HomeMy WebLinkAboutCOUNCIL - COMPLETE AGENDA - 12/13/2011 - COMPLETE AGENDACITY COUNCIL AGENDA
Karen Weitkunat, Mayor Council Chambers
Kelly Ohlson, District 5, Mayor Pro Tem City Hall West
Ben Manvel, District 1 300 LaPorte Avenue
Lisa Poppaw, District 2 Fort Collins, Colorado
Aislinn Kottwitz, District 3
Wade Troxell, District 4 Cablecast on City Cable Channel 14
Gerry Horak, District 6 on the Comcast cable system
Darin Atteberry, City Manager
Steve Roy, City Attorney
Wanda Krajicek, City Clerk
The City of Fort Collins will make reasonable accommodations for access to City services, programs, and activities
and will make special communication arrangements for persons with disabilities. Please call 221-6515 (TDD 224-
6001) for assistance.
ADJOURNED MEETING
December 13, 2011
6 p.m.
1. Call Meeting to Order.
2. Roll Call.
3. Executive Session Authorized.
The meeting of December 6, 2011, was adjourned to this date and time to allow the Council to
consider adjourning into Executive Session for the purpose of meeting with the City Attorney
regarding legal issues, as permitted under Section 2-31(a)(2) of the City Code.
4. Other Business.
5. Adjournment.
Karen Weitkunat, Mayor Council Information Center
Kelly Ohlson, District 5, Mayor Pro Tem City Hall West
Ben Manvel, District 1 300 LaPorte Avenue
Lisa Poppaw, District 2 Fort Collins, Colorado
Aislinn Kottwitz, District 3
Wade Troxell, District 4 Cablecast on City Cable Channel 14
Gerry Horak, District 6 on the Comcast cable system
Darin Atteberry, City Manager
Steve Roy, City Attorney
Wanda Krajicek, City Clerk
The City of Fort Collins will make reasonable accommodations for access to City services, programs, and activities
and will make special communication arrangements for persons with disabilities. Please call 221-6515 (TDD 224-
6001) for assistance.
WORK SESSION
December 13, 2011
After the Adjourned Meeting
1. Call Meeting to Order.
2. Discussion of the Implementation Steps Related to the November 1, 2011, Adoption of
the Citizen Initiated Ordinance Prohibiting Medical Marijuana Centers, Optional
Premises Cultivation Operations, and Medical Marijuana Infused Product Manufacturers
From Operating Within the City Limits. (staff: Jerry Schiager, Ginny Sawyer, the
Medical Marijuana Staff Team; 45 minute discussion)
A citizen initiated ordinance to prohibit the operation of Medical Marijuana Centers,
Optional Premises Cultivation Operations, and Medical Marijuana-Infused Product
Manufacturing within the City of Fort Collins Corporate Limits was approved by the
voters on November 1, 2011. The Larimer County Clerk and Recorder has certified the
election results and the 90 day period during which these businesses can remain open will
end on February 14, 2012. Therefore, all businesses must be closed by February 14,
2012.
Staff has notified all license holders of the February 14, 2012 deadline and has received
many questions regarding implementation of the ban from the licensees. License holders
were asked to work with Police Services regarding their closing dates and to schedule
final inspections of all locations. Staff has also consulted with the State Medical
Marijuana Enforcement Division (MMED) to obtain assistance with product
forfeiture/seizure and disposal.
In the near future, staff will be bring forth an ordinance regarding the citizen-approved
prohibition of all medical marijuana businesses within Fort Collins.
3. 2012 Large Commercial and Industrial Electric Rates. (staff: Brian Janonis, Steve
Catanach, Lance Smith, Bill Switzer, Ellen Switzer; 90 minute discussion)
Ordinance No. 142, 2011 passed by City Council on November 1, 2011, adopted
commercial and industrial electric rates effective for billings with meter readings on or
after January 1, 2012. The adopted rates pass through increases in Platte River Power
Authority’s wholesale rates and align with Platte River’s new seasonal rate structure.
The adopted rates also pass through the cost of service change made by Platte River to
shift a greater portion of the wholesale power cost from the monthly peak demand charge
to the energy component of the wholesale rate. In addition to the purchase power
increases, there was also a small rate increase in order to slow the reduction of Light and
Power reserves. These changes resulted in larger 2012 electric rate increases for the
large commercial and industrial customer classes than the system average, but reflect the
accurate costs of providing electric service to these classes.
Since the adoption of Ordinance No. 142, 2011, several large customers have asked the
City Council to reconsider the rate increases. These customers have stated the increases
will negatively impact their business and perhaps delay or eliminate any company
expansion plans. In recognition of these concerns, Council requested a work session for
additional review of the impacts of the rate increases on large commercial customers. As
part of this review, staff has prepared additional options for implementing the electric
rate increases for these large customers.
The 2012 rates adopted by Ordinance No. 142, 2011, will remain in effect until changed
by ordinance. If Council chooses to formally consider a change, an ordinance revising
the commercial and industrial rates could be effective prior to the higher summer season
rates during June, July and August.
4. Update on the Economic Health Strategic Planning Process with the City’s Consultant
Team and Staff. (staff: Josh Birks, Bruce Hendee; 1 hour discussion)
The City of Fort Collins’ Economic Action Plan was first developed in 2005 and has
been updated annually as part of the Budgeting for Outcomes process. Now, more than
five years later, it is time to re-evaluate the Economic Action Plan and develop a revised
Economic Health Strategic Plan. City Council approved $150,000 in one-time funding
from the Keep Fort Collins Great funding allocation for this project in 2011.
TIP Strategies from Austin, TX was selected to lead this process. TIP staff was present
at the May 10, 2011 Work Session to present their overall scope of services and have an
initial conversation with the City Council about the project. TIP staff returned on July
12, 2011, to present the draft Economic Assessment and sought input on a draft strengths,
weaknesses, opportunities, and threats (SWOT) analysis and potential list of benchmark
communities. TIP staff is returning to present an overview of the Draft Economic Health
Strategic Plan. The Plan is intended to refine the mission of the Economic Health Office
and provide an action plan for the next five years.
5. Other Business.
6. Adjournment.
DATE: December 13, 2011
STAFF: Jerry Schiager, Ginny
Sawyer and the Medical Marijuana
Staff Team
Pre-taped staff presentation: available
at fcgov.com/clerk/agendas.php
WORK SESSION ITEM
FORT COLLINS CITY COUNCIL
SUBJECT FOR DISCUSSION
Discussion of the Implementation Steps Related to the November 1, 2011, Adoption of the Citizen
Initiated Ordinance Prohibiting Medical Marijuana Centers, Optional Premises Cultivation
Operations, and Medical Marijuana Infused Product Manufacturers From Operating Within the City
Limits.
EXECUTIVE SUMMARY
A citizen initiated ordinance to prohibit the operation of Medical Marijuana Centers, Optional
Premises Cultivation Operations, and Medical Marijuana-Infused Product Manufacturing within the
City of Fort Collins Corporate Limits was approved by the voters on November 1, 2011. The
Larimer County Clerk and Recorder has certified the election results and the 90 day period during
which these businesses can remain open will end on February 14, 2012. Therefore, all businesses
must be closed by February 14, 2012.
Staff has notified all license holders of the February 14, 2012 deadline and has received many
questions regarding implementation of the ban from the licensees. License holders were asked to
work with Police Services regarding their closing dates and to schedule final inspections of all
locations. Staff has also consulted with the State Medical Marijuana Enforcement Division
(MMED) to obtain assistance with product forfeiture/seizure and disposal.
In the near future, staff will be bring forth an ordinance regarding the citizen-approved prohibition
of all medical marijuana businesses within Fort Collins.
GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED
• Does Council have any questions regarding the implementation of the medical marijuana
ban?
BACKGROUND / DISCUSSION
Implementation
As of November 2011, the City of Fort Collins had 20 licensed medical marijuana businesses. All
license holders were notified in November of the February 14, 2012 deadline to cease operation.
December 13, 2011 Page 2
Businesses whose license renewals were due or are coming due were also notified and all but one
paid the renewal fee. The one who did not renew has ceased operation.
Staff has asked each business owner to notify the City of its closing date and to coordinate with
Police Services to arrange a final inspection date. The City will work with the State of Colorado
Medical Marijuana Enforcement Division (MMED) as needed and in particular when plants or
products will be forfeited/seized.
Article II, Section 9 of the Charter requires that all permanent ordinances be codified and therefore
staff will be bringing an ordinance for Council consideration to effectuate that codification.
Patient/Caregivers
The ballot initiative approved by the voters does not affect the rights of patients and caregivers as
set forth in Article XVIII, Section 14 of the Colorado Constitution (Amendment 20), nor does it
affect other patient and caregiver provisions subsequently enacted as State law. It also does not
eliminate or affect the City’s current City Code provisions that pertain to patients and caregivers as
shown below:
Sec. 15-500. Definitions.
The following words, terms and phrases, when used in this Article, shall have the meanings
ascribed to them in this Section:
Patient shall mean a person who has a debilitating medical condition as defined in Article XVIII,
Section 14 of the Colorado Constitution.
Primary caregiver shall mean a person, other than the patient and the patient's physician, who is
eighteen (18) years of age or older and has significant responsibility for managing the well-being of
a patient who has a debilitating medical condition.
Sec. 15-501. Limitations.
Primary caregivers who cultivate, possess or dispense medical marijuana for use by patients, and
patients who cultivate or possess medical marijuana for their own medical use, shall be subject to the
following limitations:
(1) All cultivation of medical marijuana shall be conducted entirely within a building or other
fully enclosed structure.
(2) Not more than twelve (12) marijuana plants, including no more than six (6) mature plants,
may be cultivated or kept within, or on the same legal parcel as, any single-family dwelling.
In no event shall a patient or primary caregiver keep, cultivate, grow or process more medical
marijuana than such person is entitled to possess under Article XVIII, Section 14 of the Colorado
Constitution.
December 13, 2011 Page 3
ATTACHMENTS
1. Questions Received from Citizens and Council
2. Department of Public and Health and Environment Medical Use of Marijuana 5 CCR 1006-
(The entire document has been provided. Regulations 9-11 concern primary caregivers.)
3. Powerpoint Presentation
ATTACHMENT 1
Questions Received Regarding Implementation
Staff has received the following questions from license holders and the public:
Can sale amounts to other licensed Centers be waived to help reduce inventory?
o Our current ordinance prohibits the sale of any marijuana plant, clone, or seedling over 8 inches
in height. It also restricts the sale of product to no more than 2 oz per week to patients and no
more than 8 oz per week to another licensed center. Sales at the optional premise cultivation
locations are prohibited.
Will the City return any portion of renewal fees paid during the 90 day closure deadline?
o Our currently existing licensing mechanism requires an annual renewal with the following
associated costs:
$100 renewal fee
$700 annual inspection fee
There are 18 license locations that needed to be renewed or will need to be renewed between
November 1, 2011 and February 14, 2012. Those owners have asked for consideration in
rebating a portion of the annual inspection fee. An inspection will be performed at these, and all,
locations to ensure closure and disposal of product and equipment has occurred.
Will current cultivation locations be available for caregiver grows?
o This would not be allowed under current zoning.
ATTACHMENT 2
1
1
Medical Marijuana Ban
Implementation
City Council Work Session
December 13, 2011
2
Does Council have any questions regarding the
implementation of the medical marijuana ban?
Council Consideration
ATTACHMENT 3
2
3
Ban Implementation
A citizen initiated measure prohibiting the
operation of Medical Marijuana Centers,
Optional Premises Cultivation Operations, and
Medical Marijuana‐Infused Product
Manufacturing within the City of Fort Collins
Corporate Limits was approved by the voters
on November 1, 2011.
4
Medical marijuana businesses must cease operation
by February 14, 2012.
Schedule final inspections with Police Services.
Police Services working with the Medical Marijuana
Enforcement Division on closures and taking of any
plants or product.
Ban Implementation
3
5
Ban Implementation
City had 22 license holders in November 2011.
All have been notified of February 14, 2012 deadline.
One business has already ceased operation and
completed their inspection.
6
Ban Implementation
The ballot initiative does not eliminate the 12 plant
limit in residential units.
Staff will be bringing forward an ordinance to codify
the ballot language in the near future.
4
7
Council Considerations
Does Council have any questions regarding the
implementation of the medical marijuana ban?
DATE: December 13, 2011
STAFF: Brian Janonis, Steve
Catanach, Lance Smith, Bill
Switzer, Ellen Switzer
Pre-taped staff presentation: available
at fcgov.com/clerk/agendas.php
WORK SESSION ITEM
FORT COLLINS CITY COUNCIL
SUBJECT FOR DISCUSSION
2012 Large Commercial and Industrial Electric Rates.
SUBJECT FOR DISCUSSION
Ordinance No. 142, 2011 passed by City Council on November 1, 2011, adopted commercial and
industrial electric rates effective for billings with meter readings on or after January 1, 2012. The
adopted rates pass through increases in Platte River Power Authority’s wholesale rates and align
with Platte River’s new seasonal rate structure. The adopted rates also pass through the cost of
service change made by Platte River to shift a greater portion of the wholesale power cost from the
monthly peak demand charge to the energy component of the wholesale rate. In addition to the
purchase power increases, there was also a small rate increase in order to slow the reduction of Light
and Power reserves. These changes resulted in larger 2012 electric rate increases for the large
commercial and industrial customer classes than the system average, but reflect the accurate costs
of providing electric service to these classes.
Since the adoption of Ordinance No. 142, 2011, several large customers have asked the City Council
to reconsider the rate increases. These customers have stated the increases will negatively impact
their business and perhaps delay or eliminate any company expansion plans. In recognition of these
concerns, Council requested a work session for additional review of the impacts of the rate increases
on large commercial customers. As part of this review, staff has prepared additional options for
implementing the electric rate increases for these large customers.
The 2012 rates adopted by Ordinance No. 142, 2011, will remain in effect until changed by
ordinance. If Council chooses to formally consider a change, an ordinance revising the commercial
and industrial rates could be effective prior to the higher summer season rates during June, July and
August.
GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED
1. Are there options that staff has not presented that should be explored?
2. Of the options presented, which option is preferable?
3. Should staff prepare an ordinance to revise the commercial and industrial rates for 2012?
December 13, 2011 Page 2
BACKGROUND / DISCUSSION
Impacts to Commercial and Industrial Customers
As shown on Attachment 3, Fort Collins commercial and industrial rates are among the lowest in
the state and country and are projected to remain among the lowest in 2012. Platte River Power
Authority is in large part responsible for the City’s ability to maintain low electric rates. However,
Platte River’s costs are increasing and will continue to increase in the future.
In 2012, the City’s purchase power rates are increasing an average of 6.4%. The new rates have a
seasonal price signal with larger increases in the three summer months of June, July and August.
In addition, the purchase power rates will begin to recover more costs from the energy component
of the rate and less through the monthly coincident peak demand component. As a result, the
wholesale energy costs increased 47% and the wholesale coincident peak demand component
decreased 33%. This cost structure impacts large industrial and commercial customers more than
smaller users.
Since 1997, Fort Collins Light and Power’s large commercial and industrial customer rates have
been unbundled to show separate rate components for purchase power energy (kwh), purchase
power demand (coincident peak measured in kW), customer billing and distribution facilities
charges. The two purchase power components directly tie to the monthly cost of power purchased
from Platte River to serve the individual customer and the customer billing and distribution facilities
charges reflect the Utilities cost for operating and maintaining the distribution facilities to serve the
customer. These customers have advanced meters and their contribution to Platte River’s four-city
coincident peak is measured each month. The exact cost of purchase power (adjusted for losses) is
directly passed on to each of these large customers. Platte River posts its projected hourly demands
on a website available to GS50 and GS750 customers and customers may monitor the peaks to
reduce their coincident monthly demand. This enables customers to save on their monthly bills for
the purchase power coincident demand component. While the incentive to do this will remain, it
will be somewhat lessened by the cost shift from demand to energy.
The 2010 Cost of Service Study showed that Utilities also required a rate increase to fully fund
capital improvements. For the last few years, revenues have not covered the cost of capital
improvements and the difference has been drawn from reserves. While this was an intentional
strategy, it is not a sustainable one as reserves will drop below policy levels and be totally depleted
if this is not reversed. To slow the draw down of reserves, the 2012 rates also included an average
increase of 3.5% to the distribution facilities demand charge with the GS50 class seeing a 3.1%
increase and the GS750 class a 1.7% increase. See Attachment 1 for Light and Power’s working
capital reserve balances.
