HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 01/17/2006 - RESOLUTION 2006-006 ADOPTING AMENDMENTS TO THE FIN ITEM NUMBER: 14
AGENDA ITEM SUMMARY DATE: January17, 2006
FORT COLLINS CITY COUNCIL STAFF: Diane Jones/
Chuck Seest
SUBJECT
Resolution 2006-006 Adopting Amendments to the Financial Management Policies.
RECOMMENDATION
Staff recommends adoption of the Resolution.
FINANCIAL IMPACT
The Financial Management Policies (the "Policies") guide budget preparation and long-range
financial planning. The Policies reflect Council direction and commitment to sound financial
planning and management.
EXECUTIVE SUMMARY
The budget process for the City of Fort Collins is driven by many financial management
policies. To facilitate the opportunity for comprehensive review of financial management
policies, management staff compiles them into a separate document and reviews and updates the
policies annually, as needed. Staff then presents any updated and revised policies to Council for
adoption by resolution. The policies remain in effect until subsequently amended or repealed by
Council.
BACKGROUND
The following lists proposed updates and revisions, by section, with a brief explanation. A copy
of the Financial Management Policies with the original and amended policy language is
attached.
January 17, 2006 -2- Item No. 14
Proposed Amendments:
BUDGET POLICY
• Section 1.5.b. - Budget Preparation Text has been edited to reflect the City's shift to
using Budgeting for Outcomes for preparation of the 2006-2007 budget.
• Sections 1.6.d. to 1.6.f. - Principles for Budget Planning This section defines Primary,
Secondary, and Support Services. The following changes have been made:
o Combine Building Inspection (Primary) and Neighborhood Resources
(Secondary) and rename as Neighborhood and Building Services (Primary).
o Add Real Estate Services to the Support Services group.
REVENUE POLICIES
• Section 2.2.c. - Targets Text updated to reflect more current data (actual collections
through 2004).
• Sections 2.3.b.1. and 2.3.c. - Fee Policv Minor changes to the text in these sections for
clarification.
• Section 2.4 - Sales and Use Tax Distribution Updated to reflect the 3 new 0.25 cent taxes
(extensions) that begin January 1, 2006. Street Maintenance, Open Space — YES, and
Building on Basics ("BOB").
GENERAL POLICIES
• Section 3.1.b.2. - How Costs are Allocated Text edited to clarify how administrative
costs for IT are allocated. IT administrative charges are allocated to funds based on the
total number of budgeted full-time equivalent positions.
• Section 3.5.b. - Medical Insurance and Retirement Plan Updated the employee
contribution rate to the 457 deferred compensation program. The employee contribution
is up to 25% of salary, not to exceed a total of$15,000 (previous cap was $12,000). The
increased cap is in accordance with IRS regulations.
• Section 3.6.b. - Priorities for Maintenance and Repair Funding The second and third
priorities have been switched, per feedback from staff.
• Section 3.8.b. - Rebate Programs Text edited to reflect the 3 extended 0.25 sales & use
taxes.
RESERVE POLICIES
• Sections 5.2.a.LLI - General Fund Restricted Reserve for Emer eg ncies Text edited to
clarify how the reserve is funded.
CAPITAL IMPROVEMENT POLICY
• Sections 6.1 and 6.3. - Citizen Participation and Capital Improvement Program Text
updated to reflect the extension of the 0.25 sales & use tax dedicated toward funding
capital improvements (BOB). The Street Maintenance/Pavement Management Program
and the Natural Areas Program are no longer classified as capital projects. The Pavement
Management Program and the Natural Areas programs are budgeted in the
Transportation Services Fund and Natural Areas Fund respectively.
RESOLUTION 2006-006
OF THE COUNCIL OF THE CITY OF FORT COLLINS
ADOPTING AMENDMENTS TO THE FINANCIAL
MANAGEMENT POLICIES
WHEREAS,City Council has adopted Financial Management Policies for the City pursuant
to Resolution 1994-174; and
WHEREAS,Resolution 1994-174 provides that Council may adopt amendments to the City's
Financial Management Policies; and
WHEREAS, the City Manager has recommended certain proposed amendments to the
Financial Management Policies; and
WHEREAS, the City is committed to sound and efficient financial planning and
management; and
WHEREAS, the proposed amendments to the Financial Management Policies establish
guidelines for sound and efficient financial planning and management, and reflect current
requirements and laws that apply to the City's financial activities; and
WHEREAS, the City Council wishes to adopt these amendments to the City's Financial
Management Policies in pursuit of its objective of sound and efficient financial planning and
management.
NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF FORT
COLLINS as follows:
Section 1. That the Council hereby adopts the amendments to the City's Financial
Management Policies attached hereto as Exhibit "A" and incorporated herein by this reference.
Section 2. That the amendments to the Financial Management Policies adopted by the
passage of this Resolution shall be included as part of said Policies,and those Policies shall hereafter
remain in effect until the same are amended or repealed by subsequent action of the City Council.
Passed and adopted at a regular meeting of the Council of the City of Fort Collins held this
17th day of January, A.D. 2006.
Mayor
ATTEST:
City Clerk
Exhibit A
FINANCIAL MANAGEMENT POLICIES
TABLE OF CONTENTS
The Financial Management Policies are a compendium of all City policies that shape the Budget.
They are intended to assist the Council and the City Manager in preparing the Budget and help
communicate to residents and customers how the community goals are being addressed .
BUDGET POLICY
1 . 1 Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1 . 2 Charter Process Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1 . 3 Changes to Adopted Budget . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1 . 4 Lapsed Appropriations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1 . 5 Budget Philosophy and Preparation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1 . 6 Principles for Budget Planning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
REVENUE POLICIES
2 . 1 Revenue Limitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2 . 2 Revenue Review, Diversity, and Monitoring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2 . 3 Fee Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2 . 4 Sales and Use Tax Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2 . 5 Private Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
GENERAL POLICIES
3 . 1 Administrative Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3 . 2 Payment in Lieu of Taxes ( PILOT) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3 . 3 Lease- Purchase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3 . 4 Human Resource Management and Productivity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3 . 5 Medical Insurance and Retirement Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3 . 6 Facility Maintenance and Repairs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
3 . 7 Poudre Fire Authority- Revenue Allocation Formula . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
3 . 8 Rebate Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
FUND POLICIES
4 . 1 General Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
4 . 2 Enterprise Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
4 . 3 Internal Service Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
4 . 4 Special Revenue and Debt Service Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
RESERVE POLICIES
5 . 1 Policy Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
5 . 2 Types of Reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
CAPITAL IMPROVEMENT FUNDS
6 . 1 Citizen Participation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
6 . 2 Capital Improvement Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
6 . 3 Capital Improvement Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
DEBT POLICIES
7 . 1 Policy Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
7 . 2 Authorization for Municipal Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
7 . 3 Conditions for Using Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
7 . 4 Debt Indicators and Target Levels of Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
7 . 5 Sound Financing of Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
7 . 6 Financing Methods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
7 . 7 Bond Market Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
CASH MANAGEMENT AND INVESTMENT POLICY
8 . 1 Policy Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
8 . 2 Scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
8 . 3 Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
8 . 4 Delegation of Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
8 . 5 Prudence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
8 . 6 Eligible Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
8 . 7 Reporting and Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
8 . 8 Ethics and Conflicts of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
8 . 9 Policy Revisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
ECONOMIC DEVELOPMENT POLICY
9 . 1 Policy Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
9 . 2 Role of the City of Fort Collins . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
9 . 3 Role of the Private Sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
9 . 4 Role of Outside Entities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
BUDGET POLICY
1 . 1 , OVERVIEW
The budget is a long - range plan by which the City Council sets financial policy . Through
the budget , services are implemented . The budget along with the annual appropriation
ordinance provides the basis for the control of expenditures . For the City of Fort Collins ,
direction for the budget emanates from many distinct sources . The State Constitution and
the City Charter provide the basic legal requirements and time lines forthe process . Council
goals , ordinances and resolutions provide additional direction and respond to the needs of
the community .
1 . 2 . CHARTER PROCESS REQUIREMENTS
a . Budget Term
The fiscal year of the City is the calendar year . The City may adopt budgets for a
budget term of one fiscal year or more . After the Charter amendment in 1997 allowing
the budget term to be more than one fiscal year, the Council has adopted two-year
budgets that correspond with the election cycle .
b . Budget Recommendation
On or before the first Monday in September preceding each budget term , the City
Manager shall file with the City Clerk a proposed budget for the ensuing budget term
along with an explanatory message . The proposed budget shall provide a complete
financial plan for each fund of the City and shall include appropriate financial
statements for each type of fund showing comparative figures for the last completed
fiscal year , comparative figures for the current year, and the City Manager' s
recommendations for the ensuing budget term .
C . Public Record , Hearing
The City Manager' s proposed budget shall be a public record and be available to the
public for inspection and copying . The City Council shall , within ten ( 10 ) days after
the filing of the proposed budget , set a time for a public hearing . At the hearing , the
public may comment upon the proposed budget .
d . Adoption of Budget and Appropriation of Funds
After the public hearing and before the last day of November preceding the budget
term , the Council shall adopt the budget , by ordinance , for the ensuing term . Before
the last day of November of each fiscal year , the Council shall appropriate such sums
of money as it deems necessary to defray all expenditures of the City during the
ensuing fiscal year. The appropriation of funds shall be accomplished by passage of
the annual appropriation ordinance . The appropriation of funds shall be based upon
the budget as approved by the Council but need not be itemized further than by fund
with the exception of capital projects and federal or state grants , which shall be
summarized by individual project or grant .
Financial Management Policies 3
1 . 3 . CHANGES TO ADOPTED BUDGET
After the commencement of the fiscal year, the amounts appropriated for the proposed
expenditures in the adopted budget are not subject to repeal and are considered
appropriated for the purposes specified . The expenditures of City operating funds cannot
exceed the budgeted appropriations for their respective fund . In certain cases , however,
adopted budgets may be increased , decreased , or amounts transferred between funds .
a . Budget Increases
1 . Supplemental Appropriations — The Council , upon recommendation by the City
Manager, may make supplemental appropriations from actual revenues
received , anticipated revenues , and prior year reserves provided that the total
amount of the supplemental appropriation plus previous appropriations for the
fiscal year does not exceed the actual or anticipated revenue total or the
available reserve balance . No appropriation can be made which exceeds the
revenues , reserves , or other funds anticipated or available except for
emergencies due to accident or unforeseen event arising after the adoption of
the annual appropriation .
2 . Unanticipated Revenue — If a fund receives revenue during the fiscal year from
a source that was not anticipated at the time of budget adoption such as grants ,
bond issue or implementation of a new fee , Council may appropriate such
revenue for expenditure .
3 . Encumbrance Carryover — If a fund has open and valid purchase orders at the
end of a fiscal year, those related appropriations are encumbered and carried
over to the ensuing fiscal year and added to the budgeted appropriations to
cover the actual expense when it occurs .
b . Budget Decreases
The budget may also be decreased below adopted appropriations during the fiscal
year. Changes in service demand , economic conditions , projected growth limits , and
Council goals and direction may cause such budget reductions . Each service area
is responsible for developing a plan to reduce appropriations . Each plan must be in
place and ready for implementation should the need arise . If the City Manager directs
budget reductions , Council will be informed immediately and the appropriations will
be set aside through administrative action . While this administrative action does not
lower the appropriations within a fund , expenditures from the fund shall not exceed
the amount recommended by the City Manager. If the circumstances leading to the
implementation of reductions change , the appropriations may be made available for
expenditure .
c . Level of Control and Budget Transfers
1 . Control of expenditures is exercised at the fund level . Fund managers are
responsible for all expenditures made against appropriations within their fund
and can allocate available resources within the fund .
Financial Management Policies 4
2 . During the fiscal year, the Council may by ordinance and upon the
recommendation of the City Manager , transfer any unexpended and
unencumbered appropriated amount from one fund or capital project account to
another fund or capital project account , provided that :
(a ) the purpose for which the transferred funds are to be spent remains
unchanged ;
( b ) the purpose for which the funds were initially appropriated no longer
exists ; or
( c) the transfer is from a fund or capital project account in which the amount
appropriated exceeds the amount needed to accomplish the purpose
specified by the appropriation .
