HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 07/07/2009 - CONSIDERATION AND APPROVAL OF THE MINUTES OF THE M ITEM NUMBER: 6
AGENDA ITEM SUMMARY DATE: July 7, Zoos
FORT COLLINS CITY COUNCIL STAFF: Wanda Krajicek
SUBJECT
Consideration and Approval of the Minutes of the May 19 and June 2, 2009 Regular Meetings and
the May 12, June 9 and June 23, 2009 Adjourned Meetings.
May 12, 2009
COUNCIL OF THE CITY OF FORT COLLINS, COLORADO
Council-Manager Form of Government
Adjourned Meeting- 6:00 p.m.
An adjourned meeting of the Council of the City of Fort Collins was held on Tuesday,May 12,2009,
at 6:00 p.m. in the Council Chambers of the City of Fort Collins City Hall. Roll Call was answered
by the following Councilmembers: Hutchinson, Kottwitz, Ohlson, Poppaw, Roy and Troxell.
Councilmember Absent: Manvel
Staff Members Present: Atteberry, Krajicek; Roy.
Ordinance No. 053, 20099
Appropriating Funds From the City's General Fund Reserves for Transfer
to the Fort Collins Urban Renewal Authority for the Purpose of Providing
a Loan for the Rocky Mountain Innovation Initiative Project, Adopted on First Reading
The following is staffs memorandum for this item.
"FINANCIAL IMPACT
The construction of the Rocky Mountain Innovation Initiative (RM12).facility will benefit both the
Fort Collins Urban Renewal Authority (URA) and the City of Fort Collins (City):
• URA—Benefits j-om additional property tax increment, a portion ofwhich will be dedicated
to the project.
• CITY—Benefits from continued economic development by RMI2 through the support and
expansion of science and technology businesses, high-wage jobs, and venture capital and
grant investment.
The City will support the effort by making a $5.3 million dollar loan to the URA to fund the
development and construction ofa 31,000 square.foot, 4-story, LEED Gold certified building. The
building will include approximately 29,000 square feet of rentable of space and 3,000 square
feet of wet lab space. The top floor will be rented at market rates to,further subsidize the lease rates
for RM12 participants. The cash for the loan between the City and the URA will come from the
City"s investment funds. The City will earn a return of 2.5 percent on this cash while it is tied up
in this arrangement, roughly equal to the Treasury Bill return at the time of initial negotiations with
RM12.
The newfacility will generate approximately$4.3 million in tax increment revenue over the 20 years
remaining for the URA. The proven success of RM12 as an economic development stimulus engine
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makes the project worthy of URA assistance. The project needs $2.8 million or 65 percent of the
estimated total in URA assistance to subsidize lease rates near the current level. The $2.8 million
in TIF will be pledged alongside lease revenue from RMI2 to fund loan payments on the$5.3 million
loan made by the City to the URA allowing lease rates for RMIZ participants to remain below
market rates.
EXECUTIVE SUMMARY
The new facility far•IZMI2 will cost approximately$7.1 million to develop and construct. The City
will provide a loan of$5.3 million to the URA to cover development and construction costs, a
portion of which will be offset by the $2.8 million in pledged TIF. The proposed New Market Tax
Credit (NMTC)financing solution will contribute $1.8 million in project equity. In the long-term,
RM12 will owe approximately $2.6 million on a $7.1 million project as a result of this financing
solution.
Ordinance No. 053, 2009, authorizes a loan, as authorized by City Council Resolution 2008-121,
to the URA in the amount of$5,303,939. The loan will enable the URA to lend Rocky Mountain
Innovation Initiative Properties, LLC(RM12 Properties, LLC) the funds necessary to construction
a neiv.facility.for the business incubation program. RMI2 Properties, LLC is associated with the
Rocky Mountain Innovation Initiative, which runs a successful science and technology incubation
program on behalf of the City and other sponsors.
The deliberations as City Council should focus on the worthiness of this investment as a key
economic development tool for the City and Region. The underlying details of the project and the
financing solution should be questioned and discussed by the URA Board of Commissioners.
The loan will have a 20 year term, 2.5 percent interest rate, and stipulate interest only for the first
seven years consistent with the Citv's Investment Policy. In addition, the loan agreement stipulates
two disbursements,from the loan. These disbursements will mirror-the anticipated disbursements
required to fund the construction of the RM12 facility, which will be owned and operated by RM12
Properties, LLC. The first disbursement of$I,100,000 will be used to fund a 'Bridge Loan" to
RM12 Properties, LLC for the development costs occurring prior to the closing of the NMTC loans.
These development costs include: subdivision of the property, entitlement, development review,
buildirngdesign, and laiid acquisition. The second disbursement of$4,203,939 will occur when the
NMTC loans close and provide the URA the necessary cash to find the senior leverage loan in the
NMTC structure.
BACKGROUND
RM12, originally the Fort Collins Technology Incubator program launched in 1998, has evolved
from its original program to a 501(c)3 non profit organization with an expanded mission and
regional focus. Its mission to enable and accelerate the success of innovation-based start lip
companies and promote the entrepreneurial culture ofseientifuc and technology based companies
has generated 162 high-wage jobs, generated $53 million in investment and grants, and created
numerous programs and services for entrepreneurs, since 1999.
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RM12 enables and accelerates the success of innovation-based start-up companies and promotes the
entrepreneurial culture of scientific and technology based companies in the Northern Colorado
region. This has been a vital component ofsome ofFort Collins economic development successes,
i.e., Sprig Toys, 2009 Toy of the Year maker is a graduate of the program. The City of Fort Collins
graciously made City-owned facilities available to RMI2 and its clients. The first facility was made
available in 2004 and two additional.facilities in 2007. The valve of these.facilities provided by the
City, offered at cost only (e.g., Utilities) is approximately$200,000 annually. In addition, the City
provides approximately $100,000 annually in operation revenues directly to RM12.
The proposed RM12.facility will enable the program to:
• Continue its current programs;
• Expand the capacity the program to offer space to start-up companies;
• Offer new wet lab facilities_for bioscience participants;
• Continue to of below market rate rents for participating companies;
• Offer a central location near downtown for entrepreneurial events and activities; and
• Relieve the City of the provision of facilities, subsidized lease rates, and property
management.
The progran is rapidly out-growing its current facility. As a result, RM12 approached the Northern
Colorado Economic Development Corporation (NCEDC)for assistance with the site selection,for
the facility. NCEDC managed the site selection process according to the normal process. The
process includes advertising the request and soliciting responses through the NCEDC broker and
developer distribution list. Based on the responses, the proposed site was selected.for construction
ofthe new facility because it met the requirements and was within the North College Urban Renewal
Area boundary allowing for tax increment assistance.
The proposed site is in the planned Inverness Innovation Office Park located on the 200-500 block
of East Vine Drive. The property is located on the former Waste Management site. The master site
plan for the site includes,four-commercial buildings catering to similar high-tech and energy tenants
to the participants in the RMI2 program. The development plan.for the site includes both the north
and south side of East Vine Drive and will require significant public improvements. The southern
portion of the property is located within the Downtown Development Authority (DDA) bounday,
while the northern portion of the site is located in the URA. Eventually both entities will contribute
to the development and construction ofpublic improvements along East Vine Drive and the river.
RM12 is a non-profit organization that receives.funding through donations and contributions from
regional partners including: the City of Fort Collins (largest contributor), the City of'Loveland,
Colorado State University, CSU Research Foundation, and the NCEDC. RM12 cannot provide the
upfront revenue to fiend the hefty costs associated with development and construction of a new
facility. The use of property TIT assistance and the NMTC program make the project financially
.feasible by providing the necessay upfront revenue to fund development and construction of the
facility. Furthermore, thisjinancial assistance reduces the loan payments significantly allowing the
projected revenue from RM12 participant leases to.fund the loan payment associated with the
project. Therefore, the City will realize an immediate savings of$200,000 annually in real estate
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value by freeing up the current space occupied by RMI2 for market rate leases or other use by,the
City (both of which are currently prevented by the presence of RMI2 in the facilities).
SUMMARY OF KEY BENEFITS
• The Ciry gains a LEED Gold Certified facility to house the Rocky Mountain Innovation
Initiative a key part of the City's economic development strategy.
• The Ciry benefits./•om street improvements to East Vine Drive that include sidewalks, curbs,
gutters and much needed public infrastructure that is currently non-existent.
• The City helps RMI2 move towards the eventual goal ofself-sufficiency by assisting to fired
a building that will ultimately generate revenue for the program to subsidize leases and
offset operating expenses.
• The URA gains a redevelopment project that helps to revitalize the North College area and
Fast Vine Drive specifically.
• The URA provides financial assistance to a primary job generator that has a proven record
for creating high-wage jobs and new companies that remain in the City.
• The URA gains an additional$1.5 million for other public improvements in the Plan Area.
SUMMARY OF PROJECT COSTS
The proposed facility will cost approximately $7,114,950 to develop and construct, as shown in
Table 1 (refer to the detailed budget included in URA application/packet). Staff has had on going
discussions with the project applicant and has reviewed the details supporting these cost estimates
for propriety and reasonableness. A timeline,for construction has been attached(refer to the URA
applicant/packet) and shows construction beginning in November 2009 with completion
approximately 12 months later. The project applicant will be available to discuss the costs and
timeline.for construction.
Table 1
Summary of Project Costs
Item Phase I Phase II Total Percent
Raw Land $520,533 $0 $520,533 7.3%
Development Costs
Professional Fees $411,940 $67,635 $479,575 6.7%
Development&Permit Fees $25,104 $289,342 $314,446 4.4%
Subtotal $437,044 $356,977 $794,021 11.2%
Construction Costs
Hard Costs $0 $4,657,764 $4.657,764 65.5%
Owner FF& E $0 $75,000 $75,000 1.1%
Developer Fee-UDP $25,001 $226,382 $251,383 3.5%
Subtotal $25,001 $4,959,146 $4,984,147 70.1%
Financing $53,000 $407,177 $460,177 6.5%
Contingency $64,422 $291,650 $356,072 5.0%
Total Cost $1,100,000 $6,014,950 $7,114,950 100.0%
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SUMMARY OF FINANCING
The proposed financing solution includes a combination of fiords including a loan, URA 77F
revenue, and NMTC equity. The complete financing solution distributes the cost and risk between
these three revenue sources. The totalcost, including costs associated with the NMTCprogram, will
be approximately $7.3 million. The City will provide approximately $5.3 million or 72 percent of
the total amount through a loan to the URA amortized over 20 years at 2.5 percent. The first seven
years will be interest only with payments deferred.for the first four years because of the NMTC
requirements. The NMTC equity investor, US Bank Community Development Corporation
(USBCDC), will provide $2.0 million in gross equity. The project will use approximately $7.1
million of the funds for construction with the balance funding the cost of the NMTC.financing
structure (approximately $200,000, paid.for out of the NMTC equity investor contribution), as
shown in Table 2.
Table 2
NMTC Revenue
Amount Percent
NMTC Revenue
URA Senior Leverage Loan $5.3 Million 73%
USBCDC Gross Equity $2.0 Million 27%
Subtotal $7.3 Million 100%
Less:NMTC Fees $0.2 Million 3%
Net NMTC Revenue $7.1 Million 97%
The URA will make two loans to the project, as shown in Table 3. The first loan will be made to
cover development costs. This "Bridge Loan" will be for one year at 2.5 percent interest. The
second loan will be made for $5.3 million to the NMTC structure as the senior leverage lender,
meaning that the URA will have the senior position within the debt structurethat ultimately.fimds
the construction of the RM12 facility. This loan will be funded by the remaining S4.3 million frrorn
the City to URA loan and the proceeds from the repayment of the Bridge Loan, which will occur at
the time the NMTC loans close, at or near the beginning of construction in November 2009. The
loan will befor 20 years with the first seven years will be interest only at 1.5 percent. In the eighth
year, the loan will re-amortize for 20years on the remaining principal(estimated at $2.6 million)
and re-price to 2.5 percent interest to maintain the City's targeted return of 2.5 percent.
Table 3
URA Loan Disbursements
NMTC
URA Loan Disbursements
Phase I - Development ("Bridge Loan") $1.1 Million
Phase I I-Construction $4.2 Million
Total Loan Amount $5.3 Million
NMTC Net Equity $1.8 Million
Total Net Revenue $7.1 Million
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During the NMTC compliance period, a seven year period that provides the tax credit benefit to the
equity investor, the URA loan to the NMTCstructure will remain.fzxed at 1.5 percent. Hoivever, the
proposed financing solution includes the proposed dedication of 65 percent or S2.8 million of the
TIF associated with the project. These TIF monies will be available once Larimer County has issued
the Certificate of Occupancy, likely to occur after construction is completed. Therefore, the TIF
revenue will be available starting in the third year (due to the delay%caused by payment in arrears
for property tax) to offset the loan payments from the URA to the City on the original loan. These
monies combined with the interest payment coming from RM12 Properties, LLC will exceed the
City's target of 2.5 percent return;n; therefore, the URA can offer a discount on the interest rate to
RMI2 Properties, LLC during the NMTC compliance period.
The result of the proposed financing solution is a long-term debt to RMI2 Properties, LLC of
approximately $2.6 million, as shown in Table 4.
Table 4
RM12 Long-Term Debt Summary
NMTC
Total Project Cost $7.1 Million
Less: NMTC Equity $1.8 Million
Less: URA Contribution $2.8 Million
RMII Long-Term Debt ' $2.6 Million
' Includes $100,000 NMTC Exit Fee
APPLICABLE URA POLICIES
"The URA will only assist development and redevelopment projects that meet the
identified objectives of the respective Urban Renewal Plan (URP)area. "
URA staff has identified the following components in conformance with the North College Urban
Renewal Plan and integrated into the RMI2 proposed,facility.
• "To facilitate redevelopment and new development by private enterprise through
cooperation among developers and public agencies to plan, design and build needed
improvements. " The proposed project will be a private/public partnership that includes the
construction of a major catalyst project in the plan area that will generate primary jobs,for
the City.
• "To effectively utilize undeveloped and underdeveloped land. " This site was historically
used by Waste Management. The proposed use of the site fbr as the Innovation Office Park
constitutes a higher and better use of the property, which currently sits vacant.
• "To ultimately contribute to increased revenues for all taxing entities. " The proposed
property tax increment generated from this project will ultimately increase the valuation of
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the surrounding areas and benefit all taxing entities. This project will be the first offour
proposed buildings on the property and set the stage.for future development of the site.
• "To watch ,for market and/or project opportunities to eliminate blight, and when such
opportunities exist, to take action within the financial, legal, and political limits of the
Authority to acquire land, demolish and remove structures,provide relocation benefits, and
pursue redevelopment, improvement and rehabilitation projects. " The project reuses an
existing site that is vacant and includes dilapidated buildings. The project will remove these
physical symbols of blight and help to revitalize the surrounding area.
SUMMARY OF TIF USAGE
Although a formal dedication of TIF is not being considered at this time, the project has requested
a TYallocation ofS2.8 million, which is consistent with the staffand NCCAG recommendation. The
TIF will be used to offset a variety of costs show in Table 5. T his preliminary information provides
background for the discussion concerning the bridge loan and f tture resolution on TIF dedication.
Table 5
Tax Increment Financing Usage
Item Amount
Fagade & Roofing $781,318
Site Improvements $250,000
Site Prep &Processing $40,510
LEED Gold Certification $299,767
Land Acquisition and Shared Detention $520,403
Construction Hard Costs $908,002
TOTAL URA Contribution $2,800,000
This project is consistent in achieving the.following URA policies and will help accomplish the goals
within the North College Urban Renewal Plan by.-
Revitalization on blighted property;
• Stimulating private investment within the project and the surrounding area;
• Attracting primacy jobs;
• Facilitating infrastructure improvements; and
• Achieving green built goals through LEED Gold certification.
Staff has reviewed the RM12 development pro forma to evaluate the need for f nancial assistance.
This analysis shows that RM12, which operates as a non-profit company, clearly needs financial
assistance to provide subsidized office and wet lab space to participants ofthe incubation program.
Therefore, the financial assistance proposed does not provide an unreasonable financial return to
RM12. An_yfinancial assistance ultimately goes to subsidize the lease rates.for participants and the
operating costs of RM12. "
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Mike Freeman, Chief Financial Officer, stated the Ordinance will authorize an interfund loan from
the City to the URA to enable the construction of a 31,000 square foot facility to house RM12. The
loan is for S5.3 million; with a term of 20 years and a 2.5% interest rate. The mission of RM12 is
to enable and accelerate the success of innovation-based start up companies and promote the
entrepreneurial culture of scientific and technology based companies. The company is currently
leasing office space in City properties.
Mark Forsyth, Chief Executive Director of RM12, stated the purpose of RMI2 is to nurture the
development of entrepreneurial companies in their early years when they have a high tendency to
fail. The successful companies raise capital, create jobs, help diversify the economy and help
support the acceleration and creation of the targeted industry clusters. Statistics show that 84% of
businesses that graduate from incubators stay in business in their communities and use community
services. RM12 has assisted 27 start-up companies with its incubator program and assisted over 100
businesses through other programs. Almost half of the companies currently in RM12 are in the clean
energy industry. RMI2 offers other resources to start-up companies such as programs to help
beginning companies raise capital, provide business advice and creation of business plans, finding
professional service providers to assist beginning companies. RM12 hosts also educational seminars
for clients.
RM12 has filled each City facility it has leased and now has nine companies located in three City
buildings. The demand exists for more space to add more start up companies. RM12 offers office
space to companies at below market rates because companies are in a cash flow bind when they are
started. Having companies located close together breeds synergy and collaboration between the
companies.
The new facility will be located at Inverness Innovation Office Park,now being developed on Vine
Drive. The site is located with the North College Urban Renewal Area. The proposed building will
be either three or four stories; have about 29,000 square feet of rentable space with some space
available for an incubator graduate company that would pay rates closer to market rental rates. The
facility will have 3,000 square feet of bio-science wet lab space, which is currently not available to
start up companies in the area. The building will be LEED certified gold,bring new businesses and
primary jobs to the North College area and will facilitate educational seminars, community events
and serve as a hub for entrepreneurial activity.
If Council approves the Ordinance, the actual construction of the building will begin in November
or December and will be finished by Fall 2010.
Freeman stated RMI2 went through the site selection process developed by the Northern Colorado
Economic Development Corporation (NCEDC). The benefits provided by the proposed loan to
RMI2 will allow continued operation of the incubator. The space currently occupied by RMI2 will
eventually be used for other purposes by the City. The capacity of RM12 will be expanded which
will bring in more businesses. The redevelopment of Vine Drive will benefit the City. The building
will be LEED certified and will be an environmental showcase. Infrastructure improvements will
improve Vine Drive with curbs, gutters and sidewalks.
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Josh Birks, Economic Advisor, stated the City will loan the URA $5.3 million that will enable the
URA to provide funding to RMI2 to pursue a new facility. The use of new market tax credits to
provide additional equity for the project will reduce the amount of the City's loan to the URA. The
first seven years of payments on the loan will be interest only, as required by the rules for new
market tax credits. The loan payments will be lower and will allow RM12 to charge lower lease rates
to companies starting up in the program.
The following citizens supported the proposed project and urged Council to adopt the Ordinance:
Maury Dobbie, Northern Colorado Economic Development Corporation CEO and President
Greg Woods, North College Citizen Advisory Group Chair
Greg Fuhnnan, Van Dyne Chief Financial Officer of Superturbo, Inc., an incubator company
Dr. Dale Willard, Vance Microlabs, a CSU bioscience start-up company and potential beneficiary
of the RM12 programs
Rick Jones, Symbios Technologies, an RMI2 company
Bill See, North Fort Collins Business Association member
Kathy Gilliland, DK Innovative Solutions President
Doug Johnson, UniverCity Connections Director
Kathy Bauer, 1 103 Kirkwood Drive, Integrated Computer Consulting
Joe Rowen, Funding Partners Executive Director
Ed King, Spectra Digital, Inc. President
G. J. Piennan, Wirsol Solar, an RM12 company
Guy Babbit, Co-founder of Czero, an RMI2 company
David Cunningham, business development specialist
Ron Lautzenheiser,North College business owner,North College Citizen Advisory Group member
Patrick Gill, Northern Colorado Entrepreneur's Network co-founder
Jim Doherty, 5179 Torrey Pines Court
Mark Montgomery, Fort Collins resident, Van Dyne Superturbo employee
Godon Nuttall, NoCoNet and Longs Peak Networking Director
Mike Jensen, Fort Collins realtor
Sam Solt, Clear Path Labs co-founder, an RMI2 company
David May, 225 South Meldrum, Chamber of Commerce President,
Eric Sutherland, 631 LaPorte, urged Council to use caution before lending the funds to the Urban
Renewal Authority because many similar enterprises have failed across the country. He did not
believe the loan was a prudent use of taxpayer funds.
Councilmember Roy asked if the use of reserves for the loan will jeopardize other City programs.
City Manager Attebeny stated, if Council approves, the City is scheduled to use reserves to cover
gaps in the 2009 budget, as well as the 2010/2011 budget. Freeman stated the City has almost$300
million invested reserves across the organization,with about half in Utilities. The$5 million for this
loan is not coming out of any one"pot." The City will earn more interest on the loan than it could
with other investments. The City's investment policy is extremely restrictive to very safe
investments, which currently do not provide much return.
