010 budget. Councilmember Kottwitz asked what funds will be used for the solid wastestream reduction study. City Manager Atteberry stated tipping fees assessed on City departments by the Landfill will be used to fund the study. The tipping fees generate between $100,000 and $125,000 each year. Councilmember Kottwitz asked for the source of the funding of $8,000 for the Air Quality Program. Freeman stated the Quiet Zone Study will not be funded and those funds will be used for the Air Quality Program. Councilmember Manvel made a motion, seconded by Councilmember Troxell, to adopt Ordinance No. 112, 2009 on Second Reading. Councilmember Manvel made a motion, seconded by Councilmember Poppaw, to add $70,000 to the budget for affordable housing. Councilmember Kottwitz made a motion, seconded by Councilmember Troxell, to amend Councilmember Manvel's motion, to redirect $50,000 designated for the solid wastestream reduction study and $8,000 from the Air Quality Program for affordable housing, instead of using reserves for affordable housing. Councilmember Ohlson stated he did not support removing the funding for the solid wastestream reduction study or the Air Quality Program. Councilmember Kottwitz stated the additional use of reserves is not a wise use of resources when other options are available. CouncilmemberTroxell stated the solid wastestream reduction study is a result of a recommendation made at a work session and is intended to understand all aspects of the wastestream. Creation of pay -as -you -throw rates has negated the need for the study because the information received from the study would have been beneficial in the discussion of the formation of trash districts. He supported deleting the funding for the solid wastestream reduction study and using the funds for affordable housing. Mayor Hutchinson noted he did not support the further use of reserves and would support the use of the solid wastestream reduction study funds for affordable housing. The vote on the motion was as follows: Yeas: Hutchinson, Kottwitz, and Troxell. Nays: Manvel, Ohlson, Poppaw, Roy. 489 November 3, 2009 THE MOTION FAILED. The vote on the motion to add $70,000 to the budget to fund affordable housing, using $50,000 from reserves and $20,000 from financing savings regarding the Civic Center Garage was as follows: Yeas: Hutchinson, Kottwitz, Manvel, Ohlson, Poppaw, Roy and Troxell. Nays: none. 08:19619 118i [f". R[J12103 Councilmember Roy made a motion, seconded by Councilmember Manvel to use $2 million from reserves for the pavement management program. Councilmember Manvel stated providing more funding for the pavement management program is an investment in the future but he did not support the use of more reserves for 2010. Councilmember Troxell stated reserves should not be used for a maintenance program. Councilmember Kottwitz stated the use of $2 million from reserves will used two -fifths of the total reserves and she did not support the use of reserves for pavement management. The cost of postponing pavement management for one year is $210,000 but the reserves should not be used. Councilmember Ohlson noted the discussion of funding the pavement management program can continue into the next year since Council will be considering another budget for 2011-2012. He requested a description of the street specifications compared to industry standards, what peer cities are doing for pavement management, what checks are in place to ensure streets are built correctly and that chemicals are not being used that will destroy the roads three times faster than necessary. City Manager Atteberry stated Council has received information from staff regarding street standards and chemicals used by City but he will provide further information for Council. Councilmember Ohlson asked for a chart showing the recommended street standards and some history about pavement management, the dates when Council changed the street standards, and which streets are failing. Mayor Hutchinson stated waiting one year to provide more funding for pavement management did not seem to greatly jeopardize the program and he did not support the use of reserves for pavement management. The vote on the motion was as follows: Yeas: Roy. Nays: Hutchinson, Kottwitz, Manvel, Ohlson, - Poppaw, and Troxell. THE MOTION FAILED. Councilmember Ohlson noted the City loaned the Urban Renewal Authority over $5 million from reserves for the RMI2 project and greater scrutiny of that project should have occurred to consider the effects to the City's reserves. 