1 . 4 . LAPSED APPROPRIATIONS
All appropriations not spent or unencumbered at the end of the fiscal year lapse into the
fund balance applicable to the specific fund , except for :
a . Capital Projects - appropriations for capital projects which do not lapse until the
project is completed and closed out ; and
b . Grant Funds - appropriations for federal or state grants which do not lapse until the
expiration of the grant .
Council can terminate a capital project or a federal or state grant at any time prior to
completion of the project or expiration of the grant .
1 . 5 . BUDGET PHILOSOPHY
a . Philosophy
The City of Fort Collins is committed to presenting a sound financial plan for
operations and capital improvements within growth limit guidelines . To achieve this
end , the City utilizes conservative growth and revenue forecasts and :
• Prepares multi -year financial plans for operations and capital improvements ;
• Allows staff to manage the operating and capital budgets , with City Council
deciding allocations in both ;
• Adopts financial management policies which establish guidelines for multi -year
financial plans ;
• Establishes budgets for all funds based on adopted policies ;
• Appropriates the budget in accordance with the City Charter and State
Constitution ;
Financial Management Policies 5
• Adjusts the budget to reflect changes in the local economy , changes in priorities ,
and receipt of unbudgeted revenues ;
• Organizes the budget so that revenues are related to expenditures as much as
possible ;
• Provides department managers with immediate access to revenue and
expenditure information for controlling their annual expenditures against
appropriations ;
• Utilizes a performance measurement system for all activities in the City ;
• Evaluates recommendations that have a budget impact in light of annual
appropriations and multi -year financial plans .
b . Budget Preparation
While the Charter establishes time limits and the essential content of the City
Manager' s proposed budget and the adoption of the budget , the language is silent on
the budget preparation process .
The City' s Financial and Management Policies guide budget preparation and long -
range planning .
tThe City Manager, Deputy City Manager , and the Budget Director, and designated
Service Area Directors develops the guidelines , consistent with the Policies , to be
used for budget preparation . The aforementioned individuals are collectively referred
to as the Budget Leadership Team . During the development of the budget , various
department and division representatives afe may be called on to provide their
expertise . In addition , the City Council and the Executive
Lead Team provide guidance during preparation .
The City' s 2006-2007 biennial budget was prepared using a process called Budgeting
for Outcomes (" BFO" ) . The purpose of utilizing the BFO approach is to :
• Identify what' s important to a community and develop a sound financial and
service plan to achieve those outcomes ;
• Allocate dollars based on current priorities and results , not simply increase last
year' s spending ;
• Effectively deal with revenue limitations ; and
• Emphasize accountability, efficiency , innovation and partnerships .
In March , programs develop multi -year revenue projections and submit them to the
Budget Office . These revenue projections effectively "set the price of government" ;
the amount available for purchasing outcomes/results . City Council adopts the
outcomes/results that form the foundation of the budget. The revenues are then
allocated , by the Leadership Team , across the outcomes . Results Teams , organized
by outcome/result , prepare " Requests for Results" (" RFR' s" ) that include strategy
maps , two to three high level indicators to measure results , and purchasing strategies .
Financial Management Policies 6
Sellers (departments/divisions ) prepare "offers" in response to the RFR' s . The
Seller' s offers are reviewed by the Results Teams , ranked , and recommended for
inclusion or omission from the City Manager' s recommended budget , based upon the
offer' s merits and the resources available , given the outcome/result . Based tipon
Maildal that gtiffides the prograrns in developing their btidgets . In Apr' ' and ,
Gotine ' ' �ttidy sessions afe held . At these sessions , Gotineil has the opporttinity to
The City
Manager' s budget recommendation is submitted to City Council before the first
Monday in September. The recommended budget is made available for public
inspection at this time . In September, a recommended budget- in - brief is published in
the local newspaper for public information . In addition , two public hearings and time
Council work s" sessions are held in September and October . The budget for the
ensuing budget term is adopted in no later than November
1 . 6 PRINCIPLES FOR BUDGET PLANNING
The City provides a wide variety of services to the residents of the community . It is the
responsibility of City Council to adopt a budget and manage the available resources to best
meet the service needs for the overall good of the community .
To aid in planning for the allocation of resources to meet the good of the whole community ,
Council adopted Resolution 2001 - 161 , that set forth the Principles for Budget Planning .
Those Principles as adopted by Council are as follows :
a . The City should strive to attain the lowest possible interest rates on debt in order to
minimize the cost to taxpayers and users of City services .
b . The City should maintain adequate reserve levels to ensure minimal loss of service
to the community should there be unforeseen reductions in revenues or catastrophic
occurrence .
C . Employees of the City are a valuable resource in providing services to the community ,
and a compensation policy should be maintained for City employees that reflects the
value of attracting and retaining quality employees .
d . Primary services are those services that are necessary for the good of the entire
community . They are basic to the safety , health , and welfare of the community , and
the allocation of all resources necessary for the provision of primary services is the
first priority in budget preparation . Primary services are :
Financial Management Policies 7
Police Water Wastewater
Fire Transportation Stormwater
Building Inspeetion Electric Natural Resources
Development Review Engineering Facilities Maintenance
Affordable Housing Pedestrian Access (all public facilities
Neighborhood and including parks)
Building Services
e . Secondary services are those services that enhance the quality of life of the residents
and to many, increase the value of living and working in the community . While the
value of secondary services is recognized , the allocation of resources to those
services shall be considered only after the necessary allocation has been made to
fund primary services . Secondary services are :
Recreation Neighbofhood Resotifees Performing Arts
Human Rights Library Cemeteries
Golf Human Services Contract Airport
Parks Natural Areas Museum
f. Support services provide the management, guidelines , and operational assistance to
carry out the provision of primary and secondary services . Resources should be
allocated to support services to support the level and quality of primary and secondary
services expected and desired by the community . Support services are :
General Administration Finance Legal
Budget Human Resources City Clerk
Clerical Support Fleet Management Municipal Court
Information Technology Geographic Information
Real Estate Services Systems
g . No new services , other than those identified as primary services , shall be undertaken
by the City until all existing primary, secondary , and support services have received
a sufficient level of funding to meet the needs of the community .
In . Any adjustment to the existing budget shall take into account the effect that such
adjustment would have on future budget resources .
Financial Management Policies 8
REVENUE POLICIES
2 . 1 , REVENUE LIMITATION
Section 20 of Article X of the Colorado Constitution (Article X , Section 20 or "TABOR" )
places limits on revenue and expenditures of the State and all local governments . Even
though the limit is placed on both revenue and expenditures , the constitutional amendment
in reality applies to a limit on revenue collections . Growth in revenue is limited to the
increase in the Denver- Boulder- Greeley Consumer Price Index plus local growth ( new
construction and annexation ) . This percentage is added to the preceding year' s revenue
base , giving the dollar limit allowed for revenue collection in the ensuing year. Any revenue
collected over the limit must be refunded to the citizens , unless the voters approve the
retention of the excess revenue . Federal grants or gifts to the City are not included in the
revenue limit . City "enterprises" ( electric , water, wastewater and stormwater utilities ) are
exempt from the imposed limits . Beginning in 2003 , the Golf Fund revenue sources will
allow it to be considered for enterprise status for purposes of Article X , Section 20 . To
become an enterprise , voters would need to approve a Charter amendment for the Golf
Fund .
In November 1997 , Fort Collins ' voters approved a ballot measure that allows the City to
retain revenues that exceed the growth limit imposed by Article X , Section 20 . The measure
was effective for 1996 and ensuing years . The approved measure specified that any
retained revenues over the growth limit must be used for certain designated purposes .
• Public health and safety ( including , but not limited to , environmental monitoring and
mitigation )
• Transportation
• Growth management
• Maintenance and repair of public facilities
While not included as part of the approved ballot measure , legal principles require that
those revenues collected in excess of the growth limit from fees charged or other legally
restricted revenues must be used for the purpose for which they were collected . In addition ,
such revenues must also be used for the designated purposes approved by the voters .
2 . 2 REVENUE REVIEW, DIVERSITY, AND MONITORING
a . Review and Projections
The City reviews estimated revenue and fee schedules as part of the budget process .
Major revenue sources in the general fund are sales & use tax , property tax , lodging
tax , intergovernmental revenues , fines & forfeitures , user fees & charges , and
transfers from other funds . Conservative revenue projections are made for the budget
term . The projections are monitored and updated as necessary .
Financial Management Policies 9
b . Diversity
For all general government operations , the City will strive to maintain diverse revenue
sources . The City recognizes that becoming too dependent upon one revenue source
would make revenue yields more vulnerable to economic cycles .
c . Targets
The City's major source of revenue for governmental activities and more specifically
for programs within the General Fund is the Sales and Use Tax . The City will monitor
the dependency on sales and use tax by tracking the percentage of the General Fund
and General Government that comes from sales and use tax . Over the past five
years , 2000-20041998-2002 , the percentage of General Government Total Revenue
from sales and use tax (the 2 . 25% portion not dedicated for specific uses by the
voters ) has been approximately 368 % . The target for this percentage shall be 40 % .
For the General Fund , the percentage of revenues from sales & use tax has been
approximately 60 % . When the Comprehensive Annual Financial Report is completed
each year, the Finance Department will monitor these two percentages and report the
results to Council . For the General Fund the target shall be 60 % .
d . Monitoring
The percentages will be monitored each year with the preparation of the annual
financial report . Preliminary estimates of the percentages should be available in April
and be incorporated into the budget process . The percentages will be reviewed by
Council .
e . Policy Action
In the event the percentages exceed the targets , the City Manager will provide an
analysis of the City's revenues to the Council . The City Manager may propose
adjustments to revenue sources other than the sales and use tax (some examples
include user fees , fines & forfeitures , transfers from other funds ) to meet the targets
or decrease the trend of increasing dependency on sales and use tax . Generally , for
this policy to be effective , revenues from all other sources will need to grow at roughly
the same rate as the sales and use tax collections .
2 . 3 . FEE POLICY
As a home rule municipality , the City of Fort Collins has the ability to determine the extent
to which fees should be used to fund City facilities , infrastructure and services . There are
two kinds of fees that the City may establish : impact fees and special service fees . Impact
fees are typically one-time charges levied by the City against new development to generate
revenue for the construction of infrastructure and capital facilities needed to offset the
impacts of the new development . Special service fees are charges imposed on persons or
property that are designed to defray the overall cost of the particular municipal service for
which the fee is imposed . This Policy sets forth principles for identifying : the kinds of
services for which fees could appropriately be imposed by the City; methods for calculating
the percentage of costs to be recovered by such fees ; and the manner in which the fees
should be allocated among individual fee payers .
Financial Management Policies 10
a . Fees Should Be Cost Related
The amount of a fee should not exceed the overall cost of providing the facility ,
infrastructure or service for which the fee is imposed . In calculating that cost , direct
and indirect costs may be included . That is :
1 . costs which are directly related to the provision of the service ; and ,
2 . support costs which are more general in nature but provide support for the
provision of the service .
b . Percentage of Cost Recovery
The extent to which the total cost of service should be recovered through fees
depends upon the following factors :
1 . The nature of the facilities , infrastructure or services . In the case of fees for
facilities , infrastructure as well as governmental and proprietary services , total
cost recovery may be warranted . In the case of governmental services , it may
be appropriate for a substantial portion of the cost of such services to be borne
by the City' s taxpayers , rather than the individual users of such services .
Governmental services are those which are provided by the City for the public
good such as regulating land use , maintaining streets , and providing police and
fire protection . Proprietary services are those which are provided for the benefit
and enjoyment of the residents of the City , at their discretion , such as parks and
recreation services .
2 . The nature and extent of the benefit to the fee payers . When a particular facility
or service results in substantial , immediate and direct benefit to fee payers , a
higher percentage of the cost of providing the facility or service should be
recovered by the fee . When a particular facility or service benefits not only the
fee payer but also a substantial segment of the community, lower cost recovery
is warranted .
