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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 09/07/2010 - CONSIDERATION AND APPROVAL OF THE MINUTES OF THE A DATE: September 7, 2010 ' STAFF: Wanda Krajicek • • • Consideration and Approval of the Minutes of the August 17, 2010, Regular Meeting. August 17, 2010 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,August 17,2010, 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, Krajicek, Roy. Citizen Participation Gary Wockner, 516 North Grant, Save the Poudre Coalition, discussed water quality study results showing pollution in the Poudre River, particularly as it runs through Fort Collins. He stated the Save the Poudre Coalition is concerned about the Halligan Reservoir project and the Windy Gap project. He thanked City officials for their work on water conservation. Brian Waring,Arvada resident, asked why Councilmember Ohlson recused himself from voting on the proposed sales tax ballot initiative. He expressed concern regarding the City's involvement with Clarion Associates and Brendle Group. Dorothy Spivak, 1914 Lookout Lane, suggested using back-in angle parking in the downtown area to improve safety for drivers, bicyclists, and pedestrians. Barbara Schaeffer,2300 South College Avenue,expressed concern regarding the Eastside/Westside Neighborhood Standards. Ralph Castain,Fort Collins resident, expressed concern regarding the impacts of Airport expansion plans to southeast Fort Collins. Phil Friedman, 201 South Grant Avenue, Fort Collins Sustainability Group, discussed positive results of the 2009 Climate Status Report and encouraged further recycling efforts. Chuck Washington, 1125 Deercroft Court, expressed concern regarding Airport expansion plans. Michelle Jacobs, Fort Collins Board of Realtors, discussed the Eastside/Westside Neighborhood Standards and earlier City work regarding infill and redevelopment. She stated there may not be a need for more housing regulations. 389 August 17, 2010 Dale Karlin,Fort Collins Sustainability Group,asked how the City will implement the requirement that trash haulers provide yard waste collection and ban cardboard from the commercial waste stream. Roger McCarville, Arvada resident, thanked Mayor Hutchinson for his leadership at meetings and asked for information regarding Ethics Watch. Stacy Lynne, 216 Park Street, discussed ICLEI and asked why there is police presence at Council meetings. Eric Sutherland,3520 Golden Currant,asked if it is appropriate for pop-up advertisements to appear on the City of Fort Collins' on-line bill payment website. Curt Schreiber, 4021 Yellowstone Circle, expressed concern regarding the public involvement process for the Eastside/Westside Neighborhood Standards. Bruce Lockhart, 2500 East Harmony Road, did not support the construction of the Transfort South Transit Center and suggested the funds be used for other City needs. He discussed carbon dioxide levels and questioned whether increased recycling efforts would affect those levels. Clint Skutchan, Fort Collins Board of Realtors Executive Vice President, expressed concern regarding the public involvement process for the Eastside/Westside Neighborhood Standards. Citizen Participation Follow-up Councilmember Kottwitz asked if there are other plans for gathering public input regarding the Eastside/Westside Neighborhood Standards. City Manager Atteberry replied Council will have a work session on August 24th to discuss the issue. Public concerns have been discussed with staff. Deputy City Manager Jones stated additional public outreach is planned and the item will be brought before Council for formal consideration on November 16th. Councilmember Kottwitz stated she would like at least one more public outreach meeting to occur and the survey should be changed to resolve survey design issues. Councilmember Kottwitz asked for clarification regarding the Colorado Ethics Watch group. City Manager Atteberry replied the City has not hired the group; rather the group approached the City regarding the recall effort. An outside attorney was hired by the City to review the ethics complaint submitted by the group. Councilmember Kottwitz asked for a response regarding police presence at Council meetings. City Manager Atteberry replied officers are occasionally present to maintain a secure and civil environment in which Council can conduct its business. Councilmember Kottwitz asked if the City posts advertisements on the City bill-pay web page. Patty Bigner, Utility Services, replied the Green E-certification symbol appears on the e-bill 390 August 17, 2010 primarily because e-bill customers do not receive a paper bill and the program is part of the City's renewable energy generation. The pop-up provides a link to the Center for Resource Solutions and the Green E program. Councilmember Ohlson asked if the pop-up has been discontinued. Bigner replied the information is akin to that provided in bill inserts and alternative means to provide the information will be explored. Councilmember Roy expressed concern that the Eastside/Westside Neighborhood Standards survey was unbalanced. Councilmember Ohlson stated he was unsure how the survey could be changed. He stated he opted out of the vote submitting the sales tax ballot initiative to the ballot due to a conflict of interest. He noted his wife has joined the citizens' committee working to pass the ballot measure. Agenda Review City Manager Atteberry recommended withdrawing Item No. 8,Items Relating to Payment of Debt Service on 2010 Downtown Development Authority Bonds, for discussion immediately following the Consent Calendar vote. CONSENT CALENDAR 6. Consideration and Approval of the Minutes of the July 6 and July 20,2010 Regular Meeting and the July 27, 2010 Adjourned Meeting_. 7. Second Reading of Ordinance No. 089, 2010, Appropriating Unanticipated Grant Revenue in the Light and Power Fund from the Colorado Governor's Energy Office New Energy Economic Development Program Funded under the American Recovery and Reinvestment Act. This Ordinance,unanimously adopted on First Reading on July 20,2010,appropriates grant funds in the amount of$72,000, received from the State of Colorado Governor's Energy Office. The project funded by the grant will conduct a pilot implementation of the"Carbon City Sustainability Information Management System" (SIMS). This pilot project will strengthen already budgeted initiatives for home and business energy efficiency improvements in Fort Collins. 8. Items Relating to Payment of Debt Service on 2010 Downtown Development Authority Bonds. A. First Reading of Ordinance No. 090, 2010, Authorizing the Issuance of City of Fort Collins, Colorado, Downtown Development Authority Taxable Tax Increment Revenue Bonds,Series 2010A,Dated Their Delivery Date,in an Aggregate Principal Amount Not to Exceed $10,000,000, and Tax-exempt Tax Increment Revenue 391 August 17, 2010 Bonds,Series 2010B,Dated Their Delivery Date,in an Aggregate Principal Amount Not to Exceed $4,000,000, for the Purpose of Financing Certain Capital Improvements, Capital Projects and Development Projects Within the Downtown Development Authority Area; Providing for the Pledge of Certain Incremental Ad Valorem Tax Revenues to Pay the Principal of and Interest on the Bonds;Approving Documents in Connection Therewith; and Ratifying Action Previously Taken and Appertaining Thereto. B. First Reading of Ordinance No. 091, 2010, Appropriating Proceeds from the Issuance of City of Fort Collins, Colorado, Downtown Development Authority Taxable Tax Increment Revenue Bonds, Series 2010A and Tax-exempt Tax Increment Revenue Bonds,Series 2010B,for the Purpose of Making Certain Capital Improvements, Capital Projects and Development Projects Within the Downtown Area of Fort Collins. Ordinance No.090,2010,authorizes the issuance and sale of City of Fort Collins Downtown Development Authority (DDA) Taxable and Tax-Exempt Subordinate Tax Increment Revenue Bonds, Series 2010A and 2010B in the maximum aggregate principal amount of $14,000,000. The proceeds of the bonds, appropriated in Ordinance No. 091, 2010, net of issuance expenses, will be used to make capital improvements and fund programs in the downtown area consistent with the mission of the Fort Collins Downtown Development Authority. The bonds are anticipated to have final maturities no longer than ten years from the date of issuance. 9. First Reading of Ordinance No. 092,2010,Authorizing the Conveyance of a Portion of City Property in Exchange for a Parcel of Land Along the Spring Canyon Ditch Outlet Pipe. This Ordinance authorizes a land exchange between the City of Fort Collins and McCreek, LLC, who is the owner and developer of McClelland's Creek PD & PLD, 5th Filing. McCreek, LLC is the owner and developer of Outlot D,McClelland's Creek PD&PLD,5th Filing(the"Development Property"). The City Stormwater Department owns a tract of land just east of the Development Property(the"City Property"). In 2009,City staff coordinated with the developer to install a pipe in the area of the Spring Canyon Ditch due to recurring overflow and seepage issues. The pipe installation required the construction of a berm. The City would prefer to own and manage the entire berm area. The City and developer have agreed to exchange property so that the new property boundaries follow the edge of the berm. 10. Items Relating to the Final Design and Construction of the Transfort South Transit Center. A. Resolution 2010-048 Authorizing the Execution of an Amendment to the Intergovernmental Agreement Between the City of Fort Collins and the Colorado Department of Transportation for the Design and Construction of the South Transit Center. 