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HomeMy WebLinkAboutMINUTES-06/09/2009-AdjournedJune 9, 2009 COUNCIL OF THE CITY OF FORT COLLINS, COLORADO Council -Manager Form of Government Adjourned Meeting - 6:00 p.m. An adjourned meeting of the Council of the City of Fort Collins was held on Tuesday, June 9, 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, Manvel Ohlson, Poppaw, Roy and Troxell. Staff Members Present: Atteberry, Krajicek, Roy. Items Relating to Grants from the Federal Aviation Administration to the Fort Collins -Loveland Airport, Adopted The following is staffs memorandum for this item. "FINANCIAL IMPACT The Airport's 2009 approved budget is being amended to include the necessary appropriations for the expenditure of the American Recovery and Reinvestment Act funds and the Airport's local finds associated with the Entitlement finds. The local finds necessary for the projects funded with these Grants are $89,500.00 and will come /rom the Airport's hind Balance. EXECUTIVE SUMMARY A. Resolution 2009-057 Authorizing the Grecution of the 2009 Grant Agreement with the Federal Aviation Administration for lmprovemetrts to Construct a New Taxiway to be Known as the "Echo Taxiway" and to Improve Other Taxiways at the Fort Collins -Loveland Municipal Airport. B. Resolution 2009-058 Authorizing the Execution of a Stimulus Grant Agreement with the Federal Aviation Administration for Improvements to the Alpha Taxiway at the Fort Collins - Loveland Municipal Airport. Resolution 2009-057 authorizes the execution of a FAA grant in the atnount of $675,379. This grant provides the remaining amount of the $1 million of entitlement funds the Airport will receive this federal fiscal year. In February 2009, the Cities accepted the first installment of the $1 million in the amount of$324,621. Resolution 2009-058 authorizes the execution of a FAA grant in the amount of $556, 797 and is funded through the American Recovery and Reinvestment Act of 2009 ("ARRA'). This grant covers 100% of the project costs and therefore does not require any local funding. 212 June 9, 2009 BACKGROUND The work to be completed with the entitlement grant will include paving a new public taxiway (Echo Taxiway) that will better serve the expansion of the aircraft hangar area, and reconstructing portions of existing public taxiways in the hangar area that have badly deteriorated. The Airport tenants support the need to increase taxiway access to the hangar area and the reconstruction of portions ofexisting taxiways that are failing and causing drainage problems. It is the responsibility of the Airport to make these improvements. The ARRA Grant will be used to reconstruct a,portion of the Alpha taxiway, which is the primary taxiway for the Airport's main runway and has a high priority for federal funding. Alpha taxiway was reconstructed two years ago, except for the portion that will now be completed with the ARRA funds. In preparation for this slimmer's construction work, several additional projects were bid with the anticipation that ARRA funds might become available. The Alpha taxiway was one of those projects and staff is pleased with the results of this effort. " Dave Gordon, Fort Collins -Loveland Airport Director, stated the first grant is a continuation of the Entitlement Grant in the amount of $675,379 and is the balance of the $1 million grant the Airport receives each year through Entitlement funds. The first part of the grant, $324,621, was received earlier in the year. The funds will be used to construct taxiways and build a new taxiway in an area that serves a growing hangar development portion of the Airport. The second grant is a stimulus grant in the amount of $556,797 and requires no matching funds. The funds will be used to complete the last portion of Taxiway "Alpha." Mayor Hutchinson asked if the Entitlement grant was received because the Airport has a commercial carrier operating at the Airport. Gordon answered in the affirmative. The second grant is not connected in any way to the Entitlement grant. Councilmember Troxell made a motion, seconded by Councilmember Poppaw, to adopt Resolution 2009-057. Yeas: Hutchinson, Kottwitz, Manvel, Ohlson, Poppaw, Roy and Troxell. Nays: none. THE MOTION CARRIED. Councilmember Troxell made a motion, seconded by Councilmember Poppaw, to adopt Resolution 2009-058. Yeas: Hutchinson, Kottwitz, Manvel, Ohlson, Poppaw, Roy and Troxell. Nays: none. THE MOTION CARRIED. Ordinance No. 053, 2009, Appropriating Funds From the City's General Fund Reserves for Transfer to the Fort Collins Urban Renewal Authority for the Purpose of Providing a Loan for the Rockv Mountain Innovation Initiative Project Adopted on Second Reading The following is staffs memorandum for this item. 213 June 9, 2009 "EXECUTIVE SUMMARY Ordinance No. 053, 2009, unanimously adopted on First Reading on May 12, 2009, authorizes a loan, as authorized by City Council Resolution 2008-121, to the Urban Renewal Authority (URA) in the amount of S5,303,939. The loan will enable the URA to lend Rocky Mountain Innovation Initiative Properties, LLC (RMI2 Properties, LLC) the funds necessary to construct a new facility for the business incubation program. RMI2 Properties, LLC is associated with the Rocky