The following two tables show the average impacts of Platte River’s rate changes on the large
commercial and industrial customers. The percentage increases shown below are averages for the
rate classes. Individual customers may see increases greater or less than the average. For example,
the industrial customers increase between 15% and 23% in the summer and increase from 4% to
13% in the non-summer months. Individual customers may see increases that are larger or smaller
than the class averages due to differences in each customers seasonal load profile and ratio of energy
to demand (load factor).
December 13, 2011 Page 3
Table 1: Average Purchase Power and Distribution Cost Components of 2012 Large
Commercial and Industrial Rate Increases
Number of
Customers
Projected
2011
Revenues
Projected 2012
Revenues
Increase
Revenue
Proportion
of
Increase
Large Commercial
General Service 50
Purchase Power $14,607,324 $15,652,767 $1,045,443 65%
Distribution $3,931,085 $4,501,954 $570,869 35%
Total 470 $18,538,409 $20,154,721 $1,616,312 100%
Percent Increase 8.7%
Industrial
General Service 750
Purchase Power $15,258,751 $16,875,908 $1,617,157 85%
Distribution $1,996,178 2,284,899 $288,721 15%
Total 15 $17,254,929 $19,160,807 $1,905,878 100%
Percent Increase 11.0%
Table 2: Average Seasonal Impacts on Large Commercial and Industrial Rates
Summer Non-Summer Average
Large Commercial
General Service 50 20.0% 4.7% 8.7%
Industrial
General Service 750 20.7% 7.6% 11.0%
Platte River Power Authority Rates
Since the largest portion of the rate increase for these customer classes is related to purchase power,
Platte River Power Authority has provided a detailed explanation of the 2012 purchase power rate
changes and planned increases for the next few years (Attachment 4).
Accuracy of Cost of Service and Rate Design
Staff has reviewed the cost of service used to develop the rates contained in Ordinance No. 142,
2011. In staff’s opinion, the adopted rates accurately pass through the increased rates and
realignment of the purchase power for each customer rate class. The rates also reflect the costs of
billing and the operation and maintenance of the Utilities’ distribution facilities. The methodology
used by staff in developing the cost of service allocations is standard to the electric industry. An
December 13, 2011 Page 4
independent review of the cost of service was included in the scope of service for the SAIC
consultants when they were hired in early 2011. This review is expected to be completed shortly.
Any reduction to the cost of service based rates for large commercial and industrial customers would
require additional increases for the other customer classes or further draw-down of the Light and
Power Reserve Fund. Staff would not recommend further depleting reserves to accomplish a
temporary rate reduction for these classes.
Future Rate Impacts
As explained in Attachment 4, Platte River currently estimates an additional 9.4 % increase to the
wholesale purchase power cost in 2013. This will impact each customer differently, with most
commercial and industrial customers seeing an overall increase of 7-11% attributable to higher
wholesale purchase power costs. Also, as noted, the continued draw-down of reserves is not
sustainable and it is necessary for the rates to be increased gradually over the next few years to fully
cover the costs of capital improvements.
Additional Options for Implementation of Commercial Rate Increases
While the City’s electric rates will still remain low in comparison to other electric utilities, several
large customers have voiced both questions and concerns related to the magnitude of the increases.
Also, changes to the rate structure were not anticipated by these customers, causing budgeting
problems for some large customers and potential changes in operations and capital expansion plans.
The following table shows several additional options for implementing the 2012 cost increases for
the large commercial and industrial customers. Because purchase power and operating costs of the
Utility must be paid in 2012, the reduction in revenue from any changes to the large commercial and
industrial classes would have to be drawn from reserves (which are already projected to be further
depleted in 2012), or through additional 2012 rate increases to other customer classes. Deferring
the increases to these classes would compound the planned rate increases for these large customers
in the future.
December 13, 2011 Page 5
Staff Recommendation:
Staff recommends Option 1.
Other Related Issues
Issue 1
One large customer is served by a wholesale contract rate based on agreement with the City and
Platte River and will not be impacted by any change in Ordinance No. 142, 2011. The contractual
rate for this customer is specified in the Amended Master Agreement. Annual rate changes for this
customer are based solely on Platte River’s Tariff 1 (Firm Resale Power Service) as applied to the
December 13, 2011 Page 6
customer’s historic load factor. The average 2012 rate increase for this one contractual customer
is 11.3% and will vary by season.
Issue 2
A new rate class was created by Ordinance No. 142, 2011, for medium sized commercial customers.
The rate increases for these customers average 27% in the summer and 10.9% in the non-summer.
These 500 customers include sandwich shops, coffee shops, some retail, restaurants, churches,
preschools and some smaller schools. Prior to the change, all commercial customers with demands
of less than 50 kW were grouped into a single rate class and their costs of service were averaged
over both customer groups. This historical grouping resulted in lower rates for the 500 customers
with demands between 25 and 50 kW and higher rates for the 3500 customers with demands less
than 25 kW. The Utilities rate consultant, SAIC, recommended that this class be divided to better
reflect the cost to serve the diverse small/medium commercial customers. Ordinance No. 142, 2011
created the new GS25 rate and eliminated the cross subsidy between the two groups of customers.
The adopted change resulted in the largest percentage increase for the group of 500 business
customers with demands between 25 and 50 kW. These customers generally have smaller utility
budgets than those for the larger commercial and industrial customers. Additional outreach for these
customers is planned, to provide more information about the impacts of the change on their typical
charges, as well as help in reducing bills through energy efficiency and conservation measures.
NEXT STEPS
Ordinance No. 142, 2011 will become effective for commercial billings for all meter readings on
or after January 1, 2012. Should Council’s response to the questions posed indicate a desire to
change the adopted ordinance, required notice will be sent and a revised ordinance will be prepared
for Council consideration in early 2012. The new ordinance would be implemented prior to the
summer season.
Regardless of Council’s direction to staff, all large commercial and industrial customers are
encouraged to send representatives to the Utilities Key Account Meeting to learn more about the rate
increases and efficiency programs.
ATTACHMENTS
1. Light and Power Fund Reserve Balances
2. Light and Power 2012 Rate Increase by Class and Season
3. Colorado Association of Municipal Utilities Comparison Graphs for Large Commercial and
Industrial
4. National Rate Comparison Graphs
5. Platte River Rate Explanation Memo
6. Excerpt from the Agenda Item Summary for Ordinance No. 142, 2011
7. Memo from Josh Birks, City Economic Advisor, re: Economic Health Incentives - Offsetting
Commercial Utility Rate Increases
8. Ordinance No. 142, 2011
9. Powerpoint presentation
10. Platte River Power Authority Powerpoint presentation
Attachment 1 – Light and Power Fund Reserve Balances and Intended Use of Reserves
2007 2008 2009 2010 2011 2012
CAFR CAFR CAFR CAFR Estimated Reserves Estimated Reserves
Current Assets $ 66,217,267 $ 82,861,465 $ 70,640,231 $ 57,192,926
Current Liablilities $ 6,779,144 $ 24,273,012 $ 23,021,404 $ 12,056,242
Working Capital Reserves $ 59,438,123 $ 58,588,453 $ 47,618,827 $ 45,136,684 $ 44,499,684 $ 39,406,383
Note: Not all working capital reserves are cash. The balance includes inventory, accounts receivable, and accounts payable.
Cash and investments totalled $37.86 million of which $16.5 million is from the AMI bond issue.
Intended Use of Reserves
Required Reserves per Financial Policy
Reserve for Art in Public Places $ 716,700
Reserve for Operations (8% of O&M Expense less Purchase Power) $ 2,817,380
Capital Improvements (1/5th of the 5-year capital plan less capital outlay reserve) $ 10,429,159
Capital Outlay Reserve $ 797,927
Total Reserves per Financial Policy $ 14,761,166
Reserve for Encumbrances (committed by 2010 purchase order for expenditure in 2011) $ 2,303,541
Bond Proceeds Committed to AMI Grant Match $ 16,500,000
Reserves Needed to Fund Prior Year Unexpended Captial Project Appropriations $ 10,171,697
Committed and Required Reserves $ 43,736,404 $ 43,736,404 $ 43,736,404
Excess Reserves YE (estimated 2011 and 2012) $ 1,400,280 $ 763,280 $ (4,330,021)
2012 Budget $ 112,752,791
2012 Revenues $ 107,659,490
Use of Reserves in 2012 - Excludes AMI revenues and expenditures $ 5,093,301
Attachment 2 – Light and Power 2012 Rate Increase Charts
2012 RATE INCREASE
17%
20%
18%
27%
20%
21%
2%
15%
11%
5%
8%
6%
16%
4%
16%
9%
11%
19.2%
-2%
4.4%
8.3%
-5%
0%
5%
10%
15%
20%
25%
30%
RES RES DEM GS GS25 GS50 GS750 SYSTEM
Summer
Non-summer
Average
2012 Rate Class Increase Detail
-13%
-15%
-6%
-13%
16%
22%
2%
6%
16% 16%
11%
-13% -13% -12.4%
18% 18%
14%
15%
17.2%
5% 4%
14%
4% 3%
3.5%
9%
4%
8.3%
-20%
-15%
Attachment 3 – Colorado Rate Comparison
Colorado Association of Municipal Utilities Large Commercial Rate Survey
January 2011 --- Cost for 45,000 kWh and 130 KW per month
$3,423
$3,048
GUNNISON
LONGMONT 2011
FORT COLLINS 2011
LOVELAND 2011
LONGMONT 2012
ESTES PARK
COLORADO SPRINGS
FLEMING
LOVELAND 2012 - Average
FT COLLINS 2012 - Average
XCEL ENERGY
UNITED POWER
BLACK HILLS ENERGY
POUDRE VALLEY EA
$-
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
FORT COLLINS LOVELAND LONGMONT INVESTOR OWNED MUNICIPAL/REA
Colorado Association of Municipal Utilities Industrial Rate Survey
January 2011 --- Cost for 1,900,000 kWh and 3000 KW per month
$90,827
$104,260
$0
$25,000
$50,000
$75,000
$100,000
$125,000
$150,000
$175,000
$200,000
$225,000
FORT COLLINS 2011
TRI-COUNTY
LONGMONT 2011
LOVELAND 2011
COLORADO SPRINGS
LONGMONT 2012
FT COLLINS 2012 - Average
LOVELAND 2012 - Average
XCEL ENERGY
UNITED POWER
BLACK HILLS ENERGY
POUDRE VALLEY EA
FORT COLLINS LOVELAND LONGMONT INVESTOR OWNED MUNICIPAL/REA
Attachment 4 – National Rate Comparison
Cost of Electricity Commercial
Source: Energy Information Administration
0
2
4
6
8
10
12
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
YTD
Customer cost in cents per kWh
National Average Fort Collins Colorado Average
Cost of Electricity Industrial
Source: Energy Information Administration
0
1
2
3
4
5
6
7
8
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
YTD
2012
Est
Customer cost in cents per kWh
National Average Fort Collins Colorado Average
ATTACHMENT 5
Ip PLATTE RIVER
POWER AUTHORITY
MEMORANDUM
November 30, 2011
To: Darin Atteberry, Fort Collins City Manager
Brian Janonis, Fort Collins Utilities Director
From: Brian Moeck, General
Subject: Attachment for December 13 Work Session Agenda Item Summary
2012 Large Coinmejuii I and Industrial Electric Rates
Working with staff from Fort Collins Utilities, Platte River developed the attached summary to
support discussion of electric rates at the City Council work session on December 13.
Platte River staff will be available at the work session to answer any questions the City Council may
have regarding wholesale electric rates.
Please let me know if you have any questions before the meeting.
ATTACHMENT
5
PLATTE
RIVER POWER
AUTHORITY
ATTACHMENT
Agenda
Item
Summary
-
2012
Large
Commercial
&
Industrial
Electric
Rates
The
Platte
River
Board
of
Directors
approved
wholesale
electric
rates
for
2012
at
its
meeting
on
October
27,
2011.
The
average rate
increase
at
the
wholesale
level
is
6.1%.
On
average,
this
represents
an
increase
at
the
retail
level
of
about
4.3%
(combined
retail
2012
Wholesale
Rate
Increase
(vs.
2011)
—
Revenue
Requirements
ATTACHMENT
5
The
wholesale
rate
increase
from
2011
to
2012
is
primarily
driven
by
reduced
surplus
sales
revenues,
as
indicated
in
Figure
2.
Reduced
revenues
from
other
sources
must
be
recovered
from
the
Municipalities.
The
next
most significant
factor
is
increased
operation
and
maintenance
(O&M)
costs
—
primarily maintenance
work
at
Rawhide
planned
ATTACHMENT
5
The
average
surplus
sales
price for
2011
(year
to
date)
is
about
$25/MWh.
Surplus
generation
in
the
region,
higher
than
expected
hydropower
levels,
lower
natural
gas
prices
and poor
economic
conditions
all
likely
have
contributed
to
the
lower
prices.
2012
Wholesale
Rate
Structure
Change
For
several
years,
the
owner
Municipalities
have
discussed
potential
new
retail rate
structures
such
as
seasonal
and
ATTACHMENT
5
Summary
of
2012
Wholesale
Rate
(Tariff
1)
Tariff
1
Charges:
Change
Energy:
Jun
-
Aug
$003513/kWh
52.1%
Energy:
Other
Months
$0.03340/kWh
44.6%
Demand:
Jun
-
Aug
$l0.05/kW-mo
-19.1%
Demand:
Other Months
$7.53/kW-mo
-39.4%
Average
$/MWh
Estes
Park
$47.14
8.3%
Fort
Collins
$49.47
6.4%
Longrnont
$50.33
5.7%
Loveland
$50.46
5.5%
Total
$49.81
6.1%
A
summary
of
the
major
changes
to
ATTACHMENT
5
Wholesale
Rate
Projections
Additional
wholesale
rate increases
are
anticipated
in
2013,
driven
primarily
by
anticipated
increases
in
coal
prices
—
and
most
of
this
increase
would
apply
to
the
energy
charge.
Fuel
is
Platte
River’s
largest
expense,
at
about
25%
of
total
cost.
At
this
time,
the
average rate
is
estimated
to
increase
about
9.4%
in
2013.
No
rate
increases
ATTACHMENT
5
Average
monthly
retail
cost
trends
for
residential
customers
in
Colorado
are
summarized
in
Figure
5.
Platte
River’s
owner
Municipalities
all
have relatively
lower
rates
than cooperatives,
investor-owned
utilities and
other
municipalities
in
the
state.
Figure
6
shows
the
trend
for
wholesale
rates
provided
to
cooperatives
in
the
region
(from
Tn-
State)
relative
to
wholesale
rates
to
Platte
River’s
owner
Municipalities.
The
80
ATTACHMENT
5
Figure
6
—
Platte
River
and
Tn-State
‘Wholesale
Rate
Trends
70
60
40
30
20
10
70%
60%
50%
40%
30%
20%
10%
no,
U
/0
-10%
—PRPA
Average
Wholesale
Rate
Tn-State
Average
Wholesale Rate
Figure
7
—
Platte
River
and
National
Electric Rate
Trends
—
PRPA
Average
Wholesale
Rate
—
National
Retail
Rates
-20%
—-----
----------
----
----
ATTACHMENT 6
EXCERPT FROM OCTOBER 18, 2011 AGENDA ITEM SUMMARY
“Items Relating to Utility Rates, Fees and Charges for 2012”
c. Monthly Electric Rates (Ordinance No. 142, 2011, Amending Chapter 26 of the City Code to
Revise Electric Rates, Fees and Charges.)
Based on Council response at the September 13, 2011 Work Session, the electric rate ordinance does not
contain any changes to the RESR, the rate applicable to the majority of residential customers. The changes
to the RESR will be presented in a separate ordinance on November 15, 2011 and will contain several rate
form alternatives. The ordinance for consideration at this meeting pertains only to the Residential Demand,
Commercial (General Service, General Service 25, General Service 50), Industrial (General Service 750) and
Traffic rates.