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Councilmember Roy asked if new health and safety issues will confront emergency personnel as a
result of the new types of industries proposed for RM12. Freeman stated one specific of the proposal
is that RMI2 would only allow low-end bio-work. CSU's new Research Innovation Center will
contain companies that are doing sponsored research with CSU and need high-end labs or handle
infectious diseases.
Councilmember Poppaw asked if platinum LEED certification was considered for the building.
Freeman stated gold LEED certification adds significant costs to the building and the platinum level
was not considered. The RM12 Board intends to make the building a showcase facility for Fort
Collins. Some aspects of the building will be above gold LEED certification criteria.
Councilmember Poppaw asked for the cost of bringing the building to platinum LEED certification.
Councilmember Ohlson asked what will be the total amount of rented incubator space. Freeman
stated the building will contain 29,000 square fee of leased space which will triple the size of RM12.
The 4th floor will be leased at market rates for probably no more than five years or until such time
as RM12 needs the space for expansion of its programs. The indirect benefit will be to lower the
initial lease rate for RMI2 companies.
Councilmember Ohlson asked if Council voted for RM12 to be a nonprofit organization. Freeman
state RM12 pursued the nonprofit status.
Councilmember Ohlson asked for the governance model for RM12 and who selects the Board
members. Freeman stated the major stakeholders who fund RM12 sit on the Board, plus five
additional Boardmembers selected at-large. The funding groups include the City of Fort Collins,
CSU, NCEDC, City of Loveland and CSU Ventures. He is a member of the RM12 Board.
Councilmember Ohlson asked if RMI2 will own the building and the land. Freeman stated RM12
will own the land and building, once it is built and conveyed.
Councilmember Ohlson noted only162 high paying jobs have been created through RMI2 over the
past 10 years. Freeman stated three years ago RM12 recognized it was not responding to the needs
of entrepreneurial companies because of lack of space. RM12 received more building space from
the City, installed a new director and increased its staff to support the organization with more
services and programs. If additional space had been available much earlier, more jobs would have
been created. Birks stated most of the jobs generated have been in the past few years.
Councilmember Ohlson asked what the City will do with the space currently occupied by RMI2.
Freeman stated the decision has not yet been made about use of the current space.
Councilmember Ohlson asked for information about the new market tax credits. Birks stated the
new market tax credit program has the mission to encourage economic development in distressed
areas. The property RMI2 plans to build on meets the federal requirements for a distressed area. The
tax credits leverage private monies as equity into a deserving project. The private investor gets the
benefit of a tax credit. The U.S. Bank Community Development Corporation will purchase those
tax credits. The U.S. Bank Community Development Corporation was brought into the program by
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the Colorado Housing Finance Authority, which is the state organization the federal government
gives the ability to allocate tax credits. The federal requirements contain a rigorous set of criteria
and applies to certain areas in a community that qualify as blighted.
Councilmember Poppaw asked what percentage of the companies assisted by RMI2 and have
graduated from the program have remained in Fort Collins or the region. Forsyth stated two
companies have left the area.
Councilmember Poppaw asked if any environmental mitigation measures will be needed since the
site is a former Waste Management site. Freeman stated the developer of the property has shared
information from the Phase 1 and Phase 2 environmental studies. Both studies show there are no
environmental issues with the property,which was a key consideration in determining if the site was
suitable for RM12.
Councilmember Troxell stated one huge benefit of an incubator is the development of the
entrepreneurial atmosphere and asked for the requirements to become an RM12 company. Forsyth
stated the start-up companies are mentored by volunteers who are experts in their fields,which helps
the companies develop and grow. One value of being in the program is that RM12 serves as a
connecting platform that brings together resources in the community that are used by the start-up
companies to grow and expand. RM12 also provides marketing for the companies that brings in
investors. Companies are chosen based on their industry. RMI2 targets bioscience, clean energy
and information technology industry clusters, but any innovative company developing new
technologies, products or processes will be considered. A company will be interviewed by RM12
advisors who are experts in their field and RM12 staffreviews the company's business plan to assess
the viability of the plan. RM12 is looking for companies that need the support and will be good
participants because much of the value of the RM12 program comes from the various companies
working with each other. RM12 has a three year program that increases a company's rent each year
so the company is paying close to market rates at the end of that time. The RM12 Board has the
option of extending the lease time because some companies need more than three years. A company
is ready to graduate once it has secure financing and has reached a point in their business plan that
they can be supported by the business community.
Councilmember Kottwitz asked about the decision to build an new facility instead of renovating an
existing building and for information about the inclusion of a wet lab. Freeman stated one criteria
for choosing the site was to have the building located within the Downtown Development Authority
or the North College Urban Renewal Area because the facility would need public assistance through
tax increment financing. The project went through the fonnal site selection process administered
by NCEDC. The unique financing package, including the new market tax credits, requires the site
to be located in an area that meets the requirements to obtain those tax credits. Forsyth stated the
facility will be a long term investment and the lower lease rates that RM12 will be able to offer
participating companies as a result of the financing package, will be critical to making the program
viable. Bioscience start-up companies need access to a wet lab as a vital part of their development.
The wet lab will be a basic lab, but will provide bio-science companies with lab space to develop
their products.
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Councilmember Roy asked for clarification of the vision of the future campus and the public
improvements to be made near the Poudre River. Freeman stated the vision of the campus is a larger
master plan developed by the property owner with RM12 as part of the campus. The Inverness Park
Project will be on the north and south sides of Vine Drive. The RM12 project will be located on the
north side of Vine.
Councilmember Ohlson asked if any of the companies had moved their manufacturing processes
offshore and if there was any provision that would require manufacturing to be done locally. Forsyth
stated one company is looking to Mexico and Canada as possible manufacturing sites. The company
looked for local manufacturers that could produce what they needed,but they were unable to locate
any in this area.
Councilmember Ohlson asked what improvements are planned along the River. Freeman stated
some stormwater improvements will be constructed as part of the project. The building itself will
not be adjacent to the River.
Councilmember Ohlson asked if the design of the building could be changed. Forsyth stated the
drawings provided to Council were very preliminary and the final draft will probably look very
different.
Mayor Hutchinson asked for a summary of the risk assessment done by staff on this project.
Freeman stated the covenant with RM12 provides great protection for the City. The project will not
happen without the tax increment, which will be created by this project. The new market tax credits
lower the City's risk on this project because a private party is providing part of the loan. The project
meets all City investment criteria and was not given any special treatment. The City is protected by
the covenant and would acquire the property, should RM12 cease operations.
Councilmember Ohlson made a motion, seconded by Councilmember Troxell, to adopt Ordinance
No. 053, 2009 on First Reading.
Councilmember Ohlson stated providing support for RM12 enables local start-up companies to
succeed and provide jobs for this area. The project meets the goals outlined in the City's Economic
Plan.
Councilmember Roy stated companies will achieve success through this program. He asked the
RM12 Board consider endowments back to the community. He noted Freeman is a member of the
RM12 Board and he requested that future requests not include similar situations. Atteberry stated
he and Deputy City Manager Jones have previously served on the RM12 Board and this business
model works and is ethical. He will share more information with Council at a later time.
Councilmember Poppaw stated the project wil I generate high quality primary jobs in the community.
The project will help the redevelopment of North College.
Councilmember Troxell stated the project is important for the redevelopment of North College. The
project will develop a unique facility that serves a good purpose and is deserving of public support
for financing.
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Councilmember Kottwitz stated the project is a good example of encouraging partnerships,
innovation and investing in the future of Fort Collins.
Mayor Hutchinson stated the City's role in the economic health of the community is to act as a
catalyst to create an environment where entrepreneurs can succeed. This project accomplishes that
goal.
The vote on the motion was as follows: Yeas: Hutchinson, Kottwitz, Ohlson, Poppaw, Roy and
Troxell. Nays: none.
THE MOTION CARRIED.
Adjournment
The meeting adjourned at 8:05 p.m.
Mayor
ATTEST:
City Clerk
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May 19, 2009
COUNCIL OF THE CITY OF FORT COLLINS, COLORADO
Council-Manager Form of Government
Regular Meeting- 6:00 p.m.
A regular meeting of the Council of the City of Fort Collins was held on Tuesday, May 19, 2009,
at 6:00 p.m. in the Council Chambers of the City of Fort Collins City Hall. Roll Call was answered
by the following Councilmembers: Hutchinson, Kottwitz, Manvel, Ohlson, Poppaw, Roy, and
Troxell.
Staff Members Present: Atteberry, Harris, Daggett.
Citizen Participation
Thomas Edwards, l 101 South Bryan,stated police should enforce bicycling laws to protect bicyclists
and motorists.
Bruce Lockhart; 2500 East Hannony Road, opposed the establishment of a pilot trash district
because trash districting will cause the loss of jobs.
Katie Freudenthall, Director of Community Affairs, ASCSU, requested an enhancement of current
partnerships with CSU through the community liaison program as part of Budgeting for Outcomes.
Kathleen Bailey; Fort Collins resident, stated establishing a pilot trash service district will be too
costly and she urged Council to halt any trash districting.
Citizen Participation Follow-up
Councihnember Roy stated enforcement ofbicycling laws is important for the safety of the bicyclists
and for the City to achieve its goal of being a"bicycle friendly" city. He asked how the request for
an enhancement of partnerships with CSU would be submitted through the BFO process. City
Manager Atteberry stated the current liaison can submit an enhancement offer that would be
processed the same as other offers.
Mayor Hutchinson asked if the City shared the cost of a community liaison staff person with CSU.
City Manager Atteberry stated the cost is shared equally with CSU.
Councilmember Ohlson asked how many tickets have been written for bicycle violations for the last
3 years.
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Agenda Review
City Manager Atteberry stated there were no changes to the published agenda.
Bruce Lockhart, 2500 East Hannony, pulled Item #14 First Reading of Ordinance No. 059, 2009,
Authorizing the Acquisition by Eminent Domain Proceedings of Certain Lands Necessary to
Construct Public Improvements Related to the Mason Corridor Bus Rapid Transit Project (Phase
One).
Councilmember Ohlson stated he had a few questions about Item #15 Items Relating to Richards
Lake Substation Modifications, but he did not want to pull the item. He asked if this itern will
indirectly enable the Northern Integrated Supply Project(NISP)to proceed. Steve Catanach, Light
and Power Operations Manager, stated Poudre Valley REA is the beneficiary of the proposed
modifications to the Richards Lake Substation. The only link Poudre Valley REA has with the
Glade Reservoir/NISP project is an inquiry it sent asking if it would need to relocate a substation
located near the proposed site of Glade Reservoir. It is not involved in the NISP project in any way.
Mike Dahl,Platte River Power Authority,stated,if the NISP project is built, it could request service
from the appropriate electric supplier, who would be Poudre Valley REA. The interconnected
transmission system already exists in the area and could be used by the NISP project. The request
for modification to the Richards Lake Substation, made by Tri-State Generation and Transmission
Association, Inc. is made to provide greater reliability and is not connected with the NISP project,
but is solely to help improve the reliability of the Tri-State system in delivering electricity through
Poudre Valley REA to its customers in the Wellington,norther Larimer County and Foothills areas.
Councilmember Ohlson did not pull Item #15.
CONSENT CALENDAR
6. Consideration and Approval of the Minutes of the April 14, 2009 Special Meeting and the
April 21. 2009 Regular Meetiny-
7. Second Reading of Ordinance No. 047, 2009, Appropriating Unanticipated Revenue in the
General Fund for E91 I and Emergency Medical Dispatch Systems at the Poudre Emergency
Communications Center.
This Ordinance, unanimously adopted on First Reading on May 5, 2009, appropriates the
funds provided to Fort Collins Police Services by Larimer Emergency Telephone Authority
(LETA) to purchase equipment,train users and maintain equipment for emergency services
dispatching. The total amount to be appropriated is $50,935.
8. Second Reading of Ordinance No. 048, 2009, Appropriating Prior Year Reserves in the
General Fund From Police Seizure Activities for Police Services.
This Ordinance, unanimously adopted on First Reading on May 5, 2009,appropriates funds
to be used by Police Services to pay for training as well as to fund partnerships with
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May 19, 2009
community groups that seek to promote positive youth activities, anti-violence, anti-drug,
and diversity activities.
9. Items Relatiny,to the North College and East Willox Lane Capital Improvement Project.
A. Second Reading of Ordinance No. 049, 2009, Authorizing the Transfer of Existing
Appropriations from the Fort Collins Urban Renewal Authority Fund to the Capital
Projects Fund for the North College Avenue and East Willox Lane Improvement
Project.
B. Second Reading of Ordinance No. 050, 2009, Authorizing the Acquisition by
Eminent Domain Proceedings of Certain Lands Necessary to Construct Public
Improvements Related to the North College Avenue and East Willox Lane
Improvement Project.
Council has authorized the transfer of funds to the Fort Collins Urban Renewal Authority
(URA) for the purpose of providing a loan for the North College Marketplace Project,
located at the northeast corner of North College and East Willox. Ordinance No. 049, 2009,
appropriates funding from the URA into a Capital Projects account for the design and
construction of the improvements to North College and East Willox. Ordinance No. 050,
2009, authorizes the use of the City's eminent domain powers to acquire rights-of-way for
the project, if necessary. Both Ordinances were unanimously adopted on First Reading on
May 5, 2009.
10. First Reading_of Ordinance No. 054, 2009, Authorizing the Transfer of Existing
Appropriations from the Downtown Development Authority Fund to the Capital Project
Fund for the Building on Basics Pedestrian Plan Project, Linden Street Streetscape Project,
Phase I.
This Ordinance appropriates funding from the Downtown Development Authority (DDA)
into the project account for the Linden Street Streetscape project. This funding may be used
for any or all of the following phases of the project: design, engineering, right-of-way, and
construction for the segment of Linden Street from Jefferson Street/SH 14 north to the Poudre
River bridge. The City's matching funds are being provided by existing Building on Basics
Pedestrian Plan funds. In addition,CDOT has awarded the City$250,000 in funding for this
project to help the project achieve the improvements envisioned in the Downtown River
District Project approved by the City and DDA in 2008.
11. First Reading of Ordinance No.055,2009,Authorizing the Transfer of Appropriations from
the Downtown Development AuthorityFund to the Capital ProjectFund,Building ion Basics,
Intersection Improvements, Jefferson Street/SH 14 Project.
This Ordinance appropriates funding from the DDA into the project account for the
Alternatives Analysis study and recommended improvements to Jefferson Street/SH 14,from
North College Avenue to Mountain Avenue. The project includes the intersection of
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Jefferson, Riverside, Mountain, and Lincoln streets. Funding from the DDA may be used
for any or all of the following phases of the project: Alternatives Analysis study;
preliminary/final design, engineering, right-of-way, and construction. The City's matching
funds are being provided by existing Building on Basics intersection funds. In addition,the
Colorado Department of Transportation has awarded the City$1,000,000 in funding for this
project to help the project achieve the improvements envisioned in the Downtown River
District Project approved by the City and DDA in 2008.
12. Items Relating to Certain Utility Service Programs and Requirements.
A. First Reading of Ordinance No. 056, 2009,Amending Chapter 26, Article Vl, of the
City Code Relating to Certain Electric Service Programs and Requirements.
B. First Reading of Ordinance No. 057, 2009, Amending Chapter 26, Article III,
Division 6 of the City Code Relating to Water Conservation.
Revisions in the two proposed Ordinances are housekeeping changes to more closely align
Code requirements with current utility programs and practices. The changes outlined below
do not represent any change in policy or direction. There will be no increase or decrease
in customers' utility rates.
13. First Reading of Ordinance No. 058, 2009, Authorizing the Lease of the Collindale Golf
Course Residence at 1341 East Horsetooth Road for Up to Five Years.
The residence at the Collindale Golf Course was built in 1970, the same year the golf course
was constructed. The original use of the residence was for housing the Golf Course
Superintendent until 1997. Since that time, the residence has been rented to various golf-
related individuals. This action will approve a one year lease, with the City having the
option to renew the lease for additional one-year terns,up to five years. The leasing of the
Property is beneficial in that it will discourage vandalism and reduce the City's costs by
having the Tenant pay for the utilities.
14. First Reading of Ordinance No.059,2009,Authorizing the Acquisition by Eminent Domain
Proceedings of Certain Lands Necessary to Construct Public Improvements Related to the
Mason Corridor Bus Rapid Transit Project (Phase One).
The Mason Express ("MAX'), bus rapid transit project is entering into the right-of-way
acquisition phase of the project. Project acquisitions have been broken into three phases.
This Ordinance relates to Phase 1 and consists of seven distinct property ownerships. As a
critical, federally funded transportation project, City staff requests authorization to utilize
eminent domain, if necessary, and only if good faith negotiations break down, in order to
ensure a timely acquisition of the necessary property interests.
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15. Items Relating, to Richards Lake Substation Modifications.
A. Resolution 2009-047 Authorizing the City Manager to Execute a License Agreement
with Platte River Power Authority.
B. First Reading of Ordinance No. 060, 2009, Authorizing the Conveyance of a Utility
Easement to Tri-State Generation and Transmission Association, Inc.
Tri-State Generation and Transmission Association, Inc. ('Tri-State') has requested a
connection for transmission facilities between Platte River's transmission system and Tri-
State. To facilitate this connection, two new breakers and associated equipment must be
installed in the City's Richards Lake Substation. In order for this connection to occur, the
City must grant Platte River a License to install facilities that are not specifically designated
to provide service to the City and must grant Tri-State an easement to cross the substation
property with its connection.
16. Resolution 2009-048 Adopting the Recommendations of the Cultural Resources Board
Regarding Fort Fund Disbursements.
The Cultural Development and Programming and Tourism Programming accounts (Fort
Fund) provide grants to fund community events. This Resolution adopts the
recommendations from the Cultural Resources Board to disburse these funds.
***END CONSENT***
Ordinances on Second Reading were read by title by Chief Deputy City Clerk Harris.
7. Second Reading of Ordinance No. 047, 2009, Appropriating Unanticipated Revenue in the
General Fund for E91 1 and Emergency Medical Dispatch Systems at the Poudre Emergency
Communications Center.
8. Second Reading of Ordinance No. 048, 2009, Appropriating Prior Year Reserves in the
General Fund From Police Seizure Activities for Police Services.
9. Items Relating to the North College and East Willox Lane Capital Improvement Project.
A. Second Reading of Ordinance No. 049, 2009, Authorizing the Transfer of Existing
Appropriations from the Fort Collins Urban Renewal Authority Fund to the Capital
Projects Fund for the North College Avenue and East Willox Lane Improvement
Project.
B. Second Reading of Ordinance No. 050, 2009, Authorizing the Acquisition by
Eminent Domain Proceedings of Certain Lands Necessary to Construct Public
Improvements Related to the North College Avenue and East Willox Lane
Improvement Project.
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May 19, 2009
22. Second Reading of Ordinance No. 051, 2009, Amending the City Code Relating to
Enforcement of Occupancy Limits.
23. Second Reading of Ordinance No. 052, 2009, Amending Section 12-19 and Article XV of
Chapter 15 of the City Code Relating to Trash Collection.
Ordinances on First Reading were read by title by Chief Deputy City Clerk Harris.
10. First Reading of Ordinance No. 054, 2009, Authorizing the Transfer of Existing
Appropriations from the Downtown Development Authority Fund to the Capital Project
Fund for the Building on Basics Pedestrian Plan Project, Linden Street Streetscape Project,
Phase I.
11. First Reading of Ordinance No. 055,2009,Authorizing the Transfer of Appropriations from
the Downtown Development Authority Fund to the Capital Project Fund,Building on Basics,
Intersection Improvements, Jefferson Street/SH14 Project.
12. Items Relating to Certain Utility Service Programs and Requirements.
A. First Reading of Ordinance No. 056, 2009, Amending Chapter 26, Article VI,of the
City Code Relating to Certain Electric Service Programs and Requirements.
B. First Reading of Ordinance No. 057, 2009, Amending Chapter 26, Article III,
Division 6 of the City Code Relating to Water Conservation.
13. First Reading of Ordinance No. 058, 2009, Authorizing the Lease of the Collindale Golf
Course Residence at 1341 East Horsetooth Road for Up to Five Years.
14. First Reading of Ordinance No.059,2009,Authorizing the Acquisition by Eminent Domain
Proceedings of Certain Lands Necessary to Construct Public Improvements Related to the
Mason Corridor Bus Rapid Transit Project (Phase One).
15. First Reading of Ordinance No. 060, 2009, Authorizing the Conveyance of a Utility
Easement to Tri-State Generation and Transmission Association, Inc.
20. First Reading of OrdinanceNo.061,2009,Amending Chapter 26 Article VIof tile City Code
Relating to the Provision of Electric Service.
21. First Reading of Ordinance No. 062, 2009, Amending Chapter 26, Article VI of the City
Code Relating to Net Metered Electric Service.
Councilmember Manvel made a motion, seconded by Councilmember Roy, to adopt and approve
all items not withdrawn from the Consent Calendar.
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Councilmember Ohlson asked for pulled Item#14 to be considered at this time. The Mayor allowed
discussion of this item.