3 . The level of demand for a particular service . Because the pricing of services
can significantly affect demand , full cost recovery for services is more
appropriate when the market for the services is strong and will support a high
level of cost recovery .
4 . Ease of collection . In the case of impact fees , which can be collected at the time
of issuance of a building permit , ease of collection is generally not a factor. In
the case of fees for services , however, such fees may prove to be impractical
for the City to utilize if they are too costly to administer.
c . Establishment and Modification of Fees and Charges
Aside from user fees , (e . g . Recreation classes and facility room rentals ) , aAll fees
imposed by the City will be established by the City Council by ordinance . In the case
of impact fees , utility fees and charges , and special service fees assessed against
property the ordinance establishing the fees will determine :
Financial Management Policies 11
1 . the level of cost that should be recovered through the fees according to the
criteria established in this Policy ;
2 . an appropriate method for apportioning the cost of providing each service
among the users of the service ; and ,
3 . a procedure for periodically reviewing and modifying the amount of fees in order
to maintain appropriate cost recovery levels .
The amounts of these kinds of fees may be modified only by ordinance of the City
Council .
The amounts of other kinds of special service fees , such as user fees charged for the
use of City recreational and cultural facilities , may be determined by the City Manager ,
according to criteria established by the City Council by ordinance , absent any
provision of the City Charter or Code to the contrary .
All fee revenues will be estimated by the City Manager and submitted to the City
Council as part of the City Manager' s recommended budget .
d . Rebate Programs
If the amount of a particular fee is considered to be too high to accommodate the
needs of particular segments of the community and the public interest would be
served by adjusting the amount or manner of payment of such fees in particular
instances , the amount of the fee may be waived , rebated , or deferred as appropriate .
In the case of fees established by ordinance , the criteria for waiving , rebating , or
deferring payment of such fees shall be established by the City Council by ordinance .
2 . 4 . SALES AND USE TAX DISTRIBUTION
The City's Sales and Use Tax totals 3 . 00 cents , developed as follows :
1968 - General City uses 1 . 00 cent
1980 - General City uses 1 . 00 cent
1982 - General City uses 0 . 25 cent
2006 - Street Maintenance 0 . 25 cent*
2006 - Building on Basics 0 . 25 cent*
2006 - Natural Areas & Open Space 0 . 25 cent*
3 . 00 cents
* Excluding sales of grocery food .
Financial Management Policies 12
Revenue generated by the Sales and Use Tax will be distributed , based on adopted
budgets , in the following manner :
TAX ON ALL SALES & USES : 2 . 25 cents
• Fixed Dollar Amounts
Annual Debt Service
Sales & Use Tax Debt Service Reserves
Street Gve
• General Fund
Subject to appropriations , actual Sales and Use Tax revenue generated by the 2 . 25 cent
tax in excess of the fixed dollar amounts listed above , will be transferred to the General
Fund .
Actual sales and use tax revenue generated by the 0 . 25 cent tax for Natural Areas and
Open Space , Tfails and Pafks will be transferred to , and be retained in the
Fund Natural Areas Fund of eoffe5pomding opefating fdnds to be used to acquire , operate
and maintain open spaces , community separators , natural areas , wildlife habitat , riparian
areas , wetlands and valued agricultural lands and to provide for the appropriate use and
enjoyment of these areas by the citizenry , through land conservation projects to be
undertaken where there is an identifiable benefit to the residents of the City , as determined
by the City Council , either within the City or its growth management or regionally , provided
certain provisions are met .
Actual sales and use tax revenue generated by the 0 . 25 cent tax for Street Maintenance
and Tfanspoftation will be transferred to , and retained in the
Transportation Services Fund of eeffespending apefating ftinds to be used to pay the costs
of planning , design , right-of-way acquisition , incidental upgrades and other costs associated
with : the repair and renovation of City streets , including but not limited to curbs , gutters ,
bridges , sidewalks , parkways , shoulders and medians .
Actual sales and use tax revenue generated by the 0 . 25 cent tax for
Building on Basics projects will be transferred to , and be retained in the Capital Projects
Fund or corresponding operating funds to be used to pay the costs of planning , design ,
right-of-way acquisition , construction , and at least seven (7 ) years of operation and
maintenance for street/transportation projects and other community capital projects ,
identified during the Building on Basics Goffirmunity Ghomees process , approved by the
voters .
2 . 5 . PRIVATE CONTRIBUTIONS
The City encourages the solicitation of private contributions . These services and programs
represent extra services that the City has not been able to provide to residents through its
regular revenue base . In times of revenue constraints the City may not be able to provide
the same level of service without additional support . Therefore , efforts should be made to
Financial Management Policies 13
secure private contributions in support of these programs and services , as these
contributions are an integral part of their successful operation . With respect to Article X ,
Section 20 of the State Constitution , the City's Finance Department will make a
determination as to whether a contribution is a gift and is therefore excluded from
constitutional limits .
Financial Management Policies 14
GENERAL POLICIES
3 . 1 . ADMINISTRATIVE CHARGES
Expenses for departments rendering services to other departments are equitably
apportioned . For Enterprise , Internal , and Special Revenue Funds , direct charges are
made to the funds receiving services when they are rendered . Certain departments within
the General Fund provide services to all funds and do not have a direct billing mechanism .
For these General Fund departments , a cost allocation formula has been developed to
apportion costs to other funds and provide offsetting revenue to the General Fund .
a . General Fund Departmental Costs to be Allocated
Departmental costs to be allocated include City Council , City Manager, City Clerk , City
Attorney, Human Resources , Finance , and Information Technology ( IT) . Any services
in these departments which are funded by user fees or dedicated revenues are
excluded from the allocation .
The amount of costs to be allocated is the current adopted budget for each of the
departments listed above less user fees and dedicated revenue . With a multi -year
budget , the charge to each fund is increased by a determined percentage for the
second future year and then adjusted to the actual calculation with the next multi-year
budget .
b . How Costs Are Allocated
1 . The Human Resources costs are allocated to funds based on the total number
of budgeted full -time-equivalent positions in each fund .
2 . The administrative costs for IT are divided Onto the cost for each service and
allocation fflethed allocated to funds based on the total number of budgeted full -
time-equivalent positions in each fund .
3 . All other General Fund administrative costs are allocated to the funds based
upon adjusted budgets for the current year. Adjustments are made to recognize
the lower amount of administrative services required for Capital , Debt Service ,
and Purchased Power payments . Capital project budgets are reduced by two-
thirds and averaged over three years . Debt Service budgets are reduced by
three-fourths and the entire Purchased Power budget is deducted from the Light
& Power budget .
c . All Funds Receive Allocations but Not All Funds Are Charged
While Administrative Charges are allocated among all City funds , only specified funds
are charged . Charges are not made to a fund if it is not self-supporting , it is an Internal
Service fund , or if the funds role is merely to facilitate proper accounting procedures .
For example , the Sales and Use Tax fund and Debt Service fund receive amounts
which are then transferred to other funds . Charging these funds would lead to double
Financial Management Policies 15
charging many transactions and would not correspond to the level of service provided
by the departments in the General Fund .
d . Review
During each budget process , the Administrative Charge calculation will be reviewed .
Further refinements in the allocation formulas will be made as needed to assure that
the equitable apportionment requirement of the Charter is met .
3 . 2 . PAYMENT IN LIEU OF TAXES ( PILOT)
In accordance with the City Charter regarding municipality rates and finances , the water,
wastewater , and electric utilities " pay into the General Fund in lieu of taxes on account of
the city-owned utilities such amount as may be established by the Council by ordinance' .
The established PILOT rate is based on the amount of taxes that would be levied if the
utility were privately owned .
The PILOT rate , as established by Council is 6 % for the Water and Wastewater Funds and
for the Light and Power Fund . This rate is applied to the operating revenues per year for
each fund .
3 . 3 . LEASE - PURCHASE
The City of Fort Collins uses lease- purchase financing for the provision of new and
replacement equipment , vehicles and rolling stock in order to ensure the timely replacement
of equipment and vehicles . This method may also be used to acquire real property .
Members of management staff have developed an equipment needs schedule for rolling
stock which encompasses the demands of operating departments . This schedule is used
to project equipment needs for each budget term .
The City leases the asset in installments according to a fixed payment schedule . Each
installment includes principal and interest and the City builds equity and assumes risk in the
asset over the term of the lease . The annual installments are appropriated by the Council
each year.
Advantages of lease- purchase financing over the traditional cash method of financing are :
• Decreasing the impact of inflation on the purchase of new and replacement
equipment .
• Resolving the problem of a capital replacement needs backlog .
• Conserving operating reserves .
• Reducing the initial impact of the cost to user departments by enabling acquisition
costs to be spread over the useful life of the equipment .
• Safeguarding the opportunity to use cash assets to earn higher interest than the
interest cost of lease- purchasing .
Financial Management Policies 16
It should be noted that the City is able to discontinue the equipment leases at its discretion
so that future City Councils will have the option to continue or discontinue the policy of
lease- purchasing City equipment .
According to State of Colorado House Bill 90- 1164 , local governments are required to
identify as part of their budgets : 1 ) the total expenditures during the ensuing fiscal year for
all lease purchase agreements involving real and personal property; and 2 ) the total
maximum payment liability under all lease purchase agreements over the entire term of the
agreements , including all optional renewal terms .
The State does not include lease purchase in the legal definition of debt , however rating
agencies include lease purchase financing in calculating the City's long -term financial
obligations and overall debt burden .
3 . 4 . HUMAN RESOURCE MANAGEMENT AND PRODUCTIVITY
The City of Fort Collins' goal as an employer is to attract and retain quality employees in
recognition of their essential contribution in providing services to the citizens of Fort Collins .
As a provider of services in the community, the experience , commitment and talent of our
employees is critical to the quality and value of City services .
The City has two financial policies which address the human resource component of its cost
of providing services :
a . Employee Compensation Policy
In order to attract and retain quality employees and also to recognize and reward
quality performance , the City has established a system which guides the
compensation of its employees . The objective of the compensation policy is to pay
employees fairly , competitively and in a way that is understandable to the community
and the organization .
1 . For all classified employees and unclassified management of the City,
compensation will be established through a total compensation methodology .
Total compensation is defined as both salary and benefits . This methodology
will use annual surveys of the relevant labor market . The labor market is
defined as employers and jurisdictions that closely approximate the size and/or
services of the City of Fort Collins . This market will primarily consist of Front
Range communities , but may also include the state of Colorado or regional data
from both the private and public sectors .
Salaries will be calculated at the 70th percentile by taking the pay range
maximums of comparable market data and establishing a point wherein 30 % of
the salaries are higher and 69 % of the salaries are lower than the City' s pay
range maximum .
Benefits will be set at a point that is determined to be competitive , as compared
to the relevant labor market , by examining market provisions and plan design
for medical and dental insurance .
Financial Management Policies 17
2 . Hourly , temporary or contractual employee compensation rates will be set
according to the prevailing market rate for that type of job within the Northern
Colorado market ; the existing pay plan may also be considered for similar
positions . These employees are a valuable resource in the provision of services
for the community , and the City will set those compensation rates in a manner
that will attract high quality employees .
b . City Performance Goals and Measures Policies
The goals of the City of Fort Collins are to provide our citizens with outstanding
services . In doing so , the City will commit to attracting and retaining quality employees
and to recognizing and rewarding their quality performance .
To accomplish these goals , the City will :
1 . Maintain staffing at a level that will enable the City to provide the necessary
services in a high quality manner;
2 . Provide ongoing assessment of customer satisfaction with the level of services
provided by the City and continuously improve the quality of those services ;
3 . Develop and maintain a pay-for- performance review process to establish goals
and to evaluate employee work performance ;
4 . Assess options to streamline operations by continuing to monitor the cost
effectiveness of additional staffing vs . the cost of adding capital equipment ; and
5 . Measure the productivity and effectiveness of the City's work force .