392 August 17, 2010 B. First Reading of Ordinance No. 093,2010,Appropriating Prior Year Reserves in the Transit Services Fund For Transfer to the Capital Projects Fund and Appropriating Unanticipated Revenue in the Capital Projects Fund,Mason Corridor Project for the South Transit Center Project. The South Transit Center(STC)will serve as Transfort's southern transit hub,replacing the current Transit Center at The Square shopping mall. The STC will serve a wide range of users with parking spaces and access to the Mason Trail,as well as the Transfort bus service. The South Transit Center will also serve as a transfer point for regional FLEX service and the Mason Bus Rapid Transit system known as MAX.The South Transit Center will contain a bus turnaround,pedestrian shelters,customer service counter,retail space,site furnishings for passenger comfort and safety,security lighting,identification signage,signage for transit rider information and landscape improvements.The project is funded through the Colorado Department of Transportation and is being leveraged as local match towards the overall Mason Corridor Project. 11. First Reading of Ordinance No. 094, 2010, Amending Section 2-152 of the City Code to Change the Number of Members on the Commission on Disability. The membership of the Commission on Disability("Commission")consists of 11 members appointed by City Council. Currently there are two vacancies on the Commission. For the past several years turnover and recruiting new members has been a consistent problem making it difficult to reach a quorum at meetings. Staff and Commission members agree that the Commission membership should be reduced from 11 to 9 members. 12. Resolution 2010-049 Authorizing the Execution of a Second Amendment Further Extending the Term of an Intergovernmental Agreement Between the City of Fort Collins, the City of Longmont, and Platte River Power Authority Relating to the Operation of a Joint Customer Information System. In January 1998, the cities of Longmont and Fort Collins entered into a 10-year intergovernmental agreement with Platte River Power Authority to purchase and operate a joint customer information system(for customer account management and billing)on behalf of the two cities. On August 26,2008,the term of the agreement was extended for two years. As of December 31, 2010, Fort Collins Utilities will be subject to the Red Flags Rules, the implementing regulations of the Fair and Accurate Credit Transactions Act (FACT) Act. The Red Flag Rules require utilities with covered accounts to take steps to detect, prevent and mitigate identity theft.This Resolution extends the agreement with Platte River and the City of Longmont for one additional year to resolve issues related to compliance with this law. 393 August 17, 2010 13. Resolution 2010-050 Supporting the Grant Application by Weld County for a State of Colorado Energy Impact Grant to Assist in the Construction of a Regional Crime Laboratory. This Resolution offers support to Weld County to seek grant funding to help purchase or construct a forensic regional lab facility that will house forensic laboratory staffing employed by members of Fort Collins Police Services,Greeley Police Department,Loveland Police Department, Larimer County Sheriff's Department, and the Weld County Sheriffs Department. 14. Resolution 2010-051 Approving Expenditures from the Art in Public Places Reserve Account in the Cultural Services and Facilities Fund to Commission an Artist to Create Art for the Lincoln Center Renovation Proiect. This Resolution approves expenditures of$42,500 for design, materials, installation and contingency for a project with the artist Barbara Baer to create two art elements integrated into the Lincoln Center Renovation Project. One work will be created as a focal point to the new main lobby and the second will highlight the exterior south facing wall above a newly renovated entrance into the facility. 15. Resolution 2010-052 Approving the Acceptance of the Proposed Donation of Artwork on Granite Pavers from the Downtown Development Authority. This Resolution accepts the donation of granite pavers depicting local children's drawings. The Art in Public Places Program has been collaborating with the Downtown Development Authority (DDA) to create sixty granite pavers sandblasted with-drawings by Fort Collins youth. The intention of the DDA is to place the pavers in the City right-of-way in the three current Downtown Alley Enhancement Projects. Because the pavers will be placed in the City right-of-way, City staff and the DDA agreed the pavers should be donated to the City. 16. Resolution 2010-053 Authorizing the City Manager to Execute an Agreement Regarding Allegiant Air,LLC Service from Fort Collins-Loveland Municipal Airport to Mesa,Arizona. The purpose of this contract is to provide a financial and marketing boost to support the addition of new commercial air service at Fort Collins Loveland Airport (FNL). The contract waives 2 of 4 Airport related service fees for six months (Terminal Usage Fee and ARF — Fire Rescue Fee) - $50/each per landing. The contract also supports Allegiant marketing efforts by supplying a $30,000 reimbursable that Allegiant can utilize to buy marketing in the Northern Colorado and Arizona markets. The reimbursable is dependent upon the service commencing and operating 2 flights per week beginning October 2010. Due to the 50150 ownership structure with the City of Loveland this contract will be considered by the Loveland City Council as well. 17. Resolution 2010-054 Making Appointments to Various Board and Commissions. 394 August 17, 2010 This Resolution makes appointments to fill current vacancies on the Affordable Housing Board,Human Relations Commission,Water Board,Women's Commission and the Youth Advisory Board. ***END CONSENT*** Ordinances on Second Reading were read by title by City Clerk Krajicek. 7. Second Reading of Ordinance No. 089, 2010, Appropriating Unanticipated Grant Revenue in the Light and Power Fund from the Colorado Governor's Energy Office New Energy Economic Development Program Funded under the American Recovery and Reinvestment Act. Ordinances on First Reading were read by title by City Clerk Krajicek. 8. Items Relating to Payment of Debt Service on 2010 Downtown Development Authority Bonds. A. First Reading of Ordinance No. 090, 2010, Authorizing the Issuance of City of Fort Collins, Colorado, Downtown Development Authority Taxable Tax Increment Revenue Bonds,Series 2010A,Dated Their Delivery Date,in an Aggregate Principal Amount Not to Exceed $10,000,000, and Tax-exempt Tax Increment Revenue Bonds,Series 2010B,Dated Their Delivery Date,in an Aggregate Principal Amount Not to Exceed $4,000,000, for the Purpose of Financing Certain Capital Improvements, Capital Projects and Development Projects Within the Downtown Development Authority Area; Providing for the Pledge of Certain Incremental Ad Valorem Tax Revenues to Pay the Principal of and Interest on the Bonds;Approving Documents in Connection Therewith; and Ratifying Action Previously Taken and Appertaining Thereto. B. First Reading of Ordinance No. 091, 2010, Appropriating Proceeds from the Issuance of City of Fort Collins, Colorado, Downtown Development Authority Taxable Tax Increment Revenue Bonds, Series 2010A and Tax-exempt Tax Increment Revenue Bonds,Series 2010B,for the Purpose of Making Certain Capital Improvements, Capital Projects and Development Projects Within the Downtown Area of Fort Collins. 9. First Reading of Ordinance No. 092,2010,Authorizing the Conveyance of a Portion of City Property in Exchange for a Parcel of Land Along the Spring Canyon Ditch Outlet Pipe. 10. First Reading of Ordinance No. 093,2010,Appropriating Prior Year Reserves in the Transit Services Fund For Transfer to the Capital Projects Fund and Appropriating•Unanticipated Revenue in the Capital Projects Fund, Mason Corridor Project for the South Transit Center Project. 395 August 17, 2010 11. First Reading of Ordinance No. 094, 2010, Amending Section 2-152 of the City Code to Change the Number of Members on the Commission on Disability. 