Ordinance No. 059, 2009,
Authorizing the Acquisition by Eminent Domain Proceedings of Certain Lands
Necessary to Construct Public Improvements Related to the Mason Corridor
Bus Rapid Transit Project (Phase One), Adopted on First Reading
The following is staffs memorandum for this item.
"FINANCIAL IMPACT
Property acquisition costs will be covered by available project funds, whether or not eminent
domain is required.
EXECUTIVE SUMMARY
TheMason Express("MAX'), bits rapid transit project is entering into the right-of--way acquisition
phase of the project. Project acquisitions have been broken into three phases. This Ordinance
relates to Phase 1 and consists ofseven distinct property ownerships. As a critical,.federally,funded
transportation project, City staffrequests authorization to utilize eminent domain, ifnecessary, and
only ifgood faith negotiations break down, in order to ensure a timely acquisition of the necessary
property interests.
BACKGROUND
The Mason Corridor bus rapid transit project, branded Mason Express or "MAX", is a jive mile,
north-south byway which extends.front Cherry Street on the north, to south ofHarmony Road(the
site of the new South Transit Center). MAX will link major destinations and activity centers along
the City's primary transportation and commercial corridor including, "Old Town", Colorado State
University, Foothills Mall, and South College retail areas. In addition to greatly enhancing the
City's north-south transportation movement, MAX will be a significant catalyst for economic
growth, both as a short-term stimulus and as a long-term development/re-development driver. The
City is targeting a 2011 Fall operation date.for the corridor.
The project is predominately located within the outside twenty-five.feet of the east half of the
Burlington Northern Santa Fe Railway (the "BSNF)property, however, overall project right-of-
way will consist of a combination of property owned by the BNSF, Colorado State University,
private land owners, and the City. At present, in addition to the BNSF, Colorado State University,
the Colorado State University Research Foundation, and several ditch companies, the project will
involve property acgttisition,fr-om forty-two distinct property owners. Each acquisition is unique,
but the typical acquisition need for Phase 1 of the Project can be characterized as a ten foot
permanent easement and a thirty to ji f y.foot temporary construction easement along the rear of the
property. Fee simple ownership is also needed in a variety of locations to accommodate stations,
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utilities and other ancillmy project improvements. City staff has taken great effort to minimize
impacts to property owners, and will continue to do so as the project progresses.
To accommodate work/low and timing,property acquisitions have been broken into three phases.
Phase I consists ofseven distinct property ownerships (see attached location map). The remaining
property ownerships will be divided between Phases 2 and 3, and will come as separate agenda
items in the coming months.
In addition to hosting a number ofpublicforums on various aspects ofthe project, City staffhas had
initial communications with all the property owners along the corridor. Additionally, staff has had
detailed communications with the seven ownerships in Phase 1. Furthermore, the Phase I
ownerships have also been notified by certified mail ofstaff's intention to request authorization to
use eminent domain, if necessary, to acquire project property interests.
In all communications staff
strongly emphasizes the City's desire to cooperatively work towards
achieving a voluntary agreement.
To ensure the integrity of the project schedaale, maintain certain project eff ciencies and to remain
a viable Federal Transit Administration faanded project, it is critical that the City have the ability
to acquire the property interests in a timely manner. In addition, since this is a federally funded
project, Council must authorize eminent domain (if necessary) before appraisals and negotiations
can take place. Staff has a high degree of respect and understcntding for the sensitivity of the
process and commits to utilizing the option only if absolutely necessary and only ifgood.laith
negotiations are not successful. "
Bruce Lockhart,2500 East Harmony,stated the use of eminent domain should not be authorized and
he asked if any follow-up reports would be provided to Council to provide oversight. He did not
support the use of any funds for the Mason Corridor Project.
City Manager Atteberry stated authorizing the use of eminent domain is a standard operating
procedure for most capital projects done by the City, but is rarely used.
Counci Im ember Troxel I asked for an explanation of the use of eminent domain. Helen Matson,Real
Estate Services Manager, stated the project is a federally funded project and federal requirements
state the use of eminent domain must be authorized prior to an appraiser examining the site. A
notice of interest letter will be sent to each property owner that includes information about eminent
domain and the property owner's right to get their own appraisal. Before the letter can be sent,
Council must authorize the use of eminent domain, if needed. City Manager Atteberry noted
Council will be notified in an executive session before any eminent domain proceedings are started.
Mayor Hutchinson noted Mr. Lockhart's comments would have been appropriate for Citizen
Participation and he asked if Councilmembers Manvel and Roy would accept a friendly amendment
to the motion that would move Item#14 back onto the Consent Calendar. Councilmembers Manvel
and Roy accepted the friendly amendment.
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The vote on the motion to adopt the Consent Calendar was as follows: Yeas: Hutchinson,Kottwitz,
Manvel, Ohlson, Poppaw, Roy and Troxell. Nays: none.
THE MOTION CARRIED.
Staff Reports
City Manager Atteberry congratulated the staff in the City's Cultural, Parks, Recreation and
Environment service area for being named a finalist for the 2009 National Gold Medal Award for
Excellence in Park and Recreation Management.
City Manager Atteberry stated the CSU community liaison launched the Party Warning Program
several weeks earlier, in cooperation with CSU police and Fort Collins Police Services. The pilot
program ran from April 17 through May 17. CSU students living off-campus were given the
opportunity to register parties and received educational materials about partying safely. Seventy-six
parties were registered and seven of those parties received complaints,with only one citation issued,
while a total of 127 noise complaints were received throughout the city during the same time period.
Kathleen Bracke,Transportation Planning Director,stated the conversion of Mason and Howes into
two-way streets is an important milestone for the Mason Corridor Project. Staff has provided
considerable outreach to the downtown businesses and the community about the conversion as part
of the first phase of the Mason BRT project. The conversion project is a signing and striping project
to convert Mason and Howes streets back to two-way traffic. The conversion is necessary to keep
the BRT vehicles moving efficiently along the Corridor. Steve McQuilken,Mason Corridor Project
Manager, stated the conversion work will begin on June 8 on North Howes Street and is scheduled
to be completed by the end of June. The Mason Street conversion will probably begin in August.
The conversion will not remove any parking spaces from Howes Street and will affect only a few
parking spaces on Mason Street.
Councilmember Manvel asked for a profile of Mason Street and how it will look with bike lanes,
driving lanes, bus lanes and outdoor seating areas. Bracke stated the design drawings will be
provided to Council.
Councilmember Roy noted the two-way street conversion will also encourage two-way bicycle
traffic.
Councilmember Reports
Councilmember Poppaw held a District meeting about saving through sustainability. The Larimer
Emergency Telephone Authority(LETA)system was used to send a recorded message to the citizens
of her District to announce the meeting. The LETA system includes a non-emergency component
that is available to all the partner agencies at no cost.
Councilmember Manvel attended a Livable Cities conference in Oregon which promoted a
sustainable system to build a city.
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Councilmember Ohlson stated the Downtown Development Authority has committed another $2
million to the Museum/Discovery Center project.
Mayor Hutchinson stated Platte River Power Authority held a Boardmember retreat to discuss the
Climate Action Plan for Platte River.
Ordinance No. 061, 2009,
Amending Chapter 26 Article VI of the City Code Relating to
the Provision of Electric Service, Adopted on First Reading
The following is staffs memorandum for this item.
"EXECUTIVE SUMMARY
The proposed Code change has been drafted to clarify that the City is the sole provider of retail
electric service with the City. The revised Code has been drafted with the goal of addressing three
key issues. The first is the establishment of service territory protections similar to those afforded
investor owned utilities, rural electric associations and other municipal utilities throughout the
State. The second goal is to align service area definitions with bond holder expectations. The third
goal is to support the development ofrenewable generation projects, including those owned by third-
party entrepreneurs selling electricity at retail within City limits, provided certain conditions are
met.
BACKGROUND
Staff had three specific goals in the development of the proposed code change. The first was to
provide the same level of service area protection as that provided to utilities regulated by the
Colorado Public Utilities Commission. The following details the reasons considered in the
development of the first goal.
In 2007, a customer in the City ofLongmont started to evaluate a potential arrangement with a third
party solar developer. Under the proposed business model the developer would install and own the
solar generation plant and would sell the energy to the customer at a negotiated rate. Upon review
it was revealed that the City of Longmont's service territoy code did not clearly prohibit this type
ofarrangement, although Colorado statutes would have prohibited this arrangement ifit had been
proposed in the service territory of an investor-owned utility or rural electric association.
Subsequently, the City ofLongmont City Code was amended to provideprotections identical to those
in Colorado statute.
Rather than oppose the solar development, Platte River and the City of Longmont of to enter
into a buy-sell agreement with the developer in order to support the customer. The development did
not advance for unrelated economic reasons.
After becoming aware of the situation in Longmont, the City of Fort Collins examined its existing
service area ordinances. It was discovered that the existing City Code did not expressly prohibit
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"behind the.fence"competitors from selling electric service to customers if there is no need to cross
over City right-of-ivay or other City property. The potential loss of large customers could adversely
affect both Platte River and the City. The knowledge that this risk exists required that the risk be
reported to bond holders.
The current City code states:
Sec. 26-441. Franchise required.
"Except as otherwise provided herein, it shall be umlawftd to fin-nish or offer to
farrnish to cmy property in the City any electrical service transmitted through wires
installed or maintained in, on, under or over any street, alley, sidewalk, easement or
other public place in the City unless the City Council has, by ordinance, granted a
franchise allowing such service.Any such franchise shall comply with all provisions
of the Charter and shall specify the area of the City in which such service is
permitted.
The current Code makes it unlatilful to provide electrical service to anyproperty in the City through
wires or equipment in any public right-of--way without a franchise agreement with the City. The
Code does not specifically address service.from another entity, only that service cannot be provided
by facilities on public property.
The existing Code would also allow third party generation developers to install on-site generation
without interaction or coordination with the City, unless they wished to interconnect with the City's
system.
The proposed ordinance clearly states that no other entity can provide electric service to customers
within City limits except under specific conditions that are designed to advance the installation and
development of renewable resources and to ensure continued reliability of the Fort Collins electric
system.
The second stated goal is to bring the Fort Collins Code into line with Platte River bond holder
expectations. Previous bond purchasers had the expectation that no retail competition existed in
the areas served by the Platte River member cities. The discovery of the potential for retail
competition under the current Code requires disclosure of this information to the bond holders, if
not remedied.
The issue was also brought to the attention of the bond rating agencies and potential buyers during
Platte River's recent bond issc tat?ce in March of 2009. The Bond Issue Book detailing Platte River's
offering included the following disclosure.-
"In 2008 Fort Collins became aware that a possible loophole existed in its service
territory protection code provision. Under the current language of this code
provision it may be possible for a competitive provider to site a generator on the
property ofa municipal customer and provide retail electric service to that customer
provided the.facilities of the competitive provider do not cross municipal streets and
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rights-of-ivay. An amended code provision will be considered by the governing body
of Fort Collins in early 2009."
Although this issue did not have a negative impact on Platte River's recent bond issuance, the
concerns expressed during presentations to the City, the Electric Board and the Natural Resource
Advisory Board were legitimate concerns that needed to be disclosed in the discussion.
As noted, the third goal in developing the proposed code change is to provide support for the
development of renewable generation within the City.
Under the proposed Code change, there is no restriction on the ability of a customer to develop any
level ofgeneration for the customer's own use off grid.
Customers may also install generation for their use and tenants'use on their own property. This
scenario may fall under the Public Utilities Commission rules on master metering. The master
metering rules provide protection to consumers that are sub-metered. The rules insure that the
landlord(or master meter operator)does not add additional charges or increase the cost of energy
to the tenant.
With the proposed Code change, customers may also install generation for their own use and cross
City right-of-way, if approved by City Council through a revocable permit. An example of a
potential situation where this applies is at CSU. CSU is currently developing a new parking
structure on Prospect Avenue. The structure is separated fYom campus by Lake Street, a public
right-of way. CSU intends to install a solar array on the roof of this structure. The current Code
would either require CSU to apply.for a franchise in order to cross the right-of-way or require the
City to abandon the street and turn it over to CSU. The proposed ordinance will allow Council to
grant a permit to CSU to allow the interconnection of its array with the campus electrical system.
The proposed change will also allow the retail sale of energy to a City customer fi-om a qualifying
renewable resource by a third party entity provided certain conditions are met. The high initial
capital cost of installing a photovoltaic system can make it difficult for either a homeowner or a
business to install a system. Several companies offer third party turn key financing and installation
for customers that enter into long term power purchase contracts. The proposed ordinance will
allow thirdparty generators to install systems up to 10 kW for residential customers and 1,000 kW
for commercial customers. Above 1,000 kW the proposed Code change requires Platte River, the
City, the third parry generator and the customer to enter into a buy sell agreement within which
Platte River will commit to the purchase of the energy generated by the third parry for resale to the
City and then to the customer at the price agreed upon between the third parry generator and the
customer. This allows Platte River to stay within the chain of title of the energy and to remain as
the sole provider of energy to the City for levels greater than those established in this ordinance.if
the ordinance is approved on First Reading,staffwill bringforward a third parry service agreement
for Council consideration on June 2.
Utilities currently remit in lieu oftaxesandfranchise_fees6%ofthe revenues collected. Discussions
with the Electric Board and Natural Resource Advisory Board related to the collection of Payments
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in Lieu of Taxes (PILOTs).from an entity selling energy at the retail level received two different
recommendations. The Electric Board recommends the City waive the collection of PILOTS to
insure that the City is providing the maximum incentive towards the installation of renewable
resources. The Natural Resources Advisory Board recommends the City collect PILOTS.for retail
energy sales. Collection of PILOTs would protect funds currently collected by the City's General
Fund. Staff also recommends that any entity operating as a retail provider within the City pay
PILOTs. The impact on General Fund revenues.for a residential installation would amount to
approximately S0.004 per kilowatt hour. This would amount to$13.53 per yearfo•a residence with
a 2.5 kWsystem. It is more difficult to predict what the actual financial impact would be ifPILOTs
were waived.for commercial installations because of the variables involved in peak demand and
coincident demand billing. Modeling of a 1,000 kW system for- one of the City's large industrial
customers indicates that the annual PILOTS lost world be $8,600 per year. "
Steve Catanach, Light and Power Operations Manager,stated the proposed Code changes define the
City of Fort Collins Light and Power Utility as the sole provider of electric service within city limits.
The changes also bring the Code in line with bondholder expectations and to support the installation
of renewable generation, including generation owned by a third party selling electricity at retail in
the city limits. The current Code requires any electric or service provider crossing a publicly-owned
right-of-way to obtain a franchise agreement from the City. The proposed Code language will align
the Code language with language used by other utilities across the state. The proposed Code change
will not affect any customers installing renewables off grid,installing renewables from their own use
or customer generators that supply renewable energy to a tenant on their property or adjacent
properties. The Code change will allow a revocable permit to be granted to a customer who provides
renewable energy across a right-of-way. Another proposed Code change will allow a third party
renewable generator to sell electricity at retail within the City's service territory. Residential
customers will be allowed to install generators on their homes up to 10 kW. Commercial customers
will be allowed to generate up to 1000 kW.
Eric Sutherland, 631 LaPorte Avenue, stated the Code change that defines Fort Collins Light and
Power Utility as the sole provider of electric service within city limits is not necessary because the
City Charter already grants the City that right. He urged Council not to adopt the Ordinance.
Phil Friedman,201 South Grant,stated the Ordinance takes a prudent approach to address issues that
might be forthcoming with additional small scale distributive generation. The payments in-lieu of
taxes should not be suspended from third party purchase agreements.
Bruce Lockhart,2500 East Harmony,stated allowing different providers of electricity in one market
would reduce the cost of energy through competition. He urged Council not to adopt the Ordinance.
Councilmember Ohlson asked for clarification of the recommendations from the Electric Board and
the Natural Resources Advisory Board. The minutes provided from the Boards do not clearly state
the vote of the Boards.
Councilmember Ohlson asked why the issue of bondholder expectations was raised because the
Platte River bonds sold very quickly without the Code change in place. Catanach stated the issue
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of retail competition that did exist in the areas served by the Platte River member cities was raised
before the bonds were sold.The issue did not affect the sale of the bonds,but the potential for retail
competition under the current Code requires disclosure of this information to the bondholders and
needs to be corrected. Brian Moeck, Platte River Power Authority General Manager, stated a
loophole exists in the current Code that does allow retail competition, under some circumstances.
Platte River has an all-requirements contract with the City. Platte River did disclose the issue to
potential bondholders and stated the issue was being addressed by the City. The bonds did sell
rapidly for many reasons but continuing to allow retail competition could affect future bond ratings.
Councilmember Roy asked if allowing retail competition would create a more competitive
environment with the use of new energy technologies and make the bonds more attractive. Moeck
stated having a retail competition could adversely affect the bond rating of Platte River. Retail
competition in other states, such as Texas, has not brought about lower costs and has brought about
many regulatory problems.
Mayor Hutchinson asked if adopting the Code change that states the City's Light and Power Utility
will be the sole provider of electric service within city limits will have any adverse effects. Moeck
stated he did not foresee any adverse effects.
Councilmember Ohlson asked Mr. Sutherland for an explanation of his concerns about the proposed
Code changes. Mr. Sutherland stated State law and the City's Charter already give an iron-clad
monopoly for the City Utility to offer electric service to its customers. The only issue that needs to
be resolved is creation of regulations that allow distributed energy generation to thrive in Fort
Collins. The proposed regulations are not the best model for the City to follow. He has spoken with
the bond rating company and was told the issue of retail competition would not affect the bond
ratings, so Council did not need to consider that change.
Councilmember Ohlson asked for staffs opinion on whether the City's Charter already gives the
City a monopoly. Carrie Daggett, Deputy City Attorney, stated the City has very broad power and
the Charter does give the City much authority to control the activities of persons who are crossing
City rights-of-way. The Public Utilities Commission also certifies public utilities. There is a
category of provider that operates not as a public utility but as a contract utility provider, not
providing service to the general public, but to selected customers on a contract basis. Potential
circumstances exist where such a utility provider could provide service to a large customer without
crossing City right-of-way. The proposed Code change is intended to ensure an opening is not left
for those kinds of services to be created without any City role in regulating and addressing
interconnection with the City's system.
Councilmember Troxell suggested the word "renewable" be removed from the second Whereas
clause so that it reads: "... are appearing in the energy market' to reflect the total energy market.
Councilmember Troxell stated the Ordinance provides for distributed generation and allows
renewable energy development within the city. He asked how the Utility will manage the generation
systems that will appear in neighborhoods and at what point the numbers of generators will impact
the entire system. Catanach stated the Utility is already developing a model to determine the impact
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of renewable generators on the system. In a neighborhood, several houses generating at maximum
capacity could overtax the transformer for that area. Staff is working with a consultant to identify
saturation levels and will review the Code as technologies change and the levels of distributed energy
increase.
Councilmember Troxell asked for clarification of the definition of"High voltage transmission" in
Section 7 of the Ordinance. Catanach stated the definition is a modified version of an older
definition that used the word "impulses." Division 2 has been clarified to show it relates to high
voltage transmission facilities.
Councilmember Troxell stated the City has a policy of undergrounding electric cables and he asked
if the Ordinance will allow any above-ground poles and wires. Catanach stated some areas that are
annexed into the city have above ground utilities already in place. Utilities has the goal of
undergrounding those cables, but it takes time to allocate the funding needed to do the
undergrounding.
Councilmember Roy asked for an estimate of the amount of payment in-lieu of taxes(PILOTs)that
would be waived over a two-year period. Catanach stated a few hundred dollars would have been
waived from the systems already in place. In the future, the impact to the General Fund could be
several thousand dollars as systems expand. Staff recommends collection of payment in-lieu of
taxes.
Councilmember Roy asked if the cost of photovoltaic will decrease as more systems are installed.
Catanach stated breakthroughs in photovoltaic technology will decrease the cost and increase the
production capacity. Review of the Ordinance periodically to address the impact of new
technologies on the City's system will be important.
Councilmember Ohlson asked if the Ordinance has been reviewed by any consultant. Catanach
stated no consultant has been involved.
Councilmember Roy asked if the member cities of Platte River were also considering similar
ordinances and if the member cities were home ruled. Catanach stated Longmont has already taken
action to ensure they are sole providers. The proposed changes have been discussed with the Platte
River Board of Directors. Additionally,Platter River has made decisions in support of the Ordinance
such as removing themselves from the need of any buy-sell agreement up to 1000 kW of production.
Those decisions apply to the other member cities, as well. Jenny Lopez-Filkins, Assistant City
Attorney,stated the member cities are home ruled and each member municipality has ordinances that
clearly set service territories. Daggett stated Estes Park is not a home rule town. Loveland has
language that addresses service areas in its Code.
Councilmember Troxell made a motion, seconded by Councilmember Manvel, to adopt Ordinance
No. 061, 2009 on First Reading with an amendment that removes the word "renewable" from the
second Whereas clause.
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Councilmember Roy asked for the addition of PILOTS to the ordinance. Catanach stated the
ordinance will allow the Utility to charge PILOTS or the equivalent sales or use tax through third
party retail sales. Daggett stated the requirement for PILOTs is in a different section of Chapter 26
of City Code and applies to all charges to electric customers. Catanach stated a third party generator
would be selling electricity to the customer that would be offsetting the energy delivered by the City
of Fort Collins to that customer. Staff recommends charges tax on the electricity sales of the third
party generator. The Electric Board recommended not collecting PILOTS. The Natural Resources
Advisory Board and staff recommend collection of PILOTs, so no change is needed to the section
in Chapter 26 that discusses PILOTS.
