HomeMy WebLinkAboutMINUTES-07/19/2011-RegularJuly 19, 2011
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, July 19, 2011,
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: Horak, Kottwitz, Manvel, Ohlson, Poppaw, Troxell and
Weikunat.
Staff Members Present: Atteberry, Krajicek, Roy.
Citizen Participation
Chuck Washington, 1125 Deercraft Court, spoke regarding expenditure of surplus funds and'
encouraged reinstituting Dial -a -Ride services in the southeast part of town.
Chantel Havre, 1705 Remington Street, Community for Sustainable Energy, discussed sustainable
energy in Fort Collins and thanked Councilmembers for their service.
Peggy Loonan, 708 Gilgalad Way, expressed concern regarding the City appeal process and opposed
current practices of staff in that process.
Laurence Budd, 1442 Glen Haven Drive, discussed FCPAN, the Fort Collins public access channel
and requested that the rejection of a certain medical program be examined.
Joan Black, 1206 Canvasback Court, thanked Councilmember Horak for his response regarding
Dial -a -Ride access and supported expanding access further south.
Devin Hirning, 2214 Fossil Creek Parkway, opposed the staff recommendation regarding Item No.
19, Resolution 2011-060 Amending the Rules of Procedure Governing the Conduct of City Council
Meetings.
Pam Jennings, Disabled Resource Services, 424 Pine Street, thanked Council and the Fort Collins
CDBG Commission for fully funding the Disabled Resources Services funding request.
Eric Sutherland, 3520 Golden Currant, showed a video of Steve Catanach, Light and Power
Operations Manager, stating Council had vetted the business case for the'Smart Meter project. Mr.
Sutherland alleged that is not a true statement.
Mel Hilgenberg, 172 North College, thanked Councilmember Troxell for pulling the alley naming
issue off the July 5, 2011 Consent Calendar. He suggested alternative names of Will Schwartz, Otto
Warner, and Gale Hilgenberg.
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July 19, 2011
Lloyd Walker, 1756 Concord Drive, discussed inconsistencies between the City's bicycle policies
and the Land Use Code. He offered several suggestions to improve the situation including the
creation of a Bike Overlay Zone within 1.5 miles of CSU's campus.
Sarah Burnett, 714 Gilgalad Way, discussed Item No. 18, First Reading of Ordinance No. 095,
2011, Amending the Appeals Procedure Contained in Chapter 2, Article II, Division 3 of the City
Code Relating to the Procedures for Hearing Appeals to the City Council. She supported the
Ordinance as it would allow site visits by Council.
Jonathan Feiman, 959 Gilgalad Way, opposed staff s role in the preparation of Agenda Item
Summaries for appeals of land use decisions.
Citizen Participation Follow-up
Mayor Weitkunat spoke on behalf of City employees in response to Mr. Sutherland's accusations.
She spoke to the honesty, integrity, ethics, and quality work of City staff.
Mayor Pro Tern Ohlson agreed with Mayor Weitkunat and spoke to the integrity of staff.
Councilmember Manvel requested an explanation regarding Mr. Budd's question about the public
access channel programming.
Councilmember Horak requested an examination of the current Dial -a -Ride system and feedback
regarding concerns. He asked for numerical data supporting the Smart Meter program and for an
explanation of the appeal process that can be shared with citizens.
Councilmember Kottwitz thanked Mr. Washington and Ms. Black for their input regarding the
southeast connections for Dial -a -Ride. She stated she would like to see Transfort and Dial -a -Ride
as two separate issues in the future.
Mayor Pro Tern Ohlson requested all available information regarding the context of the decision to
decrease Dial -a -Ride services, which had been above and beyond federal standards previously.
Councilmember Horak requested an analysis of the distribution of available funds with respect to
possibly increasing Dial--a-Ride services.
Agenda Review•
City Manager Atteberry stated there are revised Ordinances for Item Nos. 18 and 26, First Reading
of Ordinance No. 095, 2011, Amending the Appeals Procedure Contained in Chapter 2, Article II,
Division 3 of the City Code Relating to the Procedures for Hearing Appeals to the City Council and
Items Relating to the Fort Collins Museum/Discovery Science Center Project. Item No. 28, First
Reading of Ordinance No. 098, 2011, Repealing and Reenacting Division 14, Article III of Chapter
2 of the Code of the City of Fort Collins Dissolving the Electric Board and Creating a New Energy
Board, is recommended to be withdrawn to the August 16, 2011 meeting.
July 19, 2011
CONSENT CALENDAR
6. Second Reading of Ordinance No. 076, 2011, Appropriating Unanticipated Revenue in the
General Fund for the Purchase, Training and Ongoing Maintenance of the E911 and
Emergency Dispatch Systems at Fort Collins Police Services Dispatch Center.
Larimer Emergency Telephone Authority provides funds, to the Fort Collins Police Services
to be used for equipment and training to process E911 calls. This Ordinance, unanimously
adopted on First Reading on July 5, 2011, appropriates those funds.
Second Reading of Ordinance No. 077, 2011, Appropriating Unanticipated Revenue in the
Light and Power, Water and Wastewater Funds for Capital Projects to Relocate Utility
Facilities in the Mason Corridor Bus Rapid Transit Project and Transferring Existing Light
and Power Appropriations into the Light and Power Utility Relocation Capital Project.
This Ordinance, unanimously adopted on First Reading on July 5, 2011, appropriates capital
project funding for the Utilities to relocate existing electric, water and wastewater facilities
to accommodate the Mason Corridor Bus Rapid Transit (BRT) Project. Light and Power
will also supply power to the bus stations along the corridor.
Second Reading of Ordinance No. 078, 2011, Appropriating Unanticipated Grant and Other
Revenue in the Conservation Trust Fund for the Hughes Stadium Disc Golf Course.
This Ordinance, unanimously adopted on First Reading on July 5, 2011, appropriates an
$85,000 awarded by Great Outdoors Colorado has awarded for the completion of the Hughes
Stadium Disc Golf Course. The project involves the development of an 18-hole disc golf
course at Hughes Stadium in conjunction with Colorado State University. The course is
primarily located in the stormwater detention basin directly west of Overland Trail Road.
The course will include new trees and shrubs, a new access road off County Road No. 42C,
and the course tee areas and baskets.
9. Items Relating to Amendments to the Definitions in Article I of Chapter 26, the Electric
Article of Chapter 26, and to Standards for Interconnection of Electric Generation Facilities.
A. Second Reading of Ordinance No. 079, 2011, Making Certain Amendments to
Chapter 26 of the City Code Pertaining to the Provision of Net Metering Service and
Certain Definitions Related Thereto.
B. Second Reading of Ordinance No. 080, 2011, Amending Various Provisions of the
City Code and the Land Use Code Pertaining to the Definition of General Manager.
C. Second Reading of Ordinance No. 081, 2011, Making Certain Amendments to
Interconnection Standards for Generating Facilities Connected to the Fort Collins
Distribution System.
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These Ordinances, unanimously adopted on First Reading on July 5, 2011, make minor
revisions to the definitions section of Article I and to the Electric Article of Chapter 26 of
the City Code and the Land Use Code. These revisions include updating the definition of
General' Manager, clarification regarding the provision of net metering service and
clarification regarding authority to execute interconnection or parallel generation agreements
on behalf of the City. Light and Power is also recommending adding clarifying language to
the City's indemnification and insurance requirements contained in the City's
Interconnection Standards. These standards govern operational and other requirements, for
interconnection generating facilities to the City's electric distribution system.
10. Second Reading of Ordinance No 082 2011 Calling a Special Municipal Election to Be
Held in Conjunction with the November 1 2011 Larimer County Coordinated Election.
This Ordinance, unanimously adopted on First Reading on July 5, 2011, calls a Special
Municipal Election to be held in conjunction with the November 1, 2011 Larimer County
Coordinated Election, and preserves the opportunity for Council to place initiated or referred
issues on the November ballot. If Council decides to place any measures on the ballot it
would need to do so no later than at its August 16 meeting. If Council does not take action
by ordinance or resolution. before the statutory deadline (September 2) to certify ballot
language to Larimer County, the election will be cancelled and the provisions of this
Ordinance will be of no further force and effect.
This Ordinance does not submit a specific measure to the November 1, 2011 ballot.
However, a group of citizens is currently circulating an initiative petition proposing a
prohibition on the establishment, operation or licensing of medical marijuana centers,
optional premises cultivation operations, and medical marijuana -infused product
manufacturing within the city of Fort Collins. The deadline to submit the petition to the City
Clerk's Office is July 19, 2011. Adoption of this Ordinance is a required step in preserving
the option for City Council to submit the initiated ordinance, and/or any other ballot
measures that Council may desire, at the November 1, 2011 Coordinated Election.
11. Items Relating to the Access Road at Soapstone Prairie Natural Area.
A. Second Reading of Ordinance No. 083, 2011, Authorizing the Transfer to Larimer
County of Public Right -of -Way Easements Acquired by the City for the
Reconstruction of Rawhide Flats Road.
B. Second Reading of Ordinance, No. 084, 2011, Authorizing the Conveyance of
Access Easements to Three Private Land Owners within the Soapstone Prairie
Natural Area.
