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HomeMy WebLinkAboutMINUTES-11/07/1989-Regular' November 7, 1989 COUNCIL OF THE CITY OF FORT COLLINS, COLORADO Council -Manager Form of Government Regular Meeting - 6:30 p.m. A regular meeting of the Council of the City of Fort Collins was held on Tuesday, November 7, 1989, at 6:30 p.m. in the Council Chambers in the City of Fort Collins City Hall. Roll call was answered by the following Councilmembers: Azari, Edwards, Horak, Kirkpatrick, Mabry, Maxey, and Winokur. Staff Members Present: Burkett, Krajicek, Roy Citizen Participation A. Proclamation Naming November 9 as Vet Center Day was forwarded to the appropriate persons. B. Proclamation Naming November 11 as Veterans _Day of Remembrance was forwarded to.the appropriate persons. ' C. Proclamation Naming November 16 as Great American Smokeout Day was accepted by Gail Bishop, American Cancer Society representative. D. Presentation of award from the EPA for excellence in the beneficial use of wastewater byproducts was made by Max Dotson, Director of Water Management Region VIII EPA, and Debbie English, Construction Grants Program, Colorado Water Quality Control Division. Jim Creeden, P.O. Box 1022, Chairman, Citizens Offering Police Support, described a shooting incident that occurred in January, 1988 involving Officer Mike Swihart and urged Council to consider making a recommendation to the Court in the upcoming sentencing. Agenda Review: City Manager City Manager Burkett requested that Item #9, Items Relating to Rohrbacker Annexation, and Item #10, Hearing and First Reading of Ordinance No. 140, 1989, Amending Section 7-127 of the Code Relating to Campaign Contribution Limits, be pulled from the Agenda. Councilmember Horak asked that Item #12; Hearing and First Reading of Ordinance No. 142, 1989, Rezoning 21.5 Acres of the Timberline Farm Master Plan to I-P, Industrial Park, and Item #17, Resolution 89-198 Authorizing ' the Mayor to Execute a Deed of Conveyance for the Sale of the Bingham Hill Reservoir Property, be removed from the Consent Calendar. -554- November 7, 1989 Councilmember Kirkpatrick withdrew Item #19, Resolution 89-200 Making Appointments to the Community Air Quality Task Force, from the Consent Agenda. Councilmember Azari requested that Item #14, Resolution 89-195 Approving the Purchase of a 1990 FMC Vanguard 3000 Street Sweeper, be withdrawn from the Consent Agenda. Consent Calendar This Calendar is intended to allow the City Council to spend its time and energy on the important items on a lengthy agenda. Staff recommends approval of the Consent Calendar. Anyone may request an item on this calendar be "pulled" off the Consent Calendar and considered separately. Agenda items pulled from the Consent Calendar will be considered separately under Agenda Item #21, Pulled Consent Items. 5. Q Second Reading of Ordinance No. 40, 1989, Annexing Approximately 149.8 Acres Known as New Note Partnership First Annexation. Second Reading of Ordinance No. 41, 1989, Zoning Approximately 149.8 Acres Known as New Note Partnership First Annexation, into the IL Limited Industrial District, with a planned unit development condition. On March 21, Council adopted by a vote of 6-0 Resolution 89-59 Setting Forth Findings of Fact and Determinations and also adopted by a vote of 6-0 on First Reading Ordinance No. 40, 1989 and Ordinance No. 41, 1989 annexing and zoning approximately 149.8 acres, located east of Hewlett-Packard and north of Harmony Road. The requested zoning is the IL Limited Industrial District. On April 4 and June 20, at the request of the petitioner, Council voted to postpone consideration of these Ordinances on Second Reading. On August 1, at the request of the petitioner, Council voted unanimously to postpone until this date. The petitioner has submitted a letter requesting that the New Note and Koldeway Annexations be continued to February 6. Adoption of the Consent Calendar will postpone consideration of this item until February 6, 1990. APPLICANT: New Note Partnership OWNER: Same c/o Jack Blake, Managing Partner P. 0. Box 429 Fort Collins, CO 80522 -555- November 7, 1989 i7. Postponing of Consideration of Items Relating to New Note Partnership Second Annexation and Zoning. A. Second Reading of Ordinance No. 42, 1989, Annexing Approximately 97 Acres Known as New Note Partnership Second Annexation. B. Second Reading of Ordinance No. 43, 1989, Zoning Approximately 97 Acres Known as New Note Partnership Second Annexation, into the IL Limited Industrial District, with a planned unit development condition. On March 21, Council by a vote of 6-0 adopted Resolution 89-60 Setting Forth Findings of Fact and Determinations and also adopted on First Reading by a vote of 6-0 Ordinance No. 42, 1989 and Ordinance No. 43, 1989 annexing and zoning approximately 97 acres, located west of I-25 and north of Harmony Road. The requested zoning is the IL Limited Industrial District. At the request of the petitioner, on April 4 and June 20, Council voted to postpone consideration of these Ordinances on Second Reading. On August 1, at the request of the petitioner, Council voted unanimously to postpone until this date. The petitioner has submitted a letter requesting that the New Note and Koldeway Annexations be continued to February 6. Adoption of the Consent Calendar will postpone consideration of this item until February 6, 1990. APPLICANT: New Note Partnership OWNER: Same c/o Jack Blake, Managing Partner P. 0. Box 429 Fort Collins, CO 80522 8. Postooninq of Consideration of Items Relating to the Koldpwav Second Reading of Ordinance No. 44, 1989, Annexing Approximately 8.1 Acres Known as the Koldeway Annexation. Second Reading of Ordinance No. 45, 1989, Zoning Approximately 8.1 Acres Known as the Koldeway Annexation, into the BP Planned Business District. On March 21, Council unanimously adopted Resolution 89-61 Setting Forth Findings of Fact and Determinations and also unanimously adopted on First Reading Ordinance No. 44, 1989 and Ordinance No. 45, 1989 annexing and zoning approximately 8.1 acres, located at the northwest corner of I-25 and Harmony Road. The requested zoning is the _BP Planned Business District. ' At the request of the petitioner, on April 4 and June 20, Council voted to postpone consideration of these Ordinances on Second Reading. On August 1, at the request of the petitioner, Council voted -556- 10. November 7, 1989 unanimously to postpone to this date. The petitioner has submitted a letter requesting that the New Note and Koldeway Annexations be continued to February 6. Adoption of the Consent Calendar will postpone consideration of this item until February 6, 1990. APPLICANT: Arthur T. Koldeway OWNER: Same 6229 Co. Rd. 13 Loveland, CO 80537 Items Relating to Rohrbacker Annexation. A. Second Reading of Ordinance No. 137, 1989 Annexing Approximately 3.6 acres Known as Rohrbacker Annexation. Second Reading of Ordinance No. 138, 1989 Zoning Approximately 3.6 acres Known as Rohrbacker Annexation, into the C, Commercial District, with a planned unit development condition. On October 17, Council unanimously adopted Resolution 89-176 Setting Forth Findings of Fact and Determinations Regarding the Rohrbacker Annexation. On October 17, Council also unanimously adopted on First Reading Ordinance No. 137, 1989 and Ordinance No. 138, 1989, annexing and zoning approximately 3.6 acres, located on East Magnolia Court, west of Link Lane and north of East Mulberry. The requested zoning is the C, Commercial District. APPLICANT: Rosalie Rohrbacker OWNER: Same 430 West Myrtle Fort Collins, CO 80524 Section 7-127 of the City Code imposes a limitation upon the amount which may be contributed to the campaigns of candidates for office at city elections. The existing wording is somewhat ambiguous as to: (1) whether the limitation applies to both contributions and contributions in kind; and (2) whether the limitation applies only to direct contributions or also to independent expenditures that are made without the prior knowledge of the candidate. The proposed changes to the Code would remove those ambiguities. This ordinance would authorize the Director of Purchasing & Risk Management to enter into a three-year contract with Poudre Valley Hospital for the medical treatment of employees injured on the job. 1 -557- 12. November 7, 1989 This ordinance authorizes the rezoning of 19.8 acres from R-L-P, Low Density Planned Residential, to I-P, Industrial Park, and 1.7 acres from T, Transitional, to I-P, Industrial Park located in the Timberline Farm Master Plan. The total of 21.5 acres are located at the northeast corner of Harmony Road and Timberline Road. The rezoning to I-P, Industrial Park, is conditioned on all development proceeding as a P.U.D. under the criteria of the Land Development Guidance System. 