22. First Reading of Ordinance No. 095, 2010, Making Certain Amendments to Chapter 15, Article XVI of the City Code Governing the Licensing, Location and Operation of Medical Marijuana Businesses. Eric Sutherland,3520 Golden Currant,withdrew Item No. 12,Resolution 2010-049 Authorizing the Execution of a SecondAmendment Further Extending the Term of an Intergovernmental Agreement Between the City of Fort Collins, the City of Longmont, and Platte River Power Authority Relating to the Operation of a Joint Customer Information System. Councilmember Roy withdrew Item No. 16,Resolution 2010-053 Authorizing the City Manager to Execute an Agreement RegardingAllegiantAir,LLCServicefrom Fort Collins-Loveland Municipal Airport to Mesa, Arizona. Councilmember Manvel made a motion, seconded by Councilmember Roy, to adopt and approve all items not withdrawn from the Consent Calendar. Yeas: Hutchinson,Kottwitz,Manvel, Ohlson, Poppaw, Roy and Troxell. Nays: none. THE MOTION CARRIED. Items Relating to Payment of Debt Service on 2010 Downtown Development Authority Bonds, Adopted on First Reading The following is staff s memorandum for this item. "EXECUTIVE SUMMARY A. First Reading of Ordinance No. 090, 2010,Authorizing the Issuance of City of Fort Collins, Colorado,Downtown DevelopmentAuthority Taxable Tax Increment Revenue Bonds,Series 2010A, Dated Their Delivery Date, in an Aggregate Principal Amount Not to Exceed $10,000,000, and Tax-exempt Tax Increment Revenue Bonds, Series 2010B, Dated Their Delivery Date, in an Aggregate Principal Amount Not to Exceed$4,000,000,for the Purpose of Financing Certain Capital Improvements, Capital Projects and Development Projects Within the Downtown Development Authority Area; Providing for the Pledge of Certain Incremental Ad Valorem Tax Revenues to Pay the Principal of and Interest on the Bonds; Approving Documents in Connection Therewith;and Ratifying Action Previously Taken and Appertaining Thereto. B. First Reading of Ordinance No. 091, 2010, Appropriating Proceeds from the Issuance of City of Fort Collins, Colorado, Downtown Development Authority Taxable Tax Increment Revenue Bonds, Series 2010A and Tax-exempt Tax Increment Revenue Bonds, Series 2010B, for the Purpose of Making Certain Capital Improvements, Capital Projects and Development Projects Within the Downtown Area of Fort Collins. 396 August 17, 2010 Ordinance No. 090, 2010, authorizes the issuance and sale of City of Fort Collins Downtown Development Authority (DDA) Taxable and Tax-Exempt Tax Increment Revenue Bonds, Series 2010A and 2010E in the maximum aggregate principal amount of$14,000,000. The proceeds of the bonds, appropriated in Ordinance No. 091, 2010, net of issuance expenses, will be used to make capital improvements and fund programs in the downtown area consistent with the mission of the Fort Collins Downtown Development Authority. The bonds are anticipated to have final maturities no longer than ten years from the date of issuance. BACKGROUND Before initiation of bond issuance, DDA staff evaluates factors that create the structure of the DDA's financing plan, which include needs, costs, and timing. Needs are the project or program commitments authorized by the DDA Board of Directors. Costs include the compensation paid to the financing team (bond counsel, financial advisor, DDA 's legal counsel), fees due at closing (origination fee, cost of issuance fee), and current interest rate structure. Timing includes anticipating when the reimbursement requests will come to the DDA from project or program owners combined with an analysis ofthe revenue stream comingfrom property tax increment,which is used to service the debt. These factors also influence the size of the bonds. A unique factor for the DDA in the 2010 Bond Series issuance is the complexity added to the DDA 's revenue stream by the Senate Bill 170 statute amendment, which affects revenues beginning in tax year 2011. On the advice of the City's and the DDA 's financial advisor,James Capital Advisors,Inc., the DDA is seeking to consolidate and issue a bond series prior to the formal commencement of Senate Bill 170. The provisions of this bill require adjustment to the tax increment base and share back of property tax revenue with overlapping entities. These provisions affect the Fort Collins DDA in tax year 2011. Uncertainty about how the bond investment market would respond to Senate Bill 170 requirements precipitated the need to plan ahead for project and program reimbursement funding that could potentially extend into 2012. Since 2002, the City of Fort Collins has purchased the DDA's tax increment bonds. The City of Fort Collins is unable to purchase the 2010 series bonds as there is not enough capacity above the required reserve policy to allow lending at this time. The DDA, working with the City's finance department and the financial advisor, sought private placement with a local bank. Private placement was the method recommended by James Capital Advisors over other options such as syndication of bonds on the bond trading market. It was anticipated that only local banks familiar with of the DDA 's mission and a willingness to understand and work with the complex mechanics of Senate Bill 170 tax increment base adjustment and share-back requirements would be interested in purchasing the 2010 Tax Increment Revenue Bonds. The DDA was able to secure favorable terms for bond debt financing with Great Western Bank. A second offer from another local bank was also considered. It was determined that the offer from Great Western was the most advantageous to the DDA, given the DDA's need to remain sensitive to project owner expectations and commitments to their lending partners. There is an additional complexity in this issuance. By determination of Sherman&Howard L.L.C., bond counsel for the City of Fort Collins and the DDA, the DDA bonds will have two (2) 397 August 17, 2010 classifications—taxable and tax-exempt, each having its own interest rate. The tax-exempt bonds may only be used to fund capital projects. Using conservative projections of future tax increment revenue, DDA staff and the DDA budget/finance committee have determined this debt can be serviced over a 10 year term with property tax revenues paid into the tax increment fund in accordance with the amended DDA statute. The Bonds DDA staff has estimated the debt payments on the$14,000,000 with interest payments occurring on a semi-annual basis, beginning in June 2011 and annualprincipal payments beginning in December 2012. The debt service schedule calls for the final payments for the bonds to occur in 2020. Sources Bond Proceeds $14,000,000 Total Sources $14,000,000 Uses Open Project Commitments $ 9,355,855 Unappropriated Bond Project Account 1,644,145 Debt Service Reserve Fund 1,400,000 Origination Fee 61,800 Cost of Issuance 60,000 Bond Counsel and Financial Advisor 60,000 Contingency 1,418,20 Total Uses $14,000,000 The sources and uses of the finds are estimates and are subject to change until the issuance and sale of the bonds. Final amounts, rates and costs will be determined after the private placement has been completed. Open Proiect Commitments include projects and programs that the DDA Board has taken formal action to approve commitment offunds. Unappropriated Bond Project Account includes projects and programs, consistent with the DDA mission that still require formal DDA Board and City Council action before the funds can be expended. The reason these placeholder items are included in the 2010 Bond Issuance is because they represent future obligations such as annual maintenance of the downtown enhanced alleys, continuation of annual programs such as the holiday lights and the ice rink, and utilities and maintenance of the East Vine Drive warehouse. All proceeds in this account will be brought to the DDA Board and the City Council for appropriation within the next year. " Councilmember Troxell withdrew from the discussion ofltems Relating to Payment ofDebt Service on 2010 Downtown Development Authority Bonds due to a conflict of interest. 398 August 17, 2010 Councilmember Roy made a motion,seconded by Councilmember Poppaw,to adopt Ordinance No. 090,2010,on First Reading. Yeas:Hutchinson,Kottwitz,Manvel,Ohlson,Poppaw and Roy. Nays: none. THE MOTION CARRIED. Councilmember Manvel made a motion, seconded by Councilmember Poppaw,to adopt Ordinance No. 091, 2010, on First Reading. Yeas: Hutchinson,Kottwitz, Manvel, Ohlson, Poppaw and Roy. Nays: none. THE MOTION CARRIED. Staff Reports Carol Webb, Utilities Regulatory and Government Affairs Manager, discussed the voluntary Household Hazardous Waste Collection event held on June 5th, at which 20,000 pounds of hazardous materials were collected. Councilmember Ohlson asked if items were re-used or recycled. Webb replied there was a re-use table available but was unsuccessful due to the high volume of latex paint being dropped off. Other materials were put through a recycling process. Latex paint was solidified and taken to an industrial landfill in Bennett, Colorado. Councilmember Reports Councilmember Troxell discussed the Neighborhood Night Out event held on August 3rd and thanked Target and Outback Steakhouse for their sponsorship of the nationwide event. Resolution 2010-055 Authorizing and Directing the City Manager to Join the Efforts of Colorado State University, the Fort Collins Area Chamber of Commerce, Larimer County and Private Enterprise in Developing Targeted Industry Clusters, Adopted The following is staff s memorandum for this item. "EXECUTIVE SUMMARY This Resolution authorizes and directs the City Manager to continue to support on behalfof the City participation in the formation and development of cluster initiatives relating to the identified targeted industries of the City, to work with regional partners and local business entities to develop strategic plans for the clusters, and to support the advancement of the plans as they are implemented for the purpose ofprimary job retention, expansion, and creation. 