3 . 5 . MEDICAL INSURANCE AND RETIREMENT PLAN
a . Medical Insurance
In 1981 , the City of Fort Collins set up a partially self-funded medical insurance
program . The objective of a self-funding program is to reduce the cost of medical
insurance by assuming the risk for certain plan expenses . Assuming a portion of the
risk lowers the amount of charges compared to a conventional full insurance plan . For
most of the last 22 years , the City has found this funding method to be a cost-effective
means of providing a very desirable employee benefit .
To administerthe self-funded and insured portions of the medical insurance plans , the
City conducts a competitive proposal process every five years or more often if
required . The insurance contracts are reviewed annually for both performance and
cost . During the annual renewal process , the City negotiates to attain more favorable
rates from insurance providers . The types of services contracted for include plan
administrative services , stop- loss protection against unexpected expenses , life and
accidental death and dismemberment insurance , and long -term disability coverage .
Financial Management Policies 18
b . Retirement Programs
The City of Fort Collins contributes to three types of pension plans , including :
1 . Social Security;
2 . 401 (a ) Money Purchase Plans for Service Directors , Classified and Unclassified
Management , Police and Fire ; and
3 . 401 (a ) Defined Benefit Plan - the General Employees Retirement Plan . This
plan is no longer open to new participants .
For the Social Security program , the City follows the program guidelines of the Social
Security Administration . The Finance Department makes the appropriate employer
and employee contributions with the bi -weekly payroll checks .
The City uses private companies to operate the money purchase plans . For City
employees , the ICMA Retirement Corporation administers the money purchase plans .
For employees of the Poudre Fire Authority , Prudential Management Investment
Services administers the money purchase plan .
The City , through the Finance and Human Resource Departments , administers the
defined benefit plan . In 1998 , the General Employees Retirement Plan offered its
members the opportunity to transfer their assets to a money purchase plan . Of over
800 members , 368 members decided to move to the money purchase plan . As of
December 31 , 19987 $9 million of plan assets were transferred to the plan . The rate
of contribution for the City administered plan is based upon an actuarial valuation to
determine the plan ' s normal cost and unfunded liability for benefits . The City will
maintain contribution rates at a level sufficient to meet all current normal costs of the
pension plan . Should an unfunded liability be determined for the defined benefit plan ,
such liability will be amortized over a period not to exceed twenty years .
In addition to the pension programs , the City offers deferred compensation plans to
City and Poudre Fire Authority employees as an adjunct to the general retirement
plan . This helps the City maintain comparability with benefits provided by other Front
Range communities . Employee participation in the deferred compensation plan is
optional .
The Budget incorporates the following rate requirements to provide funding support
for this retirement program policy :
Social General Money Money Purchase
Security Employee Purchase Management
Normal Costs Contribution Retirement Police/Fire & Classified 1 ,21314
City Contribution 7 . 65% 4 . 5% 8%/8% 3 %- 10%
Employee Contribution 7 . 65% none 8 %/ 10% 0%-6%
( 1 ) For the City Manager, City Attorney, Municipal Judge, and Services Directors , the City contributes at a rate
of 10% of base salary. There is no employee match required .
Financial Management Policies 19
(2 ) For Unclassified Management and Department Heads, the City contributes either 3% if the employee is in
GERP or if the employee has the City contribute to the deferred compensation plan or 7 . 5% if the employee
has opted out of the GERP and does not have the City contribute to the deferred compensation plan .
Employees in this category contribute 6% .
(3) For classified employees who transferred from the General Employee Retirement Plan in 1998 , the City
contributes 7 .5% . If the classified employee remains in the GERP , the contribution rate is 3% , and if the
employee has the City contribute to the deferred compensation plan , the contribution rate is 4.5% . Employees
contribute either 0% or 3% of their salary.
(4) The maximum contribution to a 401 money purchase plan is the lesser of 25% of salary or $40 , 000 . This
maximum is indexed for inflation .
The table below shows the contribution rates to the 457 deferred compensation
program :
Deferred Compensation
City Contribution 3% to 7 . 5%
Employee Contribution up to 25% of salary , not to exceed a total of $ 125 , 000
3 . 6 . FACILITY MAINTENANCE AND REPAIRS
a . Maintenance , Repair & Replacement ( MM & R)
1 . MAINTENANCE — The upkeep of building systems to realize their anticipated
useful life . Includes periodic actions to assure continued service , operational
efficiency, or to prevent breakdowns (for example , changing filters and belts on
HVAC equipment . ) .
2 . REPAIR/REPLACEMENT — Actions needed to restore building systems/
components to a functional condition . Performed when systems/components
have reached their useful life ; become obsolete ; pre-maturely worn out ; or have
failed ( i . e . , roof replacement) .
b . Priorities for Maintenance and Repair Funding
1 . Life , health , and safety (for example , heating system repair)
2 . Repair and Restoration Protect Capital Investment ( preventative maintenance )
3 . Repair and Restoration
These priorities are used as the basis for funding recommendations in the budget
process .
Financial Management Policies 20
c . Funding Policy/Target
The City of Fort Collins recognizes the need to maintain City buildings to adequately
support provision of services to its residents . The ongoing funding target for M & R of
General Government facilities is 4 % of Current Replacement Value ( CRV) for
occupied of the facilities .
3 . 7 . POUDRE FIRE AUTHORITY - REVENUE ALLOCATION FORMULA
In December of 1981 , the City and the Poudre Valley Fire Protection District created the
Poudre Fire Authority ( PFA) through an intergovernmental agreement . The PFA provides
fire protection services to Fort Collins and the surrounding area . The agreement specifies
a Revenue Allocation Formula ( RAF ) for defining the City's contribution to the PFA for
operations and maintenance . Originally, for PFA's operating costs , the City shared property
tax and sales and use tax collections . In addition to operating costs , the agreement further
provides authorization for the PFA to request funds for capital costs pursuant to the
procedures set by the City and District . PFA's capital needs include land acquisition ,
construction of additional stations , and acquisition of majorfire fighting apparatus . The RAF
has served as the Poudre Fire Authority's funding mechanism from 1981 through the 1993
budget. After the State Constitution was amended in 1992 , the RAF was revised . In its
original form , the Revenue Allocation Formula allowed the PFA to realize the full extent of
growth in sales and use tax and property tax collections . Article X , Section 20 of the State
Constitution now limits the rate of growth to a combination of the Denver- Boulder-Greeley
Consumer Price Index and additions to the local property tax base primarily due to
construction and annexation . Accordingly , the Revenue Allocation Formula for the City's
contribution to the PFA has been restructured to fit within the constraints of Article X,
Section 20 .
The City will continue its current policy of funding PFA capital needs by dedicating one mill
of the City's total mill levy . The revenue from the dedicated mill will be managed according
to the property tax mill levy and revenue limitation provisions of Article X , Section 20 . The
City's contribution to PFA for operation and maintenance will be calculated by the Revenue
Allocation Formula . The Revenue Allocation Formula allocates to PFA 67 . 09% of the
property tax mills available for operations and 0 . 303 of one cent of the City's 2 . 25 cent sales
and use tax applicable to all taxable sales and uses . The resulting contribution for
operations and maintenance will then be compared to the constitutional growth limits . The
City's operation and maintenance contribution to PFA will be the lesser of the contribution
as determined by the Revenue Allocation Formula or the allowable contribution in
accordance with the limits imposed by Article X, Section 20 of the State Constitution .
3 . 8 . REBATE PROGRAMS
The City recognizes that certain segments of its population , specifically the disabled and
senior citizens on fixed incomes , may be unable to keep pace with increasing taxes and
utility costs . In an effort to partially offset the cost of property taxes , utility billings and sales
taxes on these segments of its population , the City has established several rebate
programs , as follows :
Financial Management Policies 21
a . Property Tax and Utility Charge Rebate Program
These programs provide financial assistance to disabled residents and senior citizens ,
in the form of an annual rebate on property tax and utility charges , who qualify under
residency and income guidelines .
b . Sales Tax Rebate on Food Program
The Council recognizes that sales tax on grocery food is a higher proportion of low-
income individuals and families than higher income individuals and families . For this
reason , the City specifically excluded tax on the sale of grocery food when enacting
three 0 . 25 cent sales and use tax extensions that went into effect in January 2006 .
In November 2002 voters approved the renewal of the " Natural Areas and Parks : one-
quarter cent sales and use tax to continue the City' s existing open space program .
The tax was renewed for a period of 25 years , ending December 31 , 2030 . In April
2005 , voters approved a City- initiated ballot measure which extends the Street
Maintenance and Transportation " one-quarter cent sales and use tax to continue the
City' s Street Maintenance Program . The one-quarter cent tax for Street maintenance
was renewed for a period of 10 years , ending December 31 , 2015 . In November
2005 , voters approved a City- initiated ballot measure which extends the " Community
Enhancemments Projects" one-quarter cent sales and use tax to continue the City' s
capital improvement program . The tax was renewed for a period of 10 years , ending
December 31 , 2015 . ,
The three 0 . 25 eent sales and dse taxes that went iMtO @ffett jalldafy 1 , 1998 , afe
In addition to these measures , the City has a Sales Tax Rebate on Food Program .
This program provides for an annual rebate to members of qualifying households on
the basis of residency and income guidelines .
Financial Management Policies 22
FUND POLICIES
4 . 1 , GENERAL FUND
The General Fund is the largest and most diverse of the City's operating funds . It includes
all resources not legally restricted to specific uses . The major source of revenue to the
General Fund is sales and use tax , which accounts for approximately 60 % of the revenue .
Local property tax and Lodging Tax are also included , as are revenues derived from fees
for services and materials , licenses , permits , and fines .
a . Service Productivity Incentive Policy
This Policy provides incentives for General Fund managers to improve planning and
delivery of services . General Fund managers need a means by which to save
unspent annual appropriations that result from increases in productivity. Without an
incentive policy, managers tend to spend savings on short term needs rather than
long - range service improvement. This policy creates incentives to more closely
examine spending decisions and to consider program related savings before
requesting additional General Fund resources .
Prudent cost-effective service delivery requires long range planning of both costs and
resources necessary to provide the service . This Policy provides a framework within
which managers can develop strategic plans rather than short term , line item cost
approaches . Allowing managers to save and use resources from increased
productivity emphasizes responsibility and accountability for efficient service delivery .
It further allows more flexibility for General Fund managers , similar to the
management conditions of enterprise funds .
b . Policy Structure
This Policy defines savings as unspent department or division level appropriations
which managers have not committed for future years . Committed appropriations
include encumbrances , unspent lease purchase , and any planned re-appropriations .
The Policy further requires that the savings result from increased productivity in
service delivery .
1 . Budget Office staff will adjust department or division savings within a service
area for any over spending by another department or division within the service
area .
2 . Budget Office staff will determine the department and division annual savings
after the annual financial report is completed .
3 . The following criteria guide the use of carry-over savings and appropriations .
(a ) The City Manager must review and approve requests for use of savings .
( b ) Increased productivity should generate the savings , ratherthan decreases
in services .
Financial Management Policies 23
(c) Departments and divisions should use savings for the improvement of
future service delivery .
(d ) City Council must approve , through an appropriation ordinance , the
request for use of savings .
(e ) Annual General Fund revenue collections must be equal to or greater than
the projected budget revenue .
The eligible productivity savings shall be separately accounted for in a General Fund
designated reserve account . Requests for the use of accumulated savings from prior
year(s ) held in this reserve can be made by the department or divisions at any time
during the year.
4. 2 . ENTERPRISE FUNDS
The City has five Enterprise Funds . These are Golf, Light & Power, Wastewater, Storm
Drainage , and Water. The Enterprise Fund classification has been used to account for
various services for which there exists a significant potential for financing through user
charges . Historically , services were accounted for in an Enterprise Fund if financed more
than 50 % by user charges (of the five Enterprise Funds , all but the Golf Fund are also
treated as "enterprises" within the meaning of Article X , Section 20 of the State
Constitution ) . All Enterprise Funds will recover 100 % of their costs .