To complete the process of improving Rawhide Flats Road, the City has requested that
Larimer County vacate sections of road right-of-way that were abandoned in 2008 when the
road was realigned and reconstructed by the City to provide access to Soapstone Prairie
Natural Area. The County conditioned its approval of the road improvements on the City's
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July 19, 2011
follow up to request this vacation in order to stop the unnecessary public use of the old
abandoned road areas and to allow the land to revert to the surrounding landowner(s). Once
the sections of right-of-way are vacated, the ownership will revert to the adjacent
landowners. In connection with the vacation of the unneeded sections of right-of-way, the
City is proposing to transfer to the County six new right-of-way easements that the City
acquired to build the realigned portions of the improved road. This transfer will establish
that the easements are held by Larimer County as public road easements for Rawhide Flats
Road along with the other segments of the Road, and that the right-of-way being vacated is
no longer needed.
The City has also asked the County to vacate any remaining public road rights -of -way within
Soapstone Prairie Natural Area. This action will establish that Rawhide Flats Road north
of the Natural Area boundary line is a private road owned by the City for the sole purpose
of providing access to Soapstone Prairie Natural Area. There are currently three property
owners with in -holding properties within Soapstone Prairie Natural Area. When this section
of Rawhide Flats Road is vacated, these owners will lose their legal access to their
properties. In order to continue to provide these owners legal access to their property, the
City will need to grant each owner an access easement from the boundary of the Natural
Area to their property line. The access easements will follow the same alignment as the
existing road on the Soapstone Prairie Natural Area. These Ordinances were unanimously
adopted on First Reading on July 5, 2011.
12. Second Reading of Ordinance No. 085, 2011, Authorizing the Conveyance to Capstone
Development Corporation of Three Easements on Stormwater Utility Property at Creekside
Park.
Capstone Development Corporation is planning a mixed use development. The project area
is 10.4 acres and is located near Stuart Street and College Avenue. It fronts College Avenue
around the Discount Tire property and continues to the west to the railroad. The project area
is also at the rear of the Dairy Queen property. This mixed use development is for student
housing and retail space. It will have two buildings, 221 dwelling units and 8,000 square
feet of new retail space. The retail space will be the first floor of the building fronting on
South College Avenue.
This Ordinance, unanimously adopted on First Reading on July 5, 2011, authorizes a
drainage easement for construction of a new flood control channel, a drainage easement for
sheet flows from the adjoining property, and a temporary construction easement to construct
a pedestrian trail and an underground stormwater pipe on City -owned property known as
Creekside Park.
13. Second Reading of Ordinance No. 086, 2011, Authorizing the Conveyance to Solitaire
Homes, LLC of a Public Trail Easement on City Property.
Solitaire Homes, LLC is planning a 27 acre (approximately) development north and west of
Laporte Avenue and Taft Hill Road, opposite .the Poudre School District offices. This
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July 19, 2011
Ordinance, unanimously adopted on First Reading on July 5, 2011, authorizes a 438 square
foot public trail easement from the City across City property managed by the Water Utility
to facilitate a planned trail within the development.
14. First Reading of Ordinance No 090 2011 Appropriating General Fund Prior Year Reserves
for the Affordable Housing Fund and Land Bank Program.
City Council authorized expenditures in 2010 for Affordable Housing and the Land Bank
Program. All of the authorized expenditures were not spent in 2010 because the projects for
which the dollars were originally appropriated could not be completed during 2010.
Reappropriation of $295,821 is necessary for completion of the projects in 2011. These
unexpended monies lapsed into the General Fund balance at the end of 2010 and reflect no
change in Council policies.
15. Items Relating to the Shields Street Bridge Replacement and LaPorte Avenue Bride
Replacement.
A. Resolution 2011-058 Authorizing the Mayor to Enter into a Contract with the
Colorado Department of Transportation for the Construction of the Shields Street
Bridge Replacement and Laporte Avenue Bridge Replacement.
B. First Reading of Ordinance No. 091, 2011, Appropriating Unanticipated Revenue
from the Colorado Department of Transportation in the City Bridge Program Fund
for the Shields Street Bridge Replacement and Laporte Avenue Bridge Replacement.
The City of Fort Collins Engineering Department has been awarded three grants from the
federally funded Colorado Off -System Bridge Program totaling $2,225,932. This funding
contract between the City and Colorado Department of Transportation is for the replacement
of two structurally deficient bridges owned by the City. The two bridges are Shields Street
Bridge over Larimer Canal No. 2, and Laporte Avenue Bridge over the Arthur Ditch.
16. Items Relating to a Long -Term Solar Power Arrangement for the Water Treatment Facility.
A. First Reading of Ordinance No. 092, 2011, Authorizing the Execution of a Power
Purchase Agreement Contract with a Photovoltaic Provider at the Water Treatment
Facility for a Term of Up to 20 Years.
B. Resolution 2011-059 Authorizing a Revocable Permit to a Selected Solar Provider
for the Use of the City Water Treatment Facility Property for a Solar Project.
The Water Treatment Facility receives its electrical power from Xcel Energy. A solar power
generation project, with a fixed electrical rate sold back to the City, allows the offset of a
portion of electrical usage at the plant site. A third party Photovoltaic system developer will
design, construct, operate and maintain for up to 20 years a solar power project. This
Ordinance allows for, a 20-year contract between the system developer and the City. The
July 19, 2011
Resolution issues a revocable permit for use of a portion of land onsite of the Water
Treatment Facility by the photovoltaic system developer.
17 Items Relating to Grass Height Restrictions and Updating Related City Code References.
A. First Reading of Ordinance No. 093, 2011, Amending Article IV of Chapter 20 of
the City Code Regarding Weeds, Grass and Rubbish.
B. First Reading of Ordinance No. 094, 2011, Amending Article VII of Chapter 12 of
the City Code Regarding Resource Conservatiori.
In an effort to promote water conservation, lower greenhouse gas emissions, and provide
options for Fort Collins residents who are interested in using water -wise turfgrass, these
Code amendments will allow certain grass types to be exempt from the current six (6) inch
height limit. The grass types that would be exempt are Blue Grama and Buffalo grass, and
they would have a height limit of twelve (12) inches.
18. First Reading of Ordinance No. 095, 2011, Amendingthe he Appeals Procedure Contained in
Chapter 2, Article II, Division 3 of the City Code Relating to the Procedures for Hearing
Appeals to the City Council.
This Ordinance changes the timing for the scheduling of appeal hearings and for requesting
site inspections and also amends the appeals procedure so as to allow the general public to
participate in the appeal hearing and to allow Councilmembers who have filed an appeal to
participate in deciding the appeal.
19. Resolution 2011-060 Amending the Rules of Procedure Governing the Conduct of City
Council Meetings.
This Resolution would amend the rules of procedure that govern the conduct of City Council
meetings with regard to citizen comment during the Citizen Participation segment of the
meetings. The 30-minute time limit that currently exists for the Citizen Participation segment
of the meetings would be eliminated and two topics would be specified as not appropriate
for comment: matters on the discussion agenda for the meeting and quasi-judicial matters.
20. Resolution 2011-061 Adopting the Recommendations of the Cultural Resources Board
Re arding Fort Fund Disbursements.
The Cultural Development and Programming and Tourism Programming accounts (Fort
Fund) provide grants to fund community events. This resolution will adopt the
recommendations from the Cultural Resources Board to disburse these funds.
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July 19, 2011
21. Resolution 2011-062 Making Appointments to the Retirement Committee and the Women's
Commission.
A vacancy currently exists on the Retirement Committee due to the resignation of Dick
Burkhartzmeyer. Councilmembers Ben Manvel and Wade Troxell reviewed the applications
on file. The interview team is recommending John Lindsay to fill the vacancy with a term
to begin immediately and set to expire on December 31, 2011.
A vacancy also exists on the Women's Commission due to the resignation of Randi Nelson.
Applications were solicited and Councilmembers Ben Manvel and Wade Troxell conducted
interviews. The interview team is recommending Jan Hawn to fill the vacancy with a term
to begin immediately and set to expire on December 31, 2012.
***END CONSENT***
Ordinances on Second Reading were read by title by City Clerk Krajicek.
6. Second Reading of Ordinance No. 076, 2011, Appropriating Unanticipated Revenue in the
General Fund for the Purchase, Training and Ongoing Maintenance of the E911 and
Emergency Dispatch Systems at Fort Collins Police Services Dispatch Center.
7. Second Reading of Ordinance No. 077, 2011, Appropriating Unanticipated Revenue in the
Light and Power, Water and Wastewater Funds for Capital Projects to Relocate Utility
Facilities in the Mason Corridor Bus Rapid Transit Project and Transferring Existing Light
and Power Appropriations into the Light and Power Utility Relocation Capital Project.
8. Second Reading of Ordinance No. 078, 2011, Appropriating Unanticipated Grant and Other
Revenue in the Conservation Trust Fund for the Hughes Stadium Disc Golf Course.
10. Second Reading of Ordinance No. 082, 2011, Calling a Special Municipal Election to Be
Held in Conjunction with the November 1, 2011 Larimer County Coordinated Election.
11. Items Relating to the Access Road at Soapstone Prairie Natural Area.
A. Second Reading of Ordinance No. 083, 2011, Authorizing the Transfer to Larimer
County of Public Right -of -Way Easements Acquired by the City for the
Reconstruction of Rawhide Flats Road.