399 August 17, 2010 BACKGROUND In 2004, the Fort Collins Economic Vitality and Sustainability Group (EVSAG), appointed by the City Council, recommended that certain business clusters be investigated as economic development strategies, naming several potential clusters. EVSAG made this recommendation due to the unique strengths and assets of our community and the desire to see a more formal economic strategy to regain and expand key industries in our community. The basic underpinnings of a successful industry cluster include: • An active University with strong research and development knowledge • A strong public and private leadership base • A critical mass of collaborative%ompetitive companies • Access to entrepreneurial support • A skilled workforce • Institutional and facility support In 2006, the City of Fort Collins commissioned a study to evaluate the geographic concentration and interconnectedness of companies within the community in order to determine potential industry clusters. The study identified several existing and emerging industry clusters. The identified clusters were modified into five targeted industry clusters, which became the focus of job creation activities. These clusters included: Clean Energy,Bioscience, Chip Design, Software, and Uniquely Fort Collins. On March 21, 2006, the City Council adopted Resolution 2006-037, authorizing and directing the City Manager to join efforts with Colorado State University, the Northern Colorado Economic Development Corporation, the Fort Collins Area Chamber of Commerce, Poudre School District, Larimer County and private enterprises to develop a Clean Energy Cluster for Northern Colorado. Resolution 2010-055 reaffirms the City's role with respect to the Clean Energy Cluster and provides new authorization and direction for the City Manager to engage in similar formation and development activities related to addition Targeted industry clusters. Over time, the Targeted industry clusters have undergone an evolution —and it will be important in the future to continue evolving and improving our approach for supporting target industries. Since the 2006 study there has been a significant effort by the City, Colorado State University, and the private sector to implement the cluster strategy. Some of the efforts to implement the cluster strategy have been very successful, in particular in the Clean Energy and Biosciences area. Other efforts in software and chip design have not progressed to date. In an effort to continuously improve our approach and to try and create as mach value and success, staff has been evaluating the addition of a new target industry group in the water innovation arena and is now at a point to make a recommendation to add that target industry group to the list that the City officially supports. The five recommended cluster initiatives consist of interrelated groups of businesses and organizations from within the identified Targeted Industries, including: 400 August 17, 2010 • Clean Energy—Companies providing knowledge and expertise in renewable energy, energy efficiency, solar and wind energy, green building, and fuel cells. • Water Innovation — Companies active in the research and production of products and services for water reuse and conservation, testing, filtration, efficient irrigation management, sustainable water design, weather modeling, and water efficiency; a new proposed target industry cluster. • Bioscience— Companies that research,produce, and distributer medical devices, medical instruments,pharmaceuticals, and biofuels. • Technology— Companies specializing in data mapping, computer programming, Internet service, software development, and microchip design and production; replaces the previously separate Chip Design and Software clusters. • Uniquely Fort Collins — Companies engaged in creative industries such as design, publishing,performing arts, visual arts/crafts, and craft and micro-brewed beverages. " Councilmember Troxell withdrew from the discussion of Resolution 2010-055 Authorizing and Directing the City Manager to Join the Efforts of Colorado State University, the Fort Collins Area Chamber of Commerce, Larimer County and Private Enterprise in Developing Targeted Industry Clusters due to a conflict of interest. Josh Birks, Economic Advisor, stated the 2004 Fort Collins Economic and Vitality Group recommended exploring business clusters as a potential economic development strategy. This Resolution approves five targeted industry clusters: Clean Energy, Water Innovation, Bioscience, Technology, and Uniquely Fort Collins. Birks detailed the five clusters and types of companies included in each. Ann Hutchison,Fort Collins Chamber of Commerce,supported the Resolution and formation of the targeted industry clusters. Gary Wockner, 516 North Grant, Save the Poudre Coalition, expressed concern that the City may begin to promote businesses that specialize in river and environmental destruction, such as dam building. Eric Sutherland, 3520 Golden Currant, expressed concern regarding the Fort Zed project. Bruce Lockhart,2500 East Harmony Road,expressed concern the industry cluster idea is not unique or sustainable. Kyle Kauffman, Fort Collins resident, expressed support for clean energy initiatives. Mayor Hutchinson noted the Clean Energy cluster grew 5.2% between 2008 and 2009 in Fort Collins while declining 7.6% nationally during the same time period. Birks stated Colorado State University gives Fort Collins legitimacy with regard to clean energy. Councilmember Ohlson asked why staff had not selected more unique clusters. Birks replied many communities have attempted to implement a cluster strategy with little success. It is difficult to combine public, private, and academic sectors together with common vision and purpose. While 401 August 17, 2010 the cluster strategy is quite mainstream, the ability to make it successful is more difficult. It can work in Fort Collins because of the innovation and spirit existing in Fort Collins' companies. Councilmember Ohlson asked about renaming the Technology cluster as technology applies to a variety of industries, not solely computer-related industries. Birks stated Fort Collins may not yet have a legitimate technology cluster but the industry needs to be recognized for its importance and ability to be a future cluster. Councilmember Ohlson asked if the Technology cluster solely references computer technology. Birks replied technology is being used as a generic term to include chip design and software companies. Councilmember Ohlson stated there are other businesses focused on sustainable products and services which should be included in the Uniquely Fort Collins cluster. Birks replied the Be Local group could be included in the Uniquely Fort Collins cluster. Councilmember Roy asked how staff would rate the advisability of the City partnering with a particular business. Birks replied the Water Innovation cluster is attempting, with its vision, mission, and core values statement, to articulate work focused on stewardship and economic development. Initiatives will be selected through an executive board review of ideas and Council will also review the initiatives with each budget cycle. Councilmember Roy stated more focus should have been placed on supporting education efforts for individual citizens. Councilmember Ohlson stated he would like to rename the Clean Energy cluster as no energy source is truly"clean." He suggested City Council direct the City Manager to work with the City's regional partners to facilitate the timely renaming of the Clean Energy cluster. Councilmember Ohlson made a motion, seconded by Councilmember Poppaw, to direct the City Manager, in working with the City's regional partners on the Targeted Industry Cluster Initiatives, to facilitate the timely renaming of the Colorado Clean Energy Cluster. Councilmember Manvel stated he would support the motion. Mayor Hutchinson stated the City's role in this process is as a catalyst and enabler. 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 Manvel, to adopt Resolution 2010-055. 402 August 17, 2010 Councilmember Ohlson stated he would support the motion and added his future support will be dependent upon the renaming of the Clean Energy cluster. Councilmember Kottwitz stated she would support the motion and future support of economic development. Mayor Hutchinson stated the initial cluster idea was part of the Economic Action Plan adopted by the 2005-2006 City Council. He stated the cluster idea will capitalize on existing unique capabilities and allow the City to be a catalyst and enabler. The vote on the motion was as follows: Yeas: Hutchinson, Kottwitz, Manvel, Ohlson, Poppaw and Roy. Nays: none. THE MOTION CARRIED. ("Secretary's note: The Council took a brief recess at this point in the meeting.) Items Relating to the Licensing of Medical Marijuana Businesses, Adopted on First Reading The following is staffs memorandum for this item. "EXECUTIVE SUMMARY A. Resolution 2010-056 Postponing the City Council's Decisions as to Whether Existing Medical Marijuana Businesses Should Be Allowed to Remain in Their Current Locations and as to When, If at All, Applications for New Medical Marijuana Businesses Should Be Accepted by the City. B. First Reading of Ordinance No. 095, 2010, Making Certain Amendments to Chapter 15, Article XVI of the City Code Governing the Licensing, Location and Operation of Medical Marijuana Businesses. The Resolution postpones a decision as to whether location requirements enacted in Chapter 15 of the City Code should be made applicable to existing medical marijuana dispensaries, thereby allowing them to remain in their current locations. In addition, the Resolution postpones a decision as to when, if at all, the City should begin accepting applications for new medical marijuana businesses. The Ordinance amends Article XVI, Chapter 15, of the City Code to address certain inconsistencies between the City's local regulations and the Colorado Medical Marijuana Code so as to facilitate the licensing of existing medical marijuana businesses in Fort Collins. Other inconsistencies will be further studied with recommended changes brought back to Council prior to full implementation of the Colorado Medical Marijuana Code in July 2011. 