Fort Collins’ wholesale and retail electric rates are among the lowest in the region and nation. This will
continue to be true following the 8.3% electric rate increase proposed for 2012. The 8.3% increase is the
system average and will not be equally applied to all customer rate classes. Based on a cost-of-service study,
the proposed rates vary by rate class as follows:
Proposed Rate Class Increases for 2012
Individual customers will vary from the class average.
Summer increases (June, July and August) will be greater than average.
RESR – Not included in Ordinance No. 142, 2011 6.0%
Residential Demand Rate 15.9%
1. General Service (small commercial less than 25 kW) 3.9%
1. General Service 25 (small commercial between 25-49 kW) 15.5%
General Service 50 (medium commercial between 50-749 kW) 8.7%
General Service 750 (large com/industrial greater than 749kW) 11.0%
Traffic Signals 11.3%
Floodlights 0.0%
Average System Increase 8.3%
4.8% of the 8.3% system-wide increase is due to a 6.4% increase in Platte River Power Authority’s purchase
power rates. In addition, Platte River’s wholesale rate will be seasonal, with higher rates in June, July and
August. Platte River’s 2012 purchase power rate increase is due to several key factors:
• Reduced surplus sales
• Increased operating and maintenance costs
• Increased financing and depreciation costs as new projects are placed into service
• Reduced interest income – due to low interest rates and lower cash reserves
The remaining 3.5% of the 8.3% is required to reduce the use of Light and Power’s reserves to cover the cost
of system improvements and replacements. While the reduction of reserves has been intentional,
expenditures in the Light and Power Fund have exceeded revenues each year since 2007. Even following
the proposed 3.5% increase, expenditures are projected to exceed revenues for 2012.
The larger commercial classes are experiencing a greater than average increase due to the shift of purchase
power costs from demand charges to energy charges in Platte River’s new rate form. Those customers with
larger load factors, typically larger commercial and industrial customers and also the traffic signal system, will
1
have larger than average increases in the purchase power components of their rates. (Load factor measures
the consistency of power use over time.)
Although the last cost-of-service study showed that the residential demand (“RD”) rate was 18% under cost-of-
service, all rate classes were limited to a 10% increase in 2011. The 2012 increase brings the RD rate class
up to full cost-of- service. The rate has traditionally been selected by high-use customers such as those who
exclusively heat their homes with electricity. The increase to this rate will make the RESR more economical
for many of the existing RD customers in 2012. Staff is also recommending that the RD rate be available only
to those customers providing documentation that their home is heated entirely with electric energy. These
changes will begin a phase-out of the RD rate.
Electric Rate Form Changes
Changes in the electric rate forms are necessary to align rates in support of the City’s Energy Policy and
Climate Action Plan goals. By adopting rate forms to incentivize customers to conserve and use energy more
efficiently and by providing energy conservation assistance and programs to our customers, the City will more
likely be able to achieve its policy goals. In addition, successful implementation of these tools will delay or
defer the expense of constructing additional generation resources. Rate form changes are also needed to
pass through the seasonal cost differentials that will be charged by Platte River Power Authority beginning
in 2012. All rates will have higher costs in the summer (June, July and August) than during the remaining nine
“non-summer” months. Consistent with Platte River, the recommended rates also shift a greater proportion
of the rate from the demand charges to energy charges.
Rate form options were presented to the Council Finance Committee on August 15, 2011 and to the full
Council at work sessions on September 13, 2011 and October 11, 2011. Based on Council’s responses to
the questions posed at the work sessions, there is a delay in the ordinance making changes to the RESR until
November 15, 2011. Several options for the RESR ordinance will be presented at that time. The changes
recommended for the RD and Commercial/Industrial rates seemed to have wide-spread support at the
September 13 Work Session. The following summarizes changes to the electric rate forms that are included
in the proposed electric rate ordinance.
• Residential Demand: The residential demand rate will be increased to the cost-of-service and
energy charges will reflect the seasonal differential. The rate will be available only to customers who
heat their residences exclusively with electricity.
• Small /Medium Commercial: The General Service rate is currently one rate class serving all
commercial customers with average monthly demands of less than 50 kW. Staff is proposing that it
be split into two rate classes beginning in 2012.
N General Service - energy-only seasonal rate for customers with average monthly demands
of less than 25 kW
N General Service 25 - energy/demand seasonal rate for customers with average monthly
demands of between 25 and 49kW
• Large Commercial / Industrial: The recommended rate form changes for the GS50 and GS750 rate
classes are due to Platte River’s seasonal wholesale rate.
N General Service 50 – add seasonal energy and coincident demand components for
customers with average demands of between 50-749 kW
N General Service 750 – add seasonal energy and coincident demand components for
customers with average demands of 750 kW and greater
Additional Amendments to Electric Article and Rates
• Wholesale Transactions: Staff is recommending the addition of a Code section and definition to
clarify terms of wholesale transactions and to specify that the retail rates, requirements and electric
development fees do not apply to wholesale purchases.
2
• Clarification of Net Metering Credit: Staff is recommending that the rate schedule specify that credits
for net excess generation due to net metering will be based on the summer season retail energy
charge as reflected in the new rate structure.
• Clarification of Parallel Generation Credit: Staff is recommending that the rate tariff schedule specify
that credits for parallel generation delivered to the utility will be based on Platte River Power
Authority’s avoided cost rate.
• Clarification of Distribution Facilities Demand: The proposed change more fully defines distribution
facilities demand for the large commercial and industrial rate classes and permits the Utilities
Executive Director to use an alternative method to recover a customer’s cost-of-service share of
distribution demand if the costs associated with serving a customer are not fully recovered by the
standard rate.
3
ATTACHMENT 7
Economic Health Office
300 LaPorte Avenue
PO Box 580
Fort Collins, CO 80522
970.221.6505
970.224.6107 - fax
fcgov.com
MEMORANDUM
Date: December 6, 2011
To: Mayor, and City Councilmembers
From: Josh Birks, Economic Advisor – City of Fort Collins
Re: Economic Health Incentives – Offsetting Commercial Utility Rate Increases
On November 1, 2011, City Council passed Ordinance No. 142, 2011, adopting commercial and
industrial electric rates effective for billing with meter readings on or after January 1, 2012. The
adopted rates pass through increased in Platte River Power Authority’s wholesale rates and align
with Platte River’s new seasonal rate structure. Since adoption, City Council, the City Manager’s
Office, and the Economic Health Office have received numerous inquiries regarding the
increases. The December 13 City Council Work Session is an opportunity to review the increases
and evaluate alternatives.
City staff will present several alternatives for City Council review. The first and recommended
option is to aggressively market energy conservation programs and evaluate the possibility of
economic incentives for potential commercial or industrial expansions. The City has approved
economic incentives to support commercial or industrial expansions in the past. Most recently,
City Council approved a Business Assistance Package by Resolution 2011-066 on July 19, 2011
for Avago’s expansion of their electronic manufacturing operations.
Overview
This memorandum is intended to provide an overview of the available economic incentives that
could be used to offset the commercial rate increases at the time of commercial or industrial
expansion. However, it must be noted that in order to truly offset the cost any future business
assistance package may have to be more aggressive than previously presented to City Council.
All assistance packages are subject to City Council approval. If City Council instructs staff to
pursue this option, Economic Health Office staff will see it as direction to bring forward more
aggressive assistance packages when the appropriate form of commercial or industrial expansion
is proposed by businesses within the GS50 and GS750 rate classes.
Local Incentives
The following incentives may be available to a commercial or industrial expansion project. The
value of the incentive has been estimated based on a $1.0 million investment in equipment and
building enhancements. In all cases, the funds rebated by these incentives would typically flow
into the General Fund. However, it is important to note that these incentives due not reduce
current tax collections they forgo revenue that is associated with a proposed expansion. If done
right, the incentives are used to support project that would not otherwise occur; therefore, the
forgone revenue would not be realized even if the incentives are not offered to the proposed
commercial or industrial expansion project.
Manufacturing Equipment Use Tax Rebate Program – The City’s Manufacturing
Equipment Use Tax Rebate Program permits local manufactures to request a partial rebate of
the 3.0 percent local use taxes paid on qualifying equipment. Use taxes are used by other
Colorado municipalities and intended to equalize competition between venders located in the
cities who collect local sales tax and those located outside the cities who do not charge local
sales tax. City Council must approve a full rebate of the 3.0 percent use tax rate. Example, if
the client were to invest $1.0 million in manufacturing equipment, this program could
potentially save the company up to $30,000 in use tax.
Personal Property Tax Rebate – The City employs the use of personal property tax rebates
on a discretionary or case-by-case basis. Use of this incentive will require approval of the
City Council. Past agreements with primary employers have included a 10-year rebate for 50
percent of the personal property in the expansion/relocation project. A more aggressive
approach would be to rebate the full personal property tax for a 10-year or longer period.
Example, if the project includes an investment of $1.0 million in building enhancements, this
program could potentially save the company between $1,400 and $2,800 annually depending
on the rebate percentage authorized by City Council.
Payment in Lieu of Taxes Rebate – The City could elect on a case-by-case basis to evaluate
rebating a portion of the Payment in Lieu of Taxes (PILOT) associated with the “net new”
energy consumption from a commercial or industrial expansion project. The amount of the
rebate would vary depending on the estimated energy consumption associated with the
project.
1
1
2012 Electric Rate Increase
Impacts to Large Commercial and
Industrial Customers
City Council Work Session
December 13, 2011
2
Agenda
•• 2012 Rate Increase
•• Commercial & Industrial Rates
•• Options for Consideration
•• Questions for Staff
ATTACHMENT 9
2
3
2012 Rate Increase
4
City Council Presentations to Date
Work
Session
Regular
Meeting Subject
10-May-11 Utilities Rate Philosophy
13-Sep-11 Proposed Comm. & Res. Electric Rate Options
11-Oct-11 Residential Electric Rate Options, Efficiency and Conservation
18-Oct-11 First Reading of Ordinance No. 142, 2011 (Comm / Ind & Res Demand)
1-Nov-11 Second Reading of Ordinance No. 142, 2011 (Comm / Ind & Res Demand)
15-Nov-11 First Reading of Ordinance No. 166, 2011 (Res Tiered Rates)
6-Dec-11 Second Reading of Ordinance No. 166, 2011 (Res Tiered Rates)
3
5
City Council Presentations to Date
Council Finance Committee
Meeting Subject
15-Aug-11 Electric Rate Options
17-Oct-11 Recommended Rates and Fees
Electric Board
Meeting Subject
06-Apr-11 Rate Design Philosophy / PRPA Wholesale Rate Discussion
04-May-11 Rate Forms
03-Aug-11 Rate Options
06-Oct-11 Update on Rate Forms from 9/13 Council Work session
06-Oct-11 Rate Recommendations
6
2012 Electric Rate Increases
Rate Class Non-Summer Summer Annual
Residential 2.0% 16.8% 6.0%
Residential Demand 15.1% 19.6% 15.9%
GS Small Commercial -1.6% 18.1% 3.9%
GS25 Medium Commercial 10.9% 27.0% 15.5%
GS50 Large Commercial 4.7% 20.0% 8.7%
GS750 Industrial 7.6% 20.7% 11.0%
System 4.4% 19.2% 8.3%
4
7
GS50 & GS750 Customer Response
•• Following the passage of Ordinance No.
142, 2011 concerns were expressed to
Council and City Staff
•• Several options have been evaluated to
address these concerns
•• Customer outreach and communication
8
Commercial and Industrial Rates
5
9
Rate History
Cost of Electricity Commercial
Source: Energy Information Administration
0
2
4
6
8
10
12
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
YTD
Customer cost in cents per kWh
National Average Fort Collins Colorado Average
10
Rate History
Cost of Electricity Industrial
Source: Energy Information Administration
0
1
2
3
4
5
6
7
8
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
YTD
2012
Est
Customer cost in cents per kWh
National Average Fort Collins Colorado Average
6
11
CO Large Commercial Electric Rates
Colorado Association of Municipal Utilities Large Commercial Rate Survey
January 2011 --- Cost for 45,000 kWh and 130 KW per month
$3,423
$3,048
GUNNISON
LONGMONT 2011
FORT COLLINS 2011
LOVELAND 2011
LONGMONT 2012
ESTES PARK
COLORADO SPRINGS
FLEMING
LOVELAND 2012 - Average
FT COLLINS 2012 - Average
XCEL ENERGY
UNITED POWER
BLACK HILLS ENERGY
POUDRE VALLEY EA
$-
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
FORT COLLINS LOVELAND LONGMONT INVESTOR OWNED MUNICIPAL/REA
12
CO Industrial Electric Rates
Colorado Association of Municipal Utilities Industrial Rate Survey
January 2011 --- Cost for 1,900,000 kWh and 3000 KW per month
$90,827
$104,260
$0
$25,000
$50,000
$75,000
$100,000
$125,000
$150,000
$175,000
$200,000
$225,000
FORT COLLINS 2011
TRI-COUNTY
LONGMONT 2011
LOVELAND 2011
COLORADO SPRINGS
LONGMONT 2012
FT COLLINS 2012 - Average
LOVELAND 2012 - Average
XCEL ENERGY
UNITED POWER
BLACK HILLS ENERGY
POUDRE VALLEY EA
FORT COLLINS LOVELAND LONGMONT INVESTOR OWNED MUNICIPAL/REA
7
13
GS50 and GS750 Rate Structure
•• ““UUnnbbuunnddlleedd”” rates
–– Fixed Charge
–– Distribution Facilities Charge
–– Purchased Power components
•• Energy
•• Coincident Peak Demand
–– PILOT
14
Rate Increase Drivers
•• Platte River Power Authority (PRPA)
–– Commodity costs increasing
•• Coal contracts
–– Cost of Service Study
•• Rate structure adjusted
–– (Please see PRPA presentation)
•• Distribution / Facility Charges
–– Capital additions are not yet fully funded
–– Reserves draw down slowed
8
15
Rate Increase Drivers
-13% -12%
17%
9%
11%
-13%
22%
18%
4%
2%
3%
8%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
GS50 GS750 System
PP Demand PP Energy Dist fac Total Increase
16
Components of the Increase
Number Projected Projected Revenue Proportion of
of Customers 2011 Revenues 2012 Revenues Increase 2012 Increase
GS50 Large Commercial
Purchase Power $14,607,324 $15,652,767 $1,045,443 65%
Distribution $3,931,085 $4,501,954 $570,869 35%
Total 470 $18,538,409 $20,154,721 $1,616,312 100%
% Increase 8.7%
GS750 Industrial
Purchase Power $15,258,751 $16,875,908 $1,617,157 85%
Distribution $1,996,178 $2,284,899 $288,721 15%
Total 15 $17,254,929 $19,160,807 $1,905,878 100%
% Increase 11.0%
9
17
Options for Consideration
18
Options for Consideration
•• Option 1 –– Customer Outreach, Education, &
Potential Incentives
•• Option 2 –– Eliminate Distribution Facilities
Charge Increase for GS50 & GS750 only
•• Option 3 –– Decrease PILOT for GS50 & GS750
only
•• Option 4 –– PRPA Reconsideration of Increase
10
19
Option 1 –– Customer Outreach
•• No change to the adopted rate ordinance
•• Aggressively market energy conservation
programs
•• Explore potential economic incentives for
expansion
Pros
•• Sends correct price signal
•• Appropriately allocates costs
across all rate classes
•• Encourages conservation
Cons
•• Requires customer investment
20
Option 2 –– Hold Dist. Facility Charges
•• Adopt new rate ordinance to keep the Distribution
Facilities charge for these two rate classes at
2011 levels
Pros
•• Would reduce overall rate
increase for these two classes
•• GS50 from 8.7% to 5.6%
•• GS750 from 11.0% to 9.4%
Cons
•• Requires modification of approved
rate ordinance
•• Undermines integrity of Cost of
Service Rate Structure
•• Requires subsidization by other
rate classes or further drawdown of
Reserve Fund
11
21
Option 3 –– Decrease PILOT
•• Adopt new rate ordinance to set the Payment in-in -
lieu of taxes charge for these two rate classes at a
lower level than that of the other rate classes
Pros
•• Would reduce overall rate
increase for these two classes
by 1% for each 1% reduction in
PILOTs
•• No cost/revenue impact to
LightPower Light & Power
Cons
•• Requires modification of
approved rate ordinance
•• Reduces General Fund
Revenue by $370K for each 1%
reduction
•• Unfair to other rate classes
22
Option 4 –– PRPA Reconsideration
•• Request that PRPA Board reconsider the 2012
rate increase it unanimously approved 10/27/11
–– Reconsideration of overall rate increase
–– Reconsideration of rate structure change
Pros
•• Potentially reduces costs to
all rate classes temporarily
•• PRPA could use their Rate
Stabilization Fund to soften the
increase for all municipalities
Cons
•• PRPA Board has already
unanimously approved rate increase
•• Maintaining full 6.4% increase but
shifting costs back from energy to
demand would increase rates
inaccurately for other rate classes
12
23
Staff Recommendation
•• Option 1 –– Customer Outreach & Education
–– No change to the adopted rate ordinance
–– Aggressively market energy conservation
programs
–– Explore potential economic incentives
–– Consistent with rate principles
•• Encourages conservation for all rate classes
•• Fairly allocates costs of service to each rate
class
24
Other Considerations
•• PRPA Rate Increase in 2013
•• Other factors
13
25
Questions for City Council
•• Are there other options that staff has not presented
that should be explored?