490 November 3, 2009 Mayor Hutchinson noted the use of reserves for RMI2 was a loan and will be repaid. City Manager Atteberry stated the use of reserves for RMI2 was a loan and was not a one-time use of reserves. Freeman stated the first repayment of the RMI2 loan for $2.8 million occurs at the end of 2010. If other fundraising by RMI2 is successful, a larger repayment will be made. The outstanding debt after 2010 will probably be $1 million to $1.5 million. Councilmember Troxell noted the rate increase that would fund the AMI project has been removed from the budget and he asked if staff would be bringing forward a debt financing proposal for the project. City Manager Atteberry stated staff will return to Council next year with options to finance the City's portion. This Council does not support a rate increase to fund AMI, as least through 2010. If a borrowing option does not come to fruition, it appears this Council would delay funding AMI which can become problematic with the DOE grant. Councilmember Troxell noted the award was received between first and second reading of the budget ordinance and he asked how the match for the grant will be funded. City Manager Atteberry stated the award of $15.4 million is not just for AMI and a match is needed. Staff will meet with DOE representatives to determine the details. Catanach stated the funding from DOE is over a three- year period. Staff believes the match can be accomplished without raising rates. Mayor Hutchinson stated the funding for AMI is not currently in the budget. An amendment will be necessary to add the AMI funding back into the budget. Councilmember Manvel thanked staff for the effort put forth to bring the budget to Council. Councilmember Roy thanked citizens for participating in the budget process. Councilmember Ohlson noted staff is working diligently to acquire more funds for the Crossroads Safehouse than would be available by using reserves. Mayor Hutchinson stated the BFO process focuses the budget on services people need and expect from the City and the process has served the City well. 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. ("Secretary's note: The Council took a brief recess at this point in the meeting.) Ordinance 115, 2009 Amending Chapter 26 of the City Code to Revise Electric Rates, Fees and Charges, Adopted on Second Reading The following is staff s memorandum for this item. 491 November 3, 2009 "EXECUTIVE SUMMARY This Ordinance adopts monthly electric rates effective for all billings on or after January 1, 2010. Based on the direction received from City Council on First Reading of the Ordinance on October 20, 2009, and the very recent award announcement offundingfrom the Department of Energy Smart Grid grant, a second option is presented for Council 's consideration on Second Reading. Option A is the Ordinance as approved on First Reading. It increases electric rates for all customer classes by 9.5%. The 9.5% increase is based on increased costs for purchase power, renewable energy, and enhanced energy services to meet Energy Policy and Climate goals. Also included in the 9.5% is 2.08% to fund Light and Power's portion of the Advanced Metering Infrastructure (AMI) capital project. With this option, a typical single family residence's electric bill would increase $4.82 from $50.66 to $55.48. Option B raises electric rates by 7.42% for all customer classes. The increase related to AMI funding has been eliminated. The 7.42% increase continues to fund purchase power, renewable energy and enhanced energy services. A typical singlefamily residential electric bill would increase $3.77from $50.66 to $54.43 with Option B. BA CKGR O UND/D IS C USSION OPTION A A 9.5% electric rate increase was included in the City Manager's recommended budget. The increase applied to all customer classes. The 9.5% rate increase is made up of the following components: Retail Electric Rate Increase 2010 Purchase Power 4.79% Purchase Power — Renewables 0.82% Energy Services 1.81 % Advanced Metering Infrastructure (AMI) 2 08% Total Electric Rate Increase 9.50% Platte River's increases are due to several factors: Capital investments = $335 million over ten years: transmission approximately $149 million, production approximately $179 million, general at approximately $7 million (cost of materials is increasing, underground transmission). Craig coal costs have increased. 492 November 3, 2009 • 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. The Energy Services increase will fund additional conservation programs and customer initiatives to support Energy Policy goals. If the appropriation is approved, the Advance Metering Infrastructure (AMI) project is estimated to cost $21.5 million with Light and Power's share at $17.5 million. A 2.08% increase was requested for AMI. While long term savings were projected, cash flow projections required a rate increase to fund the AMI project on a pay -as you -go basis while keeping reserves at minimum levels. A second 2.08% increase for AMI was projected for 2011. Option A is no longer recommended by staff. On October 27, 2009 the City was notified that it had been