The vote on the motion was as follows:Yeas: Hutchinson,Kottwitz, Manvel,Ohlson,Poppaw,Roy
and Troxell. Nays: none.
THE MOTION CARRIED.
("Secretary's note: The Council took a brief recess at this point in the meeting.)
Ordinance No. 062, 2009,
Amending Chapter 26, Article VI of the City Code Relating
to Net Metered Electric Service. Adopted on First Reading
The following is staffs memorandum for this item.
"EXECUTIVE SUMMARY
The proposed addition to Chapter 26,Article VI the City Code defines the net metering requirements
for qualifying renewable generation facilities. In light of recent technological and legislative
developments, the City of Fort Collins intends io formalize its net metering-program. Pursuant to
a pilot program, the City of Fort Collins has offered net metering services to its customers since
2005 through special services contracts. The intent ofthis amendment to the City Code is to codify
the net metering rate in the Utility's existing rates.
BACKGROUND
Over the course ofsevera lyears, styffhas developed a net meteringprogram to establish a standard
approach to allow customers to generate renewable energy and use that energy to reduce energy
purchased from the City. A pilot program was established in 2005 and the City currently has 32
participating customers.
Net metering is defined as provision of service to a customer that has a qualifying renewable
generation resource where the energy generated by that customer that is delivered to the local
electric distribution grid is used to offset energy provided by the electric distribution utility to that
customer over a defined period of time.
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The solid line in the graph represents a residential customer's annual electrical consumption. The
dashed line represents generation .from a 5 kilowatt solar array and the dashed-dotted line
represents the net energy delivered to the customer or back to the utility over the course of the year.
Under a net metering service rate the customer's generation would directly offset their usage
between monthly billing cycles. Any excess generation delivered back to the utility will be credited
to the customer and applied towards subsequent bills. For example, the customer above generated
excess energy in March, April, May, June and October. The excess energy generated will be
credited towards the usage amount shown on the customer's bills in subsequent months, effectively
reducing subsequent utility bills. At the end of the year, should the customer have generated more
energy than they received, the utility will buy back the excess energy.
Table 1. —Sample net metering service for a residential customer with 5 kW qualifying system
Month Bill kWh Use kWh Gen Net New Bill
Jan $ 52.53 748 562 186 $ 16.01
Feb $ 55.59 795 561 234 $ 19.14
Mar $ 45.43 639 656 (17) $ 3.91
Apr $ 40.17 558 643 (85) $ 3.91
May $ 37.95 524 669 (145) $ 3.91
Jun $ 43.79 614 666 (52) $ 3.91
Jul $ 55.69 797 672 - $ 3.91
Aug $ 59.00 848 685 - $ 3.91
Sep $ 52.08 741 649 81 $ 9.17
Oct $ 40.22 559 640 (81) $ 3.91
Nov $ 42.82 599 508 10 $ 4.55
Dec 1 $ 53.01 1 756 1 531 1 225 1 $ 18.51
Totals 1 $ 578.27 1 8,177 1 7,442 1 735 1 $ 94.74
Table 1 is an example of how the customer with a 5 kilowatt system would have been billed during
the year. As noted, the customer was a net generator between March and June which offset
purchases during July and August. In October, the customer generated 81 kilowatts-hours which
offset all but 10 kilowatt-hours in November. The$3.91 charge shown during months where energy
was either negative or _ero is the Fort Collins Utilities standard fixed charge, which covers a
portion of the costs incurred thorough meter reading, customer service and billing,faenctions. The
Service Charge is levied whether any energy is consumed or not.
If the modeled customer had been a net generator over the course of the year as shown in Table 2,
which models installation of a 7 kilowatt system.for the same customer, then the Utility would have
"balanced the books" at the end of the year and paid the customer for the excess energy at a rate
per kilowatt hour consistent with the energy rate paid by that customer.
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Table 2. - Sample net metering service ./or a residential customer with 7 kW
qualifying system
Month Bill kWh Use kWh Gen Net New Bill
Jan $ 52.53 748 756 8 $ 3.91
Feb $ 55.59 795 715 80 $ 9.13
Mar $ 45.43 639 889 250 $ 3.91
Apr $ 40.17 558 849 291 $ 3.91
May $ 37.95 524 885 361 $ 3.91
Jun $ 43.79 614 883 269 $ 3.91
Jul $ 55.69 797 898 101 $ 3.91
Aug $ 59.00 848 903 (55) $ 3.91
Sep $ 52.08 741 871 130 $ 3.91
Oct $ 40.22 1 559 1 848 289 $ 3.91
Nov $ 42.82 599 686 87) $ 3.91
Dec $ 53.01 756 710 - $ 3.91
Totals $ 578.27 8,177 9,893 (1,716) 52.14
Under the State's net metering statute, regulated utilities are required to buy back excessgeneration
at the end of the year at the average incremental cost. This is equivalent to the Platte River
wholesale rate of 50.0177 per kilowatt-hour. The statute states that municipally owned utilities
"shall credit excess generation to the customer-generator in a manner deemed appropriate by the
municipally owned utility." In order to provide a strong incentive to help facilitate the installation
and development of reneivable resources, the Electric Board, Natural Resources Advisory Board
and staffrecommend that the Cirypurchase the excess energygenerated at the retail energy ratefor
the specific customers rate class. In the example above, the customer is billed under the Residential
energy rate. The rate has a$3.91 fixed charge and a$0.06498per kilowatt-hour charge. At the end
of the annual billing period the 1,716 kilowatt-hours of excess energy generated by the customer
would have been purchased for $111.51. Please note that in the examples above, the more
signi ficant savings realized by the customer is through the offset energy not used over the course of
the year, not the realized gain at the end of the year.
A State statute requires utilities to provide net metering up to 10 kilowatts.for residential and 25
kilowatts for commercial/industrial customers. The Electric Board, Natural Resources Advisory
Board and staffrecommend that the City establish a level of 1 megawatt (1,000 kilowatts) as the
adopted maximum. Above 1,000 kilowatts net metering may still apply, but will have to be discussed
with the customer in association with Platte River's Tariff 3. Tariff 3 addresses generation above
1,000 kilowatts and the potential need.for ancillary services such as back-up capacity, metering
system protection, operational coordination, voltage support and reporting must be addressed. An
installation above 1,000 kilowatts will not necessarily be excluded from net metering but additional
coordination must be addressed.
The Cities ofLongnnont and Loveland have both adopted rates that provide net metering up to 50
kilowatts. Longmont purchases the excess generation at the customer's retail rate and Loveland
purchases it at its avoided cost of$0.021 per kilo watt-houur. The Town of Estes Park has adopted
10 kW for residential and 25 kW for commercial customers, as established in the State legislation.
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Estes Park buys back the excess generation at the end of the year for its avoided cost of S0.021 pet-
kilo watt-hour.
During the January 13, 2009 work session, Council asked what other utilities are doing in support
ofreneivable generation development including net metering, excess generation purchases, rebates
and REC purchases. The attached map (Attachment 1) indicates which states have adopted net
metering requirements, which states have voluntaryprograms and which states have no net metering
policy. As seen, 40 states and Washington DC have adopted a net metering policy. The limits
established vary widely. The lowest limits shown on the map are those legislated by Colorado for
municipalities and cooperatives. The largest levels are those states that have no established
maximum. The attached table (Attachment 2) provides additional detail on each of the state
programs along with monthly and annual compensation. As shown, the level of reimbursement./or
excess energy generated varies widely. Some states buy back at retail levels, other at the avoided
generation costs and others do not purchase excess energy at the end of the year but instead simply
reset the level to zero.
Attachment 3 is a list of the incentives for renewables and energy efficiency programs offered by
utilities, municipalities, and private entities within the State of Colorado. The information was
found at 1vwiv.dsireusa.org, which provides an extensive database of federal, state and local
incentives for renewables and efficiency. Programs offered both throughout the state and the nation
vary widely.
The net metering statute also requires municipalities to adopt and post interconnection standards
that are functionally similar to those adopted by the Public Utilities Commission. The City's
Interconnection requirements were developed utilizing the International Electronic and Electrical
Engineers(IEEE)standard 1547, approved in June 2003, as a model. The PUC regrrirennerrts 1a,en-e
also developed utilizing IEEE 1547. Additionally, Utility engineers are currently working with Dr.
Keith Malmedal and Dr. P.K. Sen of NEI Inc. to revise the Utilities existing interconnection
standards. This work will also include an analysis of the level of risk different sizes and types of
installations pose to the operations of neighboring customers and the type ofprotection that should
be provided to insure that there is no negative impact to those customers.
Staff, the Electric Board, and the Natural Resources Advisory Board believe that the above
recommendations provide a strong incentive./or the installation and development of renewable
resources within the City. It is also recommend that the net metering rate either have a sunset
provision or a requirement that the rate is re-evaluated in the nest three years or sooner. If
renewable resources installations are widespread throughout the system, then it is prudent to
evaluate both the financial and operational impact these systems are having on the City.
Additionally, changes in the equipment and technology available, the incentives provided byfederal,
state and local entities could change significantly in the next three to.five years making review
prudent. "
Steve Catanach, Light and Power Operations Manager, stated net metering will allow a customer
generate energy and any excess energy produced will be added to the City's system and the customer
will receive a credit for the excess energy. The credit is carried forward month by month. The
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customer's account is reviewed once a year to"zero out"the account. If the customer has generated
more energy than he has used, the Utility will purchase the electricity. The recommendation from
the Natural Resources Advisory Board and the Electric Board is to purchase excess energy produced
at retail rate of the customer and to support net metering for systems up to 1000 M.
Eric Sutherland, 631 LaPorte, stated State law requires all service territories over 5000 metered
customers to provide net metering. Fort Collins is the last service territory in the State to adopt net
metering. He believed the cap of 1000 kW was too high and should be set at a level adjusted for
each system.
Phil Friedman, 201 South Grant, stated the growth of photo-voltaic systems on rooftops will not
increase at a rapid pace in the current economic times but it is important to set a net metering policy
now.
Bruce Lockhart, 2500 East Harmony, opposed the adoption of the Ordinance because the energy
produced by net metering would be unstable and would adversely affect the electric grid.
Councilmember Kottwitz asked for more information about the cap on net metering systems of 1000
kW and if the energy from photo voltaic systems would be unreliable. Catanach stated the intent of
the Utilities is not to stand in the way of development and the limiting factor in development of a
renewable resource is the customer's infrastructure. The ability of a customer to feed energy back
into the City's system will be limited by the infrastructure the customer has in place. Renewable
resources will be intermittent because they are limited to when the sun shines and the wind blows.
Electricity is a commodity that is produced the moment the consumer asks for it. The demand from
customers is constantly changing. The current technology of the grid allows a 15% reserve that is
ready to compensate for the loss of production or increase in load. The reserve helps support
renewable production, up to a certain capacity. In the future, the implementation of smart grid
technology will allow better control of distributed resources. The efficiency of the system has been
greatly improved and can compensate for larger levels of renewables. The 1000 kW limit provides
the maximum incentive for customers to invest in renewable energy.
Councilmember Troxell made a motion, seconded by Councilmember Poppaw, to adopt Ordinance
No. 062, 2009 on First Reading.
Councilmember Ohlson asked why Fort Collins is the last community to adopt a net metering policy.
Catanach stated Fort Collins has been providing net metering to its renewable customers since 2005.
Time was needed for staff to gather Council feedback at a work session and to answer all questions
raised. Staff did not believe there was any downside to the delay because the City already offers net
metering.
Councilmember Manvel asked why language is repeated in multiple sections of the ordinance.
Daggett stated the ordinance contains repeat language to minimize the potential for errors by the
codifier. The language is added in multiple sections because the rate schedules in Chapter 26 for
the Electric Utility contains a comprehensive set of requirements for each rate category and the
repeat language is provided for customer convenience so they can look at a rate schedule and see the
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different pieces that apply to a particular category of service. Catanach state the ordinance language
references particular kilowatt/hour charges related to each rate. When the rates change and the
designated lettering changes,the language is included in each rate instead of one generic reference.
Councilmember Roy stated the other member cities of Platte River have adopted varying limits for
the amount of excess energy a system can put into Platte River's system. It is difficult to make good
decisions about the power plant when each member sets such different caps.
Mayor Hutchinson noted the four cities that comprise Platte River have different values concerning
investments in renewables. Platte River has been able to accommodate those differences and work
with each member city. Fort Collins is ahead of the other cities in encouraging the use of
renewables. Requiring the four cities to reach agreement on some issues might bring the lowest
common denominator for some issues.
Councilmember Manvel stated the decision to encourage the use of renewables is not based on cost.
Council has set a goal to reduce the community's emissions and reducing the use of coal-powered
energy generation is one method to reduce those emissions.
Councilmember Troxell stated net metering is a key building block to providing reliable electric
service. FortZed is one project developed to demonstrate the reduction by 20-30%of peak usage by
using installed distributed energy resources that are already in place.
The vote on the motion was as follows: Yeas: Hutchinson,Kottwitz,Manvel,Ohlson,Poppaw,Roy
and Troxell. Nays: none.
THE MOTION CARRIED.
Ordinance No. 051, 2009,
Amending the City Code Relating to Enforcement
of Occupancy Limits, Adopted on Second Reading
The following is staffs memorandum for this item.
"EXECUTIVE SUMMARY
This Ordinance, adopted on First Reading on May 5, 2009 by a vote of 5-2(nays:Kottwitz, Troxell),
amends the City Code to eliminate the existing requirement that an opportunity be given to property
owners to cure occupancy violations prior to the issuance ofa citation. City Code Section 19-65(a)
(1) sets forth the procedures to be used by the City's Code enforcement officers in enforcing civil
infractions, including the occupancy regulation. The proposed amendment to this Section authorizes
enforcement staff to serve civil citations on violators of the occupancy limit regulation without first
serving a notice ofviolation. Elimination of the notice requirement will apply to all violators of the
occupancy regulation, both first-time of and repeat offenses. "
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Jeff Scheick,Director of Planning, Development and Transportation, stated Council chose to adopt
Option 1 of the Ordinance on First Reading, which removed the requirement to give notice prior to
issuing a citation for an occupancy violation. The revision enhances the enforcement of the existing
occupancy ordinance by allowing staff to issue a citation without prior notice, when appropriate.
Katie Freudenthall, Director of Community Affairs, ASCSU, urged Council not to adopt the
ordinance. Removing the notice requirement takes away due process and gives too much discretion
to City staff.
Eric Sutherland, 631 LaPorte, stated the occupancy ordinance is not fair to some segments of the
community. He urged Council not to adopt the Ordinance.
Councilmember Troxell made a motion,seconded by Councilmember Kottwitz,to postpone Second
Reading of Ordinance No. 051, 2009 until the two-year review is completed.
Councilmember Troxell stated changes should not be made to the occupancy ordinance at the same
time that the ordinance is under review and stakeholder groups are meeting to provide input about
the ordinance.
Councilmember Manvel stated staff believes changing the enforcement of the occupancy ordinance
will make the ordinance more effective. It will be many months before any other changes to the
ordinance will be considered and this change to enforcement is needed now.
Councilmember Kottwitz stated addressing this issue at this time when most of CSU is not in session
is not fair to students and the ordinance should not be considered until after the two-year review is
completed.
Councilmember Ohlson noted First Reading of the Ordinance was held when CSU was in session.
Any changes to the occupancy ordinance will not occur for many months and enforcement of the
ordinance will always be of primary importance. Staff is impeded in its enforcement of the
ordinance currently in place and allowing this change to the ordinance will allow adequate
enforcement.
Councilmember Troxell stated some have claimed that the occupancy ordinance has improved the
quality of life for neighborhoods,even without this change to enforcement,and postponement of this
ordinance should not decrease neighborhood quality of life.
Councilmember Manvel stated the changes in the proposed ordinance will not affect those renters
who are not in violation of the occupancy ordinance.
Mayor Hutchinson stated the City is committed to doing a thorough public outreach, research and
by staff of the occupancy ordinance that will culminate in October. The changes to enforcement that
will be authorized by this ordinance do not relate to the occupancy policy.
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The vote on the motion was as follows: Yeas: Kottwitz, and Troxell. Nays: Hutchinson, Manvel,
Ohlson, Poppaw, and Roy.
THE MOTION WAS DEFEATED.
Councilmember Roy made a motion, seconded by Councilmember Ohlson,to adopt Ordinance No.
051, 2009 on Second Reading.
Councilmember Kottwitz stated the stakeholder groups were not given an opportunity to express
their opinions about the enforcement of the occupancy ordinance. The number of violations has been
greatly reduced without the adoption of this ordinance.
Councilmember Troxell stated the change to enforcement directly impacts CSU students who are
not currently in session and are not here to provide input.
Councilmember Roy stated the zoning of neighborhoods is important to create affordable living in
Fort Collins to control the intensity and use of an area. Tools for enforcement of the current
occupancy ordinance are needed to continue to improve the quality of life in neighborhoods.
The vote on the motion was as follows: Yeas: Hutchinson, Manvel, Ohlson, Poppaw, and Roy.
Nays: Kottwitz, Troxell.
THE MOTION CARRIED.
Ordinance No. 052, 20099
Amending Section 12-19 and Article XV of Chapter 15 of the City Code
Relating to Trash Collection, Adopted on Second Reading
The following is staff s memorandum for this item.
"EXECUTIVE SUMMARY
Ordinance No. 052, 2009, adopted on First Reading on May 5, 2009 by a vote of 4-3 (nays:
Hutchinson, Kotttivit_, Troxell), makes several significant changes to City Code, as well as several
"housekeeping" changes to Chapter 15, "Solid Waste Collection and Recycling Services" and
Chapter 12, "Collection and Disposal of Refuse, Rubbish and Recyclables. " The goals of these
Code changes are to increase the pricing incentive.for solid waste customers to reduce trash and
improve recycling diversion rates.
For Second Reading, the proposed Code language requiring poly-cart recycling containers on page
6 of the Ordinance has been revised to make more clear the intended meaning of the requirement
With respect to container size. "
City Manager Atteberry stated the ordinance being considered by Council is not about establishing
a pilot trash district. Consideration of a pilot trash district will be held on July 21.
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Ann Tumquist, Policy and Project Manager, stated the City is looking for ways to decrease the
impact of trash trucks on neighborhoods and improve recycling. The current residential recycling
rate is between 13 and 20%and many of the proposed Code changes focus on ways to improve the
recycling rates,including pay-as-you-throw pricing. Also included is a requirement for trash haulers
to provide large recycling poly-carts.
Mark Loyoso, Gallegos Sanitation General Manager, requested Council not consider adoption of
pay-as-you-throw and keep the flat rate, instead. A flat rate is based on fixed operational costs and
is fair to all customers. A fuel surcharge is needed to account for fluctuating fuel prices. The poly-
carts will cost more than City staff estimates and changing the Code to require the trash haulers to
furnish the carts to customers places an unfair burden on the haulers.
Lucia Liley, 300 South Howes, on behalf of the local trash hauling companies, stated Loveland's
recycling rates are 55-60% as compared to Fort Collins' rate of 14%. Loveland's trash hauler
regulations are similar to what Fort Collins currently has in place. Boulder also has higher recycling
rates but has trash hauler regulations that are similar to the current regulations in Fort Collins.
Loveland and Boulder provide more recycling education to their citizens and offer free yard waste
pickup which is largely responsible for keeping the recycling rates above 50%. The flat rate system
currently in place fairly allocates all fixed operational costs among the customers. Changing the
system to pay-as-you-throw unfairly places greater costs on large group households. The proposed
regulations will unfairly impact some customers and will not help the City reach its goal of reducing
trash and increasing recycling.
Ray Meyer, General Manager of Ram Waste Systems, stated a fuel surcharge is needed to offset
rising fuel costs. Pay-as-you-throw unfairly penalizes larger households, even though a larger
household might be recycling more than a smaller household.
John Puma, Ram Waste Systems owner, stated the cost of$45 for each poly-cart was not accurately
presented by City staff. The actual cost to the haulers will be$65-70,which includes shipping from
the manufacturer, assembly, delivery to the customer, taxes and maintenance. Staff indicated the
haulers' cost for the carts would be offset by allowing recycling pickup to change from once a week
to biweekly pickup, but this does not take into account the additional cost incurred by the haulers
in collecting and servicing the carts. The time that will be needed to collect the recyclables will be
increased, even though pickup will occur less frequently. The recycling trucks currently used by the
trash haulers are not designed to handle the larger poly-carts.
Matt Gallegos, Gallegos Sanitation, stated the pay-as-you-throw regulation, combined with the
additional requirements to provide large recycling containers and the elimination of the fuel
surcharge will significantly increase service costs at all levels and customer rates will increase.
Patty Kennedy, 559 South Saint Louis Avenue, Loveland, S & S Sanitation, stated her company has
concerns with elimination of the flat rate and the costs surrounding the requirement to provide larger
recycling carts. The burden and cost of recycling should not be placed on the trash haulers.
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Stacy Lynne, 216 Park Street, urged Council not to adopt the Ordinance because it will penalize
families.