The goal of all enterprise accounts is self-sufficiency . Toward this end , funds that are not
recovering at least 75 % of costs shall incrementally adjust their rate structures to achieve
a positive income position . Those operations which cannot achieve a positive income
position within a five year time frame may be accounted for as subsidized operations and
not as Enterprise Funds .
a . Utility Services
The financial policies of the Utilities are administered in accordance with the City
Charter. Each of the four utilities has been established , and is operated as an
"enterprise" as permitted by the City Charter in accordance with Article X , Section 20
of the Colorado Constitution .
1 . Fiscal Responsibility
Per the Charter, the Financial Officer will maintain a standard system of
accounting which shall , at all times , correctly reflect all financial operations of
each utility. The Utilities may keep other supplemental records and data as are
generally used by various segments of the utility industry .
The Financial Officer shall keep accounts of each Utility Fund separate and
distinct from all other accounts of the City . Accounts for the Utilities shall contain
proportionate charges for all services performed by other departments as well
as proportionate credits for all services rendered to other departments .
Financial Management Policies 24
2 . Utility Rates
Utility rates will be based upon the cost of service approach to reflect full
distribution of costs to appropriate rate classes in order to effect equitable
sharing of costs . Rates shall be established and maintained at a level sufficient
to maintain positive net income in each of the utility funds after paying the full
cost of operating and maintaining the utilities and keeping them in good repair
and working order. Such rates shall also be sufficient to enable each utility ,
where applicable , to meet rate requirements of City or utility enterprise bond
ordinances .
b . Electric Utility
The following policies pertain to the electric utility- Light and Power Fund . Since the
utility is debt-free , these policies pertain primarily to maintenance of reserves . The
utility shall be operated :
1 . To provide an operating reserve equal to 8 % of budgeted operating
expenditures , excluding the cost of purchased power;
2 . To provide a future capital improvements reserve in an amount equal to the
average annual cost (excluding debt financing ) of the approved five-year capital
improvement plan , considering any changes which , from time to time , may be
made in such plan ;
3 . To provide a purchase power reserve up to approximately 25 % of the annual
revenue from the sale of electrical energy . This reserve shall be used to
partially off-set, defer, or mitigate the impact of purchase power cost increases
due to factors such as federal power issues . Significant changes to the 25 %
level shall be reported to the Council during the budget process .
4 . Priority for the accumulation of reserves shall be as follows : reserves shall first
be accumulated in the operating reserve , second in future capital improvements
reserve , third in the purchase power reserve . In addition , 1 % of specified capital
project appropriations shall be reserved and restricted for the City's Art in Public
Places program . After reserves are funded , any remaining working capital shall
be added to the purchase power reserve .
c . Water Utility
The following policies pertain to the water utility-Water Fund .
1 . Pledge of Revenues
The City' s general obligation water bonds are general obligations of the City
secured by a covenant to levy taxes to make all bond payments . Thus , they are
backed by the full faith and credit of the City . In addition , the City has pledged
revenues from monthlywater charges , plant investmentfees , supplemental user
fees (collected pursuant to the Anheuser-Busch Master Agreement-- hence "A- B
supplemental user fees" ) , investment earnings , and all other income derived
from the operation of the Water Fund toward payment of the bonds . The City' s
Financial Management Policies 25
practice is to pay general obligation water bonds from revenues of the water
system rather than through property taxation . The City has pledged the Water
Fund revenues indicated above toward the payment of its water enterprise
revenue bonds .
2 . Flow of Funds
The City has committed to maintain rates and charges sufficient to generate
sufficient " net revenues" of the water system to pay principal and interest on its
water revenue bonds and general obligation water bonds . Net revenues include
all revenues referred to above , less operation and maintenance ( O& M )
expenses . O & M expenses are those expenses necessary to operate , maintain ,
and repair the water system , but do not include any allowance for depreciation
or capital replacements and improvements . After all O & M expenses are paid ,
the remaining net revenue is pledged to pay the revenue bonds principal ,
interest , and related costs . After all O & M and debt services expenses are paid ,
the City is required to maintain the following revenue bond accounts :
(a ) Principal and Interest Reserve - at an amount equal to the accrued
principal and interest on the water revenue bonds ;
( b ) Debt Service Reserve - at an amount specified in the bond ordinances .
Any remaining net revenues of the Water Fund may be used for any lawful
purpose . These are used , in part , to fund major and minor capital improvements
and the following reserves :
(a ) Operating Reserve--at an amount equal to 5 % of the projected operating
revenue for the ensuing year;
( b ) Water Rights Reserve--at an amount equal to the amount of cash in - lieu -of
water rights payments and raw water surcharges less any expenditures for
acquiring water rights ;
( c) Art in Public Places Reserve--at an amount equal to 1 % of eligible capital
projects whose appropriations exceed $250 , 000 ;
(d ) Capital Reserve--at an amount equal to remaining working capital after all
other reserves are satisfied .
3 . Rate Maintenance
The Water Revenue Bond Ordinances require the City to charge and earn
sufficient revenue to produce " net pledged revenues" that are equal to 110 % of
the actual annual debt service requirements for all outstanding water revenue
bonds plus 100 % of all costs payable to issuers of reserve fund sureties . Net
pledged revenues are defined as all revenues of the Water Fund , less O & M
expenses .
Financial Management Policies 26
4 . Water Capital Cost Financing
Capital cost will be identified as either :
(a ) Minor Capital -- relatively small capital acquisitions such as vehicles , lab
equipment , or minor improvements ; or
( b ) Capital Projects-- major additions , improvements , or expansions to utility
plant .
Financing for minor capital is through water utility revenues . Financing for
capital projects is principally through long -term debt financing .
d . Wastewater Utility
The following policies pertain to the wastewater utility-Wastewater Fund .
1 . Pledge of Revenues
In accordance with the City and Wastewater Enterprise Bond Ordinances
(together the " Bond Ordinances" ) , the City has pledged revenue from monthly
sewer charges , plant investment fees , A- B supplemental user fees , investment
earnings , and all other income derived from the operation of its wastewater utility
toward the payment of its sewer revenue bonds .
2 . Flow of Funds
The first charge against Wastewater Fund revenue is operation and
maintenance ( O& M ) expenses--those expenses necessary to operate , maintain ,
and repair the sewer system . After all O& M expenses have been paid , the
remaining net revenue is pledged to pay the sewer revenue bonds principal ,
interest , and related costs . After all O & M and debt services expenses are paid ,
the City is required to maintain the following reserve accounts ( listed in pledge
order) :
(a ) Principal and Interest Reserve--at an amount equal to the accrued
principal and interest on the sewer revenue bonds ;
( b ) Debt Service Reserve--at an amount specified in the bond ordinances ;
( c ) Wastewater Bond Capital Reserve--at an amount equal to 25 % of the
O & M expenses budgeted for the fiscal year .
Any remaining net pledged revenues of the Wastewater Fund may be used for
any lawful purpose . These are used , in part , to fund major and minor capital
improvements and the following reserves :
(a ) Operating Reserve--at an amount equal to 5 % of the projected operating
revenue for the ensuing year;
Financial Management Policies 27
( b ) Art in Public Places Reserve--at an amount equal to 1 % of eligible capital
projects whose appropriations exceed $250 , 000 ;
(c) Capital Reserve--at an amount equal to remaining working capital after all
other reserves are satisfied .
3 . Rate Maintenance
The Bond Ordinances require the City to charge and earn sufficient revenue to
produce " net pledged revenues" that are equal to 115 % of the actual annual
debt service requirements for all outstanding bonds plus 100 % of all costs
payable to issuers of reserve fund sureties . Net pledged revenues are defined
as all revenues of the Wastewater Fund indicated above , less O& M expenses .
4 . Wastewater Capital Cost Financing
Capital cost will be identified as either:
(a ) Minor Capital --relatively small capital acquisitions such as vehicles , lab
equipment, or minor improvements ; or
( b ) Capital Projects--major additions , improvements , or expansions to utility
plant .
Financing for minor capital is through utility revenues . Financing for capital
projects is principally through long -term debt financing .
e . Stormwater Utility
The following policies pertain to the stormwater utility - Storm Drainage Fund .
1 . Pledge of Revenues
In accordance with the City and Storm Drainage Enterprise Bond Ordinances
(together the " Bond Ordinances" ) , the City has pledged revenue from monthly
charges , stormwater development fees , investment earnings , and all other
income derived from the operation of its stormwater utility toward the payment
of its storm drainage revenue bonds .
2 . Flow of Funds
The first charge against Storm Drainage Fund revenue is operation and
maintenance ( O&M ) expenses-those expenses necessary to operate , maintain ,
and repair the storm drainage system . After all O& M expenses have been paid ,
the remaining net revenue is pledged to pay the storm drainage revenue bonds
principal , interest , and related costs . After all O& M and debt service expenses
are paid , the City is required to maintain the following reserve accounts ( listed
in pledge order) :
(a ) Principal and interest reserve-at an amount equal to the accrued principal
and interest on the storm drainage revenue bonds ;
Financial Management Policies 28
( b ) Debt service reserve-at an amount specified in the bond ordinances .
Any remaining net pledged revenues of the Storm Drainage Fund may be used
for any lawful purpose . These are used , in part, to fund major and minor capital
improvements and the following reserves :
(a ) Operating Reserve--at an amount equal to 5 % of the projected operating
revenue for the ensuing year;
( b ) Art in Public Places Reserve--at an amount equal to 1 % of eligible capital
projects whose appropriations exceed $250 , 000 ; and
(c) Capital Reserve--at an amount equal to remaining working capital after all
other reserves are satisfied .
3 . Rate Maintenance
The Bond Ordinances require the City to charge and earn sufficient revenue to
produce " net pledged revenues" that are equal to 125 % of the actual annual
debt service requirements for all outstanding bonds . Net pledged revenues are
defined as all revenues of the Storm Drainage Fund indicated above , less O& M
expenses .
4 . Storm Drainage Capital Cost Financing
Capital cost will be identified as either:
(a ) Minor Capital -- relatively small capital acquisitions such as vehicles ,
equipment , or minor improvements ; or
( b ) Capital Projects-- major additions , improvements , or expansions to the
storm drainage system .
Financing for minor capital is through utility revenues . Financing for capital
projects is principally through long -term debt financing .
4. 3 . INTERNAL SERVICE FUNDS
Internal Service Funds account for certain support services provided to other funds and
external agencies . By imposing charges to the users of the services , they recover their
costs . The Finance Department may recommend the creation , continuation , or ending use
of an internal service fund based on documented customer needs and financial benefits .
The City now operates five internal service funds . These include the Benefits Fund ,
Communications Fund , Equipment Fund , Utilities Customer Service and Administration
Fund , and the Self- Insurance Fund .
The Internal Service Funds operate under the following guidelines .
1 . Accounting guidelines limit internal service fund charges to the recovery of the cost
of the service , including depreciation , rather than making a profit . Each fund 's prior
Financial Management Policies 29
year financial statements and estimates of future costs form the basis for the
calculation of charges .
2 . Fund managers should set charges at a level to avoid adverse financial impacts on
their customers . Fund customers and independent experts review and make
recommendations about the level of charges . The Finance Department coordinates
this analysis .
3 . Internal service funds should compete with similar services offered by the private
sector. The City staff will compare rates each year. If not competitive with the private
sector, the Finance Departmentwill analyze whetherthe private sectorshould provide
the service .
4 . Internal service funds may build up reserves . Customer-approved master plans and
independent third-party actuarial reviews (for the Benefit and Self- Insurance funds )
guide the level of reserves . Fund managers may spend reserves only for their
approved purpose .
5 . The City may buy equipment and facilities for the internal service funds through lease-
purchase financing . Management's decision to recommend lease-purchase financing
depends on : ( 1 ) cash flow needs ; (2 ) budget constraints ; ( 3 ) benefit to cost analysis ;
and (4 ) level of reserves .
6 . Except for the Utilities Customer Service and Administration Fund , Internal service
funds operate under the same guidelines and constraints as the General Fund and
other governmental funds of the City . The Utilities Customer Service and
Administration Fund operates under the guidelines of the Utilities Services Funds .