•• Of the options presented, which option is preferred?
•• Should staff prepare an ordinance to revise the
commercial and industrial rates for 2012?
26
End of Presentation
Attachment 10
1
WHOLESALE RATE REVIEW
PLATTE RIVER POWER AUTHORITY
Fort Collins City Council December 7, 2011
BACKGROUND
2
Attachment 10
2
LOCAL ELECTRIC SYSTEM
Residential
Small
Business
Large
Business
Distri-
bution
Transmission
Generation
Customers
Estes Park
Fort Collins
Longmont
Loveland
Platte River Power Authority
• Sole Electricity Supplier
• Joint Ownership / Equity
• Local Governance
3
LOCAL ELECTRIC COSTS – AVERAGE SPLIT
~ 71% ~ 29%
Generation & Transmission
(Wholesale)
Distribution
(Retail)
4
Attachment 10
3
Rawhide Unit 1 (coal) – 278 MW
Rawhide Units A B C D & F
Natural gas – 388 MW total
Craig Units 1&2 (coal) – 154 MW total
Craig Unit 3 – 100 MW Shaft Sharing
Hydropower – 90 MW Summer (seasonal
variability)
Wind – 20 MW (intermittent)
Total 2011 Load – 640 MW (Peak)
Total 2011 Firm Resources – 910 MW
EXISTING RESOURCES
Municipalities Municipalities and and Surplus Surplus Sales Sales
5
6
Attachment 10
4
HISTORICAL WHOLESALE RATES
Average Wholesale Rate History
Historical Factors:
• Rates 28% above 1982
• Same basic rate structure
• Increases began in 2004:
o Added peaking
o Lower surplus sales
o Fuel cost (coal & gas)
o Hydro changes
o Hydro cost
o New transmission
o Increased O&M
Historical Factors:
• Rates 28% above 1982
• Same basic rate structure
• Increases began in 2004:
o Added peaking
o Lower surplus sales
o Fuel cost (coal & gas)
o Hydro changes
o Hydro cost
o New transmission
o Increased O&M
-
10
20
30
40
50
$ / MWh
7
RATE DRIVERS – 2011 to 2012
8
Attachment 10
5
WHOLESALE SURPLUS SALES TREND
Surplus Sales Prices
$/MWh
9
RATE STRUCTURE CHANGE
10
Attachment 10
6
RATE MAKING PROCESS
Non-Municipal
Revenues
Wholesale Rates
Retail
Customers
(By Class)
Retail (Municipal) Rates
Municipal Rate Designs
(All Different)
12
Set by
Platte River Board Set by each Municipality
RATE STRUCTURE STUDY – TIMELINE
Fall 2009
Initial
Study
Review
(Staff)
Feb 2010
Retained
Consultant
(UFS)
Management
Team
Kick-off
Data
Collection
“Phase I”
Scope
May –
Jun 2010
City Staff
Review
Directors
Meeting
Review
City Staff
Discussions
UFS
Model
Concepts
Initial
Draft
Rates
Meeting
With City
Rate staffs
Review
of
Staff input
Apr 2010
Platte River
Board
Review
Jul 2010
Platte River
Board
Attachment 10
7
WHY CONSIDER A CHANGE ?
Update Cost Allocations
Same basic wholesale rate
design for over 30 years
Changes since initial design:
o Loads and resources
o Seasonal differences
o Credits & other allocations
New models needed for
implementing future wholesale
rates
Rate / Cost Alignment
Improve rate design to better
reflect supply costs
o Overall cost of service
o Costs vs. time (seasonal,
day type, time of day)
o Direct pass-through
(increasing)
o Expanding load control &
other technologies
13
Coal unit fuel 100% energy 100% energy
Coal variable O&M 100% energy 100% energy
Other purchases 100% energy 100% energy
Gas unit fuel 100% energy 100% energy
Gas unit debt 100% demand 100% demand
Transmission 100% demand 100% demand
ALLOCATIONS STAYING THE SAME
COST CATEGORY EXISTING PROPOSED
14
Attachment 10
8
Surplus sales 100% energy (credit) 67% energy
Hydropower 53% energy 74% energy
Coal unit debt 100% demand 24% demand
Coal fixed O&M 100% energy 76% energy
Windy Gap 100% demand 24% demand
Gas O&M 100% energy 20% energy
Ancillary services 100% energy 100% demand
Admin./General 100% energy 67% energy
Interest income 85% energy (credit) 67% energy
ALLOCATION CHANGES
CATEGORY EXISTING PROPOSED
15
KEY CHANGES
Seasonal cost differences added:
New natural gas peaking units & related infrastructure (summer)
Surplus sales credit:
Historically applied 100% to energy charge
Now applied based on overall demand/energy allocation
Hydropower operations:
Constraints have reduced flexibility to meet peak demand
Now operated similar to coal units – base load resources
Base load fixed costs:
Debt and fixed O&M now treated consistently
Less recovered at time of coincident peak
More recovered over all operating periods
16
Attachment 10
9
PEAKING RESOURCE ADDITIONS
1996
Last year of winter peak
All coal & hydro
Avg. monthly peak = 89% of annual
Seasonal difference = 5% or 18 MW
(Winter higher than summer)
Today
Coal, hydro + gas peaking
Avg. monthly peak = 75% of annual
Seasonal difference = 18% or 129 MW
(Summer much higher than winter)
Daily Peaks
17
LOADS, RESOURCES AND COST RECOVERY
MW
Municipal loads (with reserves & losses)
Highest Load
Surplus Sales
(Coal)
Lowest Load
Load
Following portion
Base-load
portion
Peaking Costs
18
Attachment 10
10
DECISION PROCESS (CONTINUED)
Feb 2011
Platte River
Board
Review
Rate
Structure
Decision
Approval to
incorporate new
structure
…
May 2011
Platte River
Board
Review
Final
Rate
Structure
and
Pricing
Tentative Approval
For 1/1/2012 start
Oct 2011
Platte River
Board
Review
2012
Rate
Approvals
… …
19
Season
Energy
(¢/kWh)
Demand
$/kW
All Months 2.310 12.42
Historical
Rate
Structure
New 2012
Seasonal
Demand &
Energy Rate
Reflects seasonal cost differences
Aligns rates with other costs – lower peak demand / higher energy
Relatively simple for metering and billing
Positions for future time-of-day rate making (new models)
Wholesale structure only – retail implementation varies by City
Season
Energy
(¢/kWh)
Demand
$/kW
Summer (Jun – Aug) 3.513 10.05
Spring, Fall & Winter 3.340 7.53
WHOLESALE RATE CHANGES
Attachment 10
11
FUTURE WHOLESALE RATE TRENDS
Multiple Unknowns:
• Surplus sales prices
• Coal prices (and gas)
• Environmental regulations
• Water supply firming
• New capacity resources
• Renewable energy
• Other capital projects
• Future O&M
• Climate change
Multiple Unknowns:
• Surplus sales prices
• Coal prices (and gas)
• Environmental regulations
• Water supply firming
• New capacity resources
• Renewable energy
• Other capital projects
• Future O&M
• Climate change
Average Wholesale Rate Increases
21
RATE COMPARISONS
22
Attachment 10
12
COLORADO WHOLESALE RATES
Platte River Tri-State Xcel ARPA
Wholesale Rate ($/MWh)
49.81
68.80
98.00
88.85
23
$40
$45
$50
$55
$60
$65
$70
$75
$80
$85
$90
Jan 06 Jul 06 Jan 07 Jul 07 Jan 08 Jul 08 Jan 09 Jul 09 Jan 10 Jul 10 Jan 11
Average Monthly Bill
Other
Municipalities
Investor Owned
Cooperative
Estes Park
Fort Collins
Loveland
Longmont
COLORADO RETAIL RATES – RESIDENTIAL
24
Attachment 10
13
RURAL COOPERATIVE SUPPLIER VS. PLATTE RIVER
-
10
20
30
40
50
60
70
80
$/MWH
PRPA Average Wholesale Rate Tri-State Average Wholesale Rate
25
NATIONAL RATES VS. PLATTE RIVER
-20%
-10%
0%
10%
20%
30%
40%
50%
60%
70%
PRPA Average Wholesale Rate National Retail Rates
26
Attachment 10
14
CONSUMER PRICE INDEX COMPARISON
27
DATE: December 13, 2011
STAFF: Bruce Hendee
Josh Birks
Pre-taped staff presentation: available
at fcgov.com/clerk/agendas.php
WORK SESSION ITEM
FORT COLLINS CITY COUNCIL
SUBJECT FOR DISCUSSION
Update on the Economic Health Strategic Planning Process with the City’s Consultant Team and
Staff.
EXECUTIVE SUMMARY
The City of Fort Collins’ Economic Action Plan was first developed in 2005 and has been updated
annually as part of the Budgeting for Outcomes process. Now, more than five years later, it is time
to re-evaluate the Economic Action Plan and develop a revised Economic Health Strategic Plan.
City Council approved $150,000 in one-time funding from the Keep Fort Collins Great funding
allocation for this project in 2011.
TIP Strategies from Austin, TX was selected to lead this process. TIP staff was present at the May
10, 2011 Work Session to present their overall scope of services and have an initial conversation
with the City Council about the project. TIP staff returned on July 12, 2011, to present the draft
Economic Assessment and sought input on a draft strengths, weaknesses, opportunities, and threats
(SWOT) analysis and potential list of benchmark communities. TIP staff is returning to present an
overview of the Draft Economic Health Strategic Plan. The Plan is intended to refine the mission
of the Economic Health Office and provide an action plan for the next five years.
GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED
1. Does City Council have any questions or comments on the draft Economic Health Strategic
Plan?
2. Does City Council have any questions or concerns about the overall project?
BACKGROUND / DISCUSSION
The draft Plan is founded the guiding principal of “A Vibrant, Resilient Economy.” The Plan
proposes that such an economy contains three essential ingredients:
• Create more and better economic opportunity for the community
• Diversify the tax base to help insulate Fort Collins from economic fluctuations
• Preserve Fort Collins’ unique quality of place and culture.
December 13, 2011 Page 2
The draft Plan refines the Economic Health Vision for Fort Collins into a unifying thread / theme
that can span across the principle projects, collaboration, research, and City policies related to
promoting a vibrant, resilient economy in Fort Collins. The draft vision is:
“Fort Collins will be a living laboratory for the application and development of
innovative systems to support cities of the future.”
The draft Plan proposes a variety of action steps organized around four key objectives. These
objectives include:
1. A comprehensive, collaborative, and effective structure for managing economic
development in Fort Collins.
2. A robust innovation ecosystem and economy that supports companies at all stages of growth.
3. A complete system for talent management that meets the needs of current and future
employers.
4. High quality community assets and infrastructure necessary to attract and retain employers
and talent.
The complete draft Plan is attached for review (Attachment 1). In addition, a copy of the
presentation to be present by TIP staff is provided as an overview (Attachment 3).
ATTACHMENTS
1. Draft Economic Health Strategic Plan
2. Work Session Summaries, May 10, 2011 and July 12, 2011
3. Consultant Powerpoint presentation
106 East 6th Street, Suite 550 | Austin, Texas 78701 | 512.343.9113 | www.tipstrategies.com
ECONOMIC HEALTH STRATEGIC PLAN
December 2011
ATTACHMENT 1
DRAFT – City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 1
SUMMARY
TABLE OF CONTENTS
INTRODUCTION .....................................................................................................................................................................................................................................................................
3
FRAMEWORK .........................................................................................................................................................................................................................................................................
7
GUIDING PRINCIPLES FOR ECONOMIC HEALTH .................................................................................................................................................
7
VISION ..........................................................................................................................................................................................................
8
OBJECTIVES ..................................................................................................................................................................................................
8
OBJECTIVE 1 .......................................................................................................................................................................................................................................................................
10
STRATEGIES ................................................................................................................................................................................................
11
OBJECTIVE 2 .......................................................................................................................................................................................................................................................................
17
STRATEGIES ................................................................................................................................................................................................
18
OBJECTIVE 3 .......................................................................................................................................................................................................................................................................
23
STRATEGIES: ...............................................................................................................................................................................................
24
OBJECTIVE 4 .......................................................................................................................................................................................................................................................................
29
STRATEGIES: ...............................................................................................................................................................................................
30
DRAFT – City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 2
SUMMARY
ACKNOWLEDGEMENTS
TIP Strategies, Atlas Advertising, and Isaac Barchas would like to thank the many individuals who
participated in the development of this plan. We are particularly grateful to the business and public
sector representatives who generously gave their time and input. Their knowledge and creativity
contributed greatly to our understanding Fort Collins’ development opportunities and our
recommendations.
We would also like to thank the leadership, staff, and the Economic Advisory Commission of the City
of Fort Collins for their critical guidance, support, and feedback.
Mayor and City Council
Karen Weitkunat, Mayor
Kelly Ohlson, Mayor Pro Tem, District 5
Ben Manvel, Councilmember, District 1
Lisa Poppaw, Councilmember, District 2
Aislinn Kottwitz, Councilmember, District 3
Wade Troxell, Councilmember, District 4
Gerry Horak, Councilmember, District 6
City Manager
Darin Atteberry, City Manager
Bruce Hendee, Assistant to the City Manager
Economic Health
Josh Birks, Economic Advisor
Claire Thomas, Marketing and Publicity Specialist
Megan Bolin, Planner
Urban Renewal Authority
Christina Vincent, Redevelopment Program Administrator
ABOUT US
TIP STRATEGIES, INC. is a privately held Austin-based
economic development consulting firm committed to
providing quality solutions for public and private-sector
clients. Established in 1995, the firm's primary focus is
economic development strategic planning.
Jon Roberts, Managing Director
Caroline Alexander, Project Manager
Kathleen Baireuther, Consultant
ATLAS ADVERTISING has helped 60+ communities in 35+
states lead and support economic growth and development in
their communities. They have helped organizations face the
national and prospect marketplace in ways they have never
done before, increasing inquiry levels, prospect activity, and
stakeholder engagement.
Ben Wright, CEO
Peter Brown, Creative Director
Keeley Sullivan, Senior Account Manager
ISAAC BARCHAS, executive director of the Austin
Technology Incubator, is a national expert in
commercialization/technology transfer and a global expert in
business incubation and entrepreneurial support. During his
tenure with the University of Texas, he has served as the
director of the Austin Technology Incubator and an associate
director of the IC2 Institute. In addition, Isaac acted as advisor
on incubation and commercialization strategy to teams from
multiple nations.
DRAFT – City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 3
INTRODUCTION
INTRODUCTION
Fort Collins enjoys an economic, social, and environmental vibrancy that is the envy of
many communities its size. Economic engines that include Colorado State University,
Poudre Valley Health System, Hewlett Packard, and Woodward employ almost 13,000
workers and represent a diverse array of industry sectors. A burgeoning culture of
entrepreneurship has produced a number of home-grown companies whose products
now reach markets across the world. These include New Belgium Brewery, Otterbox,
and Envirofit. Furthermore, the city’s location at the foothills of the Rocky Mountains
along the Poudre River provides residents and visitors with access to a wide-array of
natural amenities. The lively historic downtown is yet another community asset. These
attributes have contributed to the growth of Fort Collins, which approximately 20% over
the last decade from 118,000 residents in 2000 to 143,000 in 2010.