13. Resolution 89-194 Finding Substantial Compliance and Initiating Annexation Proceedings for the Kieft Annexation. The petitioners, Larry D. and Susan Kieft, have submitted a written petition requesting annexation of approximately 3.0 acres located south of Drake Road and west of Taft Hill Road. The petition was submitted to fulfill a condition of receiving out -of -city water service. The proposed Resolution makes a finding that the petition substantially complies with the Municipal Annexation Act, determines that a hearing should be established regarding the annexation, and directs that notice to be given of the hearing. The hearing will be held at the time of first reading of the annexation and zoning ordinances. Not less than thirty days of prior notice is required by Colorado law. The property is located within the Fort Collins Urban Growth Area. According to policies and agreements between the City of Fort Collins and Larimer County contained in the Intergovernmental Agreement for the Fort Collins Urban Growth Area, the City will consider the annexation of property in the UGA when the property is eligible for annexation according to state law.. The property gains the required 1/6 contiguity to existing city limits from a common boundary with the Brown Farm 1st Annexation to the north. 14. Resolution 89-195 Approving the Purchase of a 1990 FMC Vanguard 3000 Street Sweeper. Council approval is required for a case not requiring.bidding purchase exceeding $20,000 based on a particular individual:..'usage. Staff is requesting such a purchase from Booth Rouse Equipment Company for a 1990 FMC Vanguard 3000 Street Sweeper in the total amount of $75,545. Demonstrations of the newest models of sweepers available, both three and four wheel, have been conducted by personnel of the Streets Department, Equipment Division and Purchasing staff during this year and to date no other unit has been found that performs as well as the Vanguard 3000. -558- November 7, 1989 15. 16. 17. This case not requiring bidding purchase based on a particular individual usage has been reviewed and approved by the City Manager. The City Manager has approved this purchase and Council approval is also required for case not requiring bidding purchases exceeding $20,000. Staff is requesting purchase from O.I. Analytical, of a gas chromatograph (GC) interfaced with detectors and includes an autosampler and a standard injection module at a total cost of $42,830. This system will allow the City to comply with the revised Safe Drinking Water Regulations to routinely monitor for over fifty (50) possible organic chemical contaminants in the City's drinking water. In addition, staff will be able to accommodate the increasing number of requests from various departments to test groundwater for possible gasoline contamination. The EPA requires that specific types of instrumentation and detectors be used to perform these tests. Currently the City does not have the equipment that complies with the EPA specifications. Research has found that this system best fits City requirements. This is a case not requiring bidding and authorizing the execution of a Professional Services Agreement with Engineering Professionals, Inc. in the amount of $64,000 for construction administration services for the drainage improvements from College Avenue to west of the Burlington Northern Railroad on Spring Creek. The Bingham Hill reservoir site was purchased by the City in 1905 and the reservoir was constructed in 1910. As the concrete began to deteriorate, the risk of contamination of the water supply increased. As a result, the reservoir was taken out of service in 1982. The site contains about 9.6 acres and lies between the two hogbacks that form Bingham Hill. Staff has been concerned about liability risks and maintenance of the reservoir. A bidding process resulted in a quotation of $169,512 for demolition of the reservoir. The value of the site after demolition is estimated at $48,060. Notification of intent to dispose of the property was given to all City Departments. The Planning Department and Parks and Recreation investigated possible acquisition of the site, but decided that was not feasible and the property was put up for public bid. As a result of the bid process, the City has entered into an agreement to sell, contingent upon Council approval, the property for $26,153 to a neighboring property owner. The Resolution -559- November 7, 1989 would authorize the Mayor to execute a deed of conveyance for sale of the Bingham Hill property. 18. Resolution 89-199 Making an Appointment to the Commission on the Status of Women. A vacancy currently exists on the Commission on the Status of Women due to the resignation of Cynthia Boyd -Peterson. Councilmembers Kirkpatrick and Azari reviewed the applications on file and are recommending that Dr. Patricia Olson be appointed to fill this vacancy. 19. Resolution 89-200 Making Appointments to the Community Air Quality Task Force. On August 1, Council adopted a resolution creating the Community Air Quality Task Force. Advertisements were placed and applications distributed seeking applicants for the Task Force. Councilmembers Winokur and Azari conducted interviews of the applicants and are recommending the following individuals for appointment to the Task Force: David Dietrich Gina Janett Bill Eckert Jeff Johnson ' Jennifer Fontaine Robert Martin Douglas Fox Robert Vinton Catherine Fromme 20. Resolution 89-201 Making an Appointment to the Cultural Resources Board. A vacancy currently exists on the Cultural Resources Board due to the resignation of Jim Petersen. Councilmembers Azari and Edwards reviewed the applications on file and are recommending that Kate Griffith be appointed to fill this vacancy. Ordinances on Second Reading were read by title by Wanda Krajicek, City Clerk. Item #6. A. 560- Item V. A. ation. Q Item #8. A. I:M November 7, 1989 Item N9. A. Second Reading of Ordinance No. 137, 1989 Annexing Approxi- mately 3.6 acres Known as Rohrbacker Annexation. ry Ordinances on First Reading were read by title by Wanda Krajicek, City Clerk. 10. Three_(3) Years With Poudre Valley Hospital. 12. Hearing and First Reading of Ordinance No. 142, 1989, Rezoning 21.5 Acres of the Timberline Farm Master Plan to I-P, Industrial Park. Councilmember Mabry made a motion, seconded by Councilmember Azari, to adopt and approve all items not removed from the Consent Calendar. Yeas: Councilmembers Azari, Edwards, Horak, Kirkpatrick, Mabry, Maxey, and Winokur. Nays: None. THE MOTION CARRIED. Ordinance No. 142, 1989, Rezoning 21.5 Acres of the Timberline Farm Master Plan to I-P, Industrial Park, Adopted on First Reading Following is staff's memorandum on this item: 1-1 -561- November 7, 1989 "EXECUTIVE SUMMARY This ordinance authorizes the rezoning of 19.8 acres from R-L-P, Low Density Planned Residential, to I-P, Industrial Park, and 1.7 acres from T, Transitional, to I-P, Industrial Park located in the Timberline Farm Master Plan. The total of 21.5 acres are located at the northeast corner of Harmony Road and Timberline Road. The rezoning to I-P, Industrial Park, is conditioned on all development proceeding as a P.U.D. under the criteria of the Land Development Guidance System. BACKGROUND The request to rezone 21.5 acres to 1-P, Industrial Park, meets the designation of Section 29-401 of the Zoning Code. In addition, the Industrial Park zone district at this location is supported by the City's Land Use Policies Plan. It is the recommendation of the Planning and Zoning Board that the rezoning to I-P, Industrial Park, be conditioned on all development proceeding as a P.U.D. under the criteria of the Land Development Guidance System. The 21.5 acres are part of the 75 acre Timberline Farm Master Plan, approved by the Planning and Zoning Board at its regular meeting of September 25, 1989. The request to rezone 21.5 acres represents the ' southern Harmony Road one-third and of the Timberline Master Road. Plan and contains frontage along both These two roads are designated as major arterial streets on the Master Street Plan. The 1.7 acre corner parcel contains the old Harmony School and the 19.8 acre parcel is in pasture. Section 29-401 of the Zoning Code states that the I-P, Industrial Park, zone district is designed to be in proximity to areas zoned for residential use, and located along arterial streets. The location of the 21.5 acre parcel is in close proximity to such existing residential neighborhoods as Sunstone Village, Fox Meadows, Oak Ridge Village, Golden Meadows, and Harmony Road Mobile Home Court. The rezoning request is in conformance with the City's Land Use Policies Plan, Policy numbers 60 and 61, which state: "Industrial uses should locate near transportation facilities that offer the required access to the industry but will not be allowed to create demands which exceed the capacity of the existing and future transportation network of the City." "Industrial development should locate' within the'City