Dan DiWaard, Northern Colorado Waste Management Senior District Manager, stated fuel
surcharges are necessary for the trash haulers to recoup their costs. The poly-carts will be much
more expensive than staff has indicated.
Bruce Lockhart, 2500 East Harmony, urged Council not to adopt the proposed Ordinance.
Ray Harvey, 301 Peterson, stated recycling scrap steel and aluminum makes sense because it is
economically feasible to recycle but recycling other items is not economical. Many recycling
processes harm the environment. He urged Council not to adopt the Ordinance..
Rudy Zitti, 1626 Fantail Court, asked for the data used to predict reduced fuel costs and reduced
impacts to streets with the creation of trash districts.
("Secretary's note: The Council took a brief recess at this point in the meeting.)
Mayor Hutchinson asked for any impacts of postponing Second Reading ofthis Ordinance until July
21, when the pilot trash servicing district plan will be considered. Tumquist stated it would be
possible to change some of the implementation dates that are in the Ordinance, but staff does not
recommend postponement of the proposed Code changes. One implementation date relates to the
change in the rate structure and is set to begin July 1, 2009. The other implementation date relates
to the requirement of poly-carts and is set to begin January 1, 2010.
Councilmember Troxell asked why Loveland and Boulder have much higher diversion rates with
trash regulations in place that are similar to the current ones in the Fort Collins Code. Susie Gordon,
Senior Environmental Planner, stated Loveland provides 95% of the trash hauling services for its
residential customers. Boulder also has a single trash hauler providing trash services and has
aggressive pay-as-you-throw rates. Boulder and Loveland both provide curbside yard waste hauling.
Boulder has an added sales tax that is used for recycling purposes.
Councilmember Troxell asked if other communities use the same accounting methods to determine
recycling rates. Gordon stated most communities follow the Environmental Protection Agency's
guidelines that exclude industrial materials. Turnquist noted a significant part of the wastestream
is yard waste. Loveland and Boulder include yard waste as part of their recycling services.
Councilmember Manvel asked if Boulder and Loveland use poly-carts for recyclables. Gordon
answered in the affirmative.
Councilmember Kottwitz asked why yard waste was not included in the proposed ordinance.
Turnquist stated staff drafted the ordinance based on direction provided by Council at work sessions.
Yard waste was not one of the high priority items indicated by Council. Removing yard waste from
the wastestream will significantly impact the diversion rate but will also greatly impact citizens.
Councilmember Kottwitz asked if composting was considered as part of increasing the diversion
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rate, along with more education for the community. Gordon stated Loveland applies a monthly
environmental fee to households that helps pay for the yard waste recycling and composting done
by Loveland. Fort Collins has many educational programs through the Natural Resources
Department.
Councilmember Kottwitz asked about the marking requirements for trash trucks and the cost to the
haulers to mark their trucks. Turnquist stated the Code change will require trash trucks that are used
to collect recyclables to be clearly marked to show recyclables are not being dumped into the
wastestream. Not all trucks will need to be marked and haulers will probably use removable signage
so a trash truck could be used one week for recycling and another week for trash hauling.
Councilmember Manvel asked what percentage of administrative costs applied to fuel. Turnquist
stated the trash haulers have indicated fuel costs range from 3-10% of their total costs.
Councilmember Troxell asked if going to a straight pay-as-you-throw fee rate will penalize larger
families. Turnquist stated a larger household will pay a greater price but the more a household
recycles, the less the household will pay.
Councilmember Poppaw noted the rates are not increasing per capita,but a household will pay more
if it throws more trash away.
Councilmember Roy made a motion,seconded by Councilmember Poppaw,to adopt Ordinance No.
052, 2009, on Second Reading.
Councilmember Kottwitz made a motion, seconded by Councilmember Troxell, to postpone
consideration of Ordinance No. 052, 2009, on Second Reading until July 21.
Councilmember Kottwitz stated the proposed ordinance will affect the entire community and more
clarification is needed before Council has its final consideration, which should be delayed until July
21,when the pilot trash servicing district plan is discussed. Further discussion is needed about yard
waste, allowing a fuel surcharge and opting into the program using poly-carts for recycling.
Councilmember Ohlson noted many months have already been spent in developing the proposed
changes to City Code and it was time to move forward.
Councilmember Poppaw stated the issue has been under discussion and studied by the City for years
and now is the time to act. The Code changes should not be delayed.
Councilmember Troxell stated many questions about this issue still have not been answered and
more time was needed to include all input from citizens to have a better solution than the ordinance
as it is currently written.
Mayor Hutchinson noted some questions have been raised by citizens that have not been answered
by staff. He supported postponement of second reading.
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May 19, 2009
The vote on the motion to postpone Second Reading of Ordinance No. 052, 2009 was as follows:
Yeas: Hutchinson, Kottwitz, and Troxell. Nays: Manvel, Ohlson, Poppaw, Roy.
THE MOTION WAS DEFEATED.
Councilmember Manvel stated a fuel surcharge should not be allowed because it would be a fixed
fee and the pay-as-you-throw plan is intended to be purely volume based.
Councilmember Kottwitz stated other avenues to reducing the wastestream and improving recycling
rates should be considered. The proposed ordinance will require local trash haulers to invest large
amounts of funds and will raise the rates of the customers.
Councilmember Ohlson stated the proposed ordinance is result of many months of work, public
outreach and much compromise. Pay-as-you-throw pricing is the way to reduce the solid
wastestream and encourage more recycling. The City has a solid waste reduction plan and a Climate
Action Plan with goals that cannot be ignored. The public interest will be served with these Code
changes.
Councilmember Manvel made a motion, seconded by Councilmember Poppaw, to amend Section
8 of Ordinance No. 052, 2009, to change the date from July 1, 2009 to September 1, 2009.
Councilmember Manvel noted the trash haulers have stated they send their bills out on a quarterly
basis. Changing the date will help the haulers make the billing changes required by the Code
changes in a timely fashion.
The vote on the motion to change the date was as follows: Yeas: Hutchinson, Kottwitz, Manvel,
Ohlson, Poppaw, Roy and Troxell. Nays: none.
THE MOTION CARRIED.
Councilmember Troxell stated the original issue was presented as too many trash trucks in
neighborhoods, safety and noise. The proposed ordinance does not address that issue. Recycling
is not the only answer because many recyclables are shipped to China, which leaves a large carbon
footprint and does not accomplish any savings. A wastestream analysis is needed that would
incorporate new technologies. The proposed Ordinance targets local businesses and has many
unintended consequences that will affect citizens.
Councilmember Ohlson stated long term data is needed and he asked staff to submit a budget offer
that would develop a wastestream analysis that would show what is being generated, where it is
going,residential and commercial waste over the next two years. City Manager Atteberry stated the
data is not available and some of the proposed Code changes will enable staff to gather the data
requested.
Councilmember Manvel stated more regulation of trash hauling is needed to increase recycling rates.
Banning yard waste and cardboard from the wastestream will be other major steps to be considered
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May 19, 2009
later. Steps must be taken to enable the City to reach goals set in the wastestream reduction plan and
the Climate Action Plan. The pay-as-you-throw pricing should not raise costs but should redistribute
the costs from those who have less trash to those who have more trash.
Mayor Hutchinson stated allowing a fuel surcharge and the cost of the poly-carts are issues that
should be addressed. A systems analysis of the wastestream in Fort Collins should be done.
The vote on the motion to adopt Ordinance No. 052, 2009 on Second Reading. as amended, was as
follows: Yeas: Manvel, Ohlson, Poppaw, Roy. Nays: Hutchinson, Kottwitz, and Troxell.
THE MOTION CARRIED.
Suspension of Rules
Councilmember Manvel made a motion,seconded by Councilmember Roy,to suspend the rules and
extend the meeting. Yeas: Hutchinson, Manvel, Ohlson, Poppaw, Roy. Nays: Kottwitz,Troxell.
THE MOTION CARRIED.
Resolution 2009-049
Making Board and Commission Liaison Assignments and Various
Committee, Board and AuthoritLRpointments, Adopted as Amended
The following is staffs memorandum for this item.
"EXECUTIVE SUMMARY
This Resolution makes Councilmember-liaison assignments to boards and commissions and makes
various committee, board and authority appointments.
BACKGROUND
Following the Council organizational meeting in April of odd-numbered years, Councilmembers
decide which ofthe various board and commission liaison assignments and committee appointments
are o,finteresi to them as individuals. At the recent City Council Retreat (May 2-3) Councilmembers
discussed liaison and committee assignments.
A 2009-2011 Planning Grid (Attachment 1) has been included to facilitate tracking Council's
recommendations for assignments. Names that were preliminarily decided at the Council Retreat
have been included in the Planning Grid and Resolution 2009-049. At this meeting, names will be
inserted in the Resolution for those assignments that were not preliminary decided at the Council
Retreat.
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Appointments to the Colorado Municipal LeaguePolicy Committee are considered in the.fall of each
year. The Policy Committee will not meet before the new terms begin, therefore, this appointment
will be considered in September or October.
Resolution 2007-042 appointed Lisa Poppaw to the flousingAuthoriiy with a term to expire on May
1, 2012. Since Councilmember Poppaw wishes to remain as a member of the HousingAuthority and
her present term has not expired, a separate Resolution has not been prepared. "
Councilmember Roy made a motion, seconded by Councilmember Poppaw to adopt Resolution
2009-049 with amendments to name the liaisons not yet appointed to Boards.
Councilmember Ohlson noted he would like to continue as liaison to the boards he previously has
served as liaison.
Councilmember Roy made a motion, seconded by Councilmember Manvel, to amend Resolution
209-049 and name Councilmember Ohlson as liaison to the Building Review Board. Yeas:
Hutchinson, Kottwitz, Manvel; Ohlson, Poppaw, Roy and Troxell. Nays: none.
THE MOTION CARRIED.
CouncilmemberTroxell made am oti oil,seconded by Councilmember Kottwitz,to amend Resolution
2009-049 to allow Councilmember Troxell to remain as liaison to the Electric Board. Yeas:
Hutchinson, Kottwitz, and Troxell. Nays: Manvel, Ohlson, Poppaw, Roy.
THE MOTION WAS DEFEATED.
Councilmember Manvel made a motion, seconded by Councilmember Roy, to amend Resolution
2009-049 to name Councilmember Poppaw as liaison to the Electric Board. Yeas: Manvel,Ohlson,
Poppaw, Roy. Nays: Hutchinson, Kottwitz, Troxell.
THE MOTION CARRIED.
Councilmember Troxell made a motion, seconded by Councilmember Kottwitz, to name
Councilmember Kottwitz as liaison to the Parks and Recreation Board. Yeas: Hutchinson,Kottwitz,
and Troxell. Nays: Manvel, Ohlson, Poppaw, Roy.
THE MOTION WAS DEFEATED.
Councilmember Manvel made a motion, seconded by Councilmember Poppaw, to name
Councilmember Ohlson as•liaison to the Parks and Recreation Board. Yeas: Manvel, Ohlson,
Poppaw, Roy. Nays: Hutchinson, Kottwitz, Troxell.
THE MOTION CARRIED.
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May 19, 2009
Councilmember Poppaw made a motion,seconded by Councilmember Roy,to name Councilmember
Manvel as liaison to the Transportation Board.
Councilmember Troxell noted he has enjoyed serving on the Transportation Board and there seems
to be a disparity in choosing liaisons since he has been chosen for only one Board.
Councilmember Manvel stated a liaison does not serve on a Board and a Councilmember should not
participate in the discussions of a Board.
Councilmember Troxell noted he has attended Board meetings, but has met every requirement of a
Council liaison and has not participated as if he were a Boardmember.
The vote on the motion was as follows: Yeas: Manvel, Ohlson, Poppaw, Roy. Nays: Hutchinson,
Kottwitz, Troxell.
THE MOTION CARRIED.
Councilmember Troxell made a motion, seconded by Councilmember Kottwitz, to name
Councilimernber Kottwitz as liaison to the Water Board.
Councilmember Kottwitz noted she has extensive experience with water issues and water rights in
Colorado.
Councilmember Poppaw stated a Councilmember cannot serve on a Board but serves as a liaison to
a Board.
Councilmember Kottwitz stated background knowledge in a particular area will be helpful to
understand the issues considered by a Board.
The vote on the motion was as follows: Yeas: Hutchinson,Kottwitz, and Troxell. Nays: Manvel,
Ohlson, Poppaw, Roy.
THE MOTION WAS DEFEATED.
Councilmember Manvel made a motion, seconded by Councilmember Ohlson, to name
Councilmember Roy as liaison to the Water Board. Yeas: Manvel, Ohlson, Poppaw, Roy. Nays:
Hutchinson, Kottwitz, Troxell.
THE MOTION CARRIED.
Councilmember Manvel removed his name from consideration for the Legislative Review
Committee.
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May 19, 2009
Councilmember Manvel made a motion, seconded by Councilmember Roy to appoint
Councilmembers Hutchinson, Ohlson, and Poppaw to the Legislative Review Committee. Yeas:
Manvel, Ohlson, Poppaw, Roy. Nays: Hutchinson, Kottwitz, Troxell.
THE MOTION CARRIED.
MayorHutchinson stated he currently serves on the Platte River Power Authority Board of Directors
in his capacity as Mayor. A motion to change the appointment to Platte River and place a
Councilmember on the Board would remove Brian Janonis, Utilities Executive Director, who has
special knowledge and skills necessary to make decisions. City Manager Atteberry stated Council
has received a list of requirements for the Board of Platte River. He urged Council to keep the
Utilities Executive Director on the Platte River Board because his expertise is needed on the Board
and the member cities have their utilities directors serving on the Board, as well.
Councilmember Manvel made a motion,seconded by Councilmember Troxell,to make no changes
to the Platte River Power Authority Boardmembers. Yeas: Hutchinson, Kottwitz, Manvel,Ohlson,
Poppaw, Roy and Troxell. Nays: none.
THE MOTION CARRIED.
Councilmember Poppaw withdrew her name for consideration for the Poudre Fire Authority Board
of Directors.
Councilmember Poppaw made a motion, seconded by Councilmember Troxell, to appoint
Councilmember Kottwitz to the Poudre Fire Authority Board of Directors. Yeas: Hutchinson,
Kottwitz, Manvel, Ohlson, Poppaw, Roy and Troxell. Nays: none.
THE MOTION CARRIED.
Councilmember Poppaw made a motion, seconded by Councilmember Manvel, to appoint
Councilmember Roy as an alternate to the North College Urban Renewal Plan Citizen Advisory
Committee. Yeas: Hutchinson, Kottwitz, Manvel, Ohlson, Poppaw, and Roy. Nays: Troxell.
THE MOTION CARRIED.
Councilmember Troxell noted the distribution of liaison assignments is biased and does not reflect
a Council that wants to represent all the citizens of Fort Collins.
The vote on the motion to adopt Resolution 2009-049, with amendments was as follows: Yeas:
Hutchinson, Manvel, Ohlson, Poppaw, and Roy. Nays: Kottwitz, Troxell.
THE MOTION CARRIED.
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May 19, 2009
Adjournment
The meeting adjourned at 1 1:33 p.m.
Mayor
ATTEST:
City Clerk
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June 2, 2009
COUNCIL OF THE CITY OF FORT COLLINS, COLORADO
Council-Manager Form of Government
Regular Meeting- 6:00 p.m.
A regular meeting of the Council of the City of Fort Collins was held on Tuesday, June 2, 2009, at
6:00 p.m. in the Council Chambers of the City of Fort Collins City Hall. Roll Call was answered
by the following Councilmembers: Hutchinson, Kottwitz, Manvel, Ohlson, Poppaw, and Roy.
Councilmembers Absent: Troxell
Staff Members Present: Jones, Krajicek, Roy.
Mayor Hutchinson recognized the graduates of the City Works 101 program.
Citizen Participation
Martha Roden, 102 Peterson Street, supported the recently adopted City Code changes that will
enhance solid waste diversion and encourage recycling.
Jeff Emmel, 543 Spindrift Court, asked for Council to consider an ordinance that bans the use of
handheld cell phones by any driver of a moving vehicle.
Stacy Lynne, 216 Park Street, stated her concerns with the trash bag size and quality as defined by
Ordinance No. 052, 2009, adopted by Council on May 19.
Mike Devereaux, 2150 Maid Marian Court, urged Council to allow power wheelchairs to be used
in the bicycle lanes and to allow the user to determine the best route to use.
Eric Sutherland, 631 LaPorte Avenue, stated his concerns with Item #7, Second Reading of
Ordinance No. 053, 2009, Appropriating Funds From the City's General Fund Reserves for
Transfer to the Fort Collins Urban Renewal Authority,for the Purpose of Providing a Loan for the
Rocky Mountain Innovation Initiative Project because too many risks are involved and public dollars
should not be used for the project.
Kevin Cross,300 Peterson,Fort Collins Sustainability Group,stated his group's support for the City
Code changes to the trash policy because the changes will help the City meet its goal of diverting
50% of solid wastestream from the landfill by 2010, the 2012 and 2020 greenhouse gas emission
goals and will reduce wear on City streets by decreasing the number of trips made by recycling
trucks.
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June 2, 2009
Gina Bagbey, 2523 Constitution, stated Council did not represent the majority of Fort Collins
citizens when it adopted Ordinance No.052,2009. Trash districting is not preferred by most citizens
and most citizens do not have any complaints with the current trash haulers.
Cheryl Distaso, 135 South Sunset, stated adoption of Ordinance No. 052, 2009, will benefit the
community and the public process to develop the Ordinance was fair and transparent. She urged
Council to allow power wheelchairs in bicycle lanes.
Rudy Zitti, 1626 Fantail Court, stated his opposition to the new trash rules and the proposed trash
districting plan.
Bruce Lockhart, 2500 East Harmony, did not support any changes that require recycling.
Will Walters, 1701 Tanglewood Drive, stated the new trash rules are an important step to
implementing the Climate Action Plan.
Mary Smith, 1618 Sagewood Drive, stated the City has studied the trash hauling system for two
years and she supported the changes to the trash policy which will improve recycling rates.
Ray Smith, 1618 Sagewood Drive,stated his support for the new trash policy. He noted the City has
not conducted a trash services survey of its residents since 1999. In 2008, two trash hauling
companies provided postcards to their customers to send to the City, stating whether they were
pleased with current trash hauling practices.
Gina Janett, 730 West Oak Street,supported the City's efforts to increase recycling and decrease the
wastestream.
Citizen Participation Follow-up
Councilmember Roy asked when the City last did a trash services survey. Susie Gordon, Senior
Environmental Planner, stated 1999 was the last time the City did a statistically valid survey of
citizens' opinions about trash services.
Councilmember Ohlson asked if Council would be considering any Code changes to allow power
wheelchairs in the bicycle lanes soon. Deputy City Manager Jones stated a Code change is being
prepared for Council consideration that will allow wheelchair uses to travel in bicycle lanes under
certain limited circumstances. No date is currently set for Council consideration. Staff continues
to recommend that wheelchairs not be permitted in bicycle lanes,except under certain circumstances.
Councilmember Ohlson stated the petitions currently being circulated requesting the repeal of
Ordinance No. 052, 2009 do not have anything to do with trash districting. No one will be required
to recycle or to use a larger recycling container.
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June 2, 2009
Agenda Review -
Deputy City Manager Jones withdrew Item #7 Second Reading of Ordinance No. 053, 2009,
Appropriating Fiords From the City's General Fund Reserves.for Transfer to the Fort Collins Urban
RenewalAuthorityfor the Purpose of Providing aLoanfor the Rocky Mountain Innovation Initiative
Project from the Consent Agenda and requested the Item be postponed until June 9. The Ordinance
for Item #8 Second Reading of Ordinance No. 054, 2009, Authorizing the Transpr of Existing
Appropriations from the Downtown Development Authority Fund to the Capital Project Fund for
the Building on Basics Pedestrian Plan Project, Linden Street Streetscape Project, Phase 1 has been
revised to clarify that the revenues coming from the Building on Basics Project can only be used for
purposes approved by voters and the sidewalk improvements are for pedestrian safety.
City Attorney Roy read the changes to Ordinance No. 054, 2009.
Eric Sutherland, 631 LaPorte pulled Item #10 Items Relating to Certain Utility Service Programs
and Requirements, Her #14 Second Reading of Ordinance No. 061, 2009, Amending Chapter 26
Article VI of the City Code Relating to the Provision of Electric Sen'ice, and Item #15 Second
Reading of Ordinance No. 062, 2009, Amending Chapter 26, Article VI of the City Code Relating
to Net Metered Electric Service.
Bruce Lockhart; 2500 East Harmony Road, pulled Item #25 Resolution 2009-054 Approving an
Exemption to the Use ofa Competitive Processfora Contract with Positive Energyfora Community
Benchmarking Program to Reduce Energy Use.
Councilmember Ohlson pulled item#19 First Reading of Ordinance No. 066, 2009,Making Various
Amendments to the City Land Use Code.
CONSENT CALENDAR -
6. Consideration and Approval of the Minutes of the May 5, 2009 Regular Meeting.
7. Second Reading of Ordinance No. 053,2009,Appropriating Funds From the City's General
Fund Reserves for Transfer to the Fort Collins Urban Renewal Authority for the Purpose of
Providing a Loan for the Rocky Mountain Innovation Initiative Project.