awarded a Smart Grid Energy grant as part of the American Recovery and Reinvestment Act (ARRA). The City's portion of the grant is approximately $15.4 million. An ordinance related to this grant appropriation will be presented to Council at a later date when the grant award is finalized. Staff will present options to fund the required match at that time but it will not require the 2.08% rate increase for AMI. OPTION B The Ordinance - Option B eliminates that portion of the proposed electric rate increase attributable to the AM[ project. The October 27, 2009 award of stimulus funding eliminates the need for the 1t�1I. 2.08% increase for AThe Utilities was awarded Federal stimulus funding in the amount of $15.4 million in support ofprojects totaling $30.8 million. Projects include AMI,, several smartgrid enhancements and implementation of several long-range IT projects related to AMI. The grant requires a 50% match by the Utilities. Financing options, including debt financing, for the match will be presented to Council once the award negotiations are complete and an appropriation is requested. Option B eliminates the 2.08% increase in 2010 reducing the total electric rate increase from 9.5% to 7.42%. If the Ordinance - Option B is approved, staff will return to Council at a later date with additional specifics related to the grant award and funding options, including debt financing, for the project. Appropriations for the A11I project could be approved at that time. 493 November 3, 2009 The chart below provides Council with the projected rate increases given the following considerations: Option A — 9.5%, Ordinance as approved on first reading 1012012009. Option B — 7.42%, Ordinance revised to exclude rate increase for AMI. Electric Rate O tions or 2010 Costfor 700 kWh - Residential $ Increase % Increase Rate from 2009 from 2009 2009 Rate $50.66 2010 Option A — 9.5% $55.48 $4.82 9.5% 2010 O tion B — 7.42% $54.43 $3.77 1 7.4% With either option, Fort Collins electric rates remain competitive with those ofsurrounding utilities. FINANCLAL IMPACTS The rate Ordinance is projected to increase the annual operating revenues of the Light and Power Fund by approximately 9.5% (Option A) or 7.42% (Option B). The annual electric bill for typical residential electric customer (700 kilowatt-hours per month) would increase $57.84 with Option A and $45.24 with Option B. SUSTAINABILITY: ECONOMIC, ENVIRONMENTAL AND SOCIAL IMPACTS Environmental — Each option includes funding to enable the utilities to move toward meeting the goals and objectives of the Energy Policy including the targeted reduction in consumption of 1.5% and the City's carbon reduction goal to reduce carbon emissions to 80% of 2005 levels by 2020. Economic— The proposed increase in electric rates will increase the cost of livingfor our customers, however, the rates for all customer classes remain among the lowest in the State. To lessen the financial impact, customers have the ability to reduce their energy use to lower their utility bill. AMI will provide additional information to customers to help them manage their usage. Social - The rate increase will allow the Utilities to continue to provide safe reliable power for the benefit of the citizens and businesses of Fort Collins." Ellen Switzer, Utility Financial Operations Manager, stated Option A of the electric rate ordinance will increase rates 9.8% and was adopted by Council on First Reading on October 20, 2009. Option B increases electric rates 7.42% in 2010 and excludes the 2.08% rate increase for AMI. The Utilities has been awarded a $15.4 million SmartGrid investment grant from the Department of Energy. Staff 494 November 3, 2009 is exploring debt financing and other options for the utilities match needed for the grant. Either option of the electric rates provides Fort Collins residents with low electric rates, compared to other cities in the state. Eric Sutherland, 631 LaPorte, stated the rate increase for renewable energy goes to pay for an increase in delivery of energy from the Silver Sage Project in Wyoming. Council should have considered this rate increase before any commitment to purchase renewable energy from the Silver Sage Project was given. The way Platte River Power Authority bills Fort Collins for electric power is not acceptable and should be examined. Debt financing should not be considered for the AMI project. Bruce Lockhart, 2500 East Harmony, stated the increase in rates for renewable energy does not benefit Fort Collins residents. More consideration should be given to using nuclear energy in America. Councilmember Roy made a motion, seconded by Councilmember Poppaw, to adopt Option B of Ordinance No. 115, 2009, on Second Reading. Councilmember Roy stated renewable energy is clean energy and does not produce the adverse effects of nuclear energy. Councilmember