B. Second Reading of Ordinance, No. 084, 2011, Authorizing the Conveyance of
Access Easements to Three Private Land Owners within the Soapstone Prairie
Natural Area.
12. Second Reading of Ordinance No. 085, 2011, Authorizing the Conveyance to Capstone
Development Corporation of Three Easements on Stormwater Utility Property at Creekside
Park.
July 19, 2011
13. Second Reading of Ordinance No. 086, 2011, Authorizing the Conveyance to Solitaire
Homes, LLC of a Public Trail Easement on City Property.
26. Items Relating to the Fort Collins Museum/Discovery Science Center Project.
A. Second Reading of Ordinance No. 087, 2011, Appropriating Prior Year Reserves in
the General Fund for Transfer to the Capital Projects Fund for the Fort Collins
Museum/Discovery Science Center Project.
B. Second Reading of Ordinance No. 088, 2011, Appropriating Prior Year Reserves in
the Water Fund for the Purpose of Providing a Loan to FCDM, Inc. for the Fort
Collins Museum/Discovery Science Center Project.
Ordinances on First Reading were read by title by City Clerk Krajicek.
14. First Reading of Ordinance No. 090, 2011, Appropriating General Fund Prior Year Reserves
for the Affordable Housing Fund and Land Bank Program. ;
15. First Reading of Ordinance No. 091, 2011, Appropriating Unanticipated Revenue from the
Colorado Department of Transportation in the City Bridge Program Fund for the Shields
Street Bridge Replacement and Laporte Avenue Bridge Replacement.
25. Items Relating to the Completion of the 2011 Spring Cycle of the Competitive Process for
Allocating City Financial Resources to Affordable Housing and Community Development
Activities Utilizing the Federal Community Development Block Grant (CDBG) and Home
Investment Partnerships (HOME) Programs, and the City's Human Services Program.
C. First Reading of Ordinance No. 096,'2011, Appropriating Unanticipated Revenue
and Authorizing the Transfer of Appropriations Between Program Years in the
Community Development Block Grant Fund. ,
D. First Reading of Ordinance No. 097, 2011, Appropriating Unanticipated Revenue
and Authorizing the Transfer of Appropriations Between Program Years in the
Home Investment Partnerships Fund.
Councilmember Horak withdrew Item Nos. 18 and 19, First Reading of Ordinance No. 095, 2011,
Amending the Appeals Procedure Contained in Chapter 2, Article II, Division 3 of the City Code
Relating to the Procedures for Hearing Appeals to the City Council and Resolution 2011-060
Amending the Rules of Procedure Governing the Conduct of City Council Meetings.
Councilmember Troxell withdrew Item No. 17, Items Relating to Grass Height Restrictions and
Updating Related City Code References.
Eric Sutherland, 3520 Golden Currant, withdrew Item Nos. 9 and 16, Items Relating to Amendments
to the Definitions in Article I of Chapter 26, the Electric Article of Chapter 26, and to Standards for
Interconnection of Electric Generation Facilities and First Reading of Ordinance No. 092, 2011,
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Authorizing the Execution of a Power Purchase Agreement Contract with a Photovoltaic Provider
at the Water Treatment Facilityfor a Term of Up to 20 Years.
Councilmember Manvel made a motion, seconded by Councilmember Troxell, to adopt and approve
all items not withdrawn from the Consent Calendar. Yeas: Weitkunat, Kottwitz, Manvel, Ohlson,
Poppaw, Horak, and Troxell. Nays: none..
THE MOTION CARRIED.
Consent Calendar Follow-up
Mayor Pro Tern Ohlson asked for a brief description of Item No. 15, First Reading of Ordinance
No. 091, 2011, Appropriating Unanticipated Revenue from the Colorado Department of
Transportation in the City Bridge Program Fund for the Shields Street Bridge Replacement and
Laporte Avenue Bridge Replacement. Rick Richter, Engineering and Capital Projects Manager,
replied the item references two bridges that will be replaced using grant funds received from the
Colorado Department of Transportation. As grant money will be used, previously allocated dollars
will be used to redesign two additional deficient bridges.
Councilmember Horak suggested additional details be present when describing bridge locations.
Staff Reports
City Manager Atteberry stated Fort Collins has been designated as one of the best locations for tri-
athletes. Lawrence Pollack, Finance Department Systems Analyst, identified a need for and created
a Budgeting for Outcomes process network.
John Stokes presented an update regarding the Poudre River Ecological Vision, a project being
proposed by the Natural Resource Department. The project would create a high-level, yet
quantitative, ecological description of the Poudre River. Costs are expected to be relatively low with
a fair amount of volunteer work coming from Colorado State University personnel. This project is
not driven by other water projects such as Seaman Reservoir.
Councilmember Troxell asked if a similar project is being proposed for other City watersheds.
Stokes replied a group at Utilities is examining small stream systems within the City. Kevin Gertig,
Water Resources and Treatment Operations Manager, replied those studies are an important part of
the City's urban watershed monitoring program.. A full report and assessment will be provided to
Council in the near future.
Councilmember Horak encouraged the involvement of the United States Geological Survey.
Mayor Pro Tern Ohlson supported the project and staff s initiative in its proposal.
July 19, 2011
Councilmember Reports
Councilmember Manvel reported on a new brochure from the Poudre River Heritage Board. The
brochure will be available in local bookstores and discusses the history of Poudre River water
projects and provide descriptions of the River sections.
Councilmember Poppaw thanked Beet Street and the City for their efforts at obtaining the National
Endowment for the Arts "Our Town" grant. Jill Stilwell, Cultural Services Director, stated the grant
will fund planning and design of an art incubator in Fort Collins.
Mayor Pro Tern Ohlson stated the Finance Committee discussed the Avago project and the sales tax
rebate on food. Additionally, the Committee recommended the Downtown Development Authority
not move forward with the downtown hotel project request for proposal.
Mayor Weitkunat stated there will be a regional meeting with Loveland and Larimer County at
Harmony Library Thursday regarding connection and transportation issues. She complimented the
recent renovations to Council chambers.
Items Relating to the Completion of the 2011 Spring Cycle of the Competitive
Process for Allocating City Financial Resources to Affordable Housing and
Community Development Activities Utilizing the Federal Community Development
Block Grant (CDBG) and Home Investment Partnerships (HOME) Programs, and the
City's Human Services Program, Adopted on First Reading
The following is staffs memorandum for this item.
"EXECUTIVE SUMMARY
A. Public Hearing and Resolution 2011-063 Approving the Programs and Projects that Will
Receive Funds from the Federal Community Development Block Grant Program, the Home
Investment Partnerships Program, and the City's Human Services Program.
B. Public Hearing and Resolution 2011-064 Approving the Fiscal Year 2011 Administration
and Project Budgets for the Home Investment Partnerships Program.
C. First Reading of Ordinance No. 096, 2011, Appropriating Unanticipated Revenue and
Authorizing the Transfer of Appropriations Between Program Years in the Community
Development Block Grant Fund.
D. First Reading of Ordinance No. 097, 2011, Appropriating Unanticipated Revenue and
Authorizing the Transfer ofAppropriations Between Program Years in the Home Investment
Partnerships Fund.
E. Public Hearing and Resolution 2011-065 Eliminating Restrictions on the Use ofAffordable
Housing Funds Currently Earmarked for the Acquisition of Former Rental Properties.
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Resolution 2011-063 will complete the 2011 spring cycle of the competitive process for allocating
City financial resources to affordable housing programs/projects and community development
activities by listing the specific programs/projects that will receive fundingstarting October 1, 2011.
Ordinance No. 096, 2011, appropriates the City's FY 2011 CDBG Entitlement Grant from the
Department of Housing and Urban Development (HUD). Resolution 2011-064 establishes the
major funding categories within the HOME Program for the FY 2011 program year, which also
starts on October 1, 2011. Specific projects for the use of HOME funds will be determined in
November as a result of the 2011 fall cycle of the competitive process. Ordinance No. 097, 2011,
appropriates the City's FY 2011 HOME Participating Jurisdiction Grant from HUD. Resolution
2011-065 eliminates the restriction on $60, 000 of Affordable Housing Fund dollars that they be
used for the acquisition offormer rental properties by first-time home buyers to allowing the funds
to be used for the purchases of non -rental properties.
BACKGROUND /DISCUSSION
Resolution 2011-063 establishes which programs and projects will receive funding with CDBG
funds for the FY 2011 program year (including funds from the Entitlement Grant and'Program
Income), which starts on October 1, 2011; which programs and projects will receive funding from
carry-over funds from the HOME Program; and which programs will receive funding from the
City's 2011 Human Services Program. The CDBG Commission presents to the City Council a list
of recommendations as to which programs and projects should receive funding. The following table
summarizes the total amount and sources of all available CDBG, HOME, and City funds for
distribution during the spring cycle of the competitive process:
AMOUNT
SOURCE
$923, 469
FY 2011 CDBG Entitlement Grant
61,815
FY 2011 CDBG Program Income
8,883
Prior Year's CDBG Program Income
191,338
FY 2010 Unprogrammed CDBG Funds
211,906
FY 2010. Unprogrammed HOME Funds
102,381
FY 2010 Unprogrammed HOME CHDO Funds
25,328
FY 2004 Unprogrammed HOME Funds
389,601
2011 City Human Services Program
150,733
2011 City Human Services KFCG Funds
$2,065,454
Total Funding Available
Unprogrammed funds are funds from previous years that have yet to be allocated to specific
programs or projects. Program Income includes repayments from rehabilitation loans and home
buyer assistance loans along with repayments from development loans. Community Housing
Development Organization (CHDO) funds are HOME funds that need to be reserved for allocation
to agencies which qualify as CHDOs including the Fort Collins Housing Corporation, CARE
Housing, and Neighbor -to -Neighbor, Inc..