Mountain Innovation Initiative, which runs a successful science and technology incubation program on behalf of the City and other sponsors. Since the first reading of the RMI2 item, the appraisal for the property has been completed by Shannon & Associates. The land appraisal evaluates the land "as -is " or raw land value, without development approvals or improvemernts. The appraisal places the current raw value ofthe property at $5.10 per square foot a reduction from the contract price of S8.00 per square foot or nearly 8200,000 reduction on the purchase price. Therefore, the land purchase price needs to be re- negotiated or RM12 Properties LLC will terminate the project. The UDP teann is reviewing an offer from RMI2 properties that moves the building to the west side of the property and provides additional buildable land. Assuming a mutually agreeable resolution can be achieved, Rt1112 will either have a reduced land price or additional buildable land. An executed and revised contract will be complete by June 8, 2009- This contract will be provided in the "read before packet. " along with a brief memo describing any pertinent changes. The contract between RM12 and UDP does not involve the City or the URA but is part of the protection to the City through the assignment of rights included with the loan agreement. " Mike Freeman, Chief Financial Officer, stated the property received a lower appraisal than was originally anticipated. Staff worked with the property owner to develop an option that keeps the budget for the land at the original amount and will acquire more property for expansion. The site will be moved farther west. Eric Sutherland, 63 l LaPorte, stated his concerns with the project because it is too risky for the use of public dollars. An existing building should be used instead of constructing a new building. Mayor Hutchinson asked if investing in a project involving entrepreneurs is too risky. Freeman stated 14 companies have expressed interest in joining RM12 in the past month because of the awareness raised by the project. The demand exists to fill the space in RM12 and an extensive process was used to evaluate lease structures and lease rates and long-term funding. Using the new market tax credits for a portion of the financing reduces the City's risk because less City money is used for the loan. Mayor Hutchinson asked if an existing building was available that would meet RM12's needs. Freeman stated RM12 utilized the Northern Colorado Economic Development Corporation's site selection process for identifying available real estate. Many sites were not suitable because they did not meet the goal of keeping the project in Fort Collins. Another goal was to locate the project in the Downtown or North College area of Fort Collins. Three sites were evaluated. The first site was 214 June 9. 2009 an existing building and was purchased by another party. The second site was the Vine site, which was chosen for this project. The third site was not considered. Councilmember Manvel asked why the original contract price was for $8 per square foot, which seemed high for the area. Freeman stated when the proposal from the property owner was received, the City used a third party real estate expert to validate the offer, based on comparable properties. The City's real estate services department also provided an expert opinion that $8 per square foot was an appropriate price for that property. The commercial real estate market has shifted downward and has caused the valuation of the property to be less than anticipated. Once the appraisal was received, more negotiations occurred with the property owner and RM12 has been offered a site on the west side of the property. There is an historic property adjacent to the new RM12 site that will never be developed, so the mountain views from the new RM12 site will be better. The location of the building on the new site will be a more attractive setting and will allow for future expansion. The proximity of RMI2 to the CSU Engines Lab could create additional demand for RM12 services in the long term. Councilmember Manvel asked if RM12 plans to build a larger building with the larger site. Freeman stated RM12 does not intend to increase the size of the project at this time. Any expansion would be well into the future. Councilmember Ohlson expressed his belief that $8 per square foot still seems high since other parcels in the area had sold for $2 to $4 per square foot. He asked if the new agreement meant the project was receiving more land since the appraisal came in lower. Freeman answered RM12 will pay $5.10 per square foot and will receive more square footage as part of the agreement. Councilmember Roy asked when the final contract was executed. Freeman stated it was signed June 8. Staff had indicated to the property owner that postponement of the item indefinitely would be recommended to Council if an agreement were not reached by the time of this meeting. Councilmember Roy noted Council did not receive a copy of the contract and asked if the only change to contract was the purchase price. Freeman stated the purchase price was the only change made to the contract. The contract was included in the materials provided to Council on First Reading on May 12th. Councilmember Manvel made a motion, seconded by Councilmember Troxell, to adopt Ordinance No. 053, 2009 on Second Reading. Yeas: Hutchinson, Kottwitz, Manvel, Ohlson, Poppaw, Roy and Troxell. Nays: none. THE MOTION CARRIED. 