4. 4 . SPECIAL REVENUE AND DEBT SERVICE FUNDS
Special Revenue Funds are used to account for the proceeds of revenue sources which are
restricted by law or administrative action to expenditures for specified purposes . The Debt
Service Fund is used for the payment of principal and interest on long-term debts . The
major source of revenue in the Debt Service Fund is the Sales & Use Tax .
a . Cultural Services & Facilities Fee Policy
The Cultural Services & Facilities Fund shall budget to recover at least 40 % of its total
cost in revenue generated through implementing the following policy :
1 . Total revenue from fees and charges shall cover a minimum of 55 % of Lincoln
Center Operation and Maintenance and Performing and Visual Arts
Programming Budgets . This includes revenues generated at the Lincoln Center
from rentals , equipment , concessions and other miscellaneous sources and all
total direct revenues from the Performing and Visual Arts Programming . A
transfer from the General Fund will make up the difference between total
revenue and expenditures .
2 . The Cultural Services and Facilities Administration and Museum budgets
provide minimal financial support. These programs are funded primarily by a
transfer from the General Fund .
Financial Management Policies 30
3 . Major capital improvements and renovations will be financed through sources
other than Cultural Services and Facilities Fund .
4 . Solicitation of funds through donations , fund - raising events , and non -traditional
sources shall be encouraged by the City staff, Lincoln Center League , the
Cultural Resources Board and the City Council .
Funding collected for any special purpose shall be earmarked for that purpose
and those funds will be processed through the Fort Collins Foundation .
b . Art in Public Places
The purpose of this program is to encourage and enhance artistic expression and
appreciation and to add value to the community through acquiring , exhibiting and
maintaining public art . The program provides a funding mechanism and contains
guidelines pertaining to the selection and acquisition of works of art , restrictions on the
usage of certain funds available for the acquisition of art , upkeep and maintenance
of public art , and other areas pertaining to the general administration of the program .
Following is a summary of the guidelines which provide a framework for the
implementation and administration of the City' s Art in Public Places program .
1 . Program Funding
The APP program ' s link to funding is the City's Capital Improvements .
(a ) The program encourages City departments to include artistic and aesthetic
values in all construction projects , including those costing less than
$50 , 000 , and all purchases of personal property that may be located or
used in places open to the public .
( b ) For eligible projects costing between $50 , 000 and $250 , 000 , a city
selected artist must be utilized and participate in the design of the project
for the purpose of incorporating works of art into all aspects of the project
to the fullest extent possible within the project budget . Costs incurred by
the artist in providing these services to the City are to be paid from the
project budget .
( c) Requests for appropriations in excess of $250 , 000 for eligible projects
must include an amount equal to one percent ( 1 % ) of the amount
appropriated at the time of the request . One percent of the amount
appropriated will be earmarked for works of art and subsequently
reserved , if not spent , in the Cultural Services and Facilities Fund , with the
exception of eligible appropriations in the Utility Funds ( Light & Power,
Water, Wastewater, and Storm Drainage ) . Each of the Utility Funds is
required to establish their own accounts and reserves for the APP program
to account for the 1 % earmarked for works of art for eligible utility projects .
Financial Management Policies 31
2 . Program Administration
The APP Board , with the assistance of the APP Coordinator, will have the
responsibility of coordinating and making recommendations regarding :
(a ) acquisition of works of art ,
( b ) process to be used to select works of art and artists ,
( c ) works of art selection criteria ,
(d ) acquisition of donated artwork ,
(e ) certain restrictions on the use of restricted program funds , and
(f) encouraging donations for public art .
Program guidelines also include definitions of art in public places , work of art ,
construction project , and APP Coordinator as well as provisions for the
installation of art and contractual agreements between the City and artists or
donors of works of art .
3 . Reserves
Art in Public Places Reserve - This reserve is restricted to Art in Public Places
program use . Appropriations from this reserve and subsequent expenditures
are restricted to the acquisition or lease of works of art , the maintenance , repair
or display of works of art , and the expenses of administering the Art in Public
Places program .
The reserve is funded by amounts equal to 1 % of eligible requested capital
project appropriations in excess of $250 , 000 , excluding Light & Power, Water,
Wastewater, and Stormwater funds . These funds are required to set up their
own restricted reserve accounts for Art in Public Places .
c . Recreation Fund Fee Policy
The following fee policy for the Recreation Fund was adopted by Resolution 1990 - 132
on September 4 , 1990 . The goal of the policy is to provide for a more equitable
distribution of the costs of recreational programs between program users and General
Fund tax dollars .
Costs associated with the Recreation Fund shall be defined as either Program Costs
or Community Good Costs .
1 . Program costs are directly associated with the activities and facilities used by
the citizens , and include the following :
(a ) Activity Costs
( 1 ) part time staff
Financial Management Policies 32
(2 ) materials
(3 ) equipment
(4 ) participant transportation
(5 ) other costs directly associated with conducting activities
( b ) Facility Operation and Maintenance Costs
( 1 ) minor repairs
(2 ) custodial equipment and supplies
(3 ) building utilities
(4 ) specialized items
(5 ) other operations and maintenance costs directly associated with
operating facilities
Fees should cover the cost of the direct program experience and facilities used .
However, fees may be established in accordance with the market value of the
recreational services provided . The fees charged will not exceed the cost of
providing direct services to program users .
2 . Community Good costs are those costs that are necessary to provide a program
but are not directly experienced by the user. Such costs include the following :
(a ) full time recreation staff
( b ) office operation costs such as telephone and computer charges
(c) training costs
(d ) dues and subscriptions
(e ) insurance
(f) office supplies and equipment
(g ) other costs not directly experienced by the users
The General Fund shall cover " Community Good " costs . General Fund will also
cover deficits in programs that cannot recover all their costs through fees .
Generally , these include programs designed for special populations where it is
not feasible to cover the total cost of participation , or programs , like youth sports
where Council policy requires a fee discount. Because costs that are defined
as " Community Good " costs are supported by the General Fund , they are
subject to the same operational guidelines as established for other General
Fund budgets .
3 . Designated Reserves
Revenues collected by the Recreation Division that exceed expenditures in any
given fiscal year are used to fund designated reserves .
(a ) Designated for Operations - to be maintained at 7 % of the program costs
portion of the fund , excluding one-time capital items and lease purchase
payments . This reserve will only be used to cover revenue shortfalls .
( b ) Designated for Scholarships - established to pay fees for participants who
are unable to afford full fees for programs ; targeted at 3 % of the program
cost portion of the fund , but the level of funding is determined by the
Financial Management Policies 33
Recreation Manager , based on tentative plans for future needs and the
availability of net resources .
( c) Designated for Buildings and Improvements - to be used for one-time
improvements and upkeep of recreation facility infrastructure . The reserve
level is determined by the Recreation Manager, based on tentative plans
for future needs and the availability of net resources .
(d ) Designated for Life Cycle/Capital Needs - to be used for one-time
improvements and upkeep of equipment or for one-time purchases over
what was budgeted to maintain safety and improve service delivery . The
reserve level is determined by the Recreation Manager, based on tentative
plans for future needs and the availability of net resources .
(e ) Designated for Programs - to be used for the start- up of new or the
expansion of existing recreation activities and services which require
additional revenue .
Financial Management Policies 34
RESERVE POLICIES
5 . 1 , POLICY STATEMENT
The accumulation of reserves protects the City from uncontrollable increases in
expenditures or unforeseen reductions in revenues , or a combination of the two . It also
allows for the prudent financing of capital construction and replacement projects .
5 . 2 . TYPES OF RESERVES
The City of Fort Collins maintains reserves that are required by law or contract and that
serve a specific purpose . These types of reserves are considered restricted and are not
available for other uses . Within specific funds , additional reserves may be maintained
according to adopted policies . All expenditures of reserves must be approved by Council .
This may occur during the budget process or throughout the budget year.
a . GENERAL FUND
A top priority goal of the Council is to improve the fiscal health of the City . Revenue
projections are conservative and authorized expenditures are closely monitored . In
stable economic times , the combination of these two strategies leads to revenue
collections higher than actual expenditures . The net revenue is then available to first
fund the Restricted Reserve for Emergencies required under Article X , Section 20 of
the State Constitution and then the designated reserves . Year-end balances in the
designated reserves may be used as a funding source in the next budget term . The
General Fund reserves are funded from net revenues to maintain them at appropriate
levels .
1 . Restricted Reserves
(a ) Restricted for Emergencies - this reserve is required under Article X,
Section 20 of the State Constitution . Therefore the use of this reserve is
restricted to the purpose for which it was established . This reserve can be
used for declared emergencies only .
All City Funds , excluding the Utility Funds , are required to maintain a
Restricted Reserve for Emergencies . For ease in accounting for these
reserves , each fund will contribute the required percentage into the
General Fund to be held in the General Fund Reserve for Emergencies .
If additional General Fund
resources are required , funding would come from the existing Reserve
Designated for Contingencies .
( b ) Restricted for Affordable Housing - this reserve is restricted to affordable
housing use . City Council may appropriate funds for affordable housing
purposes . Funds appropriated for the promotion of affordable housing and
not expended during the year shall lapse to the Affordable Housing
Financial Management Policies 35
Reserve . Any appropriation from this reserve shall be restricted for the
purpose of affordable housing .
2 . Designated Reserves
(a ) Designated for Financial Uncertainty - this reserve is maintained in the
General Fund and is designed to provide orderly adjustment to unforeseen
reductions in revenues in the current year if budgeted revenues are less
than actual revenues and expenditures , including encumbrances , are
greater than actual revenues . The minimum amount of money to be held
in this reserve should be approximately 3 . 5 % of approved General Fund
operating expenditures .
If revenue shortfalls are measurable during the current budget year, the
Charter allows use of monies from this reserve to cover authorized
expenditures . Similarly, Charter authorized adjustments may be made as
part of the year-end closeout if additional monies are needed to cover
authorized expenditures . The City Manager will notify the City Council
when draws are made from this reserve .
( b ) Designated for Equipment Replacement Loans - this reserve provides a
revolving loan pool for the timely replacement of operating equipment
(vehicles , machinery , and computer equipment) . Operating managers
may borrow from this loan pool to " bridge" the period of time when the
equipment is needed and the next available lease/purchase package .
Typically , lease/purchase packages are assembled and presented to
Council twice a year. At that time , the principal amount of any loan from
this reserve will be repaid .
(c) Designated for Productivity Savings - this reserve provides General Fund
managers the flexibility of long-range service planning through the use of
accumulated savings from increased productivity in service delivery . The
eligible productivity savings held in this reserve are separately accounted
for by the department or division that generated the savings .
Requests for the use of accumulated prior year(s ) savings can be made
to the City Manager at any time during the year. City Council must
approve , through an appropriation ordinance , the use of the savings .
(d ) Designated for Contingencies - this reserve provides for the temporary
financing of unforeseen opportunities or needs of an emergency nature
including increases in service delivery costs . Monies held in this reserve
may be appropriated during the current budget year and may also be used
for the ensuing budget years as a revenue source if projected
expenditures needed to maintain appropriate levels of service exceed
projected revenues . Of all General Fund reserves , this is the most flexible .
The amount of money to be held in this reserve should not exceed 10% of
the approved General Fund operating expenditures .
The combined total of the designated reserves should not exceed 20 % of
the approved General Fund operating expenditures . ( NOTE : this
Financial Management Policies 36
recommendation is the high end of a range for year-end reserves from the
State of Colorado financial handbook for local governments . ) The target
is 15 % . This does not include the reserve Designated for Productivity
Savings .
(e ) Reserve Designated for Facilities Maintenance & Repairs — This reserve
provides maintenance and repairs funds to adequately maintain the City' s
General Fund buildings . The target funding level of the reserve is four (4 )
percent of the current replacement value (CRV) of the General Fund
buildings .