or consistent with the phasing plan for the urban growth area, where. the proper size of facilities such as water, sewer., and transportation has occurred or is planned." ' On September 25, 1989, the Planning and Zoning Board unanimously recommended approval of this rezoning request." -562- November 7, 1989 Councilmember Kirkpatrick made a motion, seconded by Councilmember Azari, I to adopt Ordinance No. 142, 1989 on First Reading. Councilmember Horak expressed concern about the nearby residential neighborhoods (Sunstone, Fox Meadows, Oakridge Village, Golden Meadows, Harmony Road Mobile Home Park) being notified of the rezoning. City Planner Ted Shepard noted the rezoning notification process involving the surrounding neighborhoods took place during the Master Plan and preliminary PUD process. He pointed out that the rezoning issue was heard by the Planning and Zoning Board and at the neighborhood meeting. The vote on Councilmember Kirkpatrick's motion to adopt Ordinance No. 142, 1989 on First Reading was as follows: Yeas: Councilmembers Azari, Edwards, Horak, Kirkpatrick, Mabry, Maxey, and Winokur. Nays: None. THE MOTION CARRIED. Resolution 89-195 Approving the Purchase of a 1990 FMC Vanguard 3000 Street Sweeper, Adopted Following is staff's memorandum on this item: "FINANCIAL IMPACT Funds are budgeted and approved in the 1990 Streets budget for this expenditure. EXECUTIVE SUMMARY Council approval is required for a case not requiring bidding purchase exceeding $20,000 based on a particular individual usage. Staff is requesting such a purchase from Booth Rouse Equipment Company for a 1990 FMC Vanguard 3000 Street Sweeper in the total amount of $75,545. Demonstrations of the newest models of sweepers available, both three and four wheel, have been conducted by personnel of the Streets Department, Equipment Division and Purchasing staff during this year and to date no other unit has been found that performs as'well as the Vanguard 3000. This case not requiring bidding purchase based on a particular individual usage has been reviewed and approved by the City Manager. BACKGROUND There are three major reasons substantiating the purchase of the Vanguard 3000 Street Sweeper from Booth Rouse Equipment Company. 1. The Vanguard 3000 is the only three -wheel sweeper on the market that ' has single front wheel steering. -563- November 7, 1989 ' The front wheel steering eliminates rear end swing out for sweeping in close corners and the ability to sweep in and out of parked cars with ease. The single front wheel design and the front center mounted cab has tremendously improved the operator's field of vision which is one of the biggest concerns staff has with sweepers. The sweeper's handling is more like operating an automobile which increases sweeping efficiency, operator's effectiveness and confidence in handling. 2. The Vanguard 3000 is the only sweeper on the market with a center mounted 5.5 cu. yd. hopper. - Conventional sweepers only have a 3 cu. yd. hopper. - The 5.5 cu. yd. hopper means there will be more time spent sweeping and less trips to the dump site. 3. The Vanguard 3000 is a totally hydraulically operated unit. - The traction drive is totally hydraulic, thus eliminating all drive chains, sprockets, ideals, differentials, and gear boxes used in conventional sweepers. I The hydrostatic system provides assisted braking and extends the Life of the braking system. - The hydrostatic system is pressurized and sealed to guard against contamination. The Vanguard 3000 Street Sweeper provides better driver maneuverability, a better field of vision for the operator, and lower maintenance costs." Councilmember Horak made a motion, seconded by Councilmember Kirkpatrick, to adopt Resolution 89-195. Councilmember Azari asked if appropriations were made prior to the beginning of the new budget year. City Manager Burkett noted that large pieces of equipment are often ordered prior to budget approval due to delays in shipping. The vote on Councilmember Horak's motion to adopt Resolution 89-195 was as follows: Yeas: Councilmembers Azari, Edwards, Horak, Kirkpatrick, Mabry, Maxey, and Winokur. Nays: None. THE MOTION CARRIED. -564- November 7, 1989 Resolution 89-198 Authorizing ' the Mayor to Execute a Deed of Conveyance for the Sale of the Bingham Hill Reservoir Property, Adopted Following is staff's memorandum on this item: "FINANCIAL IMPACT Sale of the Bingham Hill property will result in unanticipated revenue of $26,153 in the Water Fund. The sale will result in savings of $169,512 that would otherwise have to be spent for demolition of the Bingham Hill reservoir. EXECUTIVE SUMMARY The Bingham Hill reservoir site was purchased by the City in 1905 and the reservoir was constructed in 1910. As the concrete began to deteriorate, the risk of contamination of the water supply increased. As a result, the reservoir was taken out of service in 1982. The site contains about 9.6 acres and lies between the two hogbacks that form Bingham Hill. Staff has been concerned about liability risks and maintenance of the reservoir. A bidding process resulted in a quotation of $169,512 for demolition of the reservoir. The value of the site after demolition is estimated at $48,000. Notification of intent to dispose of the property was given to all City Departments. The Planning Department and Parks and Recreation investigated possible acquisition of the site, but decided that was not feasible and the property was put up for public bid. As a result of the bid process, the City has entered into an agreement to sell, contingent upon Council approval, the property for $26,153 to a neighboring property owner. The Resolution would authorize the Mayor to execute a deed of conveyance for sale of the Bingham Hill property. The Water Board voted unanimously at its October 20 meeting to recommend to Council that the sale be approved." Councilmember Mabry made a motion, seconded by Councilmember Edwards, to adopt Resolution 89-198. Water and Sewer Director Mike Smith spoke regarding the transfer of ownership to the low bidder and described the liability associated with the property. City Attorney Roy explained the City's liability would end with the transfer of ownership, as it would no longer be a City owned facility and stated the City's legal obligation to the purchaser had been satisfied by disclosure. -565- November 7, 1989 Councilmember Horak stated he was not convinced that the property should be conveyed at this time and stated he believed that all of the options had not been looked at completely. The vote on Councilmember Mabry's motion to adopt Resolution 89-198 was as follows: Yeas: Councilmembers Azari, Edwards, Kirkpatrick, Mabry, Maxey, and Winokur. Nays: Councilmember Horak. THE MOTION CARRIED. Resolution 89-200 Making Appointments to the Community Air Quality Task Force, Adopted Following is staff's memorandum on this item: "EXECUTIVE SUMMARY On August 1, Council adopted a resolution creating the Community Air Quality Task Force. Advertisements were placed and applications distributed seeking applicants for the Task Force. Councilmembers Winokur and Azari conducted interviews of the applicants and are recommending the following individuals for appointment to the Task Force: David Dietrich Gina Janett B01 Eckert Jeff Johnson Jennifer Fontaine Robert Martin Douglas Fox Robert Vinton Catherine Fromme" Councilmember Azari made a motion, seconded by Councilmember Edwards, to adopt Resolution 89-200. Councilmember Kirkpatrick noted that Council has asked the air quality task force to build community consensus around the issue and stated she did not believe that the task force with its background and technical interest in the project could effectively represent the consensus effort. She requested Council work with staff to develop precise expectations for the task force. Councilmember Horak noted his support for the individuals recommended to serve on the task force and spoke'of'their qualifications. Councilmember Azari commented on the task force interview process and noted the importance of the development of a work -plan to improve air quality. ' Councilmember Kirkpatrick requested the Council liaisons to the task force obtain a sense of Council expectations with respect to the work of the task force. -566- November 7, 1989 Mayor Winokur supported Councilmember Kirkpatrick's request and encouraged , the task force to provide Council with information on its progress. The vote on Councilmember Azari's motion to adopt Resolution 89-200 was as follows: Yeas: Councilmembers Azari, Edwards, Horak, Kirkpatrick, Mabry, Maxey, and Winokur. Nays: None. THE MOTION CARRIED. Staff Reports City Manager Burkett spoke of the town meeting to be held from 7:00-9:00 p.m. on Monday, November 20, at Westminster Presbyterian Church at 1709 West Elizabeth Street. Mayor Winokur encouraged interested citizens to attend the meeting and visit with