Kottwitz made a motion to lower the energy efficiency services increase from 1.8% to .9% each year. The motion did not receive a second. THE MOTION FAILED FOR LACK OF A SECOND. Councilmember Ohlson asked for clarification of the issue raised concerning Silver Sage Project. Brian Janonis, Utilities Executive Director, stated the rate increase associated with renewable energy is related to Platte River policy of moving away from renewable energy credits (RECs) to more "on the ground" renewables. Fort Collins is not the only member seeing a rate increase for renewable energy. The Platte River tariff charged to all four member cities is increasing. Mayor Hutchinson noted Fort Collins has a policy of moving away from RECs and Platte River is responding to Fort Collins' request to use fewer RECs. Councilmember Ohlson stated conservation efforts by residents and the use ofrenewable energy will make a difference in the future. Councilmember Troxell asked if Option B has been considered by the Electric Board. City Manager Atteberry stated there was no time between First and Second Reading of the Ordinance to have the Electric Board review Option B of the Ordinance. The Electric Board will provide further input into any proposal brought forward regarding the financing of the AMI project. 495 November 3, 2009 Councilmember Kottwitz stated the City's low utility rates attract new employers to the community and a 1.8% increase rates for energy efficiency services seems too high. Fees are a form of tax that citizens do not get to vote on and should not be raised without greater scrutiny from Council. Councilmember Manvel stated fees are paid by residents receiving a service and are not a tax. Councilmember Ohlson asked what happens to the rate increase funds collected for the energy conservation programs if those programs do not produce a certain level of success. Janonis stated the utility is a non-profit and if the funds are collected for a specific project are not used, the funds are used in future years to offset a rate increase or go into reserves. Councilmember Ohlson asked if a rate increase for energy conservation programs will be proposed for 2011 if the programs are not successful in 2010. Janonis stated rate increases associated with Platte River will occur in 2011 and any funds that are not used for other programs will be used to offset the Platte River rate increase. Mayor Hutchinson stated Option B removes a 2.08% rate increase for AMI. The vote on the motion was as follows: Yeas: Hutchinson, Manvel, Ohlson, Poppaw, Roy and Troxell. Nays: Kottwitz. Ordinance No. 102, 2009, Appropriating Unanticipated Revenue from the American Recovery and Reinvestment Act to the Transit Fund, Adopted on Second Reading The following is staff s memorandum for this item. "EXECUTIVE SUMIIIARY This Ordinance, unanimously adopted on First Reading on October 20, 2009, appropriates funds received from the American Recovery and Investment Act of 2009 (ARRA) to purchase sir NABI40- foot Low Floor Compressed Natural Gas (CNG) replacement buses and several Proximity Card Readers in 2009." Stacy Lynne, 216 Park Street, asked for the cost of each bus, the total amount of funds appropriated and what will happen to the buses being replaced. Maryls Sittner, Transfort/Dial-A-Ride General Manager, stated each bus will cost approximately $375,000 and no matching funds from the City were required. Buses that have greater than 500,000 miles or at least twelve years old are considered to be past their useful life. The buses will be auctioned after they are replaced. November 3, 2009 Councilmember Roy made a motion, seconded by Councilmember Poppaw to adopt Ordinance No. 102, 2009 on Second Reading. Yeas: Hutchinson, Kottwitz, Manvel, Ohlson, Poppaw, Roy and Troxell. Nays: none. THE MOTION CARRIED. 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. Adopted on Second Reading The following is staff s memorandum for this item. "EXECUTIVE SUMAIARY 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. Prioryear reserves areprimarily being appropriated for unanticipated operation expenses from reserves that are set aside for that purpose. This Ordinance was unanimously adopted on First Reading on October 27, 2009. " Eric Sutherland, 631 LaPorte, stated the ordinance appropriates $450,000 from other funds into a Department of Energy/FortZed/RDSI grant project. In June, Council removed the FortZed/RDSI project from the competitive bidding process in the belief that there was urgency to the project and action needed to be taken immediately yet the funds are only now being appropriated. He asked for the source of funds to purchase the diesel to be used in the diesel generators that will feed the grid for FortZed. He did not support the use of diesel generators to feed the grid for FortZed because such generators