403 August 17, 2010 BACKGROUND Application of Location Requirements to Existing Businesses ("Grandfathering") On March 16, 2010, City Council adopted Ordinance No. 025, 2010, adding a new Article XVI to Chapter 15 of the City Code, governing the licensing, location and operation of medical marijuana businesses. Section 9 of that Ordinance directed the City Manager to make recommendations to the Council on or before September 1, 2010 as to whether the location requirements for medical marijuana dispensaries should be made applicable to existing medical marijuana businesses. The location requirements state that no dispensary shall be located within 1000 feet of- another dispensary • a preschool, elementary, secondary, vocational, or trade school or within 500 feet of.• • a college or university • a child care center • a place of worship or religious assembly • a park,pool,playground, or recreational facility • a halfway house, correctional facility or substance abuse or treatment facility • the boundary of a residential zone On June 7, 2010, the governor signed House Bill 10-1284 into law enacting Title 12, Article 43.3 of the Colorado Revised Statutes (the "Colorado Medical Marijuana Code'), which regulates the cultivation, manufacture, distribution, and sale of medical marijuana as a matter of state-wide concern. The Colorado Medical Marijuana Code includes a State application deadline of August 1, 2010 for existing medical marijuana businesses that have applied for a local license prior to July 1, 2010. Depending upon the number of local applicants that have applied for a State license, and the number that are ultimately approved by the State, the number of medical marijuana businesses in the City could decrease. Staff believes it would be beneficial to know the actual number of existing businesses that are actually eligible for local licenses before making a recommendation as to the application of location requirements to existing businesses. Amendments to City Code Provisions Governing Medical Marijuana Businesses There are several inconsistencies between the City's local regulations regarding medical marijuana businesses and the provisions of the Colorado Medical Marijuana Code, many of which will require further study in order for staff to be able to recommend changes in the local regulations. Some inconsistencies, identified during theprocess ofreviewing applications, are suffccientlyproblematic that staff believes they should be immediately addressed. This Ordinance makes the following amendments to the local regulations: • Amends the definition of medical marijuana cultivation facility to include facilities associated not only with locally licensed dispensaries but also with dispensaries owned and lawfully operated by a licensee in another Colorado jurisdiction, as well as those that are 404 August 17, 2010 part of a medical marijuana delivery business that delivers medical marijuana solely within the city limits. This allows applicants to meet the State's "vertical integration" model, which requires dispensaries and cultivation facility to operate together, under the same ownership. Under the State law, a cultivation facility cannot exist alone— it must be tied to a dispensary or, medical marijuana infused products manfacturer. • Provides for the issuance of a license for each dispensary or cultivation facility included in a medical marijuana business license application. This allows one type offacility to receive a license(typically the dispensary), while another facility (typically the cultivation facility) is working through zoning and building code compliance issues. It also allows for enforcement of the local regulations for those facilities that are operational. • Amends the local security requirements to eliminate the requirement to have deadbolt locks on all exterior doors and to vest more discretion in the City Manager or his designee as to the kinds of security measures that are necessary. The intent of the existing requirement is to ensure that the licensed premises are adequately secured. However, the deadbolt requirement, as worded, is in conflict with the International Fire Code. Therefore, the proposed amendment requires locking systems for exterior doors designed and reasonably secured to deter unlawful entry, while providing safe emergency egress. • Amends language that currently limits to four ounces the amount of medical marijuana that may be sold or distributed to, or purchased from, another licensee in any seven-day period. The new language would allowgreater quantities to be exchanged between a licensee's local facility and a medical marijuana business owned by the same licensee in another Colorado county or city. The existing prohibition creates a conflict with the State law requirement that a dispensary grow 70%ofits own medical marijuana. Although a cultivation facility in Fort Collins could legitimately be growing medical marijuana for a dispensary in another jurisdiction, the four-ounce limitation makes it virtually impossible to provide that product to the dispensary. • Adds a new section authorizing the City Manager to promulgate such rules and regulations as are necessary to effectuate the implementation and enforcement of local regulations. The complexities involved in implementing the City's regulations and integrating them with the new State regulations have created a recurring need for interpretation of the City's local regulations. This new Code provision would vest in the City Manager the authority to promulgate rules and regulations that are consistent with the intent of the Code,just as certain State departments and agencies have been authorized to do with regard to the new Colorado Medical Marijuana Code. This authority to develop administrative rules and regulations will help ensure consistency in the 405 August 17, 2010 way that the Code provisions are administered and should also minimize the need for Code amendments that are intended only to clarify existing Code language. " Jerry Schiager, Police Services, stated existing medical marijuana businesses had to apply by June 30, 2010, to be eligible for an MMB license. Of the 36 applications received, 26 have a retail location and two meet the location requirements. The City Manager was to bring back a recommendation on the grandfathering issue and as to whether the application process would be opened to new businesses by September 1st. Since the passing of local regulations, the state of Colorado has passed House Bill 1284, which provides an extensive licensing and regulatory framework for medical marijuana businesses. This bill has placed a moratorium on new MMB applications until July 1, 2011. Resolution 2010-056 postpones any grandfathering decision until local applicants have completed any deficiencies in their applications and until there is more certainty from the state as to which local businesses are eligible. The Resolution also postpones a decision as to when the City should begin accepting applications for new medical marijuana businesses. Ordinance No. 095, 2010 expands the definition of a cultivation facility to allow the association with other lawful dispensaries within Colorado owned by the licensee or with a delivery business in the City. The state regulations require that any cultivation facility must be associated with a dispensary and allows for separate licensing of each facility associated with an MMB license. The Ordinance eliminates the deadbolt lock requirement which was in violation ofthe Fire Code and allows for the exchange of more than four ounces of medical marijuana per week between local businesses and other businesses owned by the same licensee in another jurisdiction. Ron Wales, Emigh Street, opposed medical marijuana businesses and expressed concern that drug cartels could form. Scott Kauffman, Top Shelf Colorado, expressed concern regarding patient privacy and suggested grandfathering could be based on state application completion. Ken Curreda, Solace Meds, 301 Smokey Street, asked that all existing businesses be grandfathered and thanked Council for its work on the item. Mayor Hutchinson noted Resolution 2010-056 would postpone the grandfathering decision. Councilmember Manvel asked if non-Fort Collins residents would be able to apply for an MMB license in Fort Collins. Schiager replied there is no such requirement in Fort Collins; however, the state bill does require applicants to be Colorado residents. Councilmember Roy made a motion, seconded by Councilmember Manvel, to adopt Resolution 2010-056. Yeas: Hutchinson, Kottwitz, Manvel, Ohlson, Poppaw, Roy and Troxell. Nays: none. THE MOTION CARRIED. Councilmember Roy made a motion,seconded by Councilmember Manvel,to adopt Ordinance No. 095, 2010, on First Reading. 