215 June 9, 2009 Ordinance No. 071, 2009, Appropriating Funds Transferred from the Fort Collins Urban Renewal Authority Fund into the Capital Projects Fund for the North College Avenue and East Willox Lane Improvement Project, Adopted on First Reading The following is staff s memorandum for this item. "FINANCIAL IMPACT Appropriation of the funds previously transferred from the URA to the City in the amount of $2,812,620 will provide the finding necessary to construct the North College Avenue and East Willox Lane Improvements Project. EXECUTIVE SUMMARY The Marketplace development is located on the northeast corner of North College Avenue and Willox Lane. It is a large commercial shopping center with a King Soopers grocery store anchor tenant. There will be significant, beneficial financial impacts to both the City and the Fort Collins Urban Renewal Authority from this project. On May S, 2009, City Council adopted, on Second Reading, Ordinance No. 046, 2009, appropriating funds from the City's General Fund reserves for transfer to the Fort Collins Urban Renewal Authority for the purpose of providing a loan for the project. On April 21, 2009, the Fort Collins Urban Renewal Authority adopted URA Resolution No. 016. That resolution authorized the negotiation and execution of a loan agreement with the City for the project and authorized the transferfrom the URA to a City Capital Projects account for the purpose of designing and constructing the improvements. On May 19, 2009, City Council adopted, on Second Reading, Ordinance No. 049, 2009, authorizing acceptance of the transfer of funds from the URA. 14owever, this ordinance did not appropriate those funds. Because the URA and the City are separate legal entities, it is necessaryfor Council to appropriate the -transferred funds. Ordinance No.071, 2009, accomplishes this. " City Attorney Roy noted the Ordinance completes a series of transactions that Council began earlier this year. Funds had been transferred from the URA to the City in order to complete the Project. This Ordinance appropriates those funds. Councilmember Roy made a motion, seconded by Councilmember Manvel, to adopt Ordinance No. 071, 2009 on First Reading. Yeas: Hutchinson, Kottwitz, Manvel, Ohlson, Poppaw, Roy and Troxell. Nays: none. THE MOTION CARRIED. 216 June 9, 2009 Other Business CouncilmemberTroxell withdrew from thediscussion of Resolution 2009-05Approving Exemptions to the Use of a Competitive Process for Contracts for Development and Demonstration of a Coordinated and Integrated System of Mixed Distributed Electric Resources under a Grantfrom the U.S. Department of Energy, due to a conflict of interest. Resolution 2009-059 Approving Exemptions to the Use of a Competitive Process for Contracts for Development and Demonstration of a Coordinated and Integrated System of Mixed Distributed Electric Resources under a Grant from the U.S. Department of Energy, Adopted The following is staffs memorandum for this item. "FINANCIAL IMPACT The total budget for the project is $11.1 million, which has already been appropriated. In November 2008, the City Council authorized Resolution 2008-106, which allows the City Manager to execute the agreement with the Department of Energy (DOE) and enter into subcontract agreements with the project partners. The agreement outlines, per the grant submittal, how matching funds are contributed and DOEfunds are distributed amongst the partners. This Resolution allows the City, as grant administrator, to contract with the non -governmental partners as an exemption to competitive process. Total project budget: $11,052,942 Total matching -funds: S 4,729,561 Funds from DOE: $ 6,323,381 EXECUTIVE SUMMARY This project will modernize and transform a portion of the electrical distribution system in the City by developing and demonstrating coordinated and integrated system ofmi�xed distributed electric resources — including renewable generation (solar), rotary- and inverter -based generation, and demand response methods — that will reduce peak loads on multiple distribution feeders in the downtown area by up to 30%and deliver improved efficiency and reliability. VOW reCu "I it" The applicant for the overall project is the City of Fort Collins. The project will address the Research, Development, and Demonstration of a Coordinated and Integrated System of 3.5 MW of Mixed Distributed Resources in Fort Collins to Achieve a 20-30% Peak Load Reduction on Multiple Distribution Feeders. Fort Collins is well positioned to execute this contract due to the unique combination of world -class research facilities at Colorado State University, participation ofglobal industry leaders and local entrepreneurs able to commercialize the technology, the City of Fort 217 June 9, 2009 Collins focus on and investments in clean energy as a key pillar of future growth, the presence of a city owned utility and extensive community support. Since this grant has been awarded and the City has begun the process of executing subcontracts with the project partners, a