Facility Maintenance Reserve monies maintained in this reserve are
authorized for expenditure , as needed , in the annual budget term . Any
funds appropriated for building maintenance and repairs that are not
expensed by year end will lapse into the reserve for future building repair
use .
(f) Reserve Designated for Transportation Capital - This reserve provides
funds for transportation capital projects . When Transportation Services
identifies a project , staff will present an appropriation ordinance for Council
to approve .
b . Other Funds
1 . Operating Reserves - operating reserves are held in Enterprise , Internal Service ,
and some Special Revenue Funds . There are two types of Operating Reserves :
(a ) An appropriated contingency which provides for unexpected or
unanticipated expenditures during the year. It is typically budgeted at an
amount equal to 2 % of the annual operating budget by fund , but may be
a fixed amount depending upon available funds .
( b ) Revenue reserve of working capital is established to provide for
unforeseen revenue losses . If something happens to the economy , there
is flexibility without worrying that current expenditures will exceed the total
revenue available . The revenue reserve is calculated at an amount equal
to 2 % of projected annual operating revenue by fund . This revenue
reserve is not appropriated as part of the annual budget, but may be
utilized at the end of the fiscal year, if necessary .
2 . Capital Reserves - Capital reserves are established in order to provide for
normal replacement of existing capital plant and additional capital improvements
financed on a pay-as-you -go basis . Debt financed capital improvements are , by
definition , financed by proceeds of bond issues and do not require capital
reserves . The amount of the reserve is determined by averaging the dollar
value of capital needs as shown in the Capital Improvement Program .
A second type of capital reserve is appropriated capital contingency , typically
5% of the amount annually appropriated for capital construction , which provides
for the conceptual study and preliminary design of unanticipated capital
improvements .
Financial Management Policies 37
3 . Debt Reserves - Debt reserves are established to protect bond holders from
payment defaults . Adequate debt reserves are essential in maintaining good
bond ratings and the marketability of bonds .
The amount of debt reserves are established by bond ordinance in association
with each bond issuance .
The City Council may establish , upon recommendation of the Financial Officer,
supplemental Debt Service reserves in addition to those expressly required by
Bond Ordinance . Such reserves shall not be deemed to confer any rights upon
Bondholders over and above those set forth in the Bond Ordinance for each
bond issue .
Financial Management Policies 38
CAPITAL IMPROVEMENT FUNDS
6 . 1 , CITIZEN PARTICIPATION
The City has a significant investment in its streets , public facilities , parks , natural areas and
other capital improvements . In past years , the City Council and the residents of Fort
Collins , through their actions , have demonstrated a firm commitment to , and investment in ,
the City capital projects . The importance of community involvement in the process of
evaluating capital projects dates back to the 1970 's . Over the years , citizen committees
have been involved in planning for capital projects , such as the Designing Tomorrow Today
( DT2 ) capital plan , Re- Evaluation of Capital Projects ( RECAP ) plan , tind ianost rettflft thre
Choices 95 capital improvement , and most recently the Building Community Choices
capital improvement plan . This tradition has continued with the Building on Basics
(" 13013 " )Garnrntinity Ghomees capital improvement plan which went into effect on January
1 , 20061996.
The residents of Fort Collins on November 1 , 20051997 , approved the extension of
a thfee 0 . 25 cent sales and use taxes ( excluding grocery food ) , packaged as the Building
on Basics Gofflffltinity Ghomees capital plan , to finance streets/transportation projects and
othercommunity capital projects . ;
This These ee 0 . 25 cent sales and use tax extension became effective January 1 , 2006
1998 . an ( The nattiral areas ta. will expire on December 31 , ; the other two
•
6 . 2 . CAPITAL IMPROVEMENT POLICY
The City will continue to operate under its existing Capital Improvement Policy :
1 . The City will develop a multi -year plan for capital improvements and update it
annually ;
2 . The City will identify estimated costs and funding sources for each capital project
requested before it is submitted to City Council ;
3 . All City capital improvements projects will be administered in accordance with the
Capital Projects Procedures Manual ;
4 . All City capital improvements will be constructed and expenditures incurred for the
purpose as approved by City Council ;
5 . The City will use a variety of different sources to fund capital projects , with an
emphasis on the " pay-as-you -go" philosophy ;
6 . Funding for operating and maintenance costs for approved capital projects must be
identified at the time projects are approved .
Financial Management Policies 39
6 . 3 . CAPITAL IMPROVEMENT PROGRAM
The City' s Capital Improvement Program includes General City Capital , 1 /4 Cent Building
on Basics Gofflnitimity 6homees , 1 /4 Gent Nattiral Areas and Parks , 1 /4 Gent St
Capital Expansion , Conservation Trust , Neighborhood
Parkland , and Utility Capital .
a . General City Capital
General City Capital includes minor street repair projects , concrete sidewalk repair
projects , construction and improvements to pedestrian access ramps , repair and
maintenance of public facilities , funding for land acquisition and implementation of the
City' s Civic Activity Center Plan and the General Government Services Strategic
Facility Plan , and other miscellaneous projects .
b . 1 /4 Cent Building on Basics Community Chomees
1 /4 Cent Building on Basics Gapital Ghoi projects were approved by the voters of
Fort Collins , at a municipal election on November 1 , 2005 . The voters
approved the extension of a 1 /4 cent sales and use tax , from which the proceeds
would be dedicated to finance a variety of streets/transportation and community
projects . Projects include improvements to Harmony Road , Timberline Road , from
Drake Road to Prospect Road , North College Avenue improvements , intersection
improvements and traffic signals at various locations , Senior Center Improvements ,
Lincoln Center renovation and cultural facilities plan , park upgrades and
enhancements , Museum/Discovery Science Center joint facility , bicycle program
implementation , pedestrian plan and disability access improvements , transit fleet
vehicle replacement , library technology improvements , police services computer aided
dispatch , records and jail management system replacement .
Road and Shields Stfeet ; improvements to a Noftheast :Ffdelt Ratite ; eelmistftletion of
Gent Natur ' Areas , Trarisand Parks
of a 1 /4 eent sales and tise tax , froffl whieh the proceeds wotild be dedicated to
;
;
irnprtvements to coninitimity parks ; and a regional tram ' •
d , 114 Gent Street Mamntenanee and Transportation
1 /4 Gent Street Maintenanee and Transportation projeets were approved by the vot
Financial Management Policies 40
L'xPaM & O .M, of the anicitial sidewalk prograrn ; Mason Street Transportation
,
e Capital Expansion
The Capital Expansion Fund provides for growth related capital improvements for
Library , Community Parkland , Police Services , Fire Services , and General
Governmental Facilities Services . Revenues from the capital expansion fees are a
form of development fee imposed on new development . The purpose of the fees is
to ensure that future growth and new development contribute its proportionate share
of providing capital improvements associated with such growth .
# Utility Capital Improvements
Utility Capital Projects , specifically Light & Power, Stormwater , Wastewater and Water
are budgeted within the appropriate enterprise fund . Sources of funding for utility
capital projects are bond proceeds and specific fees and charges . Examples of
projects include undergrounding of overhead electrical lines , improvements to water
and wastewater systems , and basin improvements associated with the City' s storm
drainage system .
Conservation Trust Projects
The Conservation Trust Fund provides for the receipt and expenditure of revenue
received from the Colorado State Lottery . The Lottery revenue finances capital
projects which relate to the acquisition and development of open space and trails
including associated administrative costs and charges . Consistent with Colorado
statutes , the operation and maintenance of existing open space and trails may also
be financed by these funds .
h . Neighborhood Parkland Projects
The Neighborhood Parkland Fund provides for the development of neighborhood
parks , as financed by a Parkland Fee . The Parkland Fee is collected from developers
for each new dwelling unit established within the City limits . The Neighborhood
Parkland Fund includes funds for the acquisition , development and administration of
neighborhood parks . The associated operation and maintenance costs are included
in the General Fund operating budget .
Financial Management Policies 41
DEBT POLICIES
7 . 1 . POLICY STATEMENT
The City of Fort Collins recognizes the primary purpose of capital facilities is to support
provision of services to its residents . Using debt financing to meet the capital needs of the
community must be evaluated according to two tests - efficiency and equity. The test of
efficiency equates to the highest rate of return for a given investment of resources . The test
of equity requires a determination of who should pay for the cost of capital improvements .
In meeting the demand for additional capital facilities , the City will strive to balance the load
between debt financing and " pay as you go" methods . The City realizes failure to meet the
demands of growth may inhibit its continued economic viability , but also realizes too much
debt may have detrimental effects . Through the rigorous testing of the need for additional
debt financed facilities and the means by which the debt will be repaid , the City will strike
an appropriate balance between service demands and the amount of debt. The City of Fort
Collins uses lease purchase financing for the provision of new and replacement equipment,
vehicles and rolling stock to ensure the timely replacement of equipment and vehicles and
to decrease the impact of the cost to the user department by spreading the costs over
several years . This method may also be used to acquire real property . The type of lease
that the City uses is termed a conditional sales lease , in effect a purchase rather than a
rental of property . The annual installments for all leases are appropriated by the Council
each year. For purposes of securing credit ratings and monitoring annual debt service as
a percentage of operating expenditures ; lease purchase financing is considered a long-term
liability of the City and therefore will be issued under the same conditions as long -term debt.
7 . 2 . AUTHORIZATION FOR MUNICIPAL BORROWING
The Charter authorizes the borrowing of money and the issuance of the following securities
to evidence indebtedness :
1 . short-term notes ,
2 . general obligation securities ,
3 . revenue securities ,
4 . refunding securities ,
5 . special assessment securities ,
6 . tax increment securities , and
7 . any other securities not in contravention of the Charter.
The Charter and State Constitution determines which securities may be issued only after
a vote of the electors of the City and approved by a majority of those voting on the issue .
7 . 3 . CONDITIONS FOR USING DEBT
Debt financing of capital improvements and equipment will be done only when the following
conditions exist :
1 . When non -continuous projects (those not requiring continuous annual appropriations )
are desired ;
Financial Management Policies 42
2 . When it can be determined that future users will receive a benefit from the
improvement ;
3 . When it is necessary to provide basic services to residents and taxpayers (for
example , purchase of water rights ) ;
4 . When the rights of bond buyers and subsequent investors are protected through full
disclosure ; and
5 . When total debt, including that issued by overlapping governmental entities , does not
constitute an unreasonable burden to the residents and taxpayers .
7 . 4 . DEBT INDICATORS AND TARGET LEVELS OF DEBT
While no absolute measures of debt burden exist , the City recognizes that municipal bond
rating agencies and financial analysts have established key debt indicators by which they
evaluate the credit strength of issuers . Since debt issued by entities sharing the same
geographic area , for example , Poudre R- 1 School District, cannot be controlled by the City,
the indicator that will be used will be calculated using only direct debt issued by the City
itself. The indicator does not include debt issued by the City or by the City Council as the
Board of Directors for the City's utilities , as the revenue collected for services are the source
of repayment . The City Council has chosen to use direct debt service as a percent of
General Fund and debt service expenditures to monitor its debt .
This indicator measures how the City's debt burden compares to financial operations . As
debt service requirements increase , the flexibility to make decisions regarding other
expenditures is reduced . Excessive debt may be indicated if the percentage is maintained
at very high levels . A debt service to operating budget expenses ratio of 10 to 15 percent
is considered fair; over 15 percent is generally considered poor.
THE TARGET INDICATOR IS :
Direct debt service as a percent of operating expense : 15 percent for the 2004-
2008 period .
Using the debt indicator as defined above , the City will have some debt capacity. This
means the City could use some of its operating revenue to support additional debt during
the five-year projection period .
Since the City's sustained growth causes demand for capital improvements financed
through debt or lease financing , the City target is set at a level slightly above the median
for cities of comparable size . The indicator is a full loading of governmental debt and is
calculated in the same manner that rating agencies use .