The FY 2011 CDBG Entitlement Grant and CDBG Program Income totals $994,167. HUD
regulations limit a maximum of 20% of these funds, or $198,832, for planning and program
July 19, 2011
administrativepurposes. Thefollowing table summarizes the amount andsources ofavailablefunds
for planning projects and CDBG Program administrative costs:
Funding for Planning and CDBG Program Administration
AMOUNT
SOURCE
$184, 693
20% of the FY 2011 CDBG Entitlement Grant
12,363
20% o FY 2011 CDBG Program Income
1,776
20% o Prior Year's CDBG Program Income
$198, 832
Total Funding Available for Planning and CDBG Program
Administration
HUD regulations limit a maximum of 15% of the FY 2011 CDBG funds and CDBG Program
Income, or $149,124 for use in the Public Services category. The City's 2011 Human Services
Program adds $389, 601 and Human Services Program KFCG funds adds an additional $150, 733,
for use in the category, for a total of $689, 458 ofavailable funding. The following table summarizes
the amount and sources of available funds for public/human service proposals:
Funding for Public/Human Services
AMOUNT
SOURCE
$138, 520
15% of the FY 2011 CDBG Entitlement Grant
9,272
15% o FY 2011 CDBG Program Income
1,332
15% o Prior Year's CDBG Program Income
389,601
2011 City Human Services Program
150, 733
12011 City Human Services KFCG Funds
$689,458
1 Total Funding Available for Public/Human Services Proposals
Considering the set -asides for Planning and Administration and Public/Human Services presented
above, the balance of the FY2011 CDBG Entitlement Grant and CDBG Program Income amounts,
or $646,211, plus $191,338 of unprogrammed FY 2010 CDBG funds, $211,906 of unprogrammed
FY 2010 HOME funds, $102, 381 of unprogrammed FY 2010 HOME CHDO funds, and $25, 328 of
unprogrammed FY 2004 HOME CHDO funds, provide an amount of $1,177,164 available for
allocation to affordable housingproposals. The following table summarizes the amount and sources
of available funds for affordable housing proposals:
Funding for Affordable Housing
AMOUNT
SOURCE
$600,256
FY 2011 CDBG Entitlement Grant
40,180
FY 2011 CDBG Program Income
5,775
Prior Year's CDBG Program Income
191,338
FY2010 Unprogrammed CDBG Funds
211,906
1 FY 2010 Unprogrammed HOME Funds
409
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102,381 FY 2010 Unprogrammed HOME CHDO Funds
25,328 FY 2004 Unprogrammed HOME CHDO Funds
$1,177,164 Total Funding Available forAffordable Housin Proposals
The City received 31 applications for funding and a staff administration request as part of the 2011
spring cycle of the competitive process requesting a total of $2, 678, 987. The total amount offunds
available from all sources is $2, 065,454. The total ofapplication requests is, thus, $613,533 more
than the amount ofavailable funding. Also, HUD regulation limitations within the Public Services
category results in a total of $260,697 more in requests than available funds for the category.
Unfortunately, funds in the Planning and Administration and Affordable Housing categories can
not be used to fund any Public Service applications. The following table summarizes the amount
of funding requests compared to the amount of funding available for each of the major funding
categories.
Category
Number of
Applications
Requested
Funding
Available
Funding
Request -
Available
Difference
Affordable Housin
3
$1,530,000
$1,177,164
-$352,836
Public Services
28
$950,155
$689,458
-260,697
Administration
-
$198,832
$198,832
0
Totals
131
$2,678,987
1 $2,065,454
$-613,533
Removing Restrictions on the Use of Affordable Housing Funds in the Home Buyer Assistance
Program
The City's Home Buyers Assistance (HBA) Program uses funding from the HOME and CDBG
federal grants and the City's Affordable Housing Fund (AHF). In the past, normal assistance has
been split with 50% coming from the HOME Program and 50% coming from the CDBG Program
(federal regulations limit the use of CDBG funds to be no more than 50% of the total assistance).
The City's AHF dollars have been earmarked for assistance to families wishing to purchase former
rental housing units (for the use of federal funds, federal regulations require rental units to be
vacant for three months in order to avoid displacement concerns and relocation payments).
With the change in federal HOME regulations, it is now basically impossible to continue using
HOME funds as the 50% match to CDBG funds in providing down payment and closing cost
assistance in the HBA Program. Staff is suggesting that the City change its policy regarding the use
of the AHF in the HBA program, eliminating the condition that they be used only for the acquisition
offormer rental units and allowing the funds to be used for any home purchase. Staff's request is
to remove the 'former rental unit only" restriction for $60,000 of AHF dollars already approved
through the competitive process for the HBA. This $60,000 could then be used to match $60,000
of CDBG funds already allocated to the HBA Program. This would still leave $84, 000 of AHF to
assist first-time home buyers wishing to purchase former rental units.
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July 19, 2011
Without the ability to use AHF as a match, assistance in the HBA would be limited to CDBG funds,
or only half the amount of assistance families would need to acquire a new home. Stated another
way, without a 50% match to CDBG funds, families would need to have between $4, 000 and $5, 000
of their own money to buy a home — not many low-income families have that amount of funds
available.
The CDBG Commission discussed this issue at its monthly meeting on February 10, 2011, and voted
unanimously to recommend the requested change in the use ofAHF dollars (see Attachment 8).
The Affordable Housing Board discussed this issue at its monthly meeting on March 3, 2011, and
voted unanimously to recommend the requested change in the use of AHF dollars (see Attachment
9).
Resolution 2011-065 would eliminate the restrictions on the use of $60, 000 ofAffordable Housing
Funds currently earmarked for the acquisition of former rental properties and permit the funds to
be used for the acquisition of any home by a first-time home buyer.
FINANCIAL /ECONOMIC IMPACTS
The Community Development Block Grant (CDBG) Program, and the Home Investment Partnership
(HOME) Program provide federal funds from the Department of Housing and Urban Development
(HUD) to the City of Fort Collins which can be allocated to housing and community development
related programs and projects,'thereby, reducing the demand on the City's General Fund Budget
to address such needs. The total amount of CDBG funds available for allocation during FY 2011
is $1,185,505, while the total amount of HOME funds for FY 2011 is $644,352. Together, the
CDBG and HOMEprograms provide $1,829,857 offederal funds to the City. The City's General
Fund does contribute $389, 601 in the Human Services Program and $150, 733 of KFCG funds for
allocation during the spring cycle, and $325,024 ofAffordable Housing Fund dollars for the fall
cycle of the competitive process.
Through theprovision ofaffordable housing, more of Fort Collins' workforce can reside within the
community. This means there is an available laborpool within the city, which is a positive benefit
to economic sustainability.
Public/human service programs contribute to economic sustainability by providing such programs
as job training and child care, so workers can maintain their employment.
ENVIRONMENTAL IMPACTS
Affordable housing programs help provide for ahealthy environment. By offering affordable
housing options for lower income people, more of Fort Collins' workforce can live in the
community instead ofbeingforced to live outside the community and commute into the cityfor work.
This helps reduce traffic congestion and, thus, improves air quality.
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Affordable housing developers, including for profit and non-profit agencies, are utilizing green
building practices. Green building practices are being used in both new construction and major
rehabilitation of existing housing unit projects. These practices include geo-thermal applications
and other energy saving techniques.
All affordable housing projects utilizing CDBG and HOME funds are required to pass a HUD
environmental review which covers such items as noise impacts; floodplains, hazardous materials,
etc. "
Ken Waido, Chief Planner, discussed the history and aspects of the competitive process. Sources
of funding are primarily the CDBG and HOME programs as well as the City's Human Services
Program and funds from Keep Fort Collins Great. There is a total deficit of over $600,000 in
unfunded requests.
Kay Rios, CDBG Chairperson, discussed funding recommendations. Union Place, an affordable
housing project, is recommended to be funded after concerns were addressed by staff. The Fort
Collins Housing Authority's land acquisition application was not granted funding as the project does
not have City entitlement or a tax credit deal.
Robert Ross, 201 7th Street, Boulder, Union Place project architect, read a letter from Donna Merton
thanking the Affordable Housing Board and the CDBG Commission for recommending approval
of its funding request. The Union Place project is going to be used as a national green affordable
housing model to be replicated across the country.
Linda Preston, BASE Camp Executive Director, thanked staff and the CDBG Commission for
recommending approval of its funding request.
Bill Stout, Women's Resource- Center, thanked staff and the Human Services Commission for
recommending it receive its funding request which will go toward a low-cost dental program.