question has come up regarding the need to competitively bid the participation of the partners. Project partners were identified early, prior to the grant being submitted, and letters of commitment were solicited by the City to outline and secure the partners role. The original concept for FortZed came. from the UniverCity Connections project, organized through the Community Foundation. Many of the partners were involved in the UniverCity Connections effort and were recruited to participate with cash and no -cash matches. Other partners were specially recruitedfor their expertise andlor specialized equipment what would be needed. Me overarching goal was to include as many local partners as would be possible — a goal that was certainly met with this project. It was never- envisioned at the time that a competitive process would be used as the partners' roles were voluntary and each partner brings specific value to the overall project. This Resolution clarifies that the City can enter into these subcontract agreements with no competitive process required. " Mike Freeman, Chief Financial Officer, stated a large Department of Energy grant has been secured for the FortZed project. It was a complicated grant proposal because of the large number of partners involved. In November 2008, Council adopted Resolution 2008-106, which authorized the City Manager to sign the contract with the Department of Energy and allowed negotiations with the partners in this Project. In February2009, Ordinance No. 013, 2009, appropriated all the grant funds the City anticipated receiving. The original proposal was developed with the understanding that the partners in the project could make profits on the work they executed under the grant. Some of the partners would not have participated in the project if they were not able to earn a profit on the work they did. The Department of Energy has changed its mind several times about the issue of where the partners could make profits on they work they do under the grant. Two weeks ago, the Department of Energy sent a letter, formally stating the original proposal was acceptable and it would allow the partners to earn profits from the work they do under the grant. As a result of this decision, the City's Purchasing Policy created a problem because the City's partners are characterized as "for profit" by the Department of Energy. The City cannot enter into the subpartner contracts because they are "for profit' and, under the Purchasing Policy, an open solicitation for proposals would be required. Requests for proposals cannot be offered because the grant partners are all volunteers and have put money, matching equipment and time into the project. This Resolution will exempt the partner contracts from the purchasing process and will enable the project to move forward in a timely fashion. Councilmember Roy asked what expertise Spirae, Inc brings to the project. Freeman stated Spirae, Inc. is -a local company that is a central part to the Smart Grid element of the project. Smart Grid will integrate the renewable energy products onto the grid to help achieve peak load reduction, the goal of the project. 218 June 9, 2009 Mayor Hutchinson noted Spirae was one of the founders of the Northern Colorado Clean Energy Cluster and has been a large component in making this project feasible. City Attorney Roy stated when the Department of Energy approved the agreements with the private partners on a "for profit" basis, it characterized the partners as contractors of the City. Under the Department of Energy regulations, that characterization requires that the procurement of those services comply with the local Purchasing Code. Exempting certain kinds of procurements from the Purchasing Code is a standard procedure under City Code, with certain criteria specified as to when it is appropriate. Those criteria do apply to this situation. The project is time sensitive and numerous delays have occurred. In order to move ahead in a timely fashion and make this project work, the request for an exemption to the competitive process is requested. Councilmember Manvel made a motion, seconded by Councilmember Poppaw, to adopt Resolution 2009-059. Councilmember Ohlson asked for an explanation of the FortZed project. Freeman stated FortZed is the creation of a zero energy district with the idea of producing as much energy locally as is used within the Downtown area. The project will generate about 5 megawatts of alternative energy and the total demand in the district is about 50 megawatts. The total project will receive $6.3 million from the U.S. Department of Energy and the balance is contributed through direct dollar contributions and matching contributions from the partners. The vote on the motion was as follows: Yeas: Hutchinson, Kottwitz, Manvel, Ohlson, Poppaw, and Roy. Nays: none. THE MOTION CARRIED. Adjournment Councilmember Ohlson made a motion, seconded by Councilmember Roy, to adjourn the meeting to Tuesday, June 23, at 6:00 p.m. for the mid -year evaluations of the City Manager, City Attorney and Municipal Judge. Yeas: Hutchinson, Kottwitz, Manvel, Ohlson, Poppaw, Roy, and Troxell. Nays: none. THE MOTION CARRIED. The meeting adjourned at 6:45 p.m. i Mayo ATTEST: `t ' ,VE - -, .City Clerk 219