7 . 5 . SOUND FINANCING OF DEBT
When the City utilizes debt financing , it will ensure that the debt is soundly financed by :
1 . Conservatively projecting the revenue sources that will be used to pay the debt ;
2 . Financing the improvement over a period not greater than the useful life of the
improvements ;
3 . Determining that the benefits of the improvement exceed the costs , including interest
costs ;
Financial Management Policies 43
4 . Maintaining a debt service coverage ratio which ensures that combined debt service
requirements will not exceed revenues pledged for the payment of debt ; and
5 . Evaluating proposed debt against the target debt indicators .
7 . 6 . FINANCING METHODS
The City maintains the following policies in relation to methods of financing used to issue
debt :
1 . Total General Obligation ( payable from Property Tax levies ) debt will not exceed 10 %
of assessed valuation per the City Charter;
2 . Where possible , the City will use revenue or other self-supporting bonds instead of
General Obligation Bonds ;
3 . When appropriate , the City will issue non -obligation debt , for example , Industrial
Development Revenue Bonds , to promote community stability and economic growth ;
4 . Staff will maintain open communications with bond rating agencies about its financial
condition and whenever possible , issue rated securities ; and
5 . Staff will exchange information with Larimer County , Poudre R- 1 School District , the
Poudre Valley Hospital District and other entities whose debt would contribute to the
overlapping debt indicators for the purpose of monitoring such debt burdens .
The budget includes appropriations for debt service payments and reserve requirements
for all outstanding debt and for debt anticipated to be issued within the ensuing budget term .
7 . 7 . BOND MARKET DISCLOSURE
The Securities and Exchange Commission ( SEC ) requires the City of Fort Collins to
covenant in its bond documents to provide bondholders certain annual financial information .
The provision of the information is done through qualified information repositories . The SEC
rule did not establish a standard format for the financial information . The required
information maybe presented in an appropriate disclosure document determined by the City
in consultation with legal counsel .
In addition to annual financial information , the City is required to covenant in the bond
documents that it will provide notice of the following " material events " to the information
repositories , with respect to the City' s bonds :
1 . principal and interest payment delinquencies ;
2 . non - payment related defaults ;
3 . unscheduled draws on debt service reserves reflecting financial difficulties ;
4 . unscheduled draws on credit enhancements reflecting financial difficulties ;
5 . substitution of credit or liquidity providers , or their failure to perform ;
6 . adverse tax opinions or events affecting the tax-exempt status of the City' s bonds ;
7 . modifications to rights of the owners of City bonds or bond calls ; or
8 . rating changes .
The City is further required to covenant that it will provide notice in a timely manner if it fails
to comply with its disclosure undertakings .
The City considers its Comprehensive and Financial Report ( CAFR) to be the most
appropriate document in which to provide the continuing disclosure information . In addition
Financial Management Policies 44
to the required annual financial information , the CAFR contains financial and statistical
information and related disclosures that are useful to existing and potential investors in the
secondary bond market as required by the rule . In accordance with the City's bond
ordinances , the Financial Officer is authorized and directed to report all material events , as
defined above , to the appropriate information repositories .
Financial Management Policies 45
CASH MANAGEMENT AND INVESTMENT POLICY
(Summarizing Resolution 1990 =044)
8 . 1 . POLICY STATEMENT
This policy was adopted by the Council of the City of Fort Collins as Resolution 1990-044 .
It is intended to supplement and expand upon Ordinance No . 109 , 1988 , " Providing for the
investment and deposit of public funds and moneys of the City of Fort Collins . "
8 . 2 . SCOPE
This policy shall apply to the investment of all general and special funds of the City of Fort
Collins ( hereinafter referred to as the " City" ) over which it exercises financial control ,
including the City of Fort Collins Firefighters Pension and General Employees Retirement
Funds .
8 . 3 . OBJECTIVES
The City's principal cash management and investment objectives are :
1 . Preservation of capital through the protection of investment principal .
2 . To maximize the cash available for investment .
3 . Maintenance of sufficient liquidity to meet the City's cash needs .
4 . Diversification of investments to avoid incurring unreasonable risk regarding a specific
security , maturity periods , or institution .
5 . To maximize the rate of return for prevailing market conditions for eligible securities .
6 . Conformance with all federal , state and other legal requirements .
8 . 4 . DELEGATION OF AUTHORITY
Responsibility for the collection and investment of all City funds is assigned to the Financial
Officer by the Charter, subject to direction of Council by resolution . The Financial Officer
may appoint other members of the Finance Department to assist in the cash management
and investment function .
The City Manager shall appoint an investment committee consisting of the Financial Officer
and at least two (2 ) other employees of the City knowledgeable in the area of governmental
investments . The purpose of the committee shall be to provide advice to the Financial
Officer regarding the operation of the Cash Management and Investment Program . The
committee shall also review the actual rate of return on the portfolio as compared to the
target rate of return .
The Financial Officer shall have the discretion to appoint one or more investment advisors
registered with the Securities and Exchange Commission . All investments made through
such investment advisors shall be within the guidelines of this Cash Management and
Investment Policy .
Financial Management Policies 46
8 . 5 . PRUDENCE
The standard of prudence to be used for managing the City's assets is the " prudent
investor" rule , which states , " Investments shall be made with judgment and care , under
circumstances then prevailing , which persons of prudence , discretion and intelligence
exercise in the management of their own affairs , not for speculation , but for investment
considering the probable safety of their capital as well as the probable income to be
derived . "
8 . 6 . ELIGIBLE INVESTMENTS
All investments will be made in accordance with Ordinance No . 109 , 1988 and the Cash
Management and Investment Policy adopted by the Council of the City of Fort Collins by
Resolution 1990-044 . The following is a summary of the authorized investments :
1 . Any securities now or hereafter designated as legal investment for municipalities in
any applicable statute of the State of Colorado .
2 . Interest- bearing accounts or time certificates of deposit at state or federal ly-chartered
savings and loan associations or national banks in Colorado which are designated as
depositories for public moneys .
3 . Obligations of the United States Government and obligations issued by an agency ,
instrumentality or public corporation of the United States .
4 . Obligations issued by or on behalf of the City .
5 . Obligations issued by or on behalf of any state , political subdivision , agency ,
instrumentality or public corporation having an investment grade rating from Moody's
Investors Service or Standard & Poor's Corporation .
6 . Prime- rated bankers acceptances and prime- rated commercial paper.
7 . Guaranteed investment contracts of domestically- regulated insurance companies
having a claims- paying ability rating of "AX or better from Standard & Poor's or A+
from Best Rating Services .
8 . Repurchase and reverse repurchase agreements of any marketable security
described in Ordinance No . 109 , 1988 which afford the City a perfected security
interest in such security .
9 . Local government investment pools authorized by the State of Colorado .
10 . Shares in any money market fund or account , unit investment trust or open -or close-
end investment company , all of the net assets of which are invested in securities
described in this section , to the extent not prohibited by Colorado Constitution or State
Statutes .
Pension funds may also be invested in equipment trust certificates , real property and loans
secured by first mortgages or deeds of trust on real property , tax certificates issued on real
property in Colorado , and common or preferred stock or debt obligations of U . S .
Corporations .
Through authorization by the Colorado Revised Statutes , the City may participate in
securities lending programs to enhance total investment return .
8 . 7 . REPORTING AND REVIEW
An investment report shall be prepared on a quarterly basis and submitted to the City
Manager. An annual summary shall be published in a newspaper of local circulation . The
Financial Management Policies 47
Financial Officer and designated investment staff shall meet at least quarterly to review the
portfolio 's adherence to appropriate risk levels and to compare the portfolio' s total return to
the established investment objectives and goals .
8 . 8 . ETHICS AND CONFLICTS OF INTEREST
City officers and employees involved in the investment process shall adhere to the rules of
conduct concerning conflicts of interest as stated in Art . IV , Section 9 ( B ) of the Charter of
the City of Fort Collins , Colorado .
8 . 9 . POLICY REVISIONS
This Cash Management and Investment Policy will be reviewed periodically by the City
Manager and the Financial Officer and may be amended by City Council as conditions
warrant .
Financial Management Policies 48
ECONOMIC DEVELOPMENT POLICY
(Summarizing Resolution 1999 =023 )
9 . 1 . POLICY STATEMENT
The City of Fort Collins has chosen a partnership model for economic development . The
partnership is between the public and private sector, and the citizens of Fort Collins . The
City provides many services to existing and prospective business . The City facilitates the
processes and procedures required for site development, provides data and demographic
information , invests in municipal infrastructure , and considers other initiatives on a case-by-
case basis .
The private sector shares responsibility with the public sector for the retention and
expansion of business or industry with the City . This may include marketing and promotion
of the community, outreach to existing business , and assistance in project financing and
small business counseling .
9 . 2 . ROLE OF THE CITY OF FORT COLLINS
Businesses considering expansion or relocation are most concerned and interested in the
overall quality of life . Some measures of quality of life include : the quality of primary and
secondary schools , the skill of the work force , the quality of municipal services , and the
state of the natural environment .
The City's primary role in economic development focuses on those areas which directly
involve City process and procedure . The City's goal is to encourage and support economic
development and economic opportunities which provide primary employment , increase
private investment within the community and improve the quality of life for its residents .
The City strives to achieve this goal through the following policies :
1 . Promotion of the City as a good place to live and work .
2 . Emphasis on comprehensive , quality municipal services as the City's primary
contribution to the community's economic development effort.
3 . Create a positive climate for both local and new business .
4 . Assist small business retention and expansion as appropriate .
5 . Encourage and promote workforce training , retraining , education , and employee
support services to assist in the creation and expansion of meaningful employment
opportunities .
6 . The City' s role in dealing with prospective expansion or relocations focuses on
planning and the provision of municipal services and facilities such as streets and
utilities .
7 . Encourage the development of a wide variety of business activities rather than
focusing solely on one sector.
8 . Awareness of the community's role in the global and domestic marketplace , and the
importance of welcoming and assisting visitors from other nations , foreign firms , and
tourists .
Financial Management Policies 49
The City has identified several action steps to be used to implement the policies above :
1 . Work with other public and private entities to promote policies and programs which
encourage education , training , workforce development , and basic , advanced , and
technological skills enhancement .
2 . Provide prospective businesses with information regarding municipal services ,
schools , recreational opportunities , health care , and other services available within the
community .
3 . Notify existing and prospective businesses of the opportunities available through
Colorado State University and the private sector in the areas of product and process
development .
4 . Consider partnerships with other public and private entities such as the Fort Collins
Virtual Business Incubator and Small Business Development Center to encourage
entrepreneurial activity within a one-stop environment .
5 . Maintain and enhance utility and technological infrastructure and strive to provide
consistently reliable and efficient service .
6 . Maintain a reasonable and equitable tax structure .
7 . Provide assistance to business and industry about City process and procedure .
8 . Afford new and existing business and industry the opportunity to seek financial
incentives from City , state , and federal sources .
9 . Monitor economic , community and environmental indicators on a periodic basis and
consider actions that address a change in the local economy .
10 . Evaluate all programs and policies that are suggested for Council consideration to
determine if there are unintended impacts on the business community.
9 . 3 . ROLE OF THE PRIVATE SECTOR
The private sector plays a significant role in the success of the overall economic
development strategy . The private sector mission is to work with the City and other public
organizations to retain and expand basic industry within the city and county . This effort
requires the support of the Northern Colorado Economic Development Corporation , the
Chamber of Commerce and other entities referenced below, as well as local banks , financial
institutions , and existing business and industry .
The private sector role is characterized by its ability to work with new and existing business
in a confidential manner. Real estate values , business climate , financing options , and site
options are most appropriately discussed by the private sector.
9 . 4 . ROLE OF OUTSIDE ENTITIES
The efforts of the City and private sector to enhance the economic prosperity of the
community are directly and indirectly supported by several organizations and entities
including :
Colorado State University
Downtown Development Authority
Larimer County
Convention & Visitor's Bureau
Poudre R- 1 School District
Private Industry Council
Employment and Training Service
Financial Management Policies 50
Though each has an independent focus , their work contributes to the overall quality of life
and prosperity enjoyed with the community . In this way , the network required to conduct
an effective community- based economic development is provided .
Financial Management Policies 51