Council. Councilmember Reports Councilmember Azari commented on the report from the Downtown Development Authority on 1990 issues. She noted the Authority would be considering abolishing the DDA or converting the Authority into a different entity and explained modifying the Authority's mission would be considered in order to deal with issues of centralized retail management. She pointed out the Authority's concern over future negotiations regarding the heavy railroad traffic through the downtown, described the north -side bypass issues and expressed concerns about the truck traffic through the historic district. She urged Council to consider diverting traffic from Jefferson Street. Councilmember Kirkpatrick advised Council of an outreach meeting she and Councilmember Edwards had attended with Lee Hansen of Poudre R-1. She added the outreach meeting was very valuable and encouraged exploration of other outreach opportunities in addition to the town meetings. Ordinance No. 139, 1989, Appropriating Prior Year Reserves and'Unanticipated Revenue in Various Funds and Authorizing the Transfer of Appropriated Amounts Between Funds. Adopted on First Reading Following is staff's memorandum on this item: "FINANCIAL IMPACT This Ordinance adds $3.2 million in revenue to the General Fund and ' increases 1989 appropriations by $287,708, resulting in an estimated undesignated reserve balance of $2.5 million. $35,000 is appropriated from -567- November 7, 1989 ' 1988 General Fund reserves. All other General Fund appropriations are funded from unanticipated revenue received. EXECUTIVE SUMMARY Several funds require supplemental appropriations for 1989 expenditures. The Background Summary gives the details for each appropriations. The intent of this ordinance is to provide City Council with a summary of a number of appropriations which need to be made before the end of the current budget year. Items considered in this "clean-up" ordinance must meet two criteria: 1. Staff perceives them to be administrative actions, or items of no controversy; or 2. They may be items which Council has already provided direction on. Included in this ordinance are appropriations for any unforeseen expenditures which may have occurred during the year or the addition of unanticipated revenue the City has received. Rather than present each of these items for individual consideration, staff believes that this format provides for more efficient Council review. Staff typically presents these items in November for Council's review in order to "clean-up" any outstanding issues which have arisen during the year. This is done primarily because we have more accurate information on which to base projected expenditure needs. If these appropriations are not made, the City runs the risk of receiving an unfavorable opinion from its auditors and being in violation of the City Charter if current appropriations are exceeded. Several of the requested appropriations were reflected in the 1989 Revised column of the budget statements submitted to Council as part of the annual resolution adopting the 1990 budget. Other requests are funded by increased revenue and therefore have no impact on the ending balance of their respective funds. Following is a list of the funds where year end reserves shown in the 1989 Revised column will decrease with these appropriations: Fund Amount Employees' Pension $ 44,130 Golf 4,247 Energy 267,291 Equipment 8,299 ' DDA/Capital Projects 425,000 Transportation Services - Streets 148,536 IM-1 November 7, 1989 BACKGROUND A. General Fund A $35,000 revenue shortfall is projected for the Cemetery Fund as of October 27, 1989. During the 1989 budget process, it was projected that a Sales Representative would be hired in the Cemetery division to promote sales of sites at the two City cemeteries. For the 1989 budget, revenue projections were estimated higher based on increased sales as a result of sales promotions by the Sales Representative. Since the salesperson position was later determined not to meet Council's direction, the position was not filled and additional revenues were not collected. For 1990, expenditures in this fund have been reduced by $38,000. This will come from personnel reductions. This item appropriates a transfer from the General Fund to cover the revenue shortfall in 1989. Funds are available in General Fund prior year reserves to transfer to the Cemetery Fund. FROM: Prior Year Undesignated 1988 Reserve $35,000 FOR: Transfer to Cemetery Fund $35,000 2. Police Services has received revenue from various sources which needs to be appropriated to cover the related expenses. Police Services cooperates with other cities and agencies by aiding in criminal investigation. Funds were received as reimbursement for overtime and related expenses ($9,319). Training courses in firearms, S.W.A.T., range equipment, etc. are offered by Police Services and tuition is charged to participants from outside agencies ($10,005). Funds were received for the annual Police river rendezvous project ($4,342) and a reimbursement for property damage claims will be received from the Self Insurance fund by this ordinance ($8,178). This item appropriates the unanticipated revenue to cover the additional expenses. FROM: Unanticipated Revenue $27,502 Restricted Reserves 4,342 FOR: Police Services $31,844 3. In 1989, the City has collected $483,443 of property taxes from Anheuser Busch which is credited to A-B per the Master Agreement. Further, the City collected $117,447 from Larimer County per the intergovernmental agreement with the County relating to A-B property taxes. These amounts need to be transferred from the General Fund to the Sales and Use Tax Fund where they are reserved for A-B debt payments. Existing appropriations are $468,979; therefore appropriations need to be increased by $131,911. FROM: Unanticipated Revenue $131,911 FOR: Transfer to Sales.& Use Tax Fund $131,911 -569- November 7, 1989 4. The Fort Collins Public Library receives donations through out the year. Through September this year over $20,000 was donated to the library to fund additional services and programs. This item appropriates the donated funds for expenditure. FROM: Unanticipated Revenue $20,000 FOR: Library Programs $20,000 5. The State of Colorado has appropriated $30,000 for Fort Collins' Better Air Campaign for 1989-1990. This money will be received as we bill the State for services from November 1989 up to July 1, 1990. The money is for salaries and education expenses of the 1989-1990 Better Air Campaign. FROM: Unanticipated Revenue FOR: 1989-1990 Better Air Campaign $30,000 $30,000 6. Training Revenue collected is generated from fees charged for training classes or workshops facilitated by the Employee Development Department. To cover the cost of trainers and materials, departments are charged for those employees who attend these workshops. Employee Development may also coordinate registration for city employees who attend outside seminars. To facilitate ease of payment, Employee Development will charge departments the registration fee for their participants. These dollars are posted in the training revenue account and payment for the total registration is then remitted to the outside organization by Employee Development. This item appropriates the training revenue for payment of the class expenses. FROM: Unanticipated Training Revenue $33,238 FOR: Class Expenses $33,238 7. The Farm Animal Account reflects the ongoing sale and purchase of animals. This year we were able to replace several ponies and train three ponies that were born at the Farm. Goats and calves that are born at the Farm are then sold at market. Pigs, chickens and turkeys are bought young, fed to maturity and sold. The funds ($4,215) from the animal sales revenue need to be appropriated to cover Farm expenditures. FROM: Unanticipated Revenue $4,215 FOR: Farm Expenses $4,215 8. The Farm Adopt An Animal account reflects money specifically given to the Farm by citizens to help take care of the animals. That account also reflects all other types of donations given to the Farm. All monies go to purchase items either for the animals' well-being or for improvements to the Farm. Funds from the Adopt An Animal Revenue ($1,500) need to be appropriated to cover farm expenses. -570- November 7, 1989 FROM: Unanticipated Revenue $1,500 FOR: Farm Expenses $1,500 B. Sales & Use Tax Fund Sales and use tax collections for 1989 are projected to be substantially higher than originally budgeted. The 1989 Budget projected a 3.5% increase. The 1989 Revised Budget reflected a 10.95% increase for the 2.25 cent tax and a 3.5% increase for the .25 cent dedicated taxes. Based on collections received through October, the projected increase for the 2.25 cent tax is 12.8Y,, and the increase for each of the 0.25 cent tax rates is projected at 5.1%. As a result of the projected increase and higher investment earnings