Ordinance No. 053, 2009, unanimously adopted on First Reading on May 12, 2009,
authorizes a loan,as authorized by City Council Resolution 2008-121,to the Urban Renewal
Authority(URA)in the amount of S5,303,939. The loan will enable the URA to lend Rocky
Mountain Innovation Initiative Properties,LLC(RMI2 Properties,LLC)the funds necessary
to construct a new facility for the business incubation program. RM12 Properties, LLC is
associated with the Rocky Mountain Innovation Initiative, which runs a successful science
and technology incubation program on behalf of the City and other sponsors.
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June 2, 2009
8. Second Reading of Ordinance No. 054, 2009, Authorizing the Transfer of Existing
Appropriations from the Downtown Development Authority Fund to the Capital Project
Fund for the Buildina on Basics Pedestrian Plan Project, Linden Street Streetscape Project.
Phase I.
This Ordinance, unanimously adopted on First Reading on May 19, 2009, appropriates
funding from the Downtown Development Authority(DDA)into the project account for the
Linden Street streetscape project. This funding may be used for any or all of the following
phases of the project: design, engineering,right-of-way,and construction for the segment of
Linden Street from Jefferson Street/SH 14 north to the Poudre River bridge. The City's
matching funds are being provided by existing Building on Basics Pedestrian Plan funds.
In addition, the Colorado Department of Transportation has awarded the City $250,000 in
funding for this project to help the project achieve the improvements envisioned in the
Downtown River District Project, approved by the City and DDA in 2008.
9. Second Reading of Ordinance No. 055, 2009, Authorizing the Transfer of Appropriations
from the Downtown Development Authority Fund to the Capital Project Fund. Building on
Basics, Intersection Improvements, Jefferson Street/SH14 Project.
This Ordinance, unanimously adopted on First Reading on May 19, 2009, appropriates
funding from the Downtown Development Authority(DDA) into the project account for the
Alternatives Analysis study and recommended improvements to Jefferson Street/SH 14, from
North College Avenue to Mountain Avenue. The project includes the intersection of
Jefferson, Riverside, Mountain, and Lincoln streets. Funding from the DDA may be used
for any or all of the following phases of the project: Alternatives Analysis study,
preliminary/final design, engineering, right-of-way, and construction. The City's matching
funds are being provided by existing Building on Basics intersection funds. In addition, the
Colorado Department of Transportation has awarded the City$1,000,000 in funding for this
project to help the project achieve the improvements envisioned in the Downtown River
District Project approved by the City and DDA in 2008.
10. Items Relating to Certain Utility Service Programs and Requirements.
A. Second Reading of Ordinance No. 056, 2009, Amending Chapter 26, Article Vl, of
the City Code Relating to Certain Electric Service Programs and Requirements.
B. Second Reading of Ordinance No. 057, 2009, Amending Chapter 26, Article III,
Division 6 of the City Code Relating to Water Conservation.
The two Ordinances, unanimously adopted on First Reading on May 19, 2009, make
housekeeping changes to more closely align Code requirements with current utility programs
and practices. The changes do not represent any change in policy or direction. There will
be no increase or decrease in customers' utility rates.
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June 2, 2009
1 I. Second Reading of Ordinance No. 058, 2009, Authorizing the Lease of the Collindale Golf
Course Residence at 1341 East Horsetooth Road for Up to Five Years.
This Ordinance, unanimously adopted on First Reading on May 19, 2009, authorizes a one
year lease for the residence at the Collindale Golf Course, with the City having the option
to renew the lease for additional one-year terns, up to five years. The leasing of this City-
owned property is beneficial in that it will discourage vandalism and reduce the City's costs
by having the Tenant pay for the utilities.
12. Second Reading of Ordinance No. 059, 2009, Authorizing the Acquisition by Eminent
Domain Proceedings of Certain Lands Necessary to Construct Public Improvements Related
to the Mason Corridor Bus Rapid Transit Project (Phase One).
The Mason Express ("MAX"), bus rapid transit project is entering into the right-of-way
acquisition phase of the project. Project acquisitions have been broken into three phases.
This Ordinance, unanimously adopted on First Reading on May 19, 2009, relates to Phase
l and consists of seven distinct property ownerships. As a critical, federally funded
transportation project, City staff requests authorization to utilize eminent domain, if
necessary, and only if good faith negotiations break down, in order to ensure a timely
acquisition of the necessary property interests.
13. Second Reading of Ordinance No. 060, 2009, Authorizing the Conveyance of a Utility
Easement to Tri-State Generation and Transmission Association, Inc.
Tri-State Generation and Transmission Association, Inc. ("Tri-State") has requested a
connection for transmission facilities between Platte River's transmission system and Tri-
State. To facilitate this connection, two new breakers and associated equipment must be
installed in the City's Richards Lake Substation. In order for this connection to occur, the
City has granted Platte River a License to install facilities that are not specifically designated
to provide service to the City. This Ordinance, unanimously adopted on First Reading on
May 19, 2009, grants Tri-State an easement to cross the substation property with its
connection.
14. Second Reading of Ordinance No. 061, 2009, Amending Chapter 26 Article VI of the City
Code Relating to the Provision of Electric Service.
This Ordinance, unanimously adopted on First Reading on May 19, 2009, clarifies that the
City is the sole provider of retail electric service with the City. The revised Code has the
goal of addressing three key issues. The first is the establishment of service territory
protections similar to those afforded investor owned utilities, rural electric associations and
other municipal utilities throughout the State. The second goal is to align service area
definitions with bond holder expectations. The third goal is to support the development of
renewable generation projects, including those owned by third-party entrepreneurs selling
electricity at retail within City limits, provided certain conditions are met.
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June 2, 2009
15. Second Reading of Ordinance No. 062, 2009, Amending Chapter 26, Article VI of the City
Code Relating to Net Metered Electric Service.
This Ordinance, unanimously adopted on First Reading on May 19, 2009, amends Chapter
26,Article VI the City Code to define the net metering requirements for qualifying renewable
generation facilities. In light of recent technological and legislative developments, the City
intends to formalize its net metering program. Pursuant to a pilot program, the City has
offered net metering services to its customers since 2005 through special services contracts.
The intent of this amendment to the City Code is to codify the net metering rate in the
Utility's existing rates.
16. First Reading of Ordinance No. 063, 2009, Appropriating Prior Year Reserves.
City Council authorized expenditures in 2008 for various purposes. The authorized
expenditures were not spent or could not be encumbered in 2008 because:
• There was not sufficient time to complete bidding in 2008 and therefore,
there was no known vendor or binding contract as required to expend or
encumber the monies.
• The project for which the dollars were originally appropriated by Council
could not be completed during 2008 and reappropriation of those dollars is
necessary for completion of the project in 2009.
• To carry on programs, services, and facility improvements in 2009 with
unspent dollars previously appropriated in 2008.
In the above circumstances, the unexpended and/or unencumbered monies lapsed into
individual fund balances at the end of 2008 and reflect no change in Council policies.
17. First Reading of Ordinance No.064,2009,Appropriating Prior Year Reserves in the Natural
Areas Fund for the Purpose of Providing Natural Areas Programming Not Included in the
2009 Adopted City Budget and Authorizing the Transfer of Appropriations to the Capital
Projects Fund.
The purpose of the previously appropriated funds is for land conservation, construction of
public improvements, restoration of wildlife habitat and other natural areas program needs
to benefit the citizens of Fort Collins.
18. First Reading of Ordinance No.065,2009,Appropriating Prior Year Reserves in the General
Fund for Cultural Development and Programming Activities and the Fort Collins Convention
and Visitors Bureau.
This Ordinance appropriates lodging tax revenues that were in excess of 2008 budgeted
lodging tax receipts to Cultural Development and Programming ("CDP"), Visitor Events,
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and the Convention and Visitors Bureau ("CVB")accounts. Lodging tax revenues for 2008
were estimated to be$746,241 and the 2008 budget appropriated an equal amount. However,
actual receipts totaled $833,468 for 2008 and the difference of $87,227 has not been
appropriated. The CDP and Visitor Events accounts each had funds from revenue received
and previous year lodging tax allocations which were not used during 2008. The unexpended
2008 funds are: CDP - $75,207, and Visitor Events - $54,031. These funds are in the
General Fund reserves for lodging taxes and must be appropriated into the respective CDP
and Visitor Events accounts.
19. First Reading of Ordinance No. 066. 2009, Making Various Amendments to the City Land
Use Code.
Staff has identified a variety of proposed changes, additions and clarifications in the 2009
annual update of the Land Use Code.
20. Items Relating to the Community Development Block Grant Recovery(CDBG-R) Program
Authorized by the American Recovery and Reinvestment Act of 2009.
A. Resolution 2009-060 Approving the Programs and Projects that Will Receive Funds
from the Community Development Block Grant Recovery (CDBG-R) Program.
B. First Reading of Ordinance No. 067,2009,Appropriating Unanticipated Revenue in
the Community Development Block Grant Fund.
The American Recovery and Reinvestment Act of 2009 is an economic stimulus package
enacted by the United States Congress and signed into law by President Obama on February
17, 2009. The Act is intended to provide a stimulus to the U.S. economy in the wake of the
economic downturn and includes federal tax relief,expansion of unemployment benefits and
other social welfare provisions, and domestic spending in education, health care, and
infrastructure, including the energy sector. The Act appropriated $1 billion in Community
Development Block Grant (CDBG) funds to states and local governments to carry out, on
an expedited basis, eligible activities under the CDBG Program. The new CDBG funds are
in a program officially called the CDBG Recovery (CDBG-R) Program and are
additional/supplemental funds for the City's FY 2008 CDBG Program, which started on
October 1,2008. Resolution 2009-050 establishes which programs and projects will receive
funding through the additional allocation of$271,137 of FY 2008 CDBG funds through the
CDBG-R Program from the U.S. Department of Housing and Urban Development (HUD).
The City's amendment to its FY 2008 CDBG Program is due to HUD by Friday June 5,
2009.
21. Items Relating to a Colorado Department of Transportation Grant for the Transit Strategic
Plan.
A. Resolution 2009-051 Authorizing the Execution of an Intergovernmental Agreement
Between the City and the Colorado Department of Transportation for Partial Funding
of the Development of a Transit Strategic Plan Update.
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B. First Reading of Ordinance No. 068, 2009, Appropriating Unanticipated Revenue
from the Colorado Department of Transportation in the Transit Fund for the
Development of the Transit Strategic Plan.
During the 2008-2009 Budgeting for Outcomes (BFO) process, Council chose to fund a
$100,000 update to the 2002 Transfort Strategic .Operating Plan. This Plan update, also
known as the 2009 Transit Strategic Plan, is a partnership between Fort Collins, Loveland,
and the Poudre School District.
In addition to the Fort Collins $100,000 contribution, Loveland contributed $52,555 to
provide an update to Loveland's 2004 COLT Transit Plan, and the Poudre School District
contributed $30,000 to conduct analysis regarding student mobility within Fort Collins
utilizing Public Transportation.
In addition to the local contributions, Transfort received a grant in the amount of$15,000
from CDOT, under Section 5304, a statewide transit planning grant program, to contribute
toward the work necessary to complete the 2009 Transit Strategic Plan with a total project
budget of$197,555.
The 2009 Transit Strategic Plan will provide Fort Collins with the information necessary to
update the 2002 Transfort Strategic Operating Plan. The plan update will address changes
that have occurred in our transportation network since the completion of the previous plan
in 2002, review existing policy, develop a strategic operating plan, and develop a financing
and resource utilization plan.
22. Items Relating to the Design of the South Transit Center as Part of the Mason Corridor/MAX
BRT Project.
A. Resolution 2009-052 Authorizing the Execution of an Intergovernmental Agreement
Between the City of Fort Collins and the Colorado Department of Transportation for
the Design of the South Transit Center.
B. First Reading of Ordinance No. 069,2009,Appropriating Unanticipated Revenue in
the Capitals Projects Fund, Mason Corridor Project for the South Transit Center
Project.
This funding contract between the City and the Colorado Department of Transportation
(CDOT) will allow for work to advance on the design of the South Transit Center, which is
an important component of the Mason Corridor/MAX BRT Project. This funding will be
used for final design, engineering, and architectural services for the South Transit Center
Project. The State SB-1 funds are part of the City's local matching funds for the Federal
Transit Administration federal funding for the overall Mason Corridor Project. The South
Transit Center Project will be located on City-owned property which is the current site of the
Mason Corridor bicycle/pedestrian trailhead parking area, located west of South College
Avenue,near the intersection of Fairway Lane and Fossil Boulevard(approximately 1/2 mile
south of Harmony Road).
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23. First Reading of Ordinance No. 070, 2009, Authorizing, Acquisition by Eminent Domain
Proceedings of Certain Lands Necessary to Construct Public Improvements in Connection
with the Harmony Road and College Avenue Improvements Project.
The intersection of College Avenue and Harmony Road is one of the busiest in the City of
Fort Collins. Recent growth in the area and new construction along the Hannony Road
corridor has caused additional congestion and traffic delays at the intersection. The
improvement project requires acquisition of various real property interests from five different
properties which are located at the College/Hannony and Harmony/Mason intersections.
This project is partially federally funded through the Colorado Department ofTransportation
and, since the project will modify College Avenue, which is a State highway, all aspects of
the project, including property acquisitions, must comply with procedures for federally
funded projects. The acquisition phase of this project will conform to the provisions of the
Uniform Relocation Assistance and Real Property Acquisitions Policies Act of 1970 as
Amended(Public Law 91-646). In accordance with these regulations,property owners must
be informed about the possible use of eminent domain and their rights pursuant to Colorado
Statute in the official Notice of Interest Letter. The authorization from City Council is
needed prior to sending this information to property owners. This letter is the first official
step in the acquisition phase and happens prior to the appraisals.
Staff has developed a recommended timeline which would allow construction to begin in
February, 2010. Given the recommended construction schedule for the project and the fact
that the acquisitions must be conducted under procedures for federally funded projects,
timely acquisition of the property interests is necessary. Therefore, staff is requesting
authorization to use eminent domain for all property acquisitions,if such action is necessary.
24. Resolution 2009-053 Authorizing the Execution of Grant Agreement 09-FNL- SO With the
State of Colorado for Funding to Acquire Snow Removal Equipment at the Fort Collins-
Loveland Municipal Airport.
The Fort Collins-Loveland Airport is being offered a grant from the State to assist with the
purchase of snow removal equipment. The Airport purchased a used snow plow truck and
snow plow blade from the Denver International Airport ("DIA")in the amount of S 15,000.
The State Grant Agreement is in the amount of$7,500 and will be used to reimburse the
Airport for half the purchase cost. The snow removal equipment will increase the safety of
the Airport and reduce the time needed to clear the Airport runways and taxiways of snow
and ice.
25. Resolution 2009-054 Approving an Exemption to the Use of a Competitive Process for a
Contract with Positive Energy for a Community Benchmarking Program to Reduce Energy
Use.
This program will be purchased directly from Positive Energy for a first year cost of
$310,000. The program utilizes targeted,integrated communications with advanced software
analytics and behavioral science principles to inform customers about their usage and
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motivate them to conserve. The money for the purchase of this program is budgeted and
available in the Energy Efficiency budget of the Light and Power Fund.
26. Resolution 2009-055 Authorizing a Revocable Pen-nit to the Fort Collins Velodrome
Association to Conduct a Bicycle Race Event Series on City Property.
The Fort Collins Velodrome Association has contacted City staff with an interest in hosting
a bike race event series on the Streets Department property located at 625 Ninth Street. The
events would be held Tuesday nights starting June 16th and would run through July 7,2009.
Since the Streets Department is not property that is generally made available for use by
outside groups under the City's Administrative Policies or the City Code,the City must issue
a revocable permit to the Association to use the City Property. The Streets Department
location was identified for the event because of the large property layout, pavement in good
conditions, and it is possible to create a 1-kilometer criterium race course on the site. City
involvement with this event will fulfill the City's Bicycle Master Plan recommendations with
respect to supporting local bicycle sporting events and would add to the overall greater goal
of promoting Fort Collins as a cycling Mecca in Northern Colorado.
27. Resolution 2009-056 Making an Appointment to the North Front Range Transportation and
Air Quality Planning Council.
This Resolution changes the current appointment to the North Front Range Transportation
and Air Quality Planning Council (aka Metropolitan Planning Organization "MPO") from
Councilmember David Roy to Councilmember Ben Manvel.
***END CONSENT***
Ordinances on Second Reading were read by title by City Clerk Krajicek.
7. Second Reading of Ordinance No.053,2009,Appropriating Funds From the City's General
Fund Reserves for Transfer to the Fort Collins Urban Renewal Authority for the Purpose of
Providing a Loan for the Rocky Mountain Innovation Initiative Project.
S. Second Reading of Ordinance No. 054, 2009, Authorizing the Transfer of Existing
Appropriations from the Downtown Development Authority Fund to the Capital Project
Fund for the Building on Basics Pedestrian Plan Project, Linden Street Streetscape Project,
Phase 1.
9. Second Reading of Ordinance No. 055, 2009, Authorizing the Transfer of Appropriations
from the Downtown Development Authority Fund to the Capital Project Fund, Building on
Basics, Intersection Improvements, Jefferson Street/SH 14 Project.
10. Items Relating to Certain Utility Service Programs and Requirements.
A. Second Reading of Ordinance No. 056, 2009, Amending Chapter 26, Article VI, of
the City Code Relating to Certain Electric Service Programs and Requirements.
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B. Second Reading of Ordinance No. 057, 2009, Amending Chapter 26, Article III,
Division 6 of the City Code Relating to Water Conservation.
11. Second Reading of Ordinance No. 058, 2009, Authorizing the Lease of the Collindale Golf
Course Residence at 1341 East Horsetooth Road for Up to Five Years.
12. Second Reading of Ordinance No. 059, 2009, Authorizing the Acquisition by Eminent
Domain Proceedings of Certain Lands Necessary to Construct Public Improvements Related
to the Mason Corridor Bus Rapid Transit Project (Phase One).
13. Second Reading of Ordinance No. 060, 2009, Authorizing the Conveyance of a Utility
Easement to Tri-State Generation and Transmission Association, Inc.
14. Second Reading of Ordinance No. 061, 2009, Amending Chapter 26 Article VI of the City
Code Relating to the Provision of Electric Service.
15. Second Reading of Ordinance No. 062, 2009, Amending Chapter 26, Article VI of the City
Code Relating to Net Metered Electric Service.
Ordinances on First Reading were read by title by City Clerk Krajicek.
16. First Reading of Ordinance No. 063, 2009, Appropriating Prior Year Reserves.
17. First Reading of Ordinance No.064,2009,Appropriating Prior Year Reserves in the Natural
Areas Fund for the Purpose of Providing Natural Areas Programming Not Included in the
2009 Adopted City Budget and Authorizing the Transfer of Appropriations to the Capital
Projects Fund.
18. First Reading of Ordinance No.065,2009,Appropriating Prior Year Reserves in the General
Fund for Cultural Development and Programming Activities and the Fort Collins Convention
and Visitors Bureau.
19. First Reading of Ordinance No. 066, 2009, Making Various Amendments to the City Land
Use Code.
20. First Reading of Ordinance No. 067, 2009, Appropriating Unanticipated Revenue in the
Community Development Block Grant Fund.
21. First Reading of Ordinance No. 068, 2009, Appropriating Unanticipated Revenue from the
Colorado Department of Transportation in the Transit Fund for the Development of the
Transit Strategic Plan.
22. First Reading of Ordinance No. 069, 2009, Appropriating Unanticipated Revenue in the
Capitals Projects Fund, Mason Corridor Project for the South Transit Center Project.
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23. First Reading of Ordinance No. 070, 2009, Authorizing Acquisition by Eminent Domain
Proceedings of Certain Lands Necessary to Construct Public Improvements in Connection
with the Hannony Road and College Avenue hnprovements Project.
Councilmember Manvel made a motion,seconded by Councilmember Poppaw,to adopt and approve
all items not withdrawn from the Consent Calendar and to adopt Item #8 as revised. Yeas:
Hutchinson, Kottwitz, Manvel, Ohlson, Poppaw, and Roy. Nays: none.
THE MOTION CARRIED.
Staff Reports
Michelle Provaznik, Horticulture Facility and Services Administrator for the Gardens on Spring
Creek, gave an update on the Gardens on Spring Creek. She stated visits to the Gardens increased
greatly over the past two years. Revenues have increased with the increased visits due to more room
rentals, more classes being held and grants that have been received. The first fundraiser was held
this spring to raise funds to build a rock garden. A variety of events, including the Urban Gardening
Festival, Spring Plant Sale and Articulture,bring many people into the Gardens. The mission of the
Gardens is to improve lives through horticulture and community partnerships are one way to achieve
that goal. Partners include various City departments, CSU, Poudre School District, Front Range
Community College and a variety of non-profits.
Mark Jackson, Transportation Group Director, stated the Harmony Road Improvements Project is
the largest transportation construction capital project underway this year. Rick Richter, Engineering
and Capital Projects Manager, stated the Hannony Improvements Project includes improving the
Harmony/Shields intersection and widening Hannony from Seneca east to the railroad tracks.