were wasteful. Mayor Hutchinson stated the diesel generators are not intended to be a source of ongoing energy production but will be used to load the system and test the grid. Councilmember Roy made a motion, seconded by Councilmember Poppaw, to adopt Ordinance No. 105, 2009 on Second Reading. Yeas: Hutchinson, Kottwitz, Manvel, Ohlson, Poppaw, Roy and Troxell. Nays: none. THE MOTION CARRIED. Ordinance No. 120, 2009, Appropriating Unanticipated Revenue in the General Fund for the Natural Resources Enemy Efficiencv Communitv Block Grant, Adopted on First Reading The following is staffs memorandum for this item. W&A November 3, 2009 "EXECUTIVE SUMMARY This Ordinance appropriates $1,307,900, received by the City under a Energy Efficiency and Conservation Block Grant (EECBG) Program. BA CKGR O UND/DISCUSSION The American Recovery and Reinvestment Act of 2009, Public Law 111-5, directs the Department of Energy to award formula -based grants to local governments under the Energy Efficiency and Conservation Block Grant (EECBG) Program. The Recovery Act's purposes are to stimulate the economy, create and retain jobs, and conserve resources in an expeditious manner. Fort Collins applied for an EECBG grant, and has been awarded $1, 307, 900. Pending Department of Energy approval, these funds would be used for a number ofprojects as follows: 1. City Building Load Management, $35,000 Automated controls for electric load management to reduce peak demand in four buildings, 281 North Mason, Senior Center, Transit Center, and Transfort. 2. Educational Outreach, $40,000 Education and public relations campaign for energy conservation among City employees, including web -site to share Citypractices and monitoring energy - conservation performance of individual departments [energy, trash, fuel, and water]. 3. Waste Diversion, $42,000 Additional recycling bins for Parks and Natural Areas, demonstration project on diversion of organic waste with several Climate Wise partners, and cardboard compacting units. 4. Photo -Voltaic Expansion, $125,900 Quadruple capacity of the Northside Aztlan Community Center Photo -voltaic system 20 kW. 5. Boiler Upgrades, $140,000 Replace antiquated boilers with high -efficiency units in the Museum and old Police Buildings, 6. Server Virtualization, $185,000 Purchase innovative computer hardware and software that would enable the retirement & virtualization of 80 inefficient servers. 7. Bicycle and Pedestrian Improvements, $325,000 a. Install Mountain Avenue sidewalk/bike lanes from Meldrum to Riverside, about 1 114 miles November 3, 2009 b. Extend Lincoln Street pedestrian path in the vicinity of Buckingham Neighborhood, about 112 mile c. Pilot -test a Bike Box, an intersection safety improvement for bicyclists, at Plum and Shields Streets. 8. Green Building Program Implementation, $245,000 Review, adopt, implement, and enforce new Green Building Standards, including inspector training and enforcement of current energy codes. 9. Climate Wise Technical Assistance, $45,000 Additional technical assistance to support new and existing Climate Wise partners to implement and report more energy -efficiency projects. Funds will be partially matched by Governor's Energy Office. 10. Solar Thermal Incentive Program, $75,000 Provide incentives for installation of residential and small-business solar thermal hot water systems. Funds will be matched by Governor's Energy Office. 11. Climate Action Plan Technical Assistance $30,000 Data collection, tracking, and progress reporting for the community carbon inventory mandated by the Climate Action Plan. FINANCIAL IMPACTS The City has been awarded a grant of $1.3 million to further the energy efficiency and other objectives of the American Recovery & Reinvestment Act. The grant requires no match from the Z ty. Stacy Lynne, 216 Park Street, stated a portion of the grant that is slated for bicycle and pedestrian improvements should be used to enforce the dismount zone in the downtown area and to remove bicycle racks from parking spaces in the downtown area. Councilmember Kottwitz asked if any of the grant funds will be used to create and retain jobs. Brian Woodruff, Environmental Planner, stated the purpose of the Department of Energy grant is to promote energy efficiencies and conservation as well as generate jobs. Councilmember Kottwitz stated these grant funds should be used in place of a 2011 rate increase for energy efficiency programs. Councilmember Troxell asked what was included in the grant application toward job creation and retention. Woodruff stated the Department of Energy dictated what the job creation numbers should be in the proposal, based on the types of activities proposed. He will provide the exact figures to Council. November 3, 2009 Councilmember Ohlson asked if this grant was connected to the grant the City has