than budgeted, the transfer to the General Fund is projected to increase $2,797,035, from $15,865,682 to $18,662,717. The increase projected for each of the dedicated 0.25 cent taxes is shown below. This item appropriates the additional funds for transfer. FROM: Unanticipated Revenue $2,923,586 FOR: Transfer to General Fund $2,797,035 Transfer to 0.25 Cent Necessary 93,668 Transfer to 0.25 Cent Street Capital 30,253 Transfer to Transportation -Streets 2,630 2. Due to the floating interest rate on the EPIC Bond Anticipation Notes, the actual amount of interest payments for 1989 is expected to be $815,000. Since only $685,000 was originally appropriated, an additional $130,000 needs to be appropriated. FROM: Prior Year Reserves EPIC $130,000 FOR: Transfer to Debt Service Fund $130,000 Per the A-B Master Agreement, A-8 use tax payments made are credited to A-8 debt service. These use taxes must be deposited in the Sales & Use Tax Fund per the City's bond ordinances. However, use tax receipts from A-B are pledged to pay debt service when funds are needed in the Wastewater Fund also. Therefore, this item appropriates the 1989 needed funds for transfer to the Wastewater Fund. FROM: Prior Year A-B Reserve $2,594,101 FOR: Transfer to the Wastewater Fund $2,594,101 Golf Fund The Golf Fund is experiencing higher, than projected electric utility costs in 1989. This item appropriates reserves to offset this cost. FROM: Prior Year Reserves S 4,247 FOR: Electric Utility Costs S 4,247 I&ViE November 7, 1989 ID. Benefits Fund Due to increased participation in the cafeteria benefit plans after the April open enrollment, unanticipated revenue from participants needs to be appropriated in the various cafeteria programs. Also, an unanticipated increase in participation of we17ness programs (aerobic classes and fund raising tournaments), funds needs to be appropriated to help fund wellness program expenses. FROM: Unanticipated Revenue $55,683 FOR: Cafeteria Programs $53,576 Wellness Program Expenses 2,107 E. Communications Fund The Water Treatment Plant II has requested that a Northstar phone system be installed, which was not budgeted for in 1989. This item appropriates unanticipated revenue from the Water Fund for payment of this system. FROM: Unanticipated Revenue $10,000 FOR: Phone System at WTP 77 $10,000 F. Energy Fund 1. Beginning in 1990, the "Energy Fund" will no longer exist. Funds will be responsible for directly paying for energy usage instead of each fund paying the Energy Fund and then the Energy Fund paying the actual bills. However, the Energy Fund also funded energy conservation projects within the City; which projects will become part of the General Fund. It is estimated that approximately S70,000 will need to be transferred to the General Fund and placed in a reserve to pay for these projects. The $70,000 is appropriated from restricted reserves in the General Fund in 1990. FROM: Year End Reserve Balance $70,000 FOR: Transfer to the General Fund $70,000 2. As stated in number I above, the Energy Fund will no longer be in existence beginning in 1990; however, funds will still be remaining in Energy Fund Reserves at the end of 1989. Determination of how best to utilize these reserves was made after several options were researched; and a rebate to all funds from the remaining balance in the Energy Fund was determined to be the best use of these funds. FROM: Year End Reserve Balance $197,291 FOR: Transfer to the General Fund` $130,212 Transfer to Equipment Fund 15,783 ' Transfer Transfer to Golf to Water 7,892 5,919 Transfer to Sewer 1,973 -572- November 7, 1989 W Transfer to Light & Power 15,783 Transfer to Transportation 7,892 Transfer to Poudre Fire Authority 11,837 Equipment Fund Departments have had higher than anticipated expenses in outside vehicle repair, maintenance and parts during 1989. Prior year reserves and revenue received from the departments should now be appropriated to cover the additional expenses. FROM: Unanticipated Revenue $50,000 Prior Year Reserves $ 8,299 FOR: Unanticipated Department Expenses 58,299 Self Insurance Fund In accordance with generally accepted accounting principles, the City must report as an expenditure any claim which can be reasonably estimated and is asserted or is probable of assertion. Although financial resources have not been expended, and will not be expended until final settlement of any claim, the amount fairly reflects the probable amount of resources which will eventually be expended. 1989 appropriations need to be increased by $750,000. This item also appropriates $375,485 to the loss fund from insurance reimbursements. FROM: Unanticipated Revenue FOR: Claim Reserve Loss Fund $1,125,485 $750,000 375,485 The listed departments paid in excess of the deductible for various damaged property claims. The loss fund now needs to reimburse the funds for their overpayment. FROM: Existing Appropriations $11,705 FOR: Transfer to General Fund $8,178 Transfer to Golf Fund 758 Transfer to Cultural Services 2,769 Community Development Block Grant Fund The City received $95,000 and $71,000 in grant revenue in 1988 and 1989 respectively from the United States Department of Housing and Urban Development (HUD) under the Rental Rehabilitation Program. These funds are to be used for rehabilitation of rental property in selected areas within Fort Collins in accordance with the Community Development Block program. FROM: HUD Rental Rehab. Grant $166,000 FOR: CDBG - Rental Rehabilitation Program $166,000 SIVA11 November 7, 1989 J. Downtown Development Authority (DDA) The 1988 DDA bond ordinance requires that interest earnings in the DDA Capital Projects Fund be transferred to the DDA Debt Service Fund to offset interest expense incurred on the bonds. Furthermore, the DDA Operations Fund needs to be reimbursed for a portion of the debt service which it covered in 1988. This item calls for $257,137 to be appropriated from current year estimated interest earnings and $11,843 from prior year reserves in the DDA Capital Projects Fund for transfer to the DDA Debt Service Fund. In addition, $156,020 needs to be appropriated from prior year reserves for transfer to the DDA Operations Fund. FROM: Current Year Revenue (Interest Earnings) $257,137 FROM: Prior Year Reserves 11,843 FOR: Transfer to the DDA Debt Service Fund $258,980 FROM: Prior Year Reserves $156,020 FOR: Transfer to the DDA Operations Fund $156,020 K. Transportation Services Fund - Streets Division 1. Once again the unpredictability of Fort Collins weather has put the ' Streets Division in a familiar position. Expenditures in the 1989 Snow Removal program have already surpassed what was originally budgeted. Furthermore, based upon historical data, the City of Fort Collins can expect 5 storms between November 1st and December 31st at an average cost of approximately $20,000 per storm. In addition, appropriations are needed over what was originally budgeted to meet an increased demand for services provided through the Streets Division Work for Others program. The increase is needed to pay for labor, equipment, and materials to provide additional street maintenance requested by other departments. FROM: Prior Year Reserves $150,000 FOR: Streets/Snow Removal $100,000 FOR: Streets/Work for Others 50,000 In past years, the City of Fort Collins Streets Division has sponsored an annual Snow & Ice Conference attended by other Front Range municipalities. In 1989, the remaining balance in the Streets Division's Reserve for Snow & Ice Conferences was transferred to the City of Greeley, the host city for the 1990 conference. This item appropriates the monies transferred. FROM: Prior Year Reserves $ 1,166 ' FOR: Streets/Snow Removal $ 1,166 L. Cultural Services & Facilities Fund -574- November 7, 1989 1. This request appropriates funds donated by the Fort Collins ' Foundation Junior League and will be used for sound reinforcement in the Performance Hall. The entire project will cost $12,700 with $8,279 coming from the donated funds and $4,421 already appropriated in the 1989 Lincoln Center budget. FROM: Fort Collins Foundation Donation $8,279 FOR: Lincoln Center Expenditures $8,279 2. The Lincoln Center charges its users for services provided, i.e., linens, decorative packages, technical labor, etc. The amount is estimated during the budget process and adjustments are made depending on actual usage. Staff is projecting an additional $10,000 in costs to be offset by revenues collected from users. FROM: Unanticipated Revenue $10,000 FOR: Lincoln Center Expenditures $10,000 3. The Museum received a grant from the Cultural Development and Programming Account for the 125th Anniversary celebration in August. This request appropriates the grant revenue received to be used towards Museum operating costs. Pension Fund M. Employees 1. Due to additional benefits paid out of the fund, costs are higher than estimated. An additional $44,130 of appropriations is needed to cover these costs. FROM: Prior Year Reserves $44,130 FOR: Benefit Payments $44,130 N. Debt Service Fund 1. This item appropriates $130,000 transferred from the Sales & Use Tax Fund for EPIC interest payments. For further information see the Sales & Use Tax Fund section. FROM: Transfer from Sales & Use Tax $130,000 FOR: EPIC Interest Payment $130,000 0. Natural Resource Recovery Grant 1. This grant fund earned $338 of interest income in 1988. These funds need to be appropriated to cover the expenditures made so that the ' fund and grant can be closed out. -575- November 7, 1989 F] FROM: Unanticipated Revenue FOR: Natural Resource Recovery Grant Southridge Greens Fund $338 $338 In the 1990 budget, Council approved merging the SouthRidge Greens Fund budget with the Debt Service Fund. Revenues have exceeded estimates in the SouthRidge Greens Fund in past years, resulting in a carryover balance from year to year. Also, revenues for 1989 are expected to exceed earlier estimated amounts. Accordingly, additional appropriations are needed to transfer the remaining balances in the SouthRidge Greens Fund to the Debt Service Fund in 1989. This item appropriates $134,852 in the SouthRidge Greens Fund for transfer to the Debt Service Fund. FROM: Unanticipated Revenue FOR: Transfer to Debt Service Fund $134,852 $134,852" Councilmember Edwards made a motion, seconded by Councilmember Azari, to adopt Ordinance No. 139, 1989 on First Reading. Finance Director Alan Krcmarik gave a brief overview of the clean-up ordinance and noted the City's compliance with governmental accounting principals. He commented on the accounting modification in the ODA Capital Projects Fund and explained the function of the sales tax fund as a holding account for later appropriations. Mayor Winokur commented on fund expenditures and transfers as annual bookkeeping functions and explained the process of adopting the annual budget. The vote on Councilmember Edwards' motion to adopt Ordinance No. 139, 1989 on First Reading was as follows: Yeas: Councilmembers Azari, Edwards, Horak, Kirkpatrick, Mabry, Maxey, and Winokur. Nays: None. THE MOTION CARRIED. Ordinance No. 146, 1989, Appropriating Prior Year Reserves for 1989 Benefits Fund Expenses. Adopted on First Reading Following is staff's memorandum on this item: "FINANCIAL IMPACT This ordinance appropriates $424,894 from Prior Year Reserves for the purpose of meeting anticipated expenses in the Benefits Fund. -576- November 7, 1989 EXECUTIVE SUMMARY ' Staff is currently involved in an effort to resolve financial issues in the Benefits Fund which relate to the City's medical insurance benefits for employees. Council's direction to staff has been to reach a solution to this funding issue as it affects the 1990 Budget by the end of 1989. Regardless of the method used to resolve this issue for the 1990 Budget year, the Benefits Fund is currently expected to be over budget during 1989 due to increased costs and increased claims experienced in the area of medical insurance. This ordinance is necessary to make sure there are adequate appropriations through 1989. The 1989 Budget for the Benefits Fund projects approx. $1.4 million in expenses for medical insurance. Claims are anticipated to total approximately $1.9 million by the end of the fiscal year. The current balance in Reserves is $424,894. With this appropriation, the Benefits Fund should have adequate appropriations through 1989, until a long term plan for funding can be developed." Councilmember Maxey made a motion, seconded by Councilmember Edwards, to adopt Ordinance No. 146, 1989 on First Reading. Director of Administrative Services Pete Dallow gave a brief explanation of the remaining reserves in the benefits fund and explained how the projected expenses for the remainder of 1989 will be met. He stated that staff is working on options and solutions to provide to Council at the December 12 worksession and explained that the requested action will preserve the City's ability to meet the current obligations. Jim Creeden, P.O. Box 1022, commented on the benefits provided to the Police Department as compared to surrounding communities. The vote on Councilmember Maxey's motion to adopt Ordinance No. 146, 1989 on First Reading was as follows: Yeas: Councilmembers Azari, Edwards, Horak, Kirkpatrick, Mabry, Maxey, and Winokur. Nays: None. If=1i1IffIrXIUI.1.i1AI1I Ordinance No. 143, 1989, Appropriating Prior Year Reserves in the Street Oversizing Fund and Authorizing the Transfer'of Appropriated Amounts to the Debt Service Fund, Adopted on First Reading Following is staff's memorandum on this item: "FINANCIAL IMPACT This ordinance appropriates $335,032 from Street Oversizing Fund reserves ' and authorizes the transfer of the appropriated funds to the Debt Service -577- November 7, 1989 I Fund to cover principal ($257,400) and interest ($77,632) payments on Lemay/Harmony SID #78, Phase 11, Street Oversizing Revenue Note. EXECUTIVE SUMMARY Council approved appropriations in 1988 for the payment of Lemay/Harmony SID #78, Phase II, Street Oversizing Revenue Note. Due to settlement negotiations, the note was not paid in 1988, but was paid in September 1989. Since the 1988 appropriations lapsed at the end of the year, the amounts have to be re -appropriated in 1989. Principal $257,400 Interest 77,632 Total Appropriation $335,032" Councilmember Mabry withdrew from discussion and vote on this item due to a perceived conflict of interest. Councilmember Azari made a motion, seconded by Councilmember Maxey, to adopt Ordinance No. 143, 1989 on First Reading. Bruce Lockhart, 2500 East Harmony Road, asked questions regarding the monies due to Dueck properties. ' Finance Director Alan Krcmarik clarified that Ordinance No. 143, 1989, dealt specifically with the street oversizing note that accompanied SID #78. The vote on Councilmember Azari's motion to adopt Ordinance No. 143, 1989 on First Reading was as follows: Yeas: Councilmembers Azari, Edwards, Horak, Kirkpatrick, Maxey, and Winokur. Nays: None. (Councilmember Mabry withdrawn) THE MOTION CARRIED. Ordinance No. 144, 1989, Authorizing the Issuance of Industrial Development Revenue Bonds of the City of Fort Collins for the ESAB Automation, Inc., Project, Adopted on First Reading Following is staff's memorandum on'this item: "FINANCIAL IMPACT The debt created by the issuance of the Industrial Development Revenue Bonds ("IDRBs") will be repaid from the net operating revenue generated by the project, not by constitute a debt or taxes or obligation resources of the of the City. The bonds do not City. Upon issuance of the bonds, ' the City will receive a fee of 1/16th of one percent of the present value -578- November 7, 1989 of the outstanding annual debt of the financing schedule, consistent with the City's IDRB policies. These funds are designated by policy to be used for economic development purposes. The fee is dependent upon the debt service for the bonds and is estimated to be $23,000. EXECUTIVE SUMMARY On August 1, 1989, the Council adopted the Inducement Resolution for the ESAB Automation, Inc. Project in the amount of $6,730,000. This ordinance authorizes the issuance of the industrial development revenue bonds to be used to finance the construction of the improvements for the project. The improvements envisioned in this land, the construction and equipping Harmony Road at Innovation Drive. The contain approximately 120,000 square privately owned and the debt is to generated by the project or the securit BACKGROUND project include the acquisition of of a facility to be located along project facilities are expected to feet of space. The project is be repaid solely from the revenue y pledged for the project. In mid -July, 1989, representatives of ESAB met with City staff to begin the process for industrial development revenue bonds. ESAB Automation, Inc., a Delaware corporation, is a wholly owned subsidiary of ESAB AB of Gothenborg, Sweden. The application for the IDRB inducement was submitted to the City on July 20 and its passage took place at the August 1, 1989, meeting. The inducement was passed by a 5-0 vote, with one member of Council abstaining, and one not present. Because the City had insufficient private activity bond allocation to fund the entire project on its own, application was made to the State of Colorado for an allocation from the state-wide balance of private activity bonds. During the application process the estimated amount of funding necessary to complete the project was reduced to $6 million. The project received approval from the State on September 27, 1989. ESAB Automation has been located in the Fort Collins area since 1978 when ESAB AB purchased Heath Engineering Company. Today, ESAB manufactures a complete line of metal fabricating shape cutting machines and robotic welding systems. The cutting machine line expanded to include