406 August 17, 2010 Councilmember Roy asked City Manager Atteberry to comment regarding the Ordinance. City Manager Atteberry replied the Ordinance allows the City to respond to a dynamic situation. The vote on the motion was as follows:Yeas:Hutchinson,Kottwitz,Manvel,Ohlson,Poppaw,Roy and Troxell. Nays: none. THE MOTION CARRIED. Resolution 2010-057 Identifying Certain Purposes for Which the Discretionary Portion of Revenues Derived from a Proposed .85% Increase in the City's Sales and Use Tax Rate Might Be Used, Adopted The following is staff s memorandum for this item. "EXECUTIVE SUMMAR Y On July 27, 2010, City Council approved Resolution 2010-047 submitting a proposed 0.85% increase in the city's sales and use tax rate to the voters for their consideration on the November 2, 2010 Election Ballot. The proposed increase is allocated to transportation,police,fire,parks and recreation, and other community priorities. Resolution 2010-058 provides additional details regarding the types of programs, activities and services which could be funded through the approximately $2.1 million in revenue provided by the 11% allocated to "other community priorities. " Examples of these needs which the City Council could fund through the City's Budgeting for Outcomes process include economic health programs, neighborhood programs, environmental programs, cultural programs, and other critical internal services and support. BACKGROIUND The proposed tax increase includes the following provisions: • An increase of.85% (or 8.5 cents on a $10 purchase) • The additional revenue would be allocated in the following manner: 0 33%for street maintenance and repair 0 17%for other street and transportation needs 0 17%for police services 0 11%for fire services 0 11%for parks maintenance and recreation services; and 0 11%for other community priorities as determined by City Council. • The increase would commence January 1, 2011 and sunset after 10 years, ending at midnight on December 31, 2020. • The increase would yield an estimated$18.9 million in the first full year of collection Additionally, the ballot language requires the City Manager to report annually to City Council on how the revenues are used and the cost saving measures that were undertaken by the City each year. 407 August 17, 2010 In continuing to communicate with community members regarding the proposed ballot measure, City Council and staff have received questions regarding the proposed uses for the funds reserved for "other community priorities as determined by City Council. " While the original resolution does not provide details on the anticipated uses for these funds, Council expects to allocate these funds to high priority City needs identified by City Council in the annual Budgetingfor Outcomes process. This portion of the sales and use tax revenue would provide approximately $2.1 million of new resources in the first year. The services which would receive allocated revenues based on the formula in Resolution 2010-047 include Transportation, Police, Fire, Parks and Recreation. In 2010, these programs account for 68%of the expenses in the City's General Fund. The remaining 32%portion of the General Fund includes such services as Economic Development, City Planning, Affordable Housing programs, Cultural Services, Development Review, Code Enforcement, Natural Resources programs, and citywide administrative costs. (The General Fund does not cover the various Utility Enterprise funds including Electric, Water, Wastewater, and Stormwater services) This Resolution provides additional details regarding the types ofprograms, activities and services which could be funded through the approximately $2.1 million in revenue provided by the 11% allocated to "other community priorities. " Some examples of needs which the City Council could fund include: • Economic Health Programs: • assistance program for business retention and expansion; • financial/economic support for clusters; • systems improvements for development review and planning processes; • Foothills Mall and other midtown College corridor redevelopment; • support of the downtown area. • Neighborhood Programs: • Code compliance; • community mediation program; • various community partnerships (with entities such Colorado State University, the Poudre School District, Larimer County); • affordable housing programs. • Environmental Programs: • air quality; • recycling; • sustainability programs; • green building. • Critical Internal Services and Support: • technology infrastructure; 408 August 17, 2010 • facility and vehicle maintenance; • administration and internal services such as Finance. " City Manager Atteberry stated this item responds to citizen concerns regarding the I I% category of the proposed tax increase allotted to "other community priorities." City Manager Atteberry detailed the evolution of the item and discussed the specific purposes for which discretionary dollars may be used. Eric Sutherland, 3520 Golden Currant, stated reserves should buffer both losses and increases in revenue and did not support the item. Mary Atchison, 2024 Linden Lake Road, supported the item and added there is community support for the tax measure. Doug Brobst, 1625 Independence Road, supported the item. Gary Thomas, Transportation Board Chair, supported the item and stated there is community support for the tax measure. Chuck Washington, 1125 Deercroft Court, supported the item and stated he would support more funding for roads. Bruce Lockhart, 2500 East Harmony Road, did not support the item. Gary Wockner, 516 North Grant, Save the Poudre Coalition, discussed the benefits of maintaining water quality and flow of the Poudre River through town. He encouraged adding the enhancement of the Poudre River to the Resolution under the category"Economic Health Programs." Chase Eckert, CSU student, stated the specifics of the II% will determine whether or not he supports the item. Councilmember Kottwitz noted this Resolution will have no effect on the ballot language. Councilmember Poppaw expressed concern that the Poudre River enhancement was excluded from the list of priorities. City Manager Atteberry replied there was no deliberate intent to exclude the Poudre River and it could be added at Council's discretion. Mayor Hutchinson noted the Resolution responds to public comment and concern and was not intended to be as specific as a budget. Councilmember Troxell asked about the origins of the Resolution. City Manager Atteberry replied the Resolution was developed through the Leadership Team and in response to public input. Councilmember Roy made a motion, seconded by Councilmember Poppaw, to adopt Resolution 057-2010 as amended, by adding "enhance Poudre River" as a bullet item under the "Economic Health Programs" category. 409 August 17, 2010 Councilmember Troxell asked for clarification regarding "enhancing the Poudre River." Councilmember Roy replied it would include improving flows through Fort Collins. Mayor Hutchinson clarified the specific items were not meant to be included in this Resolution. Councilmember Troxell expressed concern that the I 1% is a slush fund with unspecified uses. Councilmember Manvel stated there is a tension between requiring expenditures for things which may or may not be needed and being too flexible. The 11% will allow for funding unmet needs within the City budget. Councilmember Kottwitz stated the entire budget is included in this Resolution and suggested the 11%be allotted to the seven pre-defined outcomes in the budgeting process. Councilmember Ohlson stated the$500 million annual budget has less itemization and specificity than does this section of the budget which would amount to approximately$2 million. The intent when creating this ballot measure was to cover the 1/3 of the budget that does not fall into the other categories. That part of the budget has actually been cut more than the any of the other categories. Councilmember Kottwitz stated there may not be any point to having the Resolution if the 11%will be spent on the budget items. Councilmember Ohlson noted this item will give some direction to future Councils and the allocation does not necessarily equate to spending the funds. Councilmember Kottwitz stated Council needs to either be specific to meet citizen goals or not pass the Resolution . Councilmember Troxell stated he supports a 0.5%tax increase proposal,but not the 0.85%proposal and does not support the 11% "other community priorities" category. Councilmember Kottwitz stated she would not support the motion as there are no specific designations for the 11% "other community priorities" category. Mayor Hutchinson stated the Resolution outlines the community needs for which Council could use the discretionary portion of the proposed 0.85% tax rate increase. The vote on the motion was as follows: Yeas: Hutchinson, Manvel, Ohlson, Poppaw and Roy. Nays: Kottwitz and Troxell. THE MOTION CARRIED. Resolution 2010-058 Amending Resolution 2010-047 Submitting To The Registered Electors Of The City A Proposed .85% Increase In The City's Sales And Use Tax Rate On All Non-Exempt Taxable Items, To Be Used For Certain Specified Purposes, Adopted 410 August 17, 2010 And Resolution 2010-059 Directing the City Manager to Review the Use Tax Provisions of the City Code, as Well as the City's Manufacturing Equipment Use Tax Rebate Program, and to Make Recommendations to the City Council Regarding Any Changes Thereto That May Help Promote the Economic