received for AMI. City Manager Atteberry stated the City has received one grant for the AMI project and a separate grant for the proposed projects. Councilmember Ohlson asked if these grant funds will be used to restore some of the ClimateWise program activities that had been cut from the budget. City Manager Atteberry stated staff is looking in other areas for funds to enhance ClimateWise programs and items within the Climate Action Plan that were not funded in the budget. John Stokes, Natural Resources Director, stated the funds for the grant were awarded based on a formula from the Department of Energy. The grant provides $45,000 for ClimateWise Program and $30,000 for the Climate Action Plan. City Manager Atteberry noted a report detailing the amount of ARRA funds the City has received will be provided to Council. Councilmember Troxell asked that the report shows what amount of local match is required for each award received from ARRA. Stokes clarified the Energy Efficiency Community Block Grant does not require a local match. Councilmember Roy made a motion, seconded by Councilmember Poppaw, to adopt Ordinance No. 120, 2009 on Second Reading. Yeas: Hutchinson, Kottwitz, Manvel, Ohlson, Poppaw, Roy and Troxell. Nays: none. THE MOTION CARRIED. Ordinance No. 121, 2009, Amending Chapter 26 Article XII of the City Code Relating to Utility Billing Errors, Adopted on First Reading The following is staff s memorandum for this item. "EXECUTIVE SUMMARY This Ordinance codifies the Utilities' current administrative policy which addresses utility billing errors. When a customer is overcharged, the Utilities will refund the customer the overcharge for a period not to exceed sir years from the time the error is discovered. If a customer is undercharged for services received, the Utility will back bill the customer only if the undercharges occurred less than six years before the date the error is discovered and either the undercharges are for a minimal amount or the customer could not have discovered the error with reasonable inquiry. No interest will be paid or collected. BA CKGR O UND/DIS C USSION Utilities staff endeavors to accurately compute all electric, water, wastewater and stormwater billings, but misreporting, data errors and equipment failures do occur. When customer billing errors are discovered, corrections are made based on an administrative policy approved in 2000. 500 November 3, 2009 Essentially, overpayments are reimbursed for a period not to exceed 6 years and under -billings are forgiven when it is reasonable to presume that customer was unaware of the billing error. The administrative policy has functioned well in the vast majority of circumstances; however, it lacks the authority of City Code. The proposed language incorporates the existing billing error policies as a new section in Chapter 26 of the City Code. The proposed new section also stipulates that it is a punishable Code violation for a customer to make any attempt or action to mislead the utility related to a billing error. It further states that the customer is responsible for due diligence in reviewing their billing statements and for reporting errors to the Utilities. In addition to the new Code Section 26-721 titled Billing errors, the Ordinance makes clarifications in Section 26-119 Charges -in event of meter failure. The Ordinance also retitles Section 26-720 from "Administrative procedures " to "Administrative rules and regulations. " Eric Sutherland, 631 LaPorte, asked why the public notice was directed only to out -of -city utility customers and why a draft of the proposed ordinance was not available for Water Board and Electric Board members to review. He asked what the legal remedies for rate payers are currently available. Councilmember Manvel asked what the proposed ordinance will change from current practices regarding discrepancies in utility billing. Ellen Switzer, Utilities Financial Operations Manager, stated the ordinance will codify the administrative policy used by the Utilities for nine years and clarify the process for customers. Occasionally, an error is found that has occurred over many years and customers question the six -year limit contained in the refund policy. Having the specifics in the Code will help resolve conflicts with customers. Councilmember Troxell asked if a customer currently in a dispute with the Utilities regarding an overpayment covering more than six years would be grandfathered in for a refund covering more than six years. Switzer stated the policy is to refund not more than six years. City Attorney Roy stated no customer would be grandfathered and the intent of the Ordinance is to address errors that may have occurred several years ago. The Ordinance strengthens the position the City has taken through its administrative policy by codifying the same rule that