water and laser jet technologies to cut plastics, glass, and other non-metal materials. Project Budget and Use of Bond Proceeds The estimated budget for the project is as follows: Sources Proceeds of Bonds $6,000,000 less issuance costs 120,000 Subtotal $5,880,000 P-1 WM Uses November 7, 1989 Acquisition of Land (12.6 acres) $1,224,000 Construction of Building 3,776,000 Manufacturing Equipment 865,000. Total $5,880,000 Substantially all of the bond proceeds will be used to pay the capital costs of the proposed project. The equipment cost consists of major equipment used in the manufacturing process and has an expected life of 10 years. The building has an expected life of 40 years. The land and site improvements have an expected life of 40 years. The average economic life of the assets contemplated in the project is about 33 years. The term of the bonds is 20 years. The underwriter for the transaction will be Kirchner Moore & Company from Denver. It is expected that the bonds will be marketed between first and second reading. Mr. David E. Dwyer of Fischer, Brown, Huddleson & Gunn will serve as bond counsel for the transaction. The financial transaction will be secured by a letter of credit from Svenska Handelsbanken, an "AAA" rated band. Through this security, it is expected that the issue will be rated by Moody's Investor's Service. Economic Benefits The project will yield direct and indirect benefits to the Fort Collins economy. The direct benefits include an increase in the annual property tax because of the increase in the assessed valuation. The increase in the property tax is estimated to be $139,000. Use tax receipts from materials used in the construction of the improvements is expected to be approximately $71,000. Indirect benefits accrue from the fact that nearly all of the company's products will be sold outside the City limits, thereby drawing income into the City. About 10 percent of the expenditures by the company will be made to local vendors. Over the five year expansion, about 130 new employment opportunities will result. A majority of these positions will be filled by local residents." Councilmember Mabry withdrew from discussion and'vote on this item due to a perceived conflict of interest. Councilmember Maxey made a motion, seconded by Councilmember Kirkpatrick to adopt Ordinance No. 144, 1989 on First Reading. mm November 7, 1989 Finance Director Alan Krcmarik gave a brief recap of the history on the ' item and introduced Dick Powell, ESAB representative. Councilmember Kirkpatrick spoke of the industrial development revenue bond as an appropriate tool available to the City to provide opportunities for economic development in Fort Collins and commented on the City's role in economic development. She noted the amount of work done by staff, Council, and representatives from the company which made it possible to provide access to further economic development. The vote on Councilmember Maxey's motion to adopt Ordinance No. 144, 1989 on First Reading was as follows: Yeas: Councilmembers Azari, Edwards, Horak, Kirkpatrick, Maxey, and Winokur. Nays: None. (Councilmember Mabry withdrawn) THE MOTION CARRIED. Ordinance No. 145, 1989, Authorizing the Issuance of Industrial Development Revenue Bonds of the City of Fort Collins for the Innovative Companies, Inc.. Project, Adopted on First Reading Following is staff's memorandum on this item: "FINANCIAL IMPACT The debt created by the issuance of the Industrial Development Revenue Bonds ("IDRBs") will be repaid from the net operating revenue generated by the project, not by taxes or resources of the City. The bonds do not constitute a debt or obligation of the City. Upon issuance of the bonds, the City will receive a fee of 1/16th of one percent of the present value of the outstanding annual debt of the financing schedule, consistent with the City's IDRB policies. These funds are designated by policy to be used for economic development purposes. The fee is dependent upon the debt service for the bonds and is estimated to be $25,000. EXECUTIVE SUMMARY On June 20, 1989, the Council unanimously adopted an Inducement Resolution for the Innovative Companies, Inc., Project in the amount of $7 million. This ordinance authorizes the issuance of the industrial development revenue bonds' to be used to finance the construction of the improvements for the project'. These improvements include construction and expansion of existing facilities at the 4401 Innovation Drive site and the acquisition and renovation of the 3842 Redman Drive facility. The combined project facilities will contain approximately 141,000 square feet of space. The project is privately owned and the debt is to be paid from the revenue ' generated by the project. -581- November 7, 1989 BACKGROUND In early June, Innovative Companies, Inc., a Colorado corporation, submitted an application to the City for the inducement of $7 million of industrial development revenue bonds pursuant to the City's established policies. The inducement resolution for the project received unanimous support from the City Council. However, because the City had insufficient private activity bond allocation to fund the entire project, application was made to the State of Colorado for an allocation from the state-wide balance of private activity bonds. During the application process the estimated amount of funding necessary to complete the project was revised to $6.5 million. The project received approval from the State on September 27, 1989. Innovative Companies was founded in 1982. It has developed into a diversified cabinet manufacturer with nationally distributed product lines of commercial, institutional, and residential cabinetry along with store fixtures and other specialty wood products. Project Budget and Use of Bond Proceeds The estimated budget for the project is as follows: Sources Proceeds of Bonds less issuance costs Uses $6,500,000 120,000 Subtotal $6,380,000 Acquisition of Land (33.6 acres) $ 575,000 Construction and Renovation 3,670,000 Manufacturing Equipment 2,125,000 Total $6,380,000 Substantially all of the proceeds of the bond proceeds will be used to pay the capital costs of the proposed project. The equipment cost consists of major equipment used in the cabinetry manufacturing process and has an expected life of 40 years. The buildings have an expected life of 10 years. The land and site improvements have an expected life of 50 years. The term of the bonds is 20 years. The underwriter for the transaction will be Kirchner Moore & Company from Denver. It is expected that the bonds will be marketed between first and second reading. Mr. David E. Dwyer of Fischer, Brown, Huddleson & Gunn will serve as bond counsel for the transaction. 582- November 7, 1989 The financial transaction will be secured by a letter of credit from Credit , Suisse, a Swiss Banking Corporation. Through this security, it is expected that the issue will be rated by Moody's Investor's Service. Economic Benefits The project will yield direct and indirect benefits to the Fort Collins economy. The direct benefits include an increase in the annual property tax because of the increase in the assessed valuation. This increase is estimated to be $136,000. Use tax receipts from materials used in the construction of the improvements is expected to be approximately $50,000. Indirect benefits stem from the fact that nearly all of the company's products will be sold outside the City limits, thereby drawing income into the City. About 60 percent of the expenditures by the company will be made to local vendors. Over the five year expansion, about 360 new employment opportunities will result. Ninety percent of these positions will be filled from the local residents." Councilmember Maxey made a motion, seconded by Councilmember Azari, to adopt Ordinance No. 145, 1989 on First Reading. Finance Director Alan Krcmarik gave a brief presentation on the history of the item and introduced company representatives. Tom Inscho, Innovative Companies, -noted the bond obligation rested with the 1 company and stated the bonds were secured by a letter of credit. He explained the bonds provided, at no risk to the City, an opportunity for the company to expand and have a positive economic impact on the community. He noted the primary use of the bond funds would be to acquire the property and the building at 3842 Redman Drive. He spoke of the environmental concerns and stated that a noise abatement structure has been built and could be enhanced to further achieve desired results. He acknowledged the concerns about the smoke pollution generated from the plant's burning process and explained that with the state and county's assistance, and by burning natural gas, the smoke problem had been solved. He addressed the odor concern and noted the use of an additive in the finishing products diminishes the odor but does not eliminate it. He summarized