Health of the City. Adopted The following is staff s memorandum for this item. "EXECUTIVE SUMMARY On July 27, 2010, the City Council approved Resolution 2010-047 submitting to the registered electors of the City a proposed.85%increase in the City's sales and use tax rate on all non-exempt taxable items. Since the July meeting, there has been significant feedback provided by the business community regarding the advisability of applying the additional .85% use tax increase on manufacturing equipment, should the voters pass the proposed tax increase in November. This resolution would amend the ballot language to exempt manufacturing equipmentfrom the additional .85%. BACKGROUND The Fort Collins City Council passed a resolution setting ballot language seeking voter approval for a.85%increase in the sales and use tax rate. The election is scheduled for November 2, 2010. The City currently has a use tax rebate program on manufacturing equipment for qualifying manufacturers. The program was setup to recognize the need forfurthering economic development by providing incentives, including tax relief, to local manufacturers. Because of the important role that local manufacturers play in promoting the overall economic health of the City, the City Council wishes to further respond to this community concern by amending the tax measure to exempt from the proposed.85%use tax increase all manufacturing equipment, as defined in Section 25-63 of the City Code, that is used, stored, distributed or consumed in the City. " City Manager Atteberry discussed the history of Resolutions 2010-058 and 2010-059. Resolution 2010-058 would amend the ballot language to exempt manufacturing equipment from the additional .85% use tax increase. Resolution 2010-059 directs staff to review the City's overall use tax programs and evaluate whether or not any further changes are needed to promote economic health. The City Manager will present these findings to Council no later than March 31, 2011. Ann Hutchison,Fort Collins Chamber of Commerce,expressed concern the proposed sales tax rate is too high and recommended the tax be proposed at 0.5%or 0.6%. She stated the Chamber would like at least 6% of the funds earmarked for economic vitality and have the ballot language revised to eliminate the proposed increase in the use tax. Eric Sutherland, 3520 Golden Currant, spoke regarding the use of reserves. 411 August 17, 2010 Gary Wockner, 516 North Grant, supported the item. Bruce Lockhart, 2500 East Harmony Road, stated many manufacturing jobs have already been lost to other countries and added that may be a reason for some of the decrease in energy consumption. Larry Carillo, 1019 Deer Creek Lane,stated focus should be placed on the reasons behind decreased tax revenue streams and expressed concern the proposed tax may be too high. Robert Overbeck, expressed concern about the poor audio feed on Channel 14. Councilmember Roy made a motion, seconded by Councilmember Manvel, to adopt Resolution 2010-058. Councilmember Troxell asked about the estimate of the effect of the use tax exemption. Mike Freeman,Chief Financial Officer,replied the manufacturing use tax is quite complicated;therefore, calculating the exact impact an exemption would have is extremely difficult. Almost 70% of the current manufacturing use tax is currently rebated,depending on the company's level of investment. The estimate was derived from historical data and is at the high end of the range. Councilmember Troxell asked about the decision process regarding the proposed Resolutions and why the tax increase of 0.5% or 0.6% proposed by the Chamber was not addressed. Mayor Hutchinson replied a response to the Chamber was prepared quickly,through the Leadership Team, in order to be responsive to a time-sensitive need. Council's vote to support the 0.85% proposed increase negated a need to respond to the 0.5% suggestion. Councilmember Troxell stated Council also previously voted on the use tax. City Manager Atteberry stated staff does not support a 0.5%or 0.6%tax increase proposal;however, it would be brought if requested by Council. Councilmember Manvel stated exempting the use tax for manufacturers makes sense and he supported the motion. Councilmember Ohlson noted this issue was discussed three days prior to the Chamber of Commerce submitting its request. He stated jobs lost to overseas markets were lost due to federal policies rather than those of Fort Collins. Fort Collins has a strong economy. Councilmember Roy stated he would support the motion and added the outcome of this vote will determine the future of Fort Collins' quality of life. The vote on the motion was as follows:Yeas: Hutchinson,Kottwitz,Manvel,Ohlson,Poppaw,Roy and Troxell. Nays: none. THE MOTION CARRIED. 412 August 17, 2010 Councilmember Manvel made a motion, seconded by Councilmember Roy, to adopt Resolution 2010-059. Councilmember Ohlson stated Fort Collins has not raised its base tax rate in 28 years and has one of the lowest sales tax rates in the Front Range. There will be no chance to build up reserves if this tax does not pass. The vote on the motion was as follows:Yeas:Hutchinson,Kottwitz,Manvel,Ohlson,Poppaw,Roy and Troxell. Nays: none. THE MOTION CARRIED. Extension of the Meeting Councilmember Roy made a motion, seconded by Councilmember Manvel, to extend the meeting past 10:30 p.m. Yeas: Hutchinson, Kottwitz, Manvel, Ohlson, Poppaw, Roy and Troxell. Nays: none. THE MOTION CARRIED. Resolution 2010-049 Authorizing the Execution of a Second Amendment Further Extending the Term of an Intergovernmental Agreement Between the City of Fort Collins, the City of Longmont, and Platte River Power Authority Relating to the Operation of a Joint Customer Information System, Adopted The following is staff's memorandum for this item. "EXECUTIVE SUMMARY In January 1998, the cities of Longmont and Fort Collins entered into a 10 year intergovernmental agreement with Platte River Power Authority to purchase and operate a joint customer information system (for customer account management and billing) on behalf of the two cities. On August 26, 2008, the term of the agreement was extended for two years. As of December 31, 2010, Fort Collins Utilities will be subject to the Red Flags Rules, the implementing regulations of the Fair and Accurate Credit Transactions Act(FACT)Act. The Red Flag Rules require utilities with covered accounts to take steps to detect, prevent and mitigate identity theft. This Resolution extends the agreement with Platte River and the City ofLongmont for one additional year to resolve issues related to compliance with this law. BACKGROUND In 1998, Platte River Power Authority, Fort Collins and Longmont purchased a joint customer information system, to be operated on behalf of the two cities by Platte River. Platte River entered into agreements with a vendor for the purchase of the system and an annual technical support 413 August 17, 2010 program. Platte River also purchased system hardware and operating software and hired technical staff to operate and maintain the customer information system at its facility. Per the intergovernmental agreement, Fort Collins and Longmont reimburse Platte River for all costs associated with the purchase and operation of the system. To comply with the Red Flags Rules, Fort Collins Utilities has and will continue to develop policies and procedures designed to detect, prevent and mitigate identity theft and has elected to require Platte River to implement specific data security and other measures to protect Fort Collins customer data and accounts. The parties require additional time to further develop these specific measures. " Eric Sutherland, 3520 Golden Currant, expressed concern regarding intemet security with respect to pop-ups on the City billing website. Mayor Hutchinson asked for staff input regarding the pop-up advertisements. Patty Bigner,Utility Services, replied staff will investigate other means to relay information to customers. Mayor Hutchinson asked for a white paper report to be prepared for Council. Councilmember Kottwitz stated the pop-up should be removed from the website. Councilmember Ohlson asked about the use of the Green E logo. Bigner replied the Green E program is nationally recognized for setting the standard for certification of renewable energy products. Brian Janonis, Utility Services Executive Director, stated the Green E program is nationally recognized and provides national standards. He stated he is unaware of any better program. Bigner added the Green E logo pop-up has been removed from the website. Councilmember Roy stated he would like to have information regarding customer privacy in the white paper report. Mayor Hutchinson stated he would like the white paper to contain any information regarding replacing the Green E logo on the website and information regarding how users will be able to access an electronic version of the utility bill inserts. Councilmember Manvel asked why Longmont is the only other community sharing the utilitybilling website with Fort Collins. Bigner replied Longmont has had a relationship with PR-PA since 1998 but she is uncertain why Loveland and Estes Park have not participated. City Manager Atteberry replied that at the time the shared billing website was established, Loveland had recently purchased and implemented a new system. Councilmember Troxell made a motion, seconded by Councilmember Roy, to adopt Resolution 2010-049. Yeas: Hutchinson, Kottwitz, Manvel, Ohlson, Poppaw, Roy and Troxell. Nays: none. THE MOTION CARRIED. 