has existed for many years. Councilmember Troxell asked why a cutoff of six years is needed if the City has been overcharging a customer for a longer period of time. Switzer stated there have been cases where refunds have exceeded several thousand dollars. City Attorney Roy stated a timeframe needs to be established. Councilmember Roy asked if a grace period could be included in the Ordinance to allow customers up to one year to discover any errors in billing before the Ordinance becomes law. Councilmember Manvel noted the Ordinance is codifying an administrative policy already in place which has included a six -year limit of overcharge refunds. He did not support any grace period because the six -year limit is not a new rule and applies to both overcharges and undercharges. 501 November 3, 2009 Councilmember Troxell asked how many errors occur in utility billing over the past twenty years. Switzer stated billing errors are fairly rare but an occasional error effects many customers. The number of errors for the past twenty years is not available, but staff can provide information for the past two or three years. The records do not exist from twenty years ago. Councilmember Troxell asked how a customer could dispute utility billing from six years ago if the records do not exist. Switzer stated six years of utility billing records are available but those records may not be flagged to indicate any adjustment for a billing error. City Manager Atteberry asked if Councilmember Troxell's concerns were about the City's ability to successfully manage the billing for the proposed pilot trash district or about errors in utility billing. Councilmember Troxell stated the Ordinance is limiting ratepayers ability to recover overpayment and he questioned the number of errors in billing that occur. Trash services is another customer oriented billing and the same questions may arise with the trash district at a later date. City Manager Atteberry noted Utilities has been in customer service the entire time of its existence and the Utility Billing Department works diligently to ensure customers have good, accurate and reliable billing. He asked if Utility Billing had any reports to show the data that errors occur infrequently. Brian Janonis, Utilities Executive Director, stated staff will review the billing as far back as it can to determine the number of billing errors that occurred. Mayor Hutchinson asked for a report that gives data -based assessment of the rate of utility billing errors. Councilmember Kottwitz asked staff to ensure that enacting the six -year limit for the refund of overpayment does not adversely affect any customer currently in dispute about a utility billing error. Councilmember Roy asked why the Electric Board and Water Board were not given drafts of the proposed Ordinance to review before the Boards voted on whether to recommend approval of the Ordinance. City Attorney Roy stated the process to produce ordinances and resolutions for Council consideration is time -sensitive. Ordinances are revised up to the point of printing Council's agenda. Boards and commissions are presented the concepts contained in ordinances but do not receive the actual language because the ordinances are not ready. The discussion of boards and commissions should not focus on the wording of an ordinance but should focus on the concept contained in the ordinance. Council would need to direct staff to provide boards and commissions with ordinances, where possible. Mayor Hutchinson noted boards and commissions only meet once a month and trying to provide the actual wording of ordinances is not practical. Councilmember Ohlson stated he supported providing draft wording of ordinances to boards and commissions when possible. City Attorney Roy stated a draft of an ordinance can change considerably from the time a board or commission sees the draft, depending on the date of the 502 November 3, 2009 meeting of a board or commission. Any wording changed or discussed at the board or commission meeting is likely to be changed after the meeting and the board's time would have been wasted. Attention would have been called to wording that might no longer exist and may stir up controversies that become nonissues by the time the item is considered by Council. Providing the wording of an ordinance is a question of timing. If the board or commission is meeting a day or two before the agenda goes to print, the final wording can be provided for the board or commission's review. Councilmember Roy made a motion, seconded by Councilmember Manvel, to adopt Ordinance No. 121, 2009 on Second Reading. Yeas: Hutchinson, Kottwitz, Manvel, Ohlson, Poppaw, Roy and Troxell. Nays: none. 1464 i'UrrellIto]2KSYM:141" Resolution 2009-099 Finding Substantial Compliance and Initiating Annexation Proceedings for the Fossil Creek 392 