The Challenge
Though the local economy out-performed the national economy throughout most of the
1990s, it has more recently tracked the national economy very closely. In addition, the
2000 and 2008 recessions put the economy and its health at the forefront of the city’s
mind, demonstrating that Fort Collins is not insulated from powerful economic shocks.
When the Internet bubble burst, Fort Collins’s unemployment rate doubled, reaching
almost 6%. More recently, during the Great Recession, unemployment peaked at 8.5%.
In comparison to the national economy, which reached a peak unemployment rate of
9.7%, Fort Collins fared well. Nevertheless, the effects of the economic downturn were
deeply felt by many in the community, particularly by the 7,000 unemployed residents.
The economic backdrop and business cycle have created an environment where
economic health is currently a concern, but the risk is that this concern is only
temporary. When a positive economic climate returns, the interest in the city’s economic
health program could wane. There are, however, compelling reasons for a sustained
interest in economic health. These reasons include: chronic underemployment, fiscal
sustainability, and economic diversification.
FORT COLLINS TOP EMPLOYERS BY EMPLOYEE COUNT
Company
Colorado State University
Poudre School District
Poudre Valley Health Care
Larimer County
City of Fort Collins
Center Partners
Woodward Governor
Hewlett Packard
U.S. Department of Agriculture
Avago Technologies
Source: City of Fort Collins.
UNEMPLOYMENT RATES COMPARED
Source: US Bureau of Labor Statistics, LAUS.
DRAFT – City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 4
INTRODUCTION
Underemployment. Many residents of Fort Collins are significantly under-employed,
indicating a mismatch of skills between residents and the jobs available in Fort
Collins. Approximately 40% of the population age 25 or older has an advanced
degree. However, close to two-thirds of the jobs require only on-the-job training or
prior experience.
This poses a threat to the city’s ability to retain talent, especially if residents choose
to accept jobs for which they are over-qualified. If not, it creates a situation where
highly educated residents must commute to other communities for work and local
employers must recruit outside the city to find workers. This can cause additional
stress to regional transportation networks. Either way, bringing the skills of residents
and the talent requirements of employers into balance can greatly benefit the city.
Fiscal Sustainability. With a deep dependence on sales tax revenues, the city is
overly vulnerable to business cycles. During the most recent recession, sales tax
collections dropped from $77 million in 2007 to $71 million in 2009. By 2010, tax
receipts had recovered to $74 million, but three years of low sales tax collections
forced the city to make dramatic budget cuts. These cuts, however, were on top of
previous cuts in planned and existing expenses that had been made over the course
of the past 5 years. By 2010, the city had significant unfunded current and future
needs in areas such as street maintenance, public safety, and parks and recreation.
In 2010, there was a successful campaign to raise the sales tax rate by .85%, which
went into effect on January 1, 2011. This alleviated the current situation, but the city’s
fiscal situation remains vulnerable to further economic stresses.
Expanding the city’s tax base is the surest way to secure Fort Collins’s fiscal future.
Increasing the industrial and commercial tax base can help transfer some of the tax burden away from residents. In addition, this could result in more jobs in Fort
Collins, and keep employees and their dollars in the community. Finally, expanding the city’s retail offerings will also help bolster sales tax receipts.
While development is likely to occur organically in the community, the city’s participation in encouraging the expansion of its tax base should be careful and deliberate
to ensure that development is in line with its vision, culture, and values.
HIGHEST LEVEL OF EDUCATION ACHIEVED BY THE
POPULATION AGE 25 OR OLDER
Source: U.S. Census Bureau (American Community Survey, 2009)
THE THRESHOLD SKILL LEVEL REQUIRED OF THE MSA'S
EXISTING JOB BASE
Source: EMSI Complete Employment - 2011.2
no high school diploma
high school diploma or GED
some college but less than a 4-year degree
bachelor's degree or higher
Fort Collins City of
USA Colorado MSA Fort Collins
15%
28%
29%
28%
11%
23%
31%
36%
7%
20%
32%
41%
6%
15%
30%
49%
On-the-job training or previous experience
Vocational or 2-year degree
DRAFT – City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 5
INTRODUCTION
Economic Diversification. The Fort Collins economy is relatively diverse, with 12 industry
sectors that employ over 5,000 residents. Of these 12 sectors, half pay less than the MSA’s
average wages and all but one sector pays less than the national average for those sectors.
In addition, five of the top employers are in the government sector. In fact, the government
sector is the MSA’s largest sector, accounting for 15% of all jobs. While the public sector
provides high quality jobs for residents, it does not directly add to the tax base of the city,
especially since their property is tax-exempt.
The city’s manufacturing sector, which accounted for 11% of the MSAs jobs in 2001,
contracted dramatically over the course of the decade and currently accounts for only 6% of
the jobs. Between 2001 and 2010, the sector lost almost 7,000 jobs. At the same time, Fort
Collins’s GDP for the sector rose from $1.1 billion to $1.7 billion, or 56%. This rise in
productivity has led to a transformation of the sector, leaving a significant portion of the
workforce either unemployed or uncertain of their future. This transformation has also created
opportunities for innovative models and technological solutions to address the new needs of
the sector.
These considerations highlight the importance of diversifying the regional economy. To raise
wages, expand the tax base, redeploy its production workers, and capture a part of the new
manufacturing sector, the city must be vigilant and creative on economic issues.
The Response
Since 2005, the City of Fort Collins has been actively engaged in promoting the economic
health of the city. Yet challenges persist. There are structural issues that will take decades to
address. The 2011 Economic Health Strategic Plan (EHSP) proposes to intensify the city’s
efforts both in the short term, and with an eye towards the more distant future.
One of the most important elements proposed in the 2011 EHSP is strengthening and
formalizing the city’s partnerships with local economic development stakeholders. This would
leverage the city’s resources devoted to economic health and increase the city’s overall
capacity for economic health programs. This will not be an easy step to take, but doing so
JOB BASE BY INDUSTRY SECTOR IN THE FORT
COLLINS MSA, 2010
Source: EMSI Complete Employment - 2011.2
MANUFACTURING SECTOR IN THE FORT COLLINS
MSA, 2001 - 2010
Source: U.S. Bureau of Economic Analysis.
DRAFT – City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 6
INTRODUCTION
could be the act that has the greatest impact on the overall vitality of the city.
Innovation should not only continue to play a central role, but should be an even greater emphasis. The 2011 EHSP proposes a variety of strategies to strengthen the
city and region’s innovation ecosystem. The goal is to create a more entrepreneurial culture, to better support entrepreneurs, and to enhance the city’s ability to retain
successful companies and talent. With numerous engines of innovation in the city, these programmatic recommendations hold great potential for growing and
expanding the tax and employment base of Fort Collins.
In addition, a talent management program should be initiated to ensure a strong pipeline of human resources to support existing and future employers. Putting in place
mechanisms for engaging employers will help synchronize workforce development programming and educational institutions with employers’ needs. At the same time,
specific outreach and education initiatives aimed at targeted groups will provide talent and employers with more opportunities to connect. Many of these initiatives
already exist, however, the better coordination of these existing activities with the addition of a few new programs will create a much stronger system that is more
responsive and dynamic.
Finally, strategic and catalytic projects will be mechanisms for improving the city’s assets and amenities. Here the goal of retaining (and, in some cases, selectively
attracting) businesses and talent can energize the innovation economy. The city can put in place the structure and process for moving these projects forward. A
collaborative approach that enfranchises the public sector, private enterprise, academia, and non-profits is essential. This partnership will be the key to the successful
implementation not only of the proposed catalyst projects but of the city’s economic health initiatives in general.
DRAFT – City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 7
FRAMEWORK
FRAMEWORK
The City of Fort Collins must have a clear vision for its economic health program to be
effective and successful. Such clarity provides guidance for programming as well as
investment decisions. It also provides a framework for measuring progress towards goals
and program outcomes. This creates a feedback loop that gives city officials and staff the
opportunity to evaluate initiatives and understand what is working and what is not. For
these reasons, we preface the Plan with guiding principles, a vision, and objectives that
serve as the foundation for the city’s economic health program.
Guiding Principles for Economic Health
The City of Fort Collins deliberately named its program “economic health” rather than the
standard “economic development.” This is an important distinction. It implies that the goal
of the city’s program is not merely to stimulate investment and growth but to ensure a
balanced and sustainable economy.
The economic health program seeks to create a vibrant, resilient economy. To
create such an economy, the programs of the Economic Health Office must promote
more and better economic opportunity for residents, diversify the tax base of Fort Collins,
and preserve Fort Collins’ unique quality of place and culture.
The city must leverage its resources and strengthen its programs by forging strong
partnerships with other public sector entities, academia, companies, and non-profits.
Collaboration between these groups is integral to the success of any economic health
program. It is a quadruple helix rather than the triple helix. Without it, the reach of the
city’s programs will fall short, resources could be underutilized, and returns on the city’s
investment in economic health will be lower. With it, the city’s economic health programs
can become both comprehensive and effective.
SUMMARY OF ECONOMIC HEALTH FRAMEWORK
Guiding Principles
A Vibrant, Resilient Economy
The collaboration of government, academia, companies, and non-
profits is the foundation of this approach.
1. Create more and better economic opportunity for residents
2. Diversify the tax base to help insulate Fort Collins from
economic shocks
3. Preserve Fort Collins’ unique quality of place and culture
Vision
Fort Collins will be a living laboratory for the application and
development of innovative systems to support cities of the
future.
The vision should be the unifying thread / theme across the principle
projects, collaboration, research, and city policies geared toward
promoting economic health in Fort Collins.
Objectives
1. A comprehensive, collaborative, and effective structure for
managing economic development in Fort Collins.
2. A robust innovation ecosystem and economy that supports
companies at all stages of growth.
3. A complete system for talent management that meets the
needs of current and future employers.
4. High quality community assets and infrastructure necessary
to attract and retain employers and talent.
DRAFT – City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 8
FRAMEWORK
Vision
A vision for economic health brings continuity and cohesion to the various initiatives aimed at promoting economic health across the city. It brings economic
development stakeholders together to operate under a single umbrella. It becomes the unifying theme across projects, collaboration, research, and policies
geared toward promoting economic health in Fort Collins. The vision proposed in this plan is as follows:
Fort Collins will be a living laboratory for the application and development
of innovative systems to support cities of the future.
This vision statement synthesizes the public input process and a review of what the city and its stakeholders are currently doing to promote economic health.
Many of the current initiatives are related to research on new ways of managing resources – these include Fort Collins Zero Energy District (Fort ZED), the city’s
waste analysis and spent grains project, the Mason Corridor bus rapid transit project, the research conducted at CSU’s Engine and Energy Conversion Lab
(EECL), and the Water Innovation Cluster’s Lake Canal Alternative Practices and In-stream Flow Demonstration Project. These new methods for managing
resources all have technology components with commercial applications and economic opportunities associated with them. These local innovations are both a
reflection of the culture of entrepreneurship in Fort Collins as well as an asset to the community’s economic and environmental health.
Innovation and entrepreneurship are foundational values in the Fort Collins economic model. Becoming a living laboratory requires intense coordination and
collaboration. It requires the participation of the City of Fort Collins as a large buyer and a distributor of public goods, the flexibility of its utilities who manage many
of the resources, the expertise of CSU researchers, and the openness of residents and the private sector to test new technologies. The concept of a “living
laboratory” can be a powerful economic engine for the local economy and a means of attracting investment to the region.
OBJECTIVES
To achieve the city’s mission of creating a vibrant and resilient economy, and to realize the vision of becoming a living laboratory, the city must establish objectives
to act as support. The four objectives identified as the pillars of this plan are:
1. A comprehensive, collaborative, and effective structure for managing economic development in Fort Collins.
2. A robust innovation ecosystem that supports companies at all stages of growth.
3. A complete system for talent management that meets the needs of current and future employers.
4. High quality community assets and infrastructure necessary to attract and retain employers and talent.
DRAFT – City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 9
FRAMEWORK
We have placed the objective of creating a better structure for managing economic
development first because we feel strongly that a well-organized, comprehensive
structure must be in place to implement the other three objectives. With that in place, the
city will be able to focus on its core initiatives. This will also allow existing programs to
move beyond basic business retention, expansion, and creation.
The vision and objectives laid out in this plan are meant to build upon what was
established in the city’s 2005 Economic Action Plan. The 2005 plan built a strong
foundation for the economic health program. The 2011 Economic Health Strategic Plan
(EHSP) aims to strengthen the foundation and scale up the economic health program
and increase its effectiveness.
As in the 2005 plan, the concept of the innovation economy still plays a central role in the
2011 EHSP. With the research and development capabilities present in Fort Collins
today, the city cannot afford to ignore this engine of economic prosperity. A stronger
innovation system for commercializing technologies, bringing products to market,
supporting entrepreneurship, and developing the resources and capital necessary to
cultivate businesses are the essence of the 2011 EHSP.
SUMMARY OF 2005 ECONOMIC ACTION PLAN
Economic Vision: A healthy economy reflecting the values of our
unique community in a change world.
Key Strategies:
▪ Diversify the economy
▪ Be proactive
▪ Form partnerships
▪ Balanced approach
Primary Achievements:
▪ Established a more robust economic health program within
the city
▪ Forged stronger partnerships with NCEDC and Chamber
▪ Launched industry cluster initiative
▪ Enhanced the city’s business incubation resources to
include physical space
▪ Developed Foothills Mall Redevelopment Plan
▪ Updated the buildable lands inventory
DRAFT – City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 10
STRATEGIES AND ACTIONS
OBJECTIVE 1
A comprehensive & collaborative structure for economic development
The 2005 Economic Action Plan created a platform for a better coordinated economic health program within city
government. It created an economic lead team for implementing organization-wide. It also set the stage for
including economic health considerations in the city’s capital improvement plan and improving the business climate.
The city retained primary responsibility for managing basic economic development programs, including business
retention, expansion, and creation. It has partnered with other economic development stakeholders such as
Northern Colorado Economic Development Corporation (NCEDC), the Fort Collins Chamber of Commerce
(Chamber), the Small Business Development Center of Larimer County (SBDC), the Rocky Mountain Innosphere
(RMI), the industry cluster groups, and others, to assist with implementation. The city, however, has taken the
leadership role in managing and in many cases funding these programs. The city did cede the responsibility for business attraction to NCEDC.
The Economic Health Office (EHO), which is charged with managing economic health initiatives, includes
only the economic advisor, communications manager, and the redevelopment program administrator. This
is a lean staffing structure. In comparison, Fort Collins’ peer communities have a staff of 6 to 10
employees devoted to these programs. That said, the EHO has done a good job under the constraints,
but has less time available to focus on more strategic initiatives.
These basic programs are vital to maintaining a vibrant business community in Fort Collins and should be
continued and even expanded. While the current staffing pattern of the EHO does not support this, Fort
Collins is fortunate to have organizations who could potentially adopt these programs. There are 15 full-
time employees working in organizations related to economic development, including NCEDC, the
Chamber, RMI, and the SBDC. By forging stronger, formal partnerships with these organizations, the City
of Fort Collins can leverage its resources and free city staff up to focus on strategic initiatives. This move
would also have the added benefit of strengthening the overall economic development structure in Fort
Collins by unifying the efforts under a single vision and set of objectives. This in turn will expand the
capacity of the city to move its economic health program greatly beyond the basic “C.A.R.E. Model.”
PRIORITY PROJECTS
1. Economic Health Stakeholder Group
2. Contracts with service providers
3. Economic health toolbox
THE C.A.R.E. MODEL
CREATION. All local efforts to encourage the
formation of new business.
ATTRACTION. Traditional business recruitment
efforts such as community strategic planning,
industrial parks, tax incentives, and other
attraction strategies.
RETENTION. Activities targeted at existing firms,
such as job retention efforts.
EXPANSION. Encourage the expansion of
existing firms.
DRAFT – City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 11
STRATEGIES AND ACTIONS
The City of Fort Collins can better leverage its resources by contracting
with existing organizations to provide economic health services. The
NCEDC, Chamber, and RMI all have or can have additional funding
sources to supplement city funding. They can also build the general
expertise needed to create more robust basic programs. Contracting
these services out to service providers will allow the city to focus its
economic health program on strategic initiatives. Under this new model,
the city will need to clearly define its role and the role of its service
providers in administering Fort Collins economic health program.