Whitney Johnson, Matthews House Case Manager, thanked the CDBG Commission for
recommending approval of its funding request.
Pat Parker, Crossroads Safe House Director, thanked staff for assistance with the grant writing
process and thanked the CDBG Commission for recommending approval of its funding request
which will provide partial funding for four advocates assisting victims of domestic violence.
Councilmember Manvel asked when the Union Place project should be discussed. Waido replied
Council will make the final decision as to whether competitive process funds will be used as part.
of the complex financial package that will help subsidize the development of the project. If
approved tonight, dollars will not be allocated until it is certain the project has the entitlements and
other funding it needs to proceed.
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Mayor Pro Tern Ohlson expressed concern about distortion of the process should Council vote to
approve funding for the Union Place project. He stated the project is completely different from the
one considered by the CDBG and the URA.
Councilmember Manvel asked if the Union Place project set to be funded with the recommendations
is the same project reviewed by the CDBG Board. Waido replied the proposal was for $750,000 for
103 affordable units. Since the proposal was submitted, the tax credits and need to add the 55
market rate units have changed. There have been previous occasions where Council has determined
a project is not ready to receive an allocation on the current cycle. Delaying a decision on this
$750,000 would result in either the City holding onto the dollars or using them in the next program
year.
Mayor Pro Tern Ohlson noted a memo from staff indicated the CDBG Board reviewed a different
proposal.
Councilmember Poppaw thanked the CDBG Board for its work deliberating the proposals. She
asked if the decision by the CDBG Commissioners to support the project with changes was
unanimous. Ms. Rios replied the Commission offered a majority vote to support the project with
its requested funding.
Councilmember Poppaw asked if the funds would be lost if Council delayed a vote on this particular
project. Waido replied federal regulations exist regarding the amount of CDBG funds the City can
carry over. However, it would be possible for the project to resubmit for funds as part of the
process.
Councilmember Poppaw asked about the lack of tax credits for the Fort Collins Housing Authority
land acquisition. Ms. Rios replied the project has not yet secured tax credits.
Councilmember Troxell asked if the project has a geothermal component. Waido replied in the
affirmative.
Councilmember Troxell noted this project is one of two geothermal projects in the City which have
not yet come out of the ground. Mr. Ross replied the project has physically been at a standstill over
the last year; however, a great deal of work has been going into preparing the application for the tax
credits.
Councilmember Troxell asked when the applicant knew the 9% tax credit was not going to happen.
Mr. Ross replied that was discovered at the end of April. It was one of the most competitive years
in history for Colorado Finance Housing Authority funding requests.
Mayor Weitkunat asked about the security of the project's funding sources and whether the project
has received its funds from the Division of Housing. Mr. Ross replied he was uncertain.
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July 19, 2011
Mayor Weitkunat asked about the status of the 4% tax credits. Mr. Ross replied they are in the
process of being completed and the process is non-competitive.
Mayor Weitkunat asked if the developers were given an explanation for the project not receiving
the 9% tax credits. Mr. Ross stated there were no definitive explanations given.
Christina Vincent, Urban Renewal Authority Redevelopment Program Administrator, stated this
project has been in the works since 2008 and was among a few other URA projects with funding
problems for vertical construction. The economic viability of the project was not coming together
beginning in 2010. Given the $4 million that has already been invested in the project, staff members
are of the opinion that the developers have been compliant with direction from staff. They do need
to appear before the URA Board again and go through the major amendment process for the
proposed project changes.
Mayor Weitkunat noted finances will need to come from a variety of sources; however, it is
.important to know the financial structure is in place. The CDBG funds are representing the
community commitment to the affordable housing aspect of the project.
Waido noted it is important for other investors to see a local financial commitment, and, should the
project not be completed, the $750,000 will come back.
Councilmember Horak asked about the change in the number of affordable units. Vincent replied
the URA Board approved 89 units, 40% of which were affordable. The number of affordable units
has increase to.103.
Councilmember Horak asked what concerns and thoughts the CDBG Commissioners had regarding
the project changes. Ms. Rios replied these types of projects often have changes and the money
would be returned if the project was not completed. Jeff Taylor, CDBG Boardmember, stated the
Board noted the project includes a large number of units at'the lowest AMI. Market units are
frequently added to maintain the economic viability of a project. It is vital that the City show
financial support. Additionally, the private partnership is critical.
Councilmember Horak asked about the process for the major amendment. Waido replied staff will
make a recommendation based on the application and a hearing officer will make a decision
following a public hearing. An appeal of that decision would result in a hearing before Council.
The hearing will likely be held in the next two to three months.
Mayor Pro Tem Ohlson asked if a process exists by which Council could postpone tonight's
decision but not have to wait until the fall competitive process for the project to return. Waido
replied Council's decision tonight will be used to complete the annual plan to submit to HUD.
Councilmember Horak made a motion, seconded by Councilmember Troxell, to adopt Resolution
2011-063.
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July 19, 2011
Councilmember Horak commended the CDBG process and the Board's vetting of the applications
and noted the importance of affordable housing in the community.
Councilmember Manvel stated he would support the motion despite the legitimate process questions
and noted the URA Board will have the ability to approve the project. He thanked the CDBG Board
for its work on the applications.
r ,
Councilmember Troxell stated he would supportthe motion.
Councilmember Poppaw thanked the CDBG Board for its service and the applicants for their work
in the community.
Councilmember Kottwitz thanked the community's non -profits and other social service
organizations. She stated she would not support the motion based on the process issues.
Mayor Pro Tern Ohlson asked if there are funds left over in any of the categories. Waido replied
all of the available funding is being recommended to be allocated.
Mayor Pro Tern Ohlson stated he would not support the motion given the process issues.
Mayor Weitkunat noted this is a competitive process and funds need to be used to gain other funds.
Affordable housing projects should be isolated from the Development Review process as the need
is greater for the projects to exist.
Mayor Pro Tern Ohlson stated standards should not be lessened for lower income residents.
Mayor Weitkunat clarified the process for Community Development Block Grants should be
separate from the Development Review process.
The vote on the motion was as follows: Yeas: Weitkunat, Manvel, Kottwitz, Poppaw, Horak and
Troxell. Nays: Ohlson.
THE MOTION CARRIED.
Councilmember Horak made a motion, seconded by Councilmember Troxell, to adopt Ordinance
No. 096, 2011, on First Reading. Yeas: Weitkunat, Kottwitz, Manvel, Ohlson, Poppaw, Houk and
Troxell. Nays: none.
THE'MOTION CARRIED.
Councilmember Horak made a motion, seconded by Councilmember Troxell, to adopt Resolution
2011-064. Yeas: Weitkunat, Kottwitz, Manvel, Ohlson, Poppaw, Horak and Troxell. Nays: none.
THE MOTION CARRIED.
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July 19, 2011
Councilmember Horak made a motion, seconded by Councilmember Troxell, to adopt Ordinance
No. 097, 2011, on First Reading. Yeas: Weitkunat, Kottwitz, Manvel, Ohlson, Poppaw, Horak and
Troxell. Nays: none.
THE MOTION CARRIED.
Councilmember Horak made a motion, seconded by Councilmember Troxell, to adopt Resolution
2011-065. Yeas: Weitkunat, Kottwitz, Manvel, Ohlson, Poppaw, Horak and Troxell. Nays: none.
THE MOTION CARRIED.
("Secretary's note: The Council took a brief recess at this point in the meeting.)
Items Relating to the Fort Collins Museum/Discovery
Science Center Project, Adopted on Second Reading
The following is staffs memorandum for this item.
"EXECUTIVE SUMMARY
A. Second Reading of Ordinance No. 087, 2011, Appropriating Prior Year Reserves in the
General Fund for Transfer to the Capital Projects Fund for the Fort Collins
Museum/Discovery Science Center Project.
B. Second Reading of Ordinance No. 088, 2011, Appropriating Prior Year Reserves in the
Water Fund for the Purpose of Providing a Loan to FCDM, Inc. for the' Fort Collins
Museum/Discovery Science Center Project.
At the July 5, 2011 City Council meeting, Council adopted on First Reading, two ordinances which
appropriate funding to continue construction on the•new Fort Collins Museum/Discovery Science
Center facility. Ordinance No. 087, 2011, adopted 5-2 (nays: Kottwitz, Ohlson) appropriates $1.5
million from General Fund reserves to the capital project. Council amended the original ordinance
from $3 million to $1.5 million. Ordinance No. 088, 2011, adopted 6-1 (nays: Kottwitz)
appropriates $875, 000 from Water Fund reserves to the Non-profit Corporation as a loan. These
ordinances will keep the museum project moving forward for several months and avoid a costly
work stoppage.
The buildingproject is experiencing a $3, 875, 000 cash flow issue from two sources. The Downtown
DevelopmentAuthority (DDA) has committed $3 million for the building butfunds are not currently
available. The Non-profit Corporation has raised $4,561,916 of which $875, 600 is in the form of
pledges to be paid between 2011 and 2014. The two Ordinances allow construction to continue for
several months. This additional time allows Council to consider the Building Community Choices
reserve at the July 12 work session and other potential funding mechanisms; review the next few
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months ofsales tax; and the DDA will receive its certification from the County in August, providing
key data to determine when its $3 million commitment can be paid to the project.