414 August 17, 2010 Resolution 2010-053 Authorizing the City Manager to Execute an Agreement Regarding Allegiant Air, LLC Service from Fort Collins-Loveland Municipal Airport to Mesa, Arizona, Adopted The following is staff s memorandum for this item. "EXECUTIVE SUMMARY The purpose of this contract is to provide a financial and marketing boost to support the addition of new commercial air service at Fort Collins Loveland Airport (FNL). The contract waives 2 of 4 Airport related service fees for six months (Terminal Usage Fee and ARF—Fire Rescue Fee) - $50%ach per landing. The contract also supports Allegiant marketing efforts by supplying a $30,000 reimbursable that Allegiant can utilize to buy marketing in the Northern Colorado and Arizona markets. The reimbursable is dependent upon the service commencing and operating 2 flights per week beginning October 2010. Due to the 50150 ownership structure with the City of Loveland this contract will be considered by the Loveland City Council as well. BACKGROUND The purpose of this contract is to support marketing efforts during the start-up phase of new route service from the FNL Airport to Phoenix,Arizona. The two components of the package include a fee waiver amounting to$100/flightfor the first six months of operations, while the second is a directly billed marketing reimbursable. As Allegiant purchases advertising for this route launch FNL will review and reimburse bills up to$30,000. If the service is not operated 2 days per week to Phoenix the obligation for this reimbursement diminishes based in parallel with the service actually provided. As a result, of this additional service, the Airport will realize an annual increase in new revenues of approximately $160,000; a comparative analysis to the existing flight schedule and revenue is attached for informational purposes (Attachment 2). The package is in parallel with the package offered to Allegiant in 2003 when it began service; at that time the Airport also invested in additional Airport infrastructure to accommodate new commercial service; notably, the modular terminal building. Allegiant brought commercial back to FNL in 2003 after a hiatus of 5 years, in 1998 United Express and Continental Express abandon service at FNL. Based on a recent market analysis completed for FNL by Sabre Airlines Solutions, Phoenix is the 4th largest market from Northern Colorado. Staff has also provided an attached background memo that describes the contract and background in greater detail. This contract is consistent with the Business Plan developed by the Airport. The Business Plan (http://www.fortloveair.com/general-information/guiding-documents) was developed as a companion document to the Airport Master Plan which focuses exclusively on future capital projects for the Airport and some funding options. 415 August 17, 2010 The Airport Steering Committee made up of the two Mayors and City Managers directed staff to develop the business plan with an overarching goal of identifying options for improving Airport revenue with the goal of eliminating the direct city investments (currently 585,000). By executing this contract with Allegiant, additional revenues are generated for FNL. " Mike Freeman, Chief Financial Officer, discussed the history and purpose of the item. Council is being asked to consider a financial and marketing agreement with Allegiant Airlines which will involve adding two flights to Mesa, Arizona. Due to a decrease in flights to Las Vegas 18 months ago, there will be no net change in number of flights. The proposal waives the terminal usage fee and fire rescue fee service fees for six months. The overall reduction from those two waivers is over$5,000. A larger investment provides marketing support for Allegiant. Entitlement funds from the Federal Aviation Administration increase to$1 million annually with a commercial airline using a community airport. ("Secretary's note: Councilmember Ohlson left the meeting at 10:50 p.m. and returned at 11:00 P.M.) Ralph Castain, Fort Collins resident, opposed the item. Chuck Washington, 1125 Deercroft Court,opposed the item and asked if the flights would go ahead with or without City support. He suggested a review and update of the Airport Business Plan. Councilmember Kottwitz asked if this item needed to be voted upon at this time. Freeman replied the item is on both Fort Collins' and Loveland's Council agendas tonight,at the request of Allegiant Airlines. Councilmember Kottwitz thanked staff for its work on the item. She asked about the impact of the item on property values. Freeman replied staff has not researched the issue of property values. Councilmember Kottwitz asked about the source of economic impact values. Freeman replied the State of Colorado does an economic analysis of state airports periodically. If Council does not have a goal of creating a self-sustaining airport, a significant deviation from the Airport Business Plan would result. Freeman stated the Airport is not actively recruiting commercial service. There are opportunities, without having more direct investment from the cities, to try to improve Airport revenues, per the Business Plan. Councilmember Kottwitz noted the proposed new flights will not increase the net number of flights; additionally, should the new flights result in an increase, FAA regulations would prohibit limiting flights. Councilmember Kottwitz asked when the Airport Business Plan is scheduled for review and noted discussion regarding informing residences located in flight plans has been discussed. City Manager Atteberry noted the Airport Business Plan was updated in September 2009. He stated a work session should be scheduled regarding Airport planning in 2011. 416 August 17, 2010 Mayor Hutchinson supported a full review of the Airport Business Plan. Councilmember Roy asked how many subdivisions and residents are near the Airport. Freeman replied he did not have an accurate estimate of that information. Councilmember Roy asked how much property values decline per decibel increase. Freeman replied he did not have that information but would follow up. Councilmember Roy suggested postponing the item. He asked about contingency plans should the FAA or federal government have financial troubles. Freeman replied the City does not rely on FAA dollars but benefits from having an airport with commercial service. Those funds come largely from fuel taxes on airlines. City Manager Atteberry noted the Airport Management Team efficiently responds to issues and concerns. Mayor Hutchinson asked if property values fluctuate based on two flights per week. City Manager Atteberry replied the item would be researched. Councilmember Ohlson asked if it is possible to change the number of flights at the Airport. Councilmember Manvel replied, to his recollection, it is not possible to regulate that number. City Manager Atteberry replied the City has little control over commercial flights. Councilmember Manvel made a motion,seconded by Councilmember Troxell,to adopt Resolution 2010-053. Mayor Hutchinson asked if a work session could be scheduled. City Manager Atteberry replied he would schedule the item following the April 2011 elections. Councilmember Manvel asked about additional expenses which would decrease the net income of $125,000 the first year and $160,000 in subsequent years. Freeman replied there are no additional staff requirements or other expenses. Major revenues come from parking and security fees paid per seat on flights. Councilmember Manvel asked if Airport subsidies would continue if this item moves forward. Freeman replied the 2011 budget assumes the City will invest $85,000. City Manager Atteberry stated the item will be investigated prior to the draft 2011 budget. Councilmember Ohlson stated one of the functions of government is to provide subsidies and he was not in support of approving the item simply to neutralize the budget. Councilmember Ohlson expressed concern that, in a time of questioning the role of government in private industry, private industry is asking for marketing dollars. He stated he would not support subsidizing marketing as Allegiant should have waited for Council to vote prior to making its announcement regarding the new flights and marketing. 417 August 17, 2010 Councilmember Roy stated he would not support the motion as he is concerned about property values. Councilmember Kottwitz stated she would support the motion as it is a partnership between the Airport and the City of Loveland. Councilmember Troxell noted this item was originally on the Consent Calendar. He stated he would support the motion as the Airport can become a financial hub for the area. Councilmember Manvel noted,should the City not approve this item,there would be no investment with an identical payback for the City. He expressed support for Allegiant but stated he would not support the motion. Mayor Hutchinson stated eliminating subsidies has been a City goal and this item does not encourage growth. He stated he would support the motion. The vote on the motion was as follows: Yeas: Hutchinson, Kottwitz, Poppaw and Troxell. Nays: Manvel, Ohlson, and Roy. THE MOTION CARRIED. Adjournment The meeting adjourned at 11:40 p.m. Mayor ATTEST: City Clerk 418