Difficulties were encountered this spring with bad weather and problems with some water mains that
have caused a slight delay. The project adds travel lanes, bike lanes and pedestrian facilities along
Harmony. Phase 1, which is construction of the west half of the Shields/Hannony intersection and
the construction of Harmony west to Seneca will be completed by mid-June. Phase I1, the east side
of the project, will begin on June 15. The project should be completed by early August. The goal
is to complete the project before the fall semester begins at Front Range Community College.
Ordinance No. 053, 2009,
Appropriating Funds From the City's General Fund Reserves for Transfer to
the Fort Collins Urban Renewal Authority for the Purpose of Providing a Loan for
the Rocky Mountain Innovation Initiative Project, Postponed to June 9, 2009
The following is staffs memorandum for this item.
"EXECUTIVE SUMMARY
Ordinance No. 053, 2009, unanimously adopted on First Reading on May 12, 2009, authorizes a
loan, as authorized by City Council Resolution 2008-121, to the Urban Renewal Authority (URA)
in the amount of 85,303,939. The loan is-ill enable the URA to lend Rocky Mountain Innovation
Initiative Properties, LLC(RM12 Properties, LLC) the funds necessary to construct a new facility
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for the business incubation program. RM12 Properties, LLC is associated with the Rocky Mountain
Innovation Initiative, which rums a successful science and technology incubation program on behalf
of the City and other sponsors. "
Deputy City Manager Jones requested consideration of this item be postponed until June 9, 2009.
Councilmember Ohlson made a motion, seconded by Councilmember Manvel, to postpone
consideration of Ordinance no. 053, 2009 on Second Reading to June 9, 2009. Yeas: Hutchinson,
Kottwitz, Manvel, Ohlson; Poppaw, and Roy. Nays: none.
THE MOTION CARRIED.
Items Relating to Certain Utility Service Programs and Requirements,
Adopted on Second Reading
The following is staffs memorandum for this item.
"EXECUTIVE SUMMARY
A. Second Reading of Ordinance No. 056, 2009, Amending Chapter 26, Article V1, of the City
Code Relating to Certain Electric Service Programs and Requirements.
B. Second Reading of Ordinance No. 057, 2009, Amending Chapter 26, Article 111, Division 6
of the City Code Relating to Water Conservation.
The two Ordinances, unanimously adopted on First Reading on May 19, 2009, make housekeeping
changes to more closely align Code requirements with current utility programs and practices. The
changes do not represent any change in policy or direction. There will be no increase or decrease
in customers'utility rates."
Eric Sutherland, 631 LaPorte, stated the green pricing program allows citizens to pay more on their
utility bills with the assumption the funds will be used to create clean energy sources. The program
has been corrupted by diverting revenue from the program to purchasing renewable energy credits
which do not directly produce clean energy. There is no language in the City Code that will dictate
how the funds from the green pricing program will be used to further clean energy. A citizen
advisory board is needed that is more in tune with the trends that are reshaping the electric utility
industry.
Councilmember Ohlson stated Council has given direction to not purchase any renewable energy
credits and he asked when Council will consider selling the renewable energy credits already
purchased. He also asked for the Electric Board to be changed to an Energy Board. Steve Catanach,
Light and Power Operations Manager, stated Council has been provided a memo that details the
renewable energy credits owned, the location of each and the wind farm energy production. The
memo also detailed the rate impacts to customers participating in the green energy program if the
renewable energy credits were sold.
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Mayor Hutchinson noted the Leadership Team would discuss changing the Electric Board to an
Energy Board.
Councilmember Manvel asked why there was no board or commission input for this item. Terri
Bryant, Utilities Finance/Budget Manager, stated Utilities was having difficulties administering the
rebate programs. Current Code language is inflexible in allowing the administration of newer
conservation and rebate programs. The Ordinances do not impact any rate changes and only adjusts
Code language to allow more flexibility to offer citizens a multitude of rebate and conservation
programs without continually returning to Council to change Code language.
Councilmember Roy stated Council has given clear direction for renewable energy credits not to be
purchased and he asked why the purchase of renewable energy credits has not been stopped. Patty
Bigner, Utilities Customer and Employee Relations Manager, stated staffs analysis of the options
determined the impacts to the variety of programs and rates would be significant if the purchase of
renewable energy credits were to be stopped. Staff provided a memo to Council for its review before
proceeding.
Councilmember Roy made a motion,seconded by Councilmember Manvel,to adopt Ordinance No.
056, 2009 on Second Reading.
Councilmember Ohlson asked for any items that involve changes to be reviewed by the board most
closely related to the area.
Councilmember Roy asked for a discussion on renewable energy credits to be scheduled. He
supported changing the Electric Board into an Energy Board.
Councilmember Poppaw supported the creation of an Energy Board.
Mayor Hutchinson noted a renewable energy credit is designed to provide supplementary funding
to pay for electricity produced by renewable energy that is produced elsewhere and not locally.
The vote on the motion was as follows: Yeas: Hutchinson,Kottwitz,Manvel,Ohlson,Poppaw,and
Roy. Nays: none.
THE MOTION CARRIED.
Councilmember Roy made a motion,seconded by Councilmember Poppaw,to adopt Ordinance No.
057, 2009 on Second Reading. Yeas: Hutchinson, Kottwitz, Manvel, Ohlson, Poppaw, and Roy.
Nays: none.
THE MOTION CARRIED.
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Ordinance No. 061, 2009,
Amending Chapter 26 Article VI of the City Code Relating to
the Provision of Electric Service, Adopted on Second Reading
The following is staffs memorandum for this item.
"EXECUTIVE SUMMARY
This Ordinance, unanimously adopted on First Reading on May 19, 2009, clarifies that the City is
the sole provider of retail electric service with the City. The revised Code has the goal of
addressing three key issues. The.first is the establishment ofservice terr-itoryprotections similar to
those c .forded investor owned utilities, rural electric associations and other municipal utilities
throughout the State. The second goal is to align service area definitions with bond holder
expectations. The third goal is to support the development of renewable generation projects,
including those owned by third party entrepreneurs selling electricity at retail within City limits,
provided certain conditions are met.
For Second Reading, the definition of high voltage transmission has been revised to read "shall
mean the transmission ofelectric energy at voltages greater than thirty-five thousand(35,00)volts.
Section 10 of the Ordinance(page 3)has been revised to remove the word "impulses"firom "...high
voltage transmission of electric current... "
Eric Sutherland; 631 LaPorte, stated the Ordinance is not necessary and the City should be
developing regulations to regulate distributed energy generation. A third-party who develops
distributed generation should pay the City payments-in-lieu-of taxes (PILOTs). He urged Council
not to adopt the Ordinance until detennination is made as to whether PILOTs will be collected from
third-party generators.
Councilmember Roy asked if the Ordinance will allow PILOTS to be collected from third-party
generators. Steve Catanach, Light and Power Operations Manager, stated the collection of PILOTs
is included in the rate schedules in City Code.
Councilmember Manvel asked if PILOTs will be collected. Catanach answered in the affirmative.
Mayor Hutchinson asked if the PILOTS could be diverted from the Utilities fund into the General
Fund. Deputy City Manager Jones stated PILOTS are a source of revenue to the General Fund.
Catanach stated no other utility funds can be diverted to the General Fund because those funds are
committed to Utilities by the City's Charter.
Councilmember Manvel asked what happens to the renewable energy credits earned by third party
generation. Catanach stated the Utilities' Incentive Program has an option to contract with third-
party generators to purchase their renewable energy credits for S1/watt for a 20-year life span.
Utilities cannot require the customer to assign the renewable energy credits to the Utilities because
the credits have a monetary value that must be recompensed. Utilities has been purchasing
renewable energy credits from customers as part of the Incentive Program, but the purchase is not
included in the language of the Ordinance. The renewable energy credits purchased from local
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energy generation have multiple value to the Utilities. The main constraint in purchasing local
renewable energy credits is the budget and having funding available to make the purchase.
Councilmember Roy made a motion, seconded by Councilmember Manvel,to adopt Ordinance No.
061, 2009 on Second Reading.
Councilmember Roy stated he was opposed to the purchase of renewable energy credits outside of
the City, not generated or used by the citizens of Fort Collins but the purchase of locally produced
renewable energy credits is a good investment.
The vote on the motion was as follows: Yeas: Hutchinson, Kottwitz, Manvel,Ohlson,Poppaw,and
Roy. Nays: none.
THE MOTION CARRIED.
Ordinance No. 062, 2009,
Amending Chapter 26, Article VI of the City Code Relating to
Net Metered Electric Service, Postponed
The following is staffs memorandum for this item.
"EXECUTIVE SUMMARY
This Ordinance, unanimously adopted on first Reading on May 19, 2009, amends Chapter 26,
Article V1 the City Code to define the net metering requirements.for qualifying renewable generation
facilities. In light ofrecent technological and legislative developments, the City intends to.formalize
its net metering program. Pursuant to a pilot program, the City has offered net metering services
to its customers since 2005 through special services contracts. The intent of this amendment to the
City Code is to codify the net metering rate in the Utility's existing rates.
Eric Sutherland, 631 LaPorte, stated the idea of net metering is for a customer to produce enough
energy to offset the energy used. When a customer produces energy over and above the energy used,
the customer becomes a seller of electricity. The section of City Code that authorizes and sets rates
for net metering should not be used for someone who generates 1 megawatt of electricity and uses
only a fraction of that amount. A different regulatory structure is needed for distributed power
generation over and above a customer's annual consumption. Utilities should not allow production
of up to 1 megawatt.
Councilmember Ohlson asked why the cap is set at 1 megawatt and not at a much lower rate. Steve
Catanach, Light and Power Operations Manager, stated the approximate cost of installing a photo
voltaic system is between 18 and 24 cents per kilowatt/hour generated. The current rate charged to
residential customers is 6 cents per kilowatt/hour. The proposed Ordinance sets the rate of energy
purchased back from customers at 6 cents per kilowatt/hour. The excess energy generated by a large
commercial customer who would be able to install a system capable of producing I megawatt,would
be purchased back at under 2 cents per kilowatt/hour. The intent of the 1 megawatt cap is to remove
any roadblocks from any size of customer that wishes to install renewable generation.
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Councilmember Manvel asked if the rate charged to commercial customers was lower than the rate
charged by Platte River for the energy produced. Catanach stated Platte River charges the City
.01774 cents per kilowatt/hour. There is a demand rate component which is the peak usage at any
given 15 minute period during each month. The energy charge and the demand charge are blended
together for the commercial customer, for an average charge of 4 cents per kilowatt/hour. The
benefit to the customer in installing an energy generation system is in generating electricity to meet
the customer's load because the customer would save the demand component of the rate along with
the retail energy rate. Utilities will purchase any excess energy at the energy rate, but will not pay
the demand component back to the customer.
Councilmember Manvel noted the price paid to a customer for any excess energy generated will not
provide any profit to the customer. Catanach stated a review of net metering will occur periodically
as technology changes. Many states offer a cap for net metering higher than 1 megawatt and
regulated utilities in Colorado currently have a 2 megawatt limit.
Councilmember Manvel asked if the City would be required to buy energy at 6 cents per
kilowatt/hour if a customer does produce large amounts of energy that is not used by the customer.
Catanach stated the rate of 6 cents per kilowatt/hour is a residential rate. A residential customer does
not have the infrastructure or capability to place 1 megawatt of power back into the City's system.
If a large customer generates 1 megawatt and uses very little of that energy and has a connection to
the City's system that is capable of handling that 1 megawatt, the customer would sell the excess
energy to the City at a rate of just below 2 cents per kilowatt/hour. No resource exists for customer
could invest in that would produce the power for less than 2 cents per kilowatt/hour, so no customer
will profit from excess energy generation. A residential customer, could possible produce enough
excess energy to make some money from the City buying the excess energy. The idea of purchasing
excess energy at the offset retail rate is to provide an incentive for excess generation. The cost of
a system capable of producing a high amount of excess energy would be prohibitive for a residential
customer and the customer would not make a profit.
Councilmember Manvel stated many communities have linked net metering to the customer's actual
consumption and do not set a flat rate limit. Catanach stated the State has added the percentage cap
only recently and staff has not considered changing the cap from a flat rate to a percentage.
Councilmember Ohlson asked why net metering is not separated from power generation in the Code.
Catanach stated net metering addresses qualifying resources and the interconnection and parallel
generation component to the rates is designed to encompass all types of generation, not just
qualifying renewable generators.
Councilmember Ohlson asked if Second Reading could be postponed for staff to consider any
proposed revisions. Catanach stated the cap could be changed to 120% of a customer's usage, if
Council directs.
Councilmember Roy made a motion, seconded by Councilmember Manvel, to postpone Second
Reading of Ordinance No. 062, 2009 until staff has further studied the issue and reviewed any
changes with the Electric Board and the Natural Resources Advisory Board. Yeas: Hutchinson,
Kottwitz, Manvel, Ohlson, Poppaw, and Roy. Nays: none.
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THE MOTION CARRIED.
("Secretary's note: The Council took a brief recess at this point in the meeting.)
Ordinance No. 066, 2009,
Making Various Amendments to the City Land Use Code,
Adopted as Amended on First Reading
The following is staff,s memorandum for this item.
"EXECUTIVE SUMMARY
Staff has identified a variety of proposed changes, additions and clarifications in the 2009 annual
update of the Land Use Code.
BACKGROUND
The Land Use Code vvas .first adopted in March 1997. Subsequent revisions have been
recommended on a regular basis to make changes, additions, deletions and clarifications that have
been identified since the last update. The proposed changes are offered in order to resolve
implementation issues and to continuously improve both the overall quality and "user-friendliness"
of the Code.
The one potential Code change related to the bn fifer distance around wastewater treatment plants
has been pulled from this Ordinance,for separate consideration on July 7. "
Deputy City Manager Jones noted the proposed changes to the Land Use Code do not include the
issue of buffer distance from the wastewater treatment plant.
Councilmember Manvel asked if the wording in Section 2 of the Ordinance, which would allow
extensions fora final plan or site development plan,would accommodate developers when economic
conditions preclude the developer from proceeding with the plan. Ted Shepard,ChiefPlanner,stated
the proposed change adds a clause that will allow more flexibility in interpreting the criteria for
granting extensions.
Mayor Hutchinson asked what the impact will be with the proposed amendments to Section 3.2.1.
Shepard stated this Section applies to multi-family, institutional and commercial properties and not
to single family, detached homes. Laurie D'Audney, Water Conservation Specialist, stated many
sprinkler contractors and landscape designers were involved in the process of developing the
amendments. The intent is to bring standards to outdoor sprinkler systems and incorporate best
management practices and new technologies.
Councilmember Ohlson asked if the change to this Section was reviewed by the Water Board.
D'Audney stated the Water Board Conservation and Public Education Committee did review the
change.
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Councilmember Roy made a motion, seconded by Councilmember Manvel to adopt Ordinance No.
066, 2009 on First Reading.
Councilmember Ohlson made a friendly amendment to eliminate the proposed change to Section
5.1.2 (2)(g) of the Land Use Code(Section 46 of the Ordinance)until such time as staff has further
researched the proposed change in that Section. Councilmembers Roy and Manvel accepted'the
friendly amendment.
Councilmember Ohlson stated he would like a policy established to create a review system for
irrigation companies to provide oversight so the impacts on sensitive riparian areas can be
considered.
The vote on the motion was as follows: Yeas:Hutchinson,Kottwitz, Manvel, Ohlson,Poppaw,and
Roy. Nays: none.
THE MOTION CARRIED.
Resolution 2009-054
Approving an Exemption to the Use of a Competitive Process for a Contract
with Positive Energy for a Community Benchmarking Program
to Reduce Energy Use, Adopted
The following is staffs memorandum for this item.
"FINANCIAL IMPACT
This request is for an exception to the competitive process over $200,000 and requires Council
approval. The City of Fort Collins Utilities requested purchase of a community benchnrarking
program for the purpose of reducing energy use.
EXECUTIVE SUMMARY
This program will be purchased directly from Positive Energy for a first year cost of$310,000. The
program utilizes targeted, integrated communications with advanced software analytics and
behavioral science principles to inform customers about their usage and motivate them to conserve.
The mone.y.for the purchase of this program is budgeted and available in the Energy Efficiency
budget of the Light and Power Fund.
BACKGROUND
The 2009 Energy Policy, adopted by City Council on January 6, 2009,provides strategic planning
guidance.for Fort Collins Utilities'Light and Power Service Unit, the Energy Services group and
the entire City Government on electric system reliability, reduction of carbon emissions, renewable
energy and the ongoing relationship with Platte River Power Authority. The second goal area
outlines direction related to the reduction of carbon emissions related to energy use. The policy
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establishes a specific energy reduction goal: Achieve annual energy efficiency and conservation
program savings of at least 1.5% of annual energy use (based on a three year average history).
Staff researched the existing marketplace for similar energy efficiency programs and interviewed
Utilities staff members currently using the program. Although several companies are exploring
development of similar programs or were interested in developing a pilot program with the City,
staff was unable to find an established program of by other industry vendors. Some of the
unique technical qualifications of the program include proprietary software that generates
individualized reports, integration and data warehousing software, and capaciry.for data-mining
and data collection used for analyzing historical energy use patterns.
Current utility customers include Southern California Edison, Puget Sound Energy, Sacramento
Municipal Utility District, Sempra and Commonwealth Edison. Conversations with staff from
several of these utilities resulted in favorable recommendations and expressed overall satisfaction
with both Positive Energy staff and program results.
TRIPLE BOTTOM LINE FOR THE POSITIVE ENERGY PROGRAM
Social Impact
Fort Collins Utilities will be purchasing the Positive Energy community benchmarking program as
an energy efficiency and conservation strategy. Positive Energy Home Energy Reporting System
of a new, innovative approach to informing customers and motivating behavior changes that
result in reduced electricity use. A "benchmark" group of 25,000 households will receive home
energy reports on an average of 6 times per year. 150,000 fully personalized reports will be
delivered as part of this program. This group will also have free online access to the program's
Energy Insider website, where customers can get more information on energy programs and tips and
share information about what their efficient neighbors are doing to reduce consumption. This
website can also act as customer education tool,for community action and events.
Energy reduction of the benchmark group will be measured against a control group of homes that
are not receiving the reports. In addition to energy reduction dare to behavioral changes(conserving
energy), the program's home energy reports and online tools are expected to help improve Demand
Side Management program participation. One of the key program elements provided by Positive
Energy is a robust measurement and verification process that will provide a set ofdetailed program
reports which will document the savings and effectiveness of the program. Energy reduction of the
benchmark group will be measured against the control group.
Financial Impact
This program will be purchased directly from Positive Energy,for a first year cost of$310,000.
Program expense.for the first year includes a one-time setup cost and expense for subsequent years
will be approximately$252,000. Through an Intergovernmental Agreement with Platte River Power
Authority, the cost of conserved energy(CCE) will be offset at$.02/kWh or approximately$90,000
by Platte River Demand-Side Management,funding.
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Environmental Impact
Anticipated energy savings.from the program are estimated to be 4,500 MWh and 3,640 tons of
carbon dioxide avoided annually. In addition to energy savings from behavioral changes, additional
energy savings may result through suggestions for additional efficiency measures in each of the
customized energy reports. For example, in addition to turning the thermostat down in cold weather
and up in the warm weather, the report may suggest a programmable thermostat or air conditioner
tune-up. "
Bruce Lockhart, 2500 East Harmony, stated his concerns about the cost of the software for this
program. He did not believe the purchase should be exempted from the competitive bid process.
Eric Sutherland, 631 LaPorte, stated programs that encourage conservation are a good investment
for the Utilities. The Positive Energy Program was not reviewed by any board or commission and
did not receive any public input and a process should be developed to ensure citizens are included
in decisions such as the purchase of this program for over$300,000.
Councilmember Kottwitz asked if the Resolution approves the Program for only one year and if the
program will need to be reapproved each year. Patty Bigner, Utilities Customer and Employee
Relations Manager, stated the program is a pilot program. The Resolution approves an exception
to the competitive bid process and not the expenditure itself. Diane Jones, Deputy City Manager,
stated the cost for future years would be included in the budget process and will not be brought to
Council for individual consideration.
Councilmember Ohlson noted Positive Energy is the only company that provides this type of energy
conservation program and he asked if staff has confirmed that other cities using this program are
satisfied with the results. Bigner answered in the affirmative.
Councilmember Manvel asked how this program would relate to the Smart Metering Program that
the City hopes to begin in the near future. Bigner stated smart metering gives customers timely
information about energy use. The Positive Energy program will examine a customers energy use,
coupled with the type of property and area where the customer lives, and will create a virtual
neighborhood to benchmark the customer's use with the neighbor's use. The premise of the program
is that people will be motivated to change, once they understand their use compared to others who
are in similar living arrangements. The customer will receive a report that will include information
on ways to improve energy use. The goal is to reduce energy consumption by 2 to 2 1/2%annually
in the participating households.
Councilmember Ohlson asked if the Electric Board had reviewed the program. Bigner stated staff
does not typically take demand side management measures such as this one to the Electric Board.
Councilmember Kottwitz asked if the funds to purchase this program are currently available in the
Light and Power fund and for what other purpose might those funds be used. Bigner stated funding
is available for demand side management programs that are approved each year in the budget. This
program is designed to target residential customers so the same funding could be used for reducing
energy use by industrial customers. Residential customers are very difficult to reach because they
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June 2, 2009
are so diverse and numerous. This program will provide an effective way to reach a large number
of households.