BACKGROUND /DISCUSSION
Through Council's support, the Fort Collins Museum and the Discovery Science Center (DSC)
joined together to create an exceptional new museum experience and facility. In 2005, Council
included the new museum in the Building on Basics (BOB) capital program, which received strong
voter support. BOB provided $6.183 million for the project and required DSC to provide at least
$3.6 million in matching funds. The DSC (which has transitioned into the Museum Non -Profit
Corporation (NPC)) has raised more than $8 million to date, far exceeding their original $3.6
million commitment.
BOB also provides $200, 000 annually for seven years for operation and maintenance of the new
facility. The BOB operations and maintenance dollars will end after seven years of operations. The
current plan to replace these funds is to continue to build the institutional endowment over the next
seven years to generate enough income to cover the $200,000 BOB operations and maintenance
dollars.
t 014fli n
The building construction project is experiencing a $3, 875, 000 cash flow problem. Two significant
sources offunding are currently not available to pay into the construction project, which began on
August 16, 2010 and is slated for completion in November 2011.
Council adopted on First Reading Ordinance No. 087, 2011, for $1.5 million and Ordinance No.
088, 2011, for $875, 000, totaling $2, 375, 000 to keep the museum project movingforward for several
months and avoid a costly work stoppage.
To default on a construction contract would have an impact on the City's bond rating, and could
have a significant impact on the City 's reputation with contractors with the potential result offewer
firms willing to bid to the City and increased bids on future projects.
The Downtown Development Authority (DDA) committed $3 million for the building but the funds
are not currently available. The DDA is exploring funding options but will not have the funding in
2011. The Museum Non-profit Corporation (NPC) has committed $4,561,916 to the museum
building, with $875,000 of that amount in the form ofpledges. These pledges will be paid between
2011 and 2014 and are not available to fund the project now.
Ordinance No. 087, 2011 appropriates $1.5 million from the General Fund to the capital project.
Council amended the Ordinance for Second Readingfrom $3 million to $1.5 million. This funding
covers half of the DDA's $3 million commitment, but is not a loan to the DDA. The DDA will
receive its certification from the County in August, providing key data to determine when and how
the DDA will issue bonds for this and other upcoming DDA projects. It is possible the City could
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be the purchaser of the DDA's bonds. The remaining $1.5 million will be needed in several months
to complete the construction project. On First Reading, Council asked if the funding source could
be a source other than the General Fund. Building Community Choices remaining balance is
another possible source.
Ordinance No. 088, 2011, approves an $875,000 loan to the NPC to cover pledges made to the
project. The loan details are attached as an Exhibit to the Ordinance, and include a 3.5% interest
rate (prime rate of 3.25% plus .25%) with a payout schedule starting in 2012 and ending in 2014.
EXHIBITS
Council did not adopt on First Reading, Ordinance No. 089, 2011, to loan the NPC an additional
$1.2 million to cover pledges designated specifically for fabrication of exhibits for the new facility.
There are eleven th'emed areas in the master exhibit plan. Three themed areas are funded through
designated donations that have been paid: music and sound, science, and natural areas. The $1.2
million for the remaining zones is in the form of pledges to be paid between 2012 and 2017. NPC
continues to explore private bridge loans to cover the pledges. Interest rates will be higher than
what the City could provide, which will decrease the amount of funding available for exhibit
fabrication. If a loan cannot be secured, the remaining zones will be phased into the gallery as
pledges are paid, between 2012 and 2017.
Council asked ifstaff would be adding to the bottom line of the total exhibit costs if the exhibits were
phased in over time. The bottom line will see a 10 — 20% increase by phasing the exhibits. The
percentage moves toward 20% as the phases are spread farther apart over time.
On First Reading, Council requested a list of the top 4 or 5 operation and maintenance costs,
besides staffing, for the new facility. These items include:
• Utilities — estimated at $42, 600 annually (based on modeling projections that could change
according to the actual use of the building and future costs of utilities)
• Custodial, trash and recycling — estimated at $59, 000
• Maintenance and repair — estimated at $55,000 year one (Primarily HVAC, electrical,
preventive maintenance inspections, filters, etc. not covered under warranty. This number
will ratchet up as warranties expire and the building begins to age)
• Grounds maintenance/snow removal - estimated at $18,500
Council also directed staff to fill all three available City appointed seats on the NPC Board. Staff
will work with the City Manager to appoint the two vacant seats as soon as possible.
FINANCIAL /ECONOMIC IMPACTS
Ordinance No. 087, 2011, appropriates $1,500,000 in the General Fund to cover construction of
the Museum building. The DDA's pledge has already been appropriated in the Capital Projects
fund, however the project is underway and it is unable to make payment at this time.
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July 19, 2011
To fund its pledge, the DDA plans to seek external financing. In that scenario the amount of
available reserves in the General Fund at the end of 2012 are forecasted to exceed the policy
minimum by $7,500,000. If, however, the DDA instead asks the City for a loan, and the loan is
granted, available reserves above the policy minimum will be $4.5 million.
Ordinance No. 088, 2011 authorizes $875, 000 in the Water Fund to be loaned to the NPC. The NPC
building commitments have already been appropriated, in the project, however the project is
underway and they are unable to make payment at this time. The NPC has building pledges equal
to their commitment but the pledges will come in' installments through 2014. The Water fund
currently has reserves that exceed its policy minimums allowing it to make this loan. The proposed
terms are 3.5% annual interest and $875,000 in principal to be paid according to the loan
agreement. "
Jill Stilwell, Cultural Services Director, discussed the Ordinances and Council's First Reading
approvals. Councilmember Horak has added an amendment for consideration tonight to add back
$1.5 million to Ordinance No. 087, 2011, to cover the DDA's commitment in total. The third
Ordinance heard on First Reading was not passed but could be brought back before Council at its
direction.
Eric Sutherland, 3520 Golden Currant, suggested there is no guarantee that tax increment collected
by the Downtown Development Authority will be applied to this project. He made comparisons
between the museum and the RMI2 project and stated there was no governance of the RM12 project
at all.
Annette Geiselman, Discovery Science Center Director, thanked Council for adopting Ordinance
No. 088, 2011, on First Reading. She discussed community support for the museum.
Councilmember Horak made a motion, seconded by Councilmember Manvel, to adopt Ordinance
No. 087, 2011 as amended, Option A, on Second Reading.
City Attorney Roy read the Ordinance changes into the record.
Mayor Pro Tern Ohlson stated he has had several meetings with staff over the last year regarding
this issue in which staff was unaware of certain changes. He asked what assurance exists that the
governance model and communication to Council will be improved. City Manager Atteberry replied
staff is reviewing its processes to ensure these types of communication issues do not occur again.
He stated he is personally going to sit on the Board of Directors of the Non -Profit Corporation
(NPC) for a significant period of time.
Mayor Pro Tern Ohlson asked why the City only filled one of its allotted three positions on the
Board. City Manager Atteberry replied those positions will be filled moving forward.
Mayor Pro Tern Ohlson expressed concern with 25% of the permanent exhibit space being dedicated
to music. Stilwell replied an exhibit design master plan firm was hired to determine what the
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exhibits should be and the building was designed around those exhibits. Those exhibits fall into
eleven thematic areas,'one of which is music and sound.
Mayor Pro Tem Ohlson expressed concern with the relatively little amount of exhibit space being
dedicated to sustainability and energy. Stilwell replied the exhibits are designed to be a cohesive
experience with music having its own area primarily due to electric needs. Other areas incorporate
several themes and sustainability is discussed throughout the exhibit space.
Councilmember Horak asked if the exhibits were influenced by donors. Stilwell replied in the
negative.
Councilmember Kottwitz noted the early childhood section of the museum has not yet been funded.
Marty Heffernan, Director of Culture, Parks, Recreation, and Environment, clarified the space for
that exhibit is part of the construction; however, the fundraising for the actual exhibits has not yet
occurred.
Councilmember Poppaw asked how the exhibits and fundraising were prioritized. Stilwell replied
the early childhood piece is a discreet area that can be completed at a later time.
City Manager Atteberry suggested that piece is a prime opportunity for seeking specific donors.
Stilwell discussed other areas of the museum yet to be completely funded including the digital dome,
the early childhood area, and some thematic exhibit areas.
Councilmember Horak asked how much funding the early childhood area is expected to need.
Stilwell replied approximately $450,000 is needed.
Councilmember Horak suggested an independent review of the exhibit space allocations be held and
stated the Board should no longer be able to appoint boardmembers.
Councilmember Kottwitz stated she supports the project but would not support the motion as
citizens may not have intended to spend an additional $3 million on the project.
Mayor Pro Tem Ohlson expressed support for the project but stated there has been undue influence
by donors. Appropriate recognition for donors is necessary; however, one large corporate logo is
not suitable for a project 70% funded by public dollars. Ms. Geiselman replied donor recognition
guidelines, approved by City Manager Atteberry, have been accurately followed.
City Manager Atteberry asked for a brief description of donor recognition. Ms. Geiselman replied
a $1 million donation will afford the donor the recognition opportunity of an exhibit theme. All
donor recognition will be artfully and tastefully completed with a great deal of sensitivity to
avoiding advertisements.