Annexation, Adopted The following is staff s memorandum for this item. "EXECUTIVE SUNIMARY The applicant, Larry Gilleland, for the property owners, VPD 392 LLC and Peter Prato, has submitted a written petition requesting annexation of 28.9 acres located on the south side of Carpenter Road (County Road 32), at the southwest corner oflnterstate 25 & Carpenter. Road. The property is undeveloped and is in the AP -Airport District in Larimer County. The requested zoning for this annexation is C - Commercial. The surrounding properties are currently zoned POL — Public Open Lands in the City to the north, C — Commercial and T — Tourist in Larimer County to the north, AP - Airport in Larimer County to the west and south, and C - Commercial in the Town of Windsor to the east. This annexation request is in conformance with the Colorado Revised Statutes as they relate to annexations, the City of Fort Collins Comprehensive Plan, the City of Fort Collins Land Use Code, the Fossil Creek Reservoir Area Plan, the Larimer County and City of Fort Collins Intergovernmental Agreement, the City of Fort Collins and Town of Windsor Intergovernmental Agreement, and the I-251SH392Interchange Improvement Plan. There are no known controversies associated with this annexation. A few issues to be addressed as part of a future site specific development plan relate to: coordination of the SH 392 and southwest frontage road alignments and right-of-way delineations; and, potential impacts on the existing wetlands on the middle portion of the property. The development review process has protection measures within Section 3.4.1(E) of the Land Use Code to ensure that existing wetlands on the property are adequately protected and buffered. Within this section is the requirement for the provision of an ecological characterization study, which is the foundation for establishing buffer zones to protect the wetlands. 503 November 3, 2009 BA CKGR O UND/D IS C USSIO N The proposed Resolution makes a finding that the petition substantially complies with the Municipal Annexation Act, determines that a hearing should be established regarding the annexation, and directs that notice be given of the hearing. The hearing will be held at the time offirst reading of the annexation and zoning ordinances. Not less than thirty days ofprior notice is required by State law. The property is located within the Fort Collins Growth ManagementArea. According to policies and agreements between the City of Fort Collins and Larimer County contained in the Intergovernmental Agreement for the Fort Collins Urban Growth Area, the City will agree to consider annexation of property in the UGA when the property is eligible for annexation according to,State,'law. The: property lies within the Corridor Activity Center boundary in the I-251SH 392 Interchange Improvement Plan. It gains the required 116 contiguity to existing City limits from a common boundary with the Fossil Creek Reservoir Open Space Annexation (June, 2008) to the north. " Councilmember Ohlson asked if the Planning and Zoning Board will review the annexation if the Resolution initiating annexation proceedings is adopted. City Attorney Roy stated state statute requires an annexation proceeding to be initiated by Council to begin consideration of an annexation. The Planning and Zoning Board will review an annexation application and determine whether or not to recommend approval. The initiating Resolution is not an endorsement of the annexation by Council. Councilmember Ohlson asked if initiating the annexation included any zoning decision. City Attorney Roy stated the discussion about whether to annex and what zone district the property should be placed in will occur at First Reading of the annexing and zoning ordinances on December 15. The initiating Resolution complies with state statute that requires certain prerequisites be met in order for a petition for annexation to be sufficient by law. Councilmember Ohlson asked that the item be placed on discussion on December 15 to ensure the property receives the proper zoning. City Manager Atteberry noted the zoning of the property will be consistent with the Structure Plan. Councilmember Roy made a motion, seconded by Councilmember Troxell, to adopt Resolution 2009-099. Yeas: Hutchinson, Kottwitz, Manvel, Ohlson, Poppaw, Roy and Troxell. Nays: none. THE MOTION CARRIED. Other Business Councilmember Ohlson made a motion, seconded by,Councilmember Manvel, to adjourn to 6:00 p.m., Tuesday, November 10, 2009 to consider adjourning into executive session to conduct the annual performance reviews of the City Manager, City Attorney, and Municipal Judge. Yeas: Hutchinson, Kottwitz, Manvel, Ohlson, Poppaw, Roy and Troxell. Nays: none. THE MOTION CARRIED. W1L'! November 3, 2009 Adjournment The meeting adjourned at 10:05 p.m. 66 ", Mayor ATTEST: 505