Councilmember Kottwitz asked if the information provided to residents to become more energy
efficient will include an estimate of potential cost savings. Bigner stated the motivation behind this
program is to help customers see what their energy use is and to motivate them to change their
behavior which will provide cost savings.
Councilmember Roy made a motion, seconded by Councilmember Manvel, to adopt Resolution
2009-054.
Councilmember Roy asked if the City is doing anything to increase funding provided by Platte River
for programs that encourage energy conservation. Bigner stated Platte River is committed to
providing more funding for programs such as this. The Platte River Board detennines the amount
of funding for demand side management programs.
Councilmember Roy asked for a list of programs for which staff is requesting more funding from
Platte River. Bigner noted Platte River has been very supportive of the City`s demand side
management programs.
Councilmember Kottwitz stated showing customers what cost savings they could achieve with
energy conservation should be a part of this program.
Councilmember Manvel asked if a list of various demand side management programs used by other
entities was available to determine which programs would be the most beneficial to customers.
Norm Weaver, Energy Services Engineer, stated staff is currently evaluating various programs to
determine the most cost effective measures. The Positive Energy program has unique opportunities
for the residential sector and can be started immediately.
The vote on the motion was as follows: Yeas: Hutchinson, Kottwitz,Manvel, Ohlson, Poppaw,and
Roy. Nays: none.
THE MOTION CARRIED.
Other Business
Councilmember Ohlson made a motion,seconded by Councilmember Manvel,to cancel the Regular
City Council Meeting of June 16, 2009 because of the Colorado Municipal League Annual
Conference. Yeas: Hutchinson, Kottwitz, Manvel, Ohlson, Poppaw, and Roy. Nays: none.
THE MOTION CARRIED.
Councilmember Ohlson made a motion, seconded by Councilmember Manvel, to adjourn the
meeting to 6:00 p.m. June 9, to conduct any business that might come before Council. Yeas:
Hutchinson, Kottwitz, Manvel, Ohlson, Poppaw, and Roy. Nays: none.
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THE MOTION CARRIED.
Adjournment
The meeting adjourned at 9:05 p.m.
Mayor
ATTEST:
City Clerk
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June 9, 2009
COUNCIL OF THE CITY OF FORT COLLINS, COLORADO
Council-Manager Form of Government
Adjourned Meeting- 6:00 p.m.
An adjourned meeting of the Council of the City of Fort Collins was held on Tuesday,June 9, 2009,
at 6:00 p.m. in the Council Chambers of the City of Fort Collins City Hall. Roll Call was answered
by the following Councilmembers: Hutchinson, Manvel Ohlson, Poppaw, Roy and Troxell.
Staff Members Present: Atteberry, Krajicek, Roy.
Items Relating to Grants from the Federal Aviation Administration to
the Fort Collins-Loveland Airport, Adopted
The following is staffs memorandum for this item.
"FINANCIAL IMPACT
The Airport's 2009 approved budget is being amended to include the necessary appropriations for
the expenditure of the American Recovery and Reinvestment Act.funds and the Airport's local funds
associated with the Entitlement./rinds. The local funds necessary for the projects.funded with these
Grants are $89,500.00 and will come from the Airport's Fund Balance.
EXECUTIVE SUMMARY
A. Resolution 2009-057 Authorizing the Execution of the 2009 Grant Agreement with the
Federal Aviation Administration,forlrnprovements to Construct a New Taxiway to be Known
as the "Echo Taxiway" and to Improve Other Taxiways at the Fort Collins-Loveland
Municipal Airport.
B. Resolution 2009-058 Authorizing the Execution of a Stimulus Grant Agreement with the
FederalAviation Aclrninistration forImprovenents to the Alpha Taxiway at the Fort Collins-
Loveland Municipal Airport.
Resolution 2009-057 authorizes the execution of a FAA grant in the amount of$675,379. This
grant provides the remaining amount of the$I million of entitlement funds the Airport will receive
this federal f seal year. In February 2009, the Cities accepted the first installment of the$1 million
in the amount of$324,621.
Resolution 2009-058 authorizes the execution of a FAA grant in the amount of$556,797 and is
frmded through the AmericanRecoveiy and Rein vestment Act Qf2009("ARRA'). This grant covers
100%of the project costs and therefore does not require any local fimding.
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BACKGROUND
The ivork to be completed with the entitlement grant will includepaving a new public taxiway(Echo
Taxiway) that will better serve the expansion of the aircraft hangar area, and reconstructing
portions of existing public taxiways in the hangar area that have badly deteriorated. The Airport
tenants support the need to increase taxiway access to the hangar area and the reconstruction of
portions ofexisting taxiways that are.failing and causing drainage problems. It is the responsibility
of the Airport to make these improvements.
The ARRA Grant will be used to reconstruct a,portion of the Alpha taxiway, which is the primary
taxiway.for the Airport's main runway and has a high priority for federal.fimding. Alpha taxiway
ivas reconstructed ti-ro years ago, except,for the portion that will now be completed with the ARRA
frards. In preparation_for this swmner's construction work,several additional projects were bid with
the anticipation that ARRA.firnds might become available. The Alpha taxiivay was one o_f those
projects and staff is pleased with the results of this effort."
Dave Gordon, Fort Collins-Loveland Airport Director, stated the first grant is a continuation of the
Entitlement Grant in the amount of$675,379 and is the balance of the$1 million grant the Airport
receives each year through Entitlement funds. The first part of the grant, $324,621, was received
earlier in the year. The funds will be used to construct taxiways and build a new taxiway in an area
that serves a growing hangar development portion of the Airport. The second grant is a stimulus
grant in the amount of$556,797 and requires no matching funds. The funds will be used to complete
the last portion of Taxiway"Alpha."
Mayor Hutchinson asked if the Entitlement grant was received because the Airport has a commercial
carrier operating at the Airport. Gordon answered in the affirmative. The second grant is not
connected in any way to the Entitlement grant.
Councilmember Troxell made a motion,seconded by Councilmember Poppaw,to adopt Resolution
2009-057. Yeas: Hutchinson, Kottwitz, Manvel, Oh►son, Poppaw, Roy and Troxell. Nays: none.
THE MOTION CARRIED.
Councilmember Troxell made a motion,seconded by Councilmember Poppaw,to adopt Resolution
2009-058. Yeas: Hutchinson, Kottwitz, Manvel, Oh►son, Poppaw, Roy and Troxell. Nays: none.
THE MOTION CARRIED.
Ordinance No. 053, 2009,
Appropriating Funds From the City's General Fund Reserves for Transfer to
the Fort Collins Urban Renewal Authority for the Purpose of Providing a Loan
for the Rocky Mountain Innovation Initiative Project, Adopted on Second Reading
The following is staffs memorandum for this item.
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Jame 9, 2009
"EXECUTIVE SUMMARY
Ordinance No. 053, 2009, unanimously adopted on First Reading on May 12, 2009, authorizes a
loan, as authorized by City Council Resolution 2008-121, to the Urban Renewal Authority (URA)
in the amount of$5,303,939. The loan will enable the URA to lend Rocky Mountain Innovation
Initiative Properties, LLC (RM12 Properties, LLC) the funds necessary to construct a new facility
for the business incubation program. RM12 Properties, LLC is associated with the Rocky Mountain
Innovationlnitiative, which runs a successftd science and technology incubation program on behalf
of the City and other sponsors.
Since the first reading of the RMI2 item, the appraisal for the property has been completed by
Shannon &Associates. The land appraisal evaluates the land "as-is" or raw land value, without
development approvals or improvements. The appraisal places the current raw value ofthe property
at S5.10 per square foot a reduction from the contract price of$8.00 per square foot or nearly
$200,000 reduction on the purchase price. Therefore, the land purchase price needs to be re-
negotiated or RM12 Properties LLC will terminate the project. The UDP team is reviewing an offer
front RM12 properties that moves the building to the west side of the property and provides
additional buildable land.
Assuming a mutually agreeable resolution can be achieved, RM12 will either have a reduced land
price or additional buildable land. An executed and revised contract will be complete by June 8,
2009. This contract will be provided in the "read before packet, " along with a brief memo
describing any pertinent changes. The contract between RMI2 and UDP does not involve the City
or the URA but is part of the protection to the City through the assignment of rights included with
the loan agreement.
Mike Freeman, Chief Financial Officer, stated the property received a lower appraisal than was
originally anticipated. Staff worked with the property owner to develop an option that keeps the
budget for the land at the original amount and will acquire more property for expansion. The site
will be moved farther west.
Eric Sutherland, 631 LaPorte, stated his concerns with the project because it is too risky for the use
of public dollars. An existing building should be used instead of constructing a new building.
Mayor Hutchinson asked if investing in a project involving entrepreneurs is too risky. Freeman
stated 14 companies have expressed interest in joining RM12 in the past month because of the
awareness raised by the project. The demand exists to fill the space in RM12 and an extensive
process was used to evaluate lease structures and lease rates and long-term funding. Using the new
market tax credits for a portion of the financing reduces the City's risk because less City money is
used for the loan.
Mayor Hutchinson asked if an existing building was available that would meet RM12's needs.
Freeman stated RMI2 utilized the Northern Colorado Economic Development Corporation's site
selection process for identifying available real estate. Many sites were not suitable because they did
not meet the goal of keeping the project in Fort Collins. Another goal was to locate the project in
the Downtown or North College area of Fort Collins. Three sites were evaluated. The first site was
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June 9, 2009
an existing building and was purchased by another party. The second site was the Vine site, which
was chosen for this project. The third site was not considered.
Councilmember Manvel asked why the original contract price was for $8 per square foot, which
seemed high for the area. Freeman stated when the proposal from the property owner was received,
the City used a third party real estate expert to validate the offer, based on comparable properties.
The City's real estate services department also provided an expert opinion that $8 per square foot
was an appropriate price for that property. The commercial real estate market has shifted downward
and has caused the valuation of the property to be less than anticipated. Once the appraisal was
received, more negotiations occurred with the property owner and RMI2 has been offered a site on
the west side of the property. There is an historic property adjacent to the new RM12 site that will
never be developed, so the mountain views from the new RM12 site will be better. The location of
the building on the new site will be a more attractive setting and will allow for future expansion.
The proximity of RM12 to the CSU Engines Lab could create additional demand for RM12 services
in the long teen.
Councilmember Manvel asked if RM12 plans to build a larger building with the larger site. Freeman
stated RM12 does not intend to increase the size of the project at this time. Any expansion would
be well into the future.
Councilmember Ohlson expressed his belief that $8 per square foot still seems high since other
parcels in the area had sold for$2 to $4 per square foot. He asked if the new agreement meant the
project was receiving more land since the appraisal came in lower. Freeman answered RM12 will
pay $5.10 per square foot and will receive more square footage as part of the agreement.
Councilmember Roy asked when the final contract was executed. Freeman stated it was signed June
8. Staff had indicated to the property owner that postponement of the item indefinitely would be
recommended to Council if an agreement were not reached by the time of this meeting.
Councilmember Roy noted Council did not receive a copy of the contract and asked if the only
change to contract was the purchase price. Freeman stated the purchase price was the only change
made to the contract. The contract was included in the materials provided to Council on First
Reading on May 12th.
Councilmember Manvel made a motion, seconded by Councilmember Troxell, to adopi Ordinance
No.053,2009 on Second Reading. Yeas: Hutchinson,Kottwitz,Manvel,Ohlson,Poppaw,Roy and
Troxell. Nays: none.
THE MOTION CARRIED.
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June 9, 2009
Ordinance No. 071, 2009,
Appropriating Funds Transferred from the Fort Collins Urban Renewal Authority
Fund into the Capital Projects Fund for the North College Avenue and East
Willox Lane Improvement Project, Adopted on First Reading
The following is staffs memorandum for this item.
"FINANCIAL IMPACT
Appropriation of the funds previously transferred from the URA to the City in the amount of
$2,812,620 will provide the funding necessary to construct the North College Avenue and East
Willox Lane Improvements Project.
EXECUTIVE SUMMARY
The Marketplace development is located on the northeast corner of North College Avenue and
Willox Lane. It is a large commercial shopping center with a King Soopers grocery store anchor
tenant. There will be significant, beneficial financial impacts to both the City and the Fort Collins
Urban Renewal Authority from this project.
On May 5, 2009, City Council adopted, on Second Reading, Ordinance No. 046, 2009,
appropriatingfunds from the City's General Fund reserves for transfer to the Fort Collins Urban
Renewal Authority.for the purpose of providing a loan for the project.
On April 21, 2009, the Fort Collins Urban Renewal Authority adopted URA Resolution No. 016.
That resolution authorized the negotiation and execution of a loan agreement with the City for the
project and authorized the transferfrom the URA to a City Capital Projects account for the purpose
of designing and constructing the improvements.
On May 19, 2009, City Council adopted, on Second Reading, Ordinance No. 049, 2009, authorizing
acceptance of the transfer of funds from the URA. However, this ordinance did not appropriate
those funds. Because the URA and the City are separate legal entities, it is necessary for Council
to appropriate the transferred.funds. Ordinance No.071, 2009, accomplishes this. "
City Attorney Roy noted the Ordinance completes a series of transactions that Council began earlier
this year. Funds had been transferred from the URA to the City in order to complete the Project.
This Ordinance appropriates those funds.
Councilmember Roy made a motion,seconded by Councilmember Manvel,to adopt Ordinance No.
071, 2009 on First Reading. Yeas: Hutchinson, Kottwitz, Manvel, Ohlson, Poppaw, Roy and
Troxell. Nays: none.
THE MOTION CARRIED.
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June 9, 2009
Other Business
CouncilmemberTroxell withdrew from the discussion ofResolution 2009-05Approving Exemptions
to the Use of a Competitive Process for Contracts for Development and Demonstration of a
Coordinated andlntegrated System ofMixed Distributed Electric Resources under a Grant,from the
U.S. Department of Energy, due to a conflict of interest.
Resolution 2009-059
Approving Exemptions to the Use of a Competitive Process for Contracts
for Development and Demonstration of a Coordinated and Integrated System
of Mixed Distributed Electric Resources under a Grant
from the U.S. Department of Energy, Adopted
The following is staffs memorandum for this item.
"FINANCIAL IMPACT
The total budget for the project is S11.1 million, which has already been appropriated. In November
2008, the City Council authorized Resolution 2008-106, which allows the City Manager to execute
the agreement with the Department of Energy (DOE) and enter into subcontract agreements with
the project partners. The agreement outlines, per the grant submittal, how matching funds are
contributed and DOEfunds are distributed amongst the partners. This Resolution allows the City,
as grant administrator, to contract with the non-governmental partners as an exemption to
competitive process.
Total project budget: S11,052,942
Total matchingfiinds: $ 4,729,561
Funds from DOE: $ 6,323,381
EXECUTIVE SUMMARY
This project will modernize and transform a portion of the electrical distribution system in the City
by developing and demonstrating a coordinated and integrated system of mixed distributed electric
resources — including renewable generation (solar), rotary- and inverter-based generation, and
demand response methods — that will reduce peak loads on multiple distribution feeders in the
downtown area by up to 30%and deliver improved efficiency and reliability.
BACKGROUND
The applicant for the overall project is the City of Fort Collins. The project will address the
Research, Development, and Demonstration of a Coordinated and Integrated System of 3.5 MW of
Mixed Distributed Resources in Fort Collins toAchieve a 20-30%Peak Load Reduction on Multiple
Distribution Feeders. Fort Collins is well positioned to execute this contract due to the unique
combination ofworld-class research facilities at Colorado State University,participation ofglobal
industry leaders and local entrepreneurs able-to commercialize the technology, the City of Fort
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June 9, 2009
Collins focus on and investments in clean energy as a key pillar of fixture growth, the presence of
a city owned utility and extensive community support.
Since this grant has been awarded and the City has begun the process ofexecutingsubcontracts with
the project partners, a question has come up regarding the need to competitively bid the
participation of the partners. Project partners were identified early, prior to the grant being
submitted, and letters of commitment were solicited by the City to outline and secure the partners
role. The original concept for FortZed cane fron the UniverCity Connections project, organized
through the Community Foundation. Mary of the partners were involved in the UniverCity
Connections effort and were recruited to participate with cash and no-cash matches. Otherpartners
were specially recruitedfor their expertise andlor specialized equipment what would be needed. The
overarching goal was to include as many local partners as would be possible— a goal that was
certainly met with this project.
It was never envisioned at the time that a competitive process would be used as the partners'roles
were voluntary and each partner- brings specific value to the overall project. This Resolution
clarifies that the City can enter into these subcontract agreements with no competitive process
required."
Mike Freeman, Chief Financial Officer, stated a large Department of Energy grant has been secured
for the FortZed project. It was a complicated grant proposal because of the large number of partners
involved. In November 2008, Council adopted Resolution 2008-106, which authorized the City
Manager to sign the contract with the Department of Energy and allowed negotiations with the
partners in this Project. In February 2009,Ordinance No.013,2009,appropriated all the grant funds
the City anticipated receiving. The original proposal was developed with the understanding that the
partners in the project could make profits on the work they executed under the grant. Some of the
partners would not have participated in the project if they were not able to earn a profit on the work
they did. The Department of Energy has changed its mind several times about the issue of where the
partners could make profits on they work they do under the grant. Two weeks ago, the Department
of Energy sent a letter, formally stating the original proposal was acceptable and it would allow the
partners to earn profits from the work they do under the grant. As a result of this decision,the City's
Purchasing Policy created a problem because the City's partners are characterized as"for profit"by
the Department of Energy. The City cannot enter into the subpartner contracts because they are"for
profit" and, under the Purchasing Policy, an open solicitation for proposals would be required.
Requests for proposals cannot be offered because the grant partners are all volunteers and have put
money, matching equipment and time into the project. This Resolution will exempt the partner
contracts from the purchasing process and will enable the project to move forward in a timely
fashion.
Councilmember Roy asked what expertise Spirae, Inc brings to the project. Freeman stated Spirae,
Inc. is a local company that is a central part to the Smart Grid element of the project. Smart Grid
will integrate the renewable energy products onto the grid to help achieve peak load reduction,the
goal of the project.
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June 9, 2009
Mayor Hutchinson noted Spirae was one of the founders of the Northern Colorado Clean Energy
Cluster and has been a large component in making this project feasible.
City Attorney Roy stated when the Department of Energy approved the agreements with the private
partners on a "for profit" basis; it characterized the partners as contractors of the City. Under the
Department of Energy regulations, that characterization requires that the procurement of those
services comply with the local Purchasing Code. Exempting certain kinds of procurements from the
Purchasing Code is a standard procedure under City Code, with certain criteria specified as to when
it is appropriate. Those criteria do apply to this situation. The project is time sensitive and
numerous delays have occurred. In order to move ahead in a timely fashion and make this project
work, the request for an exemption to the competitive process is requested.
Councilmember Manvel made a motion,seconded by Councilmember Poppaw,to adopt Resolution
2009-059.
Councihnember Ohlson asked for an explanation of the FortZed project. Freeman stated FortZed
is the creation of a zero energy district with the idea of producing as much energy locally as is used
within the Downtown area. The project will generate about 5 megawatts of alternative energy and
the total demand in the district is about 50 megawatts. The total project will receive $6.3 million
from the U.S. Department of Energy and the balance is contributed through direct dollar
contributions and matching contributions from the partners.
The vote on the motion was as follows: Yeas: Hutchinson,Kottwitz,Manvel,Ohlson,Poppaw,and
Roy. Nays: none.
THE MOTION CARRIED.
Adjournment
Councilmember Ohlson made a motion, seconded by Councilmember Roy, to adjourn the meeting
to Tuesday, June 23, at 6:00 p.m. for the mid-year evaluations of the City Manager, City Attorney
and Municipal Judge. Yeas: Hutchinson, Kottwitz, Manvel, Ohlson, Poppaw, Roy, and Troxell.
Nays: none.
THE MOTION CARRIED.
The meeting adjourned at 6:45 p.m.
Mayor
ATTEST:
City Clerk
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June 23, 2009
COUNCIL OF THE CITY OF FORT COLLINS, COLORADO
Council-Manager Form of Government
Adjourned Meeting- 6:00 p.m.
An adjourned meeting of the Council of the City of Fort Collins was held on Tuesday;June 23,2009,
at 6:00 p.m. in the Council Chambers of the City of Fort Collins City Hall. Roll Call was answered
by the following Councilmembers: Hutchinson, Kottwitz, Ohlson, Poppaw, Roy and Troxell.
Councilmember Absent: Manvel
Staff Members Present: Atteberry, Krajicek, Roy.
Executive Session Authorized
Councilmember Ohlson made a motion, seconded by Councilmember Roy, to go into executive
session, as permitted under Section 2-31(a)(1) of the City Code for the purpose of conducting the
mid-year performance reviews of the Council's three direct employees. Yeas: Hutchinson,
Kottwitz, Ohlson, Poppaw, Roy and Troxell. Nays: none.
THE MOTION CARRIED.
("Secretary's note: The Council went into executive session at this point in the meeting.)
Adjournment
At the conclusion of the executive session, the meeting was adjourned at 9:30 p.m.
Mayor
ATTEST:
City Clerk
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