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Mayor Pro Tern Ohlson asked if the sponsorship recognition at the Gardens on Spring Creek has
improved as it was previously distracting. Heffernan replied the individual recognitions were too
prominent and staff has been consulted.
The vote on the motion was as follows: Yeas: Weitkunat, Manvel, Ohlson, Poppaw, Horak and
Troxell. Nays: Kottwitz.
THE MOTION CARRIED.
Councilmember Manvel made a motion, seconded by Councilmember Troxell, to adopt Ordinance
No. 088, 2011, on Second Reading. Yeas: Weitkunat, Manvel, Ohlson, Poppaw, Horak and Troxell.
Nays: Kottwitz.
THE MOTION CARRIED.
Resolution 2011-066
Approving an Agreement Between the City and Avago Technologies US, Inc. to
Provide Business Investment Assistance for the Building 4 Retrofit, Adopted
The following is staff s memorandum for this item.
"EXECUTIVE SUMMARY.
This Resolution approves a Business Investment Agreement between the City and Avago
Technologies. The Agreement provides two performance based investments:.(]) a one-time use tax
rebate on manufacturing equipmentpurchasedaspart ofthe expansion; and (2) apersonalproperty
tax rebate on the same equipment for ten years. Both investments relate to revenues the City would
not otherwise collect if the expansion did not occur within the City. The total investment package
has a value of approximately $3.2 million and includes both local and state investments. The total
value of the use tax and personal property constitutes $2.912 million of the package value. NOTE:
The value of the package has increased since the Council Finance Committee briefing on July 5,
2011. The increase is due to additional investment in manufacturing equipment by Avago.
BACKGROUND /DISCUSSION
In 2005, the City Council adopted the first Economic Action Plan to provide staff focus and
direction regarding efforts to enhance the local economy. The Action Plan contains four key
strategies: (])job creation through business retention, expansion, incubation, and attraction; (2)
be proactive on economic issues; (3) build partnerships; and (4) diversify the economy.
Furthermore, City Council has given consistent and clear direction that all investment agreements
be performance based.
In 2006, the ' City commissioned a study to evaluate the geographic concentration and
interconnectedness of companies within the community in order to determine potential industry
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clusters. The study identified several existing and emerging industry clusters. The identified
clusters were modified into five targeted industry clusters, which became the focus of job creation
activities. These clusters included: Clean Energy, Bioscience, Chip Design, Software, and Uniquely
Fort Collins.
On August 17, 2010, the City adopted Resolution 2010-055, authorizing and directing the City
Manager to continue to support on behalfofthe Cityparticipation in the formation and development
of cluster initiatives relating to the identified targeted industries of the City, to work with regional
partners and local business entities to develop strategic plans for the clusters, and to support the
advancement of the plans as they are implemented for the purpose of primary job retention,
expansion, and creation.
Avago Technologies has a 50 year history of innovation dating back to origins within Hewlett-
Packard Company (HP). The company began as HP's components division back in the early 1960s
and thrived therefor three decades. When HP spun offAgilent Technologies in 1999, the company
became Agilent's Semiconductor Products Group (SPG) and expanded into new markets and
applications. In late 2005, SPG was acquired by several private equity partners and Avago
Technologies was founded. Over the years, Avago has assembled a team of over 1, 000 design and
product engineers and maintains highly collaborative design and product development resources
around the world that have resulted in the development of numerous groundbreaking technologies.
The Business InvestmentAgreement being offered to Avago Technologies is consistent with both the
Action Plan strategies and City -Council direction:
The proposed Business Investment Agreement rebates tax revenues generated by the project;
without the project these revenues would not be received by the City.
The EconomicAction Plan clearly identifies business retention and expansion as the primary
goal for the City's job creation efforts over business attraction; the proposed expansion
supports this goal.
Plan Fort Collins call for creating a diversity ofjobs that enables citizens and businesses
to thrive; the proposed expansion provides an array of jobs and salary ranges. Most
importantly, the expansion brings back much needed high-tech manufacturing jobs.
PROJECT OVERIVEW
Avago Technologies plans to expand its) wafer manufacturing, which currently occurs only in
Taiwan. The company evaluated expansion at facilities in Taiwan, Italy, and Fort Collins. Avago
Technologies selected the Cityfor expansion for several reasons, including: (1) low power costs,
(2) progressive utilities willing to assist in the modernization of plant operations related to power
and water consumption, and (3) a Business Investment Agreement as described in detail below. This
expansion represents an opportunity to bring a type of chip manufacturing to Fort Collins that has
occurred primarily off -shore.
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July 19, 2011
The wafer fabrication expansion includes:
• The retrofit of the existing Building 4 (approximately 10, 000 square feet);
• $17 million in retrofit construction costs;
• $57.5 million in wafer manufacturing equipment;
• $5.7 million in equipment installation;
• An increase in water use of approximately 20.0 million gallons, an estimated 10 percent
increase (equivalent to annual consumption of approximately 300 average homes; no
anticipated impact on peak demand or the physical plant); and
• An increase of approximately 1.0 megawatts of electric capacity (equivalent to annual
consumption of approximately 500 average homes; no anticipated impact on peak demand
or the physical plant). ,
Furthermore, the proposed expansion is anticipated to add approximately 92 jobs including:
• 8 Engineers earning approximately $100,000 annually;
• 14 Technicians earning approximately $70, 000 annually; and
• 70 Operators earning approximately $40, 000 annually.
B USINESS INVESTMENT AGREEMENT
On April 22, 2011, Economic Health Office staff provided Avago Technologies with an offer of
assistance to support the retrofit of Building 4 for wafer fabrication (Attachment 1). The package
was submitted to Avago Technologies confidentially. The item was scheduled for Council Finance
Committee consideration (July 5, 2011) and City Council action (July 19, 2011). The meetings were
scheduled after the Colorado Economic Development Commission (EDC) considered a request for
assistancefrom its Strategic Fund. The EDC requests that allpotential assistancepackages remain
confidential until it has an opportunity to consider the request. The EDC considered the request on
June 16, 2011. The Council Finance Committee meetings and City Council action were scheduled
shortly after this meeting in consultation with the City Manager.
The City of Fort Collins uses a variety of local investments to assist primary employers with
expansion efforts. The total value of the proposed investmentpackage is approximately $3.2 million
and includes both local and state investments ($2.9 million in local investments and $300,000 in
state investments). The package includes the following items:
• $1.725 million in Equipment Use Tax rebate on the initial manufacturing equipment
investment associated with the project
• Approximately $817, 000 in Personal Property Tax savings on manufacturing. equipment
over a 10 year period
• Expedited review and commitment by City staff to Avago's desired timeline
• Free Integrated Design Assistance valued at $20, 000 to improve operating efficiencies
• - Assistance with building re -commissioning, valued at up to $150, 000 to maximize building
efficiency and reduce utility costs
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July 19, 2011
Implementation of the evaporative cooling credit against sewer costs, creating
approximately $20, 000 annually or a total of $200, 000 over ten years
$230,000 in Colorado Economic 'Development Commission's (EDC) Strategic Fund
assistance (subject to Board approval); and
.$73, 600 in Colorado FIRST Customized Job Training Funds.
The Utility items listed above are available to any company within Fort Collins, whether expanding
or continuing operations. They have been included in the package description because the
competition may not offer similar utility assistance.
FINANCIAL /ECONOMIC IMPACTS
Martin Shields, Associate Professor of Economic and Regional Economist at Colorado State_
Universityprepared an Economic Impact Analysis (EIA) ofAvago Technologies planned expansion
(Attachment 2). The following summarizes that analysis:
• New equipment will generate approximately $1.725 million in use tax revenue (offset by
investment package)
• The same equipment will generate approximately $163, 000 in annual personal property tax
revenue of $1.63 million over the ten year agreement period (partially offset by investment
package)
• Construction activity ($17 million retrofit and $5.7 million equipment installation) will
support 228 direct jobs and 74 spin-off jobs throughout the anticipated 15-month
construction period
• Construction will generate approximately $323,400 in use tax revenue on materials
• The 92 new jobs will support an additional 155 in spin-off secondary jobs at an average
salary of $48,900
• The 92 newjobs will generate approximately $554,000 in sales tax revenue and $413,000
in property tax revenue over the next ten years; and
• The EIA recognizes additional sales tax and property tax revenue will be generated by the
spin-off jobs; however, the analysis provides a conservative estimate of economic impact
and does not estimate these revenues.
The proposed Business Investment Agreement will have the following impacts on the City of Fort
Collins finances:
All of the estimated $1.725 million in use tax revenue collected on the purchase of the wafer
fabrication equipment will be rebated
Half of the estimated $163,000 in annual Personal Property Tax revenue collected on the
wafer fabrication equipment will be rebated for ten years for a total of approximately
$817,000
Utilities will invest approximately $170,000 in one-time energy and water efficiency design
assistance
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July 19, 2011
In addition, Avago will take advantage of the new evaporative cooling credit offered by the
Fort Collins Utilities for a total savings of $200,000 over the course of ten years
However, the City would not have collected Use Tax or Personal Property Tax revenue if
the expansion had occurred in Italy or Taiwan.
Net impact of the Business InvestmentAgreement is approximately $1.755 million, as shown.
in Table 1.