STRATEGIES
1. Clearly define the role of the City in economic
health.
1.1. Manager: through policy, partnerships, and leadership ensure
the implementation of the EHSP and the provision of basic
economic health programs.
Create a concrete scope of work, procure services, and
structure a contract with service providers for business
creation, attraction, retention, and expansion services.
Monitor contracts and evaluate performance of service
providers.
Create an EHSP implementation team composed of city staff from relevant departments and representatives from service providers who will be
charged with responsibility for implementing specific strategies. Call the team together at regular intervals to report on progress, identify obstacles to
implementation, and jointly craft solutions.
Monitor the implementation of the EHSP through a set of discrete metrics (see Implementation Guide).
PROPOSED ORGANIZATIONAL STRUCTURE OF THE
ECONOMIC HEALTH OFFICE
The new Economic Health Office will be one of three legs of the Sustainability
Services Area, along with Environmental Health and Social Sustainability. It will
have three divisions: Development Assistance, Business Assistance, and
Communications. These divisions will be assisted by the EHSP Implementation
Team, Catalyst Project Teams, and contracted service providers to manage the day-
to-day activities associated with the on-going economic health programs. The
Economic Health Stakeholder Group will provide input to the EHO to guide the
choice and prioritization of catalyst projects.
DRAFT – City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 12
STRATEGIES AND ACTIONS
1.2. Convener: Create an Economic Health Stakeholder Group (EHSG). This group would provide a platform for collaboration between parties that are
directly involved with shaping the economic future of the city. Membership would include:
1. private sector representation from the technology sector, healthcare, retail, tourism, and small business
2. foundations and non-profits
3. CSU and FRCC
Hold quarterly meetings to discuss collaboration opportunities, catalyst projects and initiatives needed to realize the economic health vision of Fort
Collins. The group should identify action items and assign responsibility to group members to ensure realization of priority projects. The city should
provide administrative support.
Identify and prioritize catalyst projects (See Objective 1, Strategy 1-1.3).
Create an online forum for continuous dialogue among the EHSG members.
1.3. Champion: advocate for policies and programs at the city that promote the economic health of Fort Collins.
Educate city staff and elected officials on the importance of the economic health program, through workshops and newsletters.
Seek economic opportunities related to city policies and
programs, particularly as they relate to sustainability.
Monitor the development process to ensure that it supports
business expansion, retention, and formation.
1.4. Catalyst: support projects through the economic development
toolbox.
With the Economic Health Stakeholder Group, devise and
maintain a list of priority catalyst projects with clearly
defined vision and goals for the project as it relates to the
city’s over-all vision.
Identify the appropriate partners for the project and form a
project team charged with moving the project forward.
Maintain a major projects list that tracks progress and
reports activities.
ECONOMIC DEVELOPMENT TOOLBOX
Special Financing Districts
Tax Increment Financing
General Improvement District
Special Improvement District
Metropolitan Improvement District
Business Improvement District
Public Improvement Fee
Low-Interest Capital
Private Activity Bond
Section 108 Loan Guarantee
Tax Rebates
Use Tax Rebate
Personal Property Tax Rebate
For Low to Moderate Income Areas /
Individuals
New Market Tax Credit
Affordable Housing Fund
HOME Investment Partnership Grant
Community Development Block
Grants
Section 108 Loan Guarantee
Source: City of Fort Collins.
DRAFT – City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 13
STRATEGIES AND ACTIONS
Cultivate connections with the developer and broker community to foster close working relationships.
1.5. Strategic Partner: assist developers and businesses to navigate the city’s development and economic assistance processes
(See Objective 4, Strategy 4-4.1).
Educate developers and businesses about services and programs available to them.
Serve as a resource for developers of projects in targeted development areas and for businesses expanding or growing in Fort Collins.
1.6. Educator: educate residents and elected officials about the importance of economic health programs.
Continue to use the Economic E-Newsletter to feature stories on various economic health initiatives within the city.
Create a module for Leadership Fort Collins to discuss the basics of economic development, how economic development is “done” in Fort Collins,
and why it is important.
Use the Coloradoan and local television news programs as communications partners for reaching residents and educating them about economic
development.
1.7. Reporter: report progress, performance, successes, etc.
Track performance metrics and outcome measures to understand the
success of the city’s economic health initiatives and the health of the city’s
economy, in general.
Create a standard report card to be updated annually that would make key
data and findings available to the general public that can be integrated into
the existing Community Scorecard.
Publicize successes from economic health initiatives as well as
entrepreneurial ventures to businesses and residents of Fort Collins.
2. Contract with local service providers to manage basic
economic development programs.
2.1. Create a detailed scope of work, procure services, and structure a contract
with service providers. The recommended division of responsibilities is as
follows:
PROPOSED RESPONSIBILITIES
DRAFT – City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 14
STRATEGIES AND ACTIONS
Chamber: BRE, workforce & education, young professionals, small business support system, advocacy
NCEDC: Business attraction, regional collaboration
RMI: Business incubation, industry cluster management, coordinator of innovation ecosystem
2.2. Monitor contracts and evaluate performance of service providers.
Include leadership of service providers in EHSP implementation team.
Through regular contact and communications with service providers, ensure the quality of the programs desired by the city.
Hold biannual updates from service providers to city council that includes output measures and program outcomes.
If the service providers fail to deliver the desired quality, re-issue a request for proposals (RFP) and award the contract through a competitive bidding
process to a new service provider.
3. Refine and improve foundational economic development initiatives: business creation, attraction, retention,
expansion.
3.1. Enhance Fort Collins’ business retention and expansion program.
City:
Establish and maintain relationships with major employers to keep a direct line
open to the business community.
Create a program for visiting the top 20 private employers in Fort Collins.
For those employers with headquarters located outside of Fort Collins, establish
relationships with the headquarters by meeting face to face with executive(s)
from the headquarters either in their home office or on a VIP trip to Fort Collins.
Establish and maintain a database of existing businesses in Fort Collins using
Sales and Use Tax licenses. Revise the application form to include information
useful for the BRE program, such as number of employees, email address of
contact, and applicable NAICS code.
Chamber:
Continue to expand the reach of the BRE survey and coordinate with NCEDC
BUSINESS RETENTION AND EXPANSION
As mentioned above, the City has focused its economic health programs
on a grow-your-own strategy. While innovation and business creation is
an important part of this kind of strategy, a robust business retention and
expansion program is more likely to pay higher dividends per dollar
invested. Existing businesses form the backbone of a thriving economy.
They typically represent the best opportunity for increasing the
employment and tax base of a community and the greatest economic
threat if they close or relocate.
The proposed strategies regarding the BRE program will strengthen the
City’s ties with its most important employers while expanding the reach of
the program. It will collect more information and provide resources to
synthesize, summarize, and distribute that information. It will also provide
a mechanism for responding to employers’ immediate needs.
DRAFT – City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 15
STRATEGIES AND ACTIONS
on the BRE survey to produce county-wide results.
Include questions on the survey for employers regarding their attitude toward the business climate, talent availability, and workforce quality in Fort
Collins. Also, ask employers what their primary challenge to doing business in Fort Collins is.
Conduct regular visits to at least 40 businesses each year; schedule in-person interviews to ask detailed questions about business needs.
Compile the results of the survey and key findings from the visits into an annual report on the state of Fort Collins’ businesses and the overall
business climate.
Create formal response mechanisms, such as a rapid response team, to address the needs of any employer facing closure or relocation outside of
Fort Collins. The team should be composed of representatives from the various economic development stakeholders that can directly address the
needs of the employer.
3.2. Coordinate with the Chamber to create stronger connections between components of Fort Collins’ small business support system.
Institute a more coordinated small business support network by fostering more interaction between small business service providers including the
Chamber, SBDC, the Poudre River Public Library Business and Non-Profit Center, Be Local Northern Colorado, Beet Street, and others.
Develop a shared information clearinghouse to provide sophisticated, high quality
industry and market information to small businesses and entrepreneurs.
Strengthen the capacity of the SBDC to provide the small business community
with one-on-one counseling.
Establish a more comprehensive technical assistance and training program that
offers workshops and training series for basic and advanced education for small
business owners.
Continue to encourage Fort Collins residents to support local business. Merge the
Shop Fort Collins First initiative and Be Local Northern Colorado initiative to avoid
duplication of efforts.
3.3. Work with NCEDC to recruit those companies vital to the success of Fort Collins
primary industry cluster initiatives.
Collaborate with the industry cluster groups to identify important components of
their industries missing in Fort Collins.
SAMPLE DATABASES TO PROMOTE
COMPETITIVE INTELLIGENCE
Company Information / Business Intelligence
D&B Million Dollar Database (www.dnbmdd.com/mddi/)
Hoovers (www.hoovers.com)
Demographic / Market Information
Demographics Now (www.demographicsnow.com)
ESRI (www.esri.com)
Nielsons Claritas (http://www.claritas.com)
New Sources and Web-based Research Tools
Ebsco Business Source Premier (www.ebscohost.com)
Factiva – Dow Jones (www.factiva.com)
IBISWorld (www.ibisworld.com)
Lexis/Nexis (www.lexisnexis.com)
Morningstar (www.morningstar.com)
DRAFT – City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 16
STRATEGIES AND ACTIONS
Actively recruit companies to fill those specific niches.
Be responsive to other prospects that mesh well with the culture and values of Fort Collins.
3.4. Collaborate more closely with Metro Denver to raise awareness of Fort Collins as an innovation hotbed in the region.
DRAFT – City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 17
STRATEGIES AND ACTIONS
OBJECTIVE 2
An innovation ecosystem that supports companies at all stages of growth.
With Colorado State University, federal research labs, and a
long list of innovative companies, Fort Collins has numerous
sources of innovation, intellectual property, and inventions
within its city limits. As a result, the city has one of the
highest rates of innovation in the US, producing 10 patents
per 10,000 residents. This fact coupled with the recognition
that entrepreneurship can be a powerful engine of economic
prosperity has led the city to identify innovation, in both the
2005 Economic Action Plan and the 2010 City Plan, as a cornerstone of the Fort Collins economy.
While having these sources of intellectual capital are essential to an innovation economy, it is not sufficient.
The city must also have a culture and support system that encourages this intellectual capital to be
commercialized, and for that commercialization (ideally) to take place in the city. In addition, it must provide
an environment that fosters business formation and expansion. Fortunately, Fort Collins has many of these
essential elements. There are, however, significant gaps in its “innovation ecosystem.”
The first is access to capital. In all of Colorado, 89 venture capital deals were funded in 2010, the large
majority of which went to the industrial / energy sector. Of these, less than 10 went to Fort Collins
companies. Fort Collins is not on the radar screens of most venture capital firms, even the ones in
Colorado. To foster the level of economic activity around the innovation occurring in Fort Collins, companies
must have better access to the capital needed to launch and grow their businesses.
The second gap lies in the culture of entrepreneurship in the city. The city and the university must
encourage innovators to spin-out companies around their discoveries and support entrepreneurs once the
companies have been formed. While Fort Collins does have an entrepreneurial spirit, its reach could be
greater, especially among CSU faculty and students.
PRIORITY PROJECTS
1. Expand RMI’s scope of services
2. Northern Colorado Angel Network
3. Raise awareness of Fort Collins as
innovation hotbed
TOP 20 CITIES FOR INNOVATION, 2010
Patents per 10,000 Residents
Metropolitan Area Patents
per 10,000
Residents
San Jose-Sunnyvale-Santa Clara, CA 54.84
Corvallis, OR 29.21
Rochester, MN 26.45
Burlington-South Burlington, VT 26.41
Bremerton-Silverdale, WA 24.21
Boulder, CO 20.33
Santa Cruz-Watsonville, CA 19.59
Ann Arbor, MI 16.27
Boise City-Nampa, ID 15.38
San Francisco-Oakland-Fremont, CA 14.51
Austin-Round Rock-San Marcos, TX 14.27
Poughkeepsie-Newburgh-Middletown, NY 12.31
Ithaca, NY 12.11
Rochester, NY 12.07
Seattle-Tacoma-Bellevue, WA 11.78
Raleigh-Cary, NC 11.12
Trenton-Ewing, NJ 10.89
Fort Collins-Loveland, CO 10.08
Durham-Chapel Hill, NC 9.83
San Diego-Carlsbad-San Marcos, CA 9.67
Source: US Patent Office, US Census, TIP Strategies calculations.
DRAFT – City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 18
STRATEGIES AND ACTIONS
The last significant gap is in Fort Collins’ ability to retain businesses once they have matured past the start-up phase. Fort Collins has three incubator facilities to
support start-up companies – the RMI, the Research Innovation Center (RIC), and the Engines and Energy Conversion Lab (EECL). It does not, however, have
many sites to accommodate those companies ready to graduate from these incubation facilities. Many of the communities surrounding Fort Collins do – these
communities include Loveland, Longmont, and Greeley – and some of those are willing to incentivize moves. This situation leaves the city at risk for subsidizing
start-up businesses and then losing them (once a return on the city’s investment would be realized). Furthermore, as important as retaining companies is,
retaining the entrepreneurial talent itself is more important.
STRATEGIES
1. Expand RMI’s role as the nexus for innovation in both Fort Collins and the Front Range.
1.1. Create an interface for continuous collaboration between academia, the private sector, the public
sector and non-profits to promote a more entrepreneurial culture and train entrepreneurial leadership
and talent.
Engage the leadership of organizations, enterprises and institutions that can move forward ideas
and projects to catalyze innovation in Fort Collins and the greater region.
Encourage innovation and collaboration through showcase events, speaker series, and
networking opportunities.
Continue to strengthen and expand RMI’s business incubation program.
Promote entrepreneurial education at Poudre School District, Front Range Community College,
and CSU by facilitating the creation of programs that focus on entrepreneurial training, technology
commercialization, and business formation.
Actively engage CSU students in entrepreneurial activities through student internships, capstone
projects, colloquia and conferences, and business plan contests that provide opportunities for
interaction with local entrepreneurs and innovative companies.
Interact with other innovative regions world-wide to stay informed of cutting-edge models for innovation.
The Quadruple Helix refers to
the interaction of four pillars in
innovation ecosystems:
1. knowledge institutions
2. enterprises
3. government, and
4. civil society.
- CLiQ
http://www.cliqproject.eu
DRAFT – City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 19
STRATEGIES AND ACTIONS
1.2. Provide support for industry cluster managers.
Differentiate between existing clusters and growth clusters:
Emerging cluster – networking events, evaluation to determine sufficient
activity to warrant formal cluster organization.
Growth cluster – focus on R&D projects and collaboration,
commercialization and business formation, industry partners, supply chain
analysis, and strategic recruitment of key businesses and talent to enhance
support system for clusters.
Existing clusters – professional associations, no need to be 501(c)(3).
Incubate nascent groups through coordination of activities, outreach, and
information.
Provide administrative support for cluster groups that need less than full-
time support.
Serve as a resource for cluster managers on best practices and strategies
for cluster development.
In partnership with the city, coordinate a challenge grants program to fund
industry cluster projects.
For select industries, contract or hire industry experts to provide technical
know-how to support commercialization, business formation, and business
growth.
Periodically review industry clusters programs and economic data to identify
emerging clusters that need incubation support and to determine if existing
clusters have reached critical mass and no longer need incubation support.
A NEW RMI
The 2011 EHSP envisions an RMI that moves far beyond business
incubation and support. It becomes the centerpiece of Fort
Collins’s innovation economy. Its role would expand to coordinating
industry cluster groups, strengthening the innovation ecosystem,
and fostering a more entrepreneurial culture in the community.
To fulfill the vision, RMI will need additional resources, both
financial and human. Three service areas will be needed to fulfill
the mission. These are:
▪ Communications & Outreach. Engaging the community to
encourage a more entrepreneurial culture is essential. This
entails public relations to promote innovation-oriented success
in the community; communications with key audiences; and
engagement with potential investors. Working with volunteers
and mentors is an additional component of this task.
▪ Industry Clusters. This area will provide administrative support
for the industry clusters; provide information to cluster
managers; counsel small businesses in cluster areas; and
provide overall management of the cluster initiative.