Innovative Companies involvement with Larimer County Health Department and the State by using MSDS provided by the manufacturer to reduce emission problems to ensure that health hazards are not created. He stated he believed the bond issue and resulting expansion of Innovative Companies would have a positive effect on Fort Collins and noted the Redman property was outside the city limits. Planning Director Tom Peterson, stated annexation of the Redman property will be completed by the end 1989. Tom Inscho, Innovative Companies, noted Credit Suisse was the issuer of the letter of credit and the project had been rated AAA by both rating , services. He noted the length of term on the letter of credit was eight I61Ia November 7, 1989 years with an option to renew annually at each anniversary date. He stated that the underlying issuer would be rated and explained the rating changes should the letter of credit not be renewed. Dave Dwyer, bond counsel, stated the bond documents provide that if the letter of credit is not renewed, the trustee will draw on the letter of credit before the expiration date and pay off the bond holders. He pointed out the company has the opportunity to provide an alternate letter of credit which has to be comparably rated to replace the Credit Suisse letter of credit. He explained that if a letter of credit is not provided, the bond documents provide that the bonds will be redeemed by a draw on the letter of credit on behalf of the trustee who in turn would pay the bond holders. Tom Inscho, Innovative Companies, stated that anticipated bond proceeds would be used for additional equipment to mitigate the noise, odor, and smoke concerns and noted that funds had been channeled into improving the traffic issue at the plant on Innovation Drive, including construction of a parking facility. He noted that contractors would be landscaping the grounds in the immediate future. Finance Director Alan Krcmarik explained why the City rather than the County, issued the IDRB's to a facility not currently within the city limits. ' Robert Kopitzke, 1917 Harmony Drive, expressed concern about the City providing IDRB opportunities to a company which has been cited for air quality violations and encouraged a citizen review board be formed to look into the violations. He expressed concern about the company's noise and air quality violations and elaborated on the intensity of the odors. Jim Broderick, McMurray Drive, commented on the odor and health concerns and on the quality of life in the neighborhood surrounding the Innovative Companies' facility. He expressed frustration regarding the potential health impacts. Councilmember Horak stated he believed that issuing the bonds at this time set a bad precedent because the air and water quality agreements and site requirements have not been executed. He stated he was unsure that Innovative Companies would reach solutions regarding the health and safety concerns and stated he would not support the motion. Councilmember Edwards expressed discomfort with separating the environmental concerns from IDRB concerns and spoke of the City's lack of jurisdiction over smoke odors. He commented on the noise concerns and urged that Innovative Companies reduce the noise created from the facility and bring the odor problem under control. He stated he was not sure that the IDRB's should be denied if the technology to abate the problems did not exist and stated he believed that natural gas was the only fuel being burned at the facility. -584- November 7, 1989 Councilmember Kirkpatrick commented she believed the tension between the company and the surrounding neighborhood was due in part, to the company's long hours, extra shifts, odors, and the noise generated from the machinery at the facility. She stated the issuance of the IDRB's will relieve some of those annoyances and commented on future expansion easing the environmental concerns. She emphasized the company's responsibility to immediately begin resolving the noise and odor concerns and encouraged Innovative Companies keep the neighborhood better informed about what the plant is doing about the odors, long work hours, and the expansion process, including the parking lot. She stated she would support the motion. Councilmember Mabry commented on the City's commitment to assist local businesses. He pointed out the local businesses obligation to be a good neighbor in the community and stated he would support the motion. He asked that between the first and second readings of the ordinance, Innovative Companies provide detailed specifics to Council which address the issue of being a good neighbor. Councilmember Azari noted the complex issue of being a good neighbor while being a productive business within the community and commented that the environmental concerns of the neighborhood were justified. She elaborated on the unknown long-range impact of the chemicals involved and of putting particulates in the air. She requested Innovative Companies initiate solutions to the issues and not settle for just being in compliance with the standards and stated she would support the motion. She expressed support for Innovative Companies providing additional information to Council about being a good neighbor and encouraged the company to more effectively communicate with the neighborhood. The vote on Councilmember Maxey's motion to adopt Ordinance No. 145, 1989 on First Reading was as follows: Yeas: Councilmembers Azar?, Edwards, Kirkpatrick, Mabry, Maxey, and Winokur. Nays: Councilmember Horak. THE MOTION CARRIED. Other Business Councilmember Horak commented on the parking requirement inadequacies for apartments and multiple family housing units and requested information from staff regarding the parking issue. He encouraged detailed public work sessions be held regarding the changes within the state highway allocation priorities and inquired about the propriety of municipalities sending correspondence to judges regarding unusual cases. City Attorney Roy stated that generally a court is open to receiving input from the community. Councilmember Maxey commented on the excessive numberof attachments to , some boards and commissions applications and encouraged limitations be placed on the number of extra pages included with the applications. -585- November 7, 1989 ' Councilmember Kirkpatrick made a motion, seconded by Councilmember Maxey, to direct the City Clerk to add a line on the boards and commission's application noting that only two pages of additional material will be accepted with the application. Yeas: Councilmembers Azari, Edwards, Horak, Kirkpatrick, Mabry, Maxey, Winokur. Nays: None. THE MOTION CARRIED. Councilmember Kirkpatrick stated that a request for proposal for convention and visitor's bureau services had been sent and commented on her involvement as a boardmember of a contractual entity which has submitted a bid to the City. She asked that the Ethics Review Board look at the question of a possible conflict of interest. Councilmember Horak proposed continuing the meeting to November 14 to consider taking formal action regarding sending a sentencing recommendation to the court. Mayor Winokur commented on the Golf Board's review of the entire golf fee structure and the issue of raising revenue. He requested the Golf Board provide additional information about the on -going maintenance expenses and the debt issues at Southridge Greens. Mayor Winokur made a motion, seconded by Councilmember Horak, requesting ' the Golf Board and staff to include as part of the assessment of golf fees, a means to increase golf revenues to cover all golf related expenses, including payment of a portion of the debt on Southridge Greens and to return to Council with the report and recommendations. Yeas: Councilmembers Azari, Edwards, Horak, Kirkpatrick, Mabry, Maxey, and Winokur. Nays: None. THE MOTION CARRIED. Adjournment Councilmember Horak made a motion, to adjourn until 6:00 p.m. on November 14 for the purpose of receiving and discussing information. on making a sentencing recommendation to the court in an upcoming Police Department case. THE MOTION DIED DUE TO LACK OF A SECOND. Councilmember Maxey made a motion, seconded by Councilmember Edwards, to adjourn the meeting until 5:45.p.m. on November 14 for the purpose of receiving and discussing information on making a sentencing recommendation to the court in an upcoming Police Department case. Yeas: Councilmembers Azari, Edwards, Horak, Kirkpatrick, Mabry, Maxey, and Winokur. Nays: None. I THE MOTION CARRIED. &I-I3 November 7, 1989 Councilmember Horak suggested the City Attorney provide information and ' recommendations to Council relating to the propriety of making a sentencing recommendation to the court. He requested specific facts regarding the City's involvement in the case, including Police Department recommendations. The meeting adjourned at 8:40 p.m. ayor TTEST: City Clerk