Table I
Estimated Revenue, Rebate, and Net Revenue
Revenue
Estimated Revenue
Rebate/
Incentive
Net Revenue
One -Time Items
Construction Use Tax
$323, 000
$0
$323, 000
Equipment Use Tax'
$1,725,000
$1,725,000
$0
Desi Assistance
$0
$20,000
$20,000
-Integrated
Re -commissioning
$0
$150,000
$150,000
-Building
Subtotal
$2,048,000
$1,895,000
$153,000
Items (Cumulative over 10 Years)
-On-Going
Personal Property Tax
$1,630,000
$817,000
$817,000
-Equipment
Off Sales Tax
$554,000
$0
$554,000
-Spin
OffProperty Tax
$413,000
$0
$413,000
-Spin
Eva orative Cooling Credit
$0
$200,000
$200,000
Subtotal
$$2,597,000
$1,017,000
$1,602,000
Total
$4 645 000
$2 912 000
$1 755 000
i Current City Code allows for a rebate of 1.5 percent of the 3.0 percent use tax. The
proposed Business InvestmentAgreement increases the rebate to the full3.Opercent;
therefore the incentive provides a value of $727,500 above current Code.
ENVIRONMENTAL IMPACTS
Avago plans to make the following system upgrades as part of the retrofit of Building 4:
• A site -wide HVAC retrofit.
• A 'free heating"project, which utilizes waste heat from HVAC Chillers to reheat incoming
outside air for Building 4. Similar to a Building 2 upgrade that reduced natural gas
consumption on site by approximately 5%.
• Purchase and installation of a high efficiency chillersized to handle the building's base load
conditions (in winter) and run at optimum performance.
• Replace two boilers with two new very high efficiency condensing boilers matched to the
building's base load, which avoids running boilers to big to run efficiently.
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July 19, 2011
Based on the Fort Collins Utility assistance, the upgrades will help to reach 3 million kilowatt-
hours of annual savings. This savings in energy consumption will have the following environmental
benefits:
• The project would comprise 14% of the City's annual efficiency savings goal;
• The project would avoid 2119 metric tons of carbon emissions annually; and
• The carbon emissions savings are equivalent to the annual emissions of 415 cars or 264
homes or the amount of carbon sequestered by 54,333 tree seedlings grown for ten years. "
Josh Birks, Economic Advisor, discussed the project at Avago and noted the Fort Collins site was
selected for the expansion over sites in Taiwan and Italy. Construction will begin in earnest soon
and the facility should be operational by next fall. An economic impact analysis was completed by
a Colorado State University economist. The appraisal estimated the project would generate $1.725
million in use tax revenues, $1.38 million in personal property tax, and approximately 228 direct
construction industry jobs for approximately 15 months. Additionally, 92 primary jobs would
generate approximately $500,000 in sales tax revenue over 10 years. The net value of the business
agreement is an approximately $730,000 additional rebate on top of the standing rebates outlined
in City Code.
Glenn Colton, 625 Hinsdale Drive, expressed concern the City has been providing too many
financial incentives for private industry. The City should consider providing financial incentives
based on need rather than simple requests.
Eric Sutherland, 3520 Golden Currant, discussed water and power use of the new facility.
Thomas Welch, 4033 Mesa Verde, expressed concern the proposed expansion will negatively affect
neighboring homes and presented a petition signed by seven of those homes.
Mayor Weitkunat asked for a staff perspective of the operations. Birks replied Building 4, in which
some manufacturing occurs, is approximately 40,000 square feet total; only 10,000 square feet of
which is occupied. This expansion would include an additional 10,000 square feet ofmanufacturing
space thereby still leaving half of the building vacant.
Steve Wolley, Avago Facilities Manager, stated this development is entirely interior with no
additional exterior construction. He stated neighborhood concerns had previously been addressed
by construction of a wall to block out sound and interior lighting structure changes. There are
further changes which could be made if needed.
City Manager Atteberry stated he would approach Hewlett Packard with the neighborhood concerns
as well.
Mayor Weitkunat asked about the means of communication between Avago and neighbors. Mr.
Wolley replied the concerns have been heard and will certainly be addressed.
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July 19, 2011
Councilmember Poppaw asked how policies at Avago could change to ensure the company is being
the best neighbor possible. Mr. Wolley replied interior lighting can be managed by lighting systems
rather than users. A physical solution will need to be developed for noise mitigation.
Councilmember Poppaw asked if Mr. Wolley would personally be willing to have somewhat regular.
meetings with neighbors. Mr. Wolley replied in the affirmative.
Councilmember Troxell asked why Fort Collins residents should care about Avago's products. Mr.
Wolley replied this facility makes cell phone parts, which are sold worldwide, as well as other
products.
Councilmember Kottwitz made a motion, seconded by Councilmember Poppaw, to adopt Resolution
2011-066.
Councilmember Poppaw supported the project and thanked Mr. Wolley for his presence and
responses.
Mayor Pro Tern Ohlson asked how the projected water and electricity usage could not affect supply.
Steve Catanach, Light and Power Operations Manager, replied the increase will have no impact on
the plant infrastructure or available capacity.
Mayor Pro Tern Ohlson stated he would like to see more information in the future in terms of the
costs, or potential negative impacts of these types of business agreements.
Mayor Pro Tern Ohlson requested salary ranges be provided when projected jobs are discussed.
Councilmember Troxell asked if distributed energy generation would be part of this project. Mr.
Wolley replied Building Four will operate on a "free heating" scenario. Various conservation
activities, such as warming water to room temperature using the waste heat off chillers, will
continue. Efficiencies are the least expensive, most effective way for industry to beat the carbon
emissions problem.
Councilmember Troxell asked if any integration of on -site energy use has occurred to help shift
peak. Mr. Wolley replied electric needs basically never cease; however, generators are run during
peak hours to help offset some peak time demand.
Councilmember Manvel supported the Resolution.
Councilmember Horak supported the Resolution.
Councilmember Kottwitz thanked staff for actively pursuing this project and commended Mr.
Wolley for his service to the community.
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July 19, 2011
Mayor Weitkunat noted Council has always supported expansion and retention of existing primary
businesses and thanked Mr. Wolley for his commitment to the business and community.
The vote on the motion was as follows: Yeas: Weitkunat, Kottwitz, Manvel, Ohlson, Poppaw, Horak
and Troxell. Nays: none.
THE MOTION CARRIED.
City Manager Atteberry discussed the possible movement of the remaining agenda items, the
Executive Session, and the URA Meeting to other dates.
Mayor Weitkunat led a brief discussion of the items yet to be heard.
Councilmember Manvel made a motion, seconded by Mayor Pro Tern Ohlson, to postpone Item
Nos. 17, 18, and 19, Items Relating to Grass Height Restrictions and Updating Related City Code
References, First Reading of Ordinance No. 095, 2011, Amending the Appeals Procedure Contained
in Chapter 2, Article II, Division 3 of the City Code Relating to the Procedures for Hearing Appea ls
to the City Council, and Resolution 2011-060 Amending the Rules of Procedure Governing the
Conduct of City Council Meetings, to a date to be determined by the Leadership Team and City
Manager. Yeas: Weitkunat, Kottwitz, Manvel, Ohlson, Poppaw, Horak and Troxell. Nays: none.
THE MOTION CARRIED.
Extension of the Meeting
Councilmember Manvel made a motion, seconded by Mayor Pro Tern Ohlson, to extend the meeting
in order to consider Item Nos. 9, 16, and 29, Items Relating to Amendments to the Definitions in
Article I of Chapter 26, the Electric Article of Chapter 26, and to Standards for Interconnection of
Electric Generation Facilities, Items Relating to a Lohg-Term Solar Power Arrangement for the
Water Treatment Facility, and Resolution 2011-067 Creating a Council Futures Committee.
Councilmember Horak expressed concern about moving forward with the items at the late hour.
Councilmember Poppaw suggested future examination of agendas to attempt to eliminate these
situations.
Councilmember Manvel and Mayor Pro Tern Ohlson withdrew the motion.
Councilmember Manvel made a motion, seconded by Mayor Pro Tern Ohlson, to postpone Item
Nos. 9 and 29, Items Relating to Amendments to the Definitions in Article I of Chapter 26, the
Electric Article of Chapter 26, and to Standards for Interconnection of Electric Generation
Facilities and Resolution 2011-667 Creating a Council Futures Committee to a- date to be
determined by the Leadership Team and City Manager.
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July 19, 2011
Councilmember Horak suggested continuing all appropriate items to an adjourned meeting on July
26th.
Councilmember Manvel and Mayor Pro Tern Ohlson withdrew the motion.
Adjournment
Councilmember Horak made a motion, seconded by Councilmember Manvel, to adjourn to 6:00
p.m. on July 26, 2011, to consider all business not considered on July 19, 2011, and to consider
going into Executive Session.
City Manager Atteberry suggested Item Nos. 16 and 29 be heard on July 26, 2011, with the
remaining business to be heard in August or September.
The vote on the motion was as follows: Yeas: Weitkunat, Kottwitz, Manvel, Ohlson, Poppaw, Horak
and Troxell. Nays: none.
THE MOTION CARRIED.
The meeting adjourned at 11:15 p.m.
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City Clerk
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