▪ Business Assistance and Support. This area will continue to
provide technical assistance to entrepreneurs and also help
businesses secure capital. It will work closely with CSU
Ventures as well as interested students and faculty with the
goal of commercializing technologies and growing businesses.
DRAFT – City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 20
STRATEGIES AND ACTIONS
1.3. Continue to provide incubation services to start-ups with a renewed focus on
successful funding and exit.
Continue to provide networking and educational opportunities for
entrepreneurs through events such as Innovation After-Hours, and SAGE.
Raise the profile of RMI clients through a stringent application process and
initial screening.
Build a strong network of seasoned entrepreneurs, business service
providers, financing experts, and technical experts that are willing to
volunteer time to work with the most promising ventures.
Create a relationship map that provides entrepreneurs with access to Fort
Collins network of business services, technical know-how, capital sources,
and other resources.
Leverage existing training and technical assistance providers to educate
entrepreneurs in the basics of business (see Objective One, Strategy 3-
3.2).
1.4. Strengthen ties to innovation-driven communities.
Consider outside members to serve on local boards.
Actively develop entrepreneurial linkages with other incubators, institutes,
and businesses.
Organize visitations and exchanges to peer communities to share best
practices and lessons learned.
2. Attract, develop, and retain entrepreneurs and cutting-edge
companies.
2.1. Foster a nurturing entrepreneurial culture that anchors talent and companies in
Fort Collins.
Support RMI in its activities to promote an entrepreneurial culture (See Objective 2, Strategy 1-1.1).
CREATING AN ENTREPRENEURIAL CULTURE
Involve entrepreneurs in leadership, strategy development as well
as policy development.
Engage students through leadership training, entrepreneurship
education, and incorporating elements of entrepreneurship in
general curriculum.
Celebrate successes to reinforce cultural change, build momentum
for entrepreneurship, and encourage innovation.
- Deb Markley, RUPRI.
CASE STUDY: CENTRAL TEXAS ANGEL NETWORK
The Central Texas Angel Network (CTAN) was founded in 2006
under the leadership of local entrepreneur Jamie Rhodes with
support from the Greater Austin Chamber of Commerce. CTAN
provides funding from $200,000 to $2 million through its network of
SEC accredited investors. Each of its investors pay a membership
fee to encourage only serious investors to join. The executive
director of CTAN carefully screens deals to ensure that high quality,
investment-ready deals are presented to the network. In addition,
CTAN has created a larger network of other angel investment
networks in the state of Texas that it can syndicate its deals to and
vice versa.
For more information, visit: www.centraltexasangelnetwork.com
DRAFT – City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 21
STRATEGIES AND ACTIONS
Incorporate entrepreneurs in the Economic Advisory Commission and in Economic Health Stakeholder Group.
Use local media outlets to celebrate entrepreneurial ventures and stories.
Showcase local innovations and innovators in community centers including Old Town, the Fort Collins Museum of Discovery, and Foothills Mall.
2.2. Build a robust capital network as part of NoCo Capital by formalizing access to the capital already present in Fort Collins and building better
relationships with the venture community outside of Fort Collins.
Establish a pre-seed fund through monetary and in-kind donations.
Formalize an angel network in Northern Colorado and form a syndication
network with other regional angel networks to bolster deal flow.
Actively market qualified Fort Collins-based start-ups to non-local investors
to get Fort Collins on their radar. Particularly, focus on Denver and Boulder
investors.
Encourage and support local entrepreneurs in tapping into federal funding
sources by applying for Small Business Innovation Research (SBIR) grants,
Small Business Technology Transfer program (STTR) and other programs
available to entrepreneurs.
Expand the revolving loan fund seeded by the Section 108 HUD grant by
seeking funding from organizations such as the US Economic Development
Agency (EDA). Consider contracting with a Community Development
Financial Institution to manage fund.
2.3. Raise awareness of Fort Collins as a hotbed of innovation to catch the eye of
both investors and entrepreneurial talent.
Leverage CSU alumni network to communicate with alumni who are
entrepreneurs, looking to invest in Fort Collins, or looking to return to Fort
Collins.
Partner with entrepreneurship support organizations in the Greater Denver region to market opportunities in Fort Collins to a broader Colorado
technology-executive talent pool.
COMMUNITY DEVELOPMENT FINANCIAL
INSTITUTIONS
Community Development Financial Institutions (CDFIs) provide
access to credit to underserved communities. Many CDFIs focus on
small business lending and venture capital investing in low-income
and minority businesses as well as start-ups.
CDFIs create funds through grants, donations, and low-cost loans
from a variety of sources. The two largest sources are the US
Treasury’s CDFI Fund and commercial banks who lend to CDFIs to
receive Community Reinvestment Act (CRA) credit. The EDA also
provides funding to CDFIs. Starbucks recently announced its Jobs
for USA program, which it will donate to CDFIs to be loaned out.
Venture-oriented CDFIs such as New Mexico Community Capital
and Pacific Community Ventures invest in businesses with high
growth potential that will provide market rates of returns will
improving the quality of life in underserved areas. Such models
could be excellent mechanisms for tapping into community capital
and expanding entrepreneurs’ access to credit.
DRAFT – City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 22
STRATEGIES AND ACTIONS
Market what Fort Collins and CSU are doing regarding technology start-ups to the specialists and executives already in Fort Collins, especially those
at large firms.
2.4. Expand Fort Collins’s capacity to support technology commercialization and product development.
Work with local manufacturers and companies to create an asset map of the resources and services available in the region to support product
development and early-stage manufacturing.
Identify areas of the product lifecycle that Fort Collins does not currently (but should) support with local services.
Develop projects and strategies to address the above gaps.
2.5. Ensure that companies have the appropriate space to grow in Fort Collins’s city limits (see Objective Four, Strategy 2) and the appropriate talent (See
Objective 3, Strategy 3).
DRAFT – City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 23
STRATEGIES AND ACTIONS
OBJECTIVE 3
A talent management system that anticipates employers’ needs
Fort Collins is fortunate to have a strong labor pool and a formidable talent magnet (CSU). The population is young
and well-educated, and is naturally attracted to Fort Collins. With almost 30,000 students and 1,500 faculty, CSU
creates a constant churn of young adults and university-related talent. Anecdotally, we heard that people so want to
live in Fort Collins that they are willing to move there without a job and accept employment for positions for which
they are over-qualified. At first glance it would seem as though under-employment is the only concern regarding
talent. Upon further inspection, however, major employers voiced a number of concerns. Issues such as skill
shortages in technical occupations, minority recruitment, and work-readiness of high school students are issues
worth addressing before they become
formidable obstacles to business retention and attraction.
Fort Collins’ high tech employers face nationwide skill shortages in technical occupations such
as engineering. While recruiting talent to Fort Collins is generally not a challenge, it is,
however, very difficult to attract minorities and even more difficult to retain them. This matters
to those companies who have stringent diversity requirements to meet. In addition, some
employers also commented that the work readiness of high school students was not sufficient.
None of these issues have a material impact on employers’ abilities to do business at this time,
but these are important trends to understand and monitor. These types of issues can be
detected and addressed early-on by developing a mechanism for greater interaction between
employers, education, workforce, and economic development.
In addition to challenges voiced by area employers, the available jobs do not necessarily meet
the skill level of the residents. Fort Collins boasts a young, highly-educated workforce that is
largely under-employed. Forty-one percent of the population in the MSA has earned a bachelor
degree or higher, yet only 25% of the jobs require that level of education. In fact, 65% of the
jobs in the MSA require only on-the-job training or previous experience.
PRIORITY PROJECTS
1. Workforce Development Program
2. Involvement of Colleges of Business
& Engineering
3. Conference Strategy
COMPARATIVE POPULATION DISTRIBUTION
BY AGE
SOURCE: U.S. Census Bureau (American Community Survey, 2009)
DRAFT – City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 24
STRATEGIES AND ACTIONS
One contributing factor to the underemployment challenge is that the Fort Collins’s labor market does not always offer open access. According to focus groups
and interviews, young professionals in Fort Collins noted that the community “feels small once you’re in” but they also commented on the challenges of “breaking
in” professionally. Many young professionals who found jobs quickly in the community were able to do so by virtue of personal and family networks, and many of
the positions were either created for them or were not advertised to the public at-large. The risk of a tight-knit social network as a driver for employment is that
newcomers could be discouraged by their inability to break into existing professional networks. Creating a platform for newcomers, recent graduates, under-
employed workers, and relocated professionals to become engaged with the community is an important element of talent management. It gives younger people –
and people moving to the area in general – an opportunity to establish a social network in the community.
Ultimately, the success of an innovation economy lies in the strength of its talent pipeline. A coordinated effort to fill out the talent pipeline will greatly enhance the
region’s innovation ecosystem and entrepreneurial culture.
STRATEGIES:
1. Create and staff a workforce development program.
1.1. Work more closely with Larimer County Workforce Center.
Incorporate Fort Collins’ target industries into the Workforce Center’s set of target industries to bring about closer coordination of training programs
and emerging industries.
Promote the Workforce Center’s services to businesses and talent across Fort Collins.
1.2. Collect, analyze, and report workforce data to enhance the community’s understanding of its labor force, market, and industry issues.
Conduct an annual employer survey that collects current and localized information on Fort Collins’ labor force and labor shed.
On an annual basis, publish a Fort Collins workforce report that provides an overview of pertinent labor market information and highlights important
accomplishments, programs, and issues in workforce development
Update basic labor market information on a quarterly basis.
1.3. Create a taskforce comprised of employers, education institutions, workforce development, and the city.
Create programs to address the primary issues raised by the taskforce.
Meet on a quarterly basis to discuss on-going programs and initiatives as well as issues.
DRAFT – City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 25
STRATEGIES AND ACTIONS
Engage employers through meaningful participation and support
in programs and initiatives aimed at resolving their specific
workforce issues and improving workforce training, including K-12
education.
2. Promote opportunities for leadership training,
professional development, and networking.
2.1. Facilitate greater levels of civic engagement.
Continue City Works, Leadership Fort Collins, and Envision:
Young Professionals as a means of training future leaders,
educating them about opportunities to participate in the
community, and engaging them. Coordinate the programs to
better define their distinct purposes and/or audiences to create a
more robust leadership development initiative.
Encourage emerging leaders to apply for seats on city boards and
commissions by hosting workshops on what the various boards
and commissions do and providing information on which seats are
available.
Work with local organizations, businesses, and institutions of
higher education to develop a volunteer clearinghouse to connect
emerging leaders with other opportunities to get involved with the
community.
Create an annual awards program to honor individuals making a
difference in the community.
2.2. Provide professional development opportunities.
Promote internship, mentorships and apprenticeship programs for high school students and university students.
Market CSU and FRCC continuing education programs to young professionals through relevant organizations.
Establish a mentorship program within the Chamber of Commerce.
TALENT ENGAGEMENT – COLUMBUS, OHIO
The Columbus Region has a median age of 34.7 and is home to
approximately 30 colleges and universities with a total enrollment of more
than 120,000 students and 20,000+ annual graduates. In 2006, the
Columbus Chamber, in partnership with public and private organizations,
launched a three-pronged initiative to engage and retain this significant local
talent base.
Columbusinternships.com
The Columbus Chamber created a website where college students can
obtain meaningful internships with local employers.
Young Professional Connectivity
Each week the Columbus Chamber collects events and activities from Young
Professionals' Organizations, corporations, philanthropic organizations and
community councils to populate an email newsletter. In addition to the
newsletter, the Chamber staffs a young professionals manager position and
its website lists approximately 60 different Columbus organizations for young
professionals.
Liveworkplaycolumbus.com
Working with the human resource and recruitment community, the Columbus
area Chamber has developed a comprehensive website to assist Columbus
region employers in "selling" the region to prospective employees.
For more information, visit http://www.columbus.org/business-
resources/workforce-development/
DRAFT – City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 26
STRATEGIES AND ACTIONS
2.3. Enhance access to and awareness of local employment
opportunities.
Launch an on-line, Fort Collins-centric job and gig board to
increase connectivity between employers and talent. Link to
the board from other Fort Collins websites including the City,
Chamber, Convention & Visitors Bureau, RMI, and CSU
Alumni Network, and CSU Career Center. Indeed.com
provides a low-cost option for accomplishing this.
Encourage employers to post job and internship opportunities
on the Fort Collins job and gig board.
Create opportunities for newcomers and job-seekers to
network with local entrepreneurs and industry leaders in Fort
Collins area businesses.
3. Strengthen the talent pipeline.
3.1. Engage the CSU Alumni Network as a key source of talent.
Partner with the CSU Alumni Association to communicate to
alumni about the innovation and related events happening in
Fort Collins.
Make Fort Collins job and gig board available to CSU Alumni
(See Objective 3, Strategy 2-2.3).
Host alumni reception(s) at RMI with regional alumni groups
to showcase what Fort Collins is doing.
Sponsor a CSU Alumni entrepreneurs network to build a
strong connection between RMI and CSU Alumni
entrepreneurs, even if they are not currently located in Fort
Collins.
THE CSU ALUMNI NETWORK: BY THE NUMBERS
Approximately 30,000 students are currently enrolled at CSU, including resident
and non-resident instruction students. The university has approximately 1,500
faculty. CSU received more than $300 million in sponsored research in 2010,
ranking the university in the top 3 percent of institutions without a medical school
for research expenditures.
In addition to the significant assets flowing into the community on an annual basis,
CSU has 184,586 living alumni with 27 geographic alumni groups (4 in Colorado
and 23 out of state) representing 17 states and 16 common interest groups.
INDEED.COM: OPTIONS FOR JOB & GIG BOARD
Fort Collins can promote local employment opportunities by integrating job posting
and job search tools from Indeed.com into existing websites. This is a low-hassle
way for the Chamber, City, CVB, and other organizations to engage talent by
creating a portal for employers to post jobs and job-seekers to access those
listings. In addition to adding valuable content across multiple platforms, each
organization can also generate revenue by becoming an access point for job
postings.
Instant Job SiteTM. The Indeed Instant Job Site is a way to add a full job search
experience to a website, with job listings powered by Indeed. Employers pay a fee
to post jobs, and searching for jobs is free to users.
JobrollTM. The Jobroll can be added to a site to provide continuously updated job
links. The pay-per-click job links can be targeted to the interests and locations of
the audience.
Job Search Boxes and Text Links. Indeed.com job search boxes can be
embedded in the website.
DRAFT – City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 27
STRATEGIES AND ACTIONS
Reach out to successful entrepreneurs and executives who are
CSU Alumni and invite them to join RMI’s initiatives.
3.2. Increase the involvement of CSU, in particular the Colleges of
Business and Engineering, as sources of entrepreneurial talent.
Strengthen the existing entrepreneurship program in the College
of Business and extend its reach across campus.
Introduce intensive business formation courses and events such
as Venture Labs and 3-Day Start-Up to generate interest in and
momentum for student-led entrepreneurial ventures.
Create a student internship program at RMI to prepare students
for employment in start-up and young companies.
Continue to explore ways of engaging faculty in technology
commercialization and business formation through the revision
of tenure policies to factor in such activities, by educating faculty
about commercialization, and by fostering a more
entrepreneurial culture at CSU in general.
Coordinate continuing education programs in partnership with
RMI and the SBDC to provide a full range of education opportunities to entrepreneurs.
3.3. Leverage the knowledge base of seasoned entrepreneurs in Fort Collins.
Continue to recruit volunteer advisors to participate in RMI.
Create networking opportunities for new entrepreneurs to interact with seasoned entrepreneurs.
Host a speaker series that features seasoned entrepreneurs talking about lessons learned and topics of interest.
4. Use tourism and visitation as a talent and business outreach strategy to support industry cluster development.
4.1. Update CVB Website to also serve as portal for talent and businesses interested in relocating to Fort Collins.
For individuals looking to relocate to Fort Collins, include links to relocation information on the Chamber Website and job searching tools.
For entrepreneurs, include links to RMI and www.FortCollinsInnovation.com.
SILICON VALLEY COMES TO THE UK
The Silicon Valley Comes to UK program is an invitation-only series of events
that bring together leading investors, iconic serial entrepreneurs, ambitious
students and successful angels from the UK with leading Silicon Valley serial
entrepreneurs and investors to discuss, debate, create and fund today's most
disruptive internet and green technologies that will change our world in the
years to come.
The objective is to inspire students and alumni to consider starting or joining an
entrepreneurial business at some point after graduation and to foster
relationships between the leading entrepreneurs, angels and investors from
Silicon Valley and Europe.
At the 2011 forum, the movers and shakers from Silicon Valley shared their
views about the new and innovative business models they see as the most
disruptive across the Gaming and the Consumer Internet sectors.
For more information, visit http://www.svc2uk.com/
DRAFT – City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 28
STRATEGIES AND ACTIONS
For businesses, include links to Economic Health Office and NCEDC.
4.2. Coordinate a conference strategy that would bring key talent and businesses to Fort Collins.
Partner with industry cluster managers, the CVB and CSU Conference Services to identify conferences and events as well as groups of
professionals and businesses that would help strengthen Fort Collins’ industry clusters.
Recruit conferences to Fort Collins or plan conferences or symposia that would appeal to targeted groups of professionals and businesses.
Use these conferences as opportunities to showcase Fort Collins to these targeted audiences.
4.3. Support the development of a blue-ribbon hotel and conference center in or adjacent to downtown (see Objective 4, Strategy 1).
DRAFT – City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 29
STRATEGIES AND ACTIONS
OBJECTIVE 4
A variety of high-quality amenities that reflect the values of the community
The City of Fort Collins ranks at the top of many lists, including: “Most Economically Vibrant College Towns;” “Best
Bicycle Cities;” “'Smarter Cities' for Energy;” and “Best Places to Live.” The city enjoys a scenic setting in the
foothills of the Rocky Mountains as well as a moderate climate that attracts avid athletes, entrepreneurs, students,
and retirees. The community also boasts amenities such as award-winning schools, a large research university, and
a thriving arts and music scene. These community assets and amenities are invaluable in creating the quality of
place that supports a vibrant economy.
The City of Fort Collins is committed to maintaining and improving it community assets
and amenities in recognition of its importance to economic health. The city’s investment
in the Fort Collins Museum of Discovery is one example of this commitment. In addition,
recent capital improvement initiatives have enabled the city to build Gateway Park,
Edora Skate Park, the new city office building at 215 N. Mason, the Downtown Transit
Center and the Civic Center Parking Structure. Funds were also used for numerous
street improvements, to provide a second sheet of ice for Edora Pool and Ice Center and
to construct a new Community Horticulture Center. The city has also identified areas for
infill and redevelopment and continues to enhance the physical and natural environment
of Fort Collins. This continuous investment in community assets and amenities has paid
high dividends.
Amenities attract skilled, talented workers, and private employers locate and expand
where they can find the best talent. However, expanding and relocating in Fort Collins is
difficult, both because of the scarcity of larger commercial and industrial space and
because of the political nature of the development approval process. This poses a threat
to the tax base and ultimately to fiscal sustainability. Investment in a “grow-your-own”
strategy for economic development will only be rewarded if local employers possess
both the capacity and desire to grow within the city limits.
PRIORITY PROJECTS
1. Hotel Conference Center
2. Business Park Feasibility
FORT COLLINS HONORS & AWARDS
One of America's 20 Most Economically Vibrant College
Towns: TheAtlanticCities.com - September 2011
Ranked 5th Best Places for Business and Careers: Forbes -
June 2011
One of the Top 10 Cities Adopting Smart Grid
Technology: U.S.News and World Report - May 2011
Top Colorado City for Job Growth, Fort Collins-Loveland: 2011
Best Cities for Job Growth, newgeography.com - May 2011
Named 5th Most Educated City in the country based on
education level of the adult population: Portfolio.com - December
2010
One the Top 25 Best Places to Retire: CNNMoney.com -
September 2010
One of the Top 10 Best College Towns: Small-Sized Cities
Category, USA Today - September 2010
One of the top six 'Smarter Cities' for Energy: Natural Resources
Defense Council, (population 100,000-249,999) - August 2010
6th Best Place to Live in the Nation: Money Magazine - July 2010
Ranked 4th Best Places for Business and Careers: Forbes - April
2010
DRAFT – City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 30
STRATEGIES AND ACTIONS
STRATEGIES:
1. Create a new model for a downtown conference
center
1.1. Identify uses for the space that will foster innovation,
collaboration, networking, and socializing.
Work with CSU and the CVB to identify programming
priorities and basic requirements for the conference
center.
Collaborate with existing public-private entities to
brainstorm unique uses for the space that would highlight
the character of the community.
Identify additional uses that could offer additional revenue
streams to support the space (i.e. weddings, family
reunions, corporate retreats, etc.)
1.2. Engage outside experts in the development of the concept.
Engage an Urban Land Institute Advisory Panel to assist
in creating a new model for a conference center.
With the “new model” in place, issue a Request for
Proposal that would encourage participants to translate
principles into a concrete conference center design.
Invite the community to vote on proposed designs for the
facility.
CONFERENCE CENTER STRATEGY
The conference center should be envisioned as a departure from traditional
conference and convention centers. It should reflect the spirit of entrepreneurship,
innovation, and collaboration in the community and should function as a major center
of activity. This would free-up academic space at the college and strengthen physical
linkages between the campus area and nearby downtown.
Such a facility would support the overall growth of CSU by helping to raise its profile.
In addition to the direct benefits typically associated with a convention center, such as
increased tax revenues and employment, a conference center can also have
significant indirect advantages. It can help establish a community identity, spur
additional development, and provide an amenity to local citizens.
Fort Collins should create a structure that reflects the goals of the community and the
range of uses the stakeholders envision for the space. Replicating existing structures
adds only marginal value; envisioning and executing on a new model for meeting
spaces and community engagement will set the city apart. Conference center
planners have begun embracing new concepts of “meeting architecture.” The result
has been facilities that feature uniquely designed settings, technical sophistication,
and specialized services geared toward gatherings of all types. In addition to hosting
conferences, for example, the space could bring the city and university together in
one downtown space. CSU could host executive education programs and academic
conferences with private sector partners. RMI could provide some of its services to
entrepreneurs in the same venue.
The goal should be to go beyond hosting conferences, and to instead create a
physical space where businesses, entrepreneurs, students, and visitors can convene
in Fort Collins’ historic downtown.
DRAFT – City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 31
STRATEGIES AND ACTIONS
2. Ensure that companies in Fort Collins have
options for expansion and relocation within the
city limits.
2.1. Conduct a needs assessment to determine types of space
that will most likely be in demand.
Collaborate with CSU, RMI, and the regional development
community to understand what types of commercial and
industrial space is available, what is currently in demand,
and what the most promising companies are likely to
need.
Work with the industry cluster managers to identify typical
space requirements needed to support industry clusters.
Survey clients of RMI, the EECL, and the RIC to
understand what their future needs will likely be.
Aggregate and present this information to the local
development community to inform them of the likely short-
term and long-term needs of Fort Collins’ businesses.
2.2. Work with the broker community to create and maintain an
inventory of available space in Fort Collins that meet the
above criteria.
Partner with Harmony Technology Park to market their
available space to companies looking to expand or
relocate in Fort Collins.
Assist the brokers in identifying promising tenants within
Fort Collins industry clusters.
Share information with prospects and business assistance
clients on what sites are available.
BIOPOLIS TECHNOLOGY PARK, SINGAPORE
Description:
International research and development center for biomedical sciences
University Collaboration:
National University of Singapore; Singapore Polytechnic, the Institute of Technical
Education
Strategic Partners:
National University Hospital; Singapore Science Park, Ministry of Education; INSEAD
Business School; Fusionopolis
Vision:
To position Singapore as a leader in the biomedical sciences. Home to public as well
as corporate research laboratories, Biopolis brings together over 2,000 scientists,
researchers, technicians and administrators in one location.
Outcomes:
Biopolis is considered by many to be the biomedical research hub of Asia. It has an
international reputation for successfully anchoring the development of Singapore’s life
sciences value chain, from R&D to manufacturing and healthcare delivery. Led by the
Agency for Science, Technology, and Research of Singapore (A*STAR), Singapore’s
leading public research agency, the research center has become a symbol of
Singapore’s ability to move quickly into cutting edge fields and attract top international
talent.
For more information, visit www.a-star.edu.sg
DRAFT – City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 32
STRATEGIES AND ACTIONS
2.3. If available space is not adequate to meet long-term goals for business growth and economic diversification, evaluate feasibility of establishing a new
technology park or parks in the city limits.
Potential sites for parks include an Innovation Park that would connect the EECL and RMI and a Prospect Technology Park on the 100 acres of
university-owned land with I-25 frontage.
Preserve potential sites as future employment centers through zoning and land-use policies and possibly land banking.
3. Continue to encourage the development of vibrant business districts, commercial nodes, and commercial corridors
through infill and redevelopment projects.
3.1. Support on-going initiatives in the Downtown Development
District, Mason Corridor, North College Corridor, Mid-Town
Corridor, and Harmony Road Corridor.
Continue outreach to the developer and broker
communities to communicate the city’s vision for
those areas and how the city can participate.
Continue to assess the city’s regulatory framework to
ensure it is supportive of desired development.
Encourage the expansion or relocation of business in
targeted development areas to stimulate commercial
activity.
3.2. Identify areas of opportunity that can become important
development centers in Fort Collins over the next 10 years.
These areas of opportunity might be:
1. Lincoln Greens as a model of sustainability
2. River District to enhance the city’s connection between
the river and Old Town
3. Mountain Vista Area as an additional employment center
VAUBAN DISTRICT, FREIBURG GERMANY
In the South of Freiburg (DE), 90 acres of land has been developed to host more
than 5,000 inhabitants and 600 jobs. Planning for the “sustainable model district”
started in 1993 and by 2001, residents had moved in. The project’s structure
integrates legal, political, social and economic stakeholders from throughout the city’s
administration. From the project’s onset, all issues (mobility, energy, housing, social
aspects, etc.) were discussed in working groups which were open to residents.
All of the residences in the district are built to a low energy standard. Some buildings
are headed by a combined heat and power station burning wood chips, and many of
the buildings have photovoltaic cells. Residents walk or cycle within the district, and
can easily travel to the Freiburg city center by public transit.
The project was driven by population growth as well as the community’s commitment
to sustainability. The principle "Learning while Planning" was adopted by the city
during the process and has allowed flexibility for future developments. One outcome
of the project was a high level of engagement among the citizens moving to the
district. Since the creation of the Vauban district, the city of Freiburg has gained
notoriety as the green capital of Germany.
DRAFT – City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 33
STRATEGIES AND ACTIONS
Ensure that land use policies protect the areas from “lower uses” and foster high-quality development.
Hold workshops with land owners and developers in each opportunity area to craft a common vision for the area.
Translate the vision into a viable blueprint that establishes a plan for achieving the vision.
Strategically identify anchors for each opportunity area that can bring in the type of traffic and uses needed to catalyze development in the rest
of the opportunity area.
3.3. Continue to support the development of the retail sector as an important amenity for talent and employers.
Continue the refinement of a retail strategy with outside assistance.
Prioritize redevelopment opportunities in targeted investments zones.
Continue to provide assistance to developers navigating the development process and financial support using creative financing mechanisms.
4. Continue to improve the business climate as a means of retaining companies and fostering their expansion.
4.1. Continue to ensure that the development and business assistance process is predictable and transparent.
Develop a clear incentives policy that outlines the use of the city’s economic development tool box.
Work with representatives of the local business and development community to gather input on the development review process.
Continue to benchmark the local permitting process against similar processes in neighboring communities.
Continue to shepherd companies through the development process as needed.
Work closely with the City Council to continue to help make the development approval process as predictable and transparent as possible.
Publicize the existing outline of the development process to brokers, developers, and the community-at-large and enhance the outline where
necessary.
4.2. Continue to advocate for economic health interests in government policies and programs that impact the business climate.
Educate elected officials on the importance of economic health (see Objective 1, Strategy 1-1.6).
Seek opportunities to integrate economic health objectives into city policies and programs.
DRAFT – City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 34
STRATEGIES AND ACTIONS
5. Continue to explore options for improving the delivery of high quality early childhood education to support working
families.
5.1. Work with the Fort Collins small business support network to tailor programs for childcare providers.
Prepare information in the form of a planning guide to educate interested parties on how to start a child care facility, applicable regulatory
requirements, funding opportunities, and links to other child care resources.
Introduce training programs and technical support services specifically for childcare providers and family child care homes.
Incentivize inclusion of childcare facilities in affordable housing, transit-oriented developments, and employment centers.
5.2. Make funding available to support childcare-oriented businesses.
Consider childcare businesses as allowable applicant for Section 108 Loan Program.
Allow funds in TIF districts to be used to provide loans for the development of childcare facilities.
Pursue other federal funding sources such as CDBG and HUD grants that could be used to provide capital to support the expansion and
development of childcare facilities.
Use overlay districts as potential tools to encourage the implementation of the opportunity area visions.
Identify state and federal programs that could be leveraged to induce greater private investment.
Economic Health Office
300 LaPorte Avenue
PO Box 580
Fort Collins, CO 80522
970.221.6505
970.224.6107 - fax
fcgov.com
MEMORANDUM
DATE: May 11, 2011
TO: Mayor and City Council members
THROUGH: Darin Atteberry, City Manager
FROM: Mike Freeman, Chief Financial Officer
Josh Birks, Economic Advisor
RE: May 10, 2011 Work Session Summary – Economic Health Strategic Plan
Update
This memorandum provides a summary of the discussion relating to the Economic Health
Strategic Plan Update, which occurred at the City Council Work Session on May 10, 2011.
Attendance: Mayor Weitkunat; Council Members – Ohlson, Poppaw, Horak, Troxell, Manvel;
Staff – Darin Atteberry, Mike Freeman, Josh Birks, and consultants John Roberts, TIP Strategies
and Isaac Barchas, Austin Technology Incubator
Presentation Overview
Staff presented an overview of the Economic Health Strategic Plan Update project, funded
with $150,000 from the Keep Fort Collins Great tax revenues
A brief overview of the history leading to this project and review of the previous Economic
Action Plan was provided by staff
The consultant team introduced their project team and reviewed the outline scope of work,
including the proposed public engagement process
Council Comments
Please expand the stakeholder list to include key members of the broader community: early
childhood education representatives, workforce representatives, arts and culture
representatives, environmental representatives, small business representatives, governmental
employment representatives (e.g. State and Federal agencies and institutions)
The definition of economic health needs to be clear throughout the project with clear metrics.
The definition should consider the inclusion of poverty rates, unemployment rates,
homelessness rates, per capita income, and an industry diversity index. The clear definition
should be used to form a baseline for use moving forward.
An outcome of the process should be clear metrics with targets. These can be used by City
Council to help determine policy relative to various economic health activities.
Please consider the use of a working group that meets more frequently than monthly to assist
the process moving forward.
ATTACHMENT 2
Economic Health Office
300 LaPorte Avenue
PO Box 580
Fort Collins, CO 80522
970.221.6505
970.224.6107 - fax
fcgov.com
MEMORANDUM
DATE: July 13, 2011
TO: Mayor, and City Councilmembers
THROUGH: Darin Atteberry, City Manager
FROM: Mike Freeman, Chief Financial Officer; and
Josh Birks, Economic Advisor
RE: JULY 12, 2011 - WORK SESSION SUMMARY:
ECONOMIC HEALTH STRATEGIC PLAN UPDATE
This memorandum provides a summary of City Councilmember feedback related to the
Economic Health Strategic Plan Update item presented at Work Session on July 12, 2011. City
staff and consultants from TIP Strategies provided an overview of the Draft Assessment and
sought input on a draft strengths, weaknesses, opportunities, and threats (SWOT) analysis and
potential list of benchmark communities.
DRAFT SWOT ANALYSIS:
City Councilmembers suggested the following items be added to the SWOT Analysis:
Quality of life or place characteristics (Strength)
Local accolades/awards e.g. Forbes’ recent ranking of Fort Collins as 5th Best Place for
Business and Careers (Strength)
Local Healthcare Providers, specifically Poudre Valley Health System
(Strength/Opportunity)
Front Range Community College (Strength)
K-12 Education (Strength)
Early Childhood Care and Education (Weakness and Opportunity)
New and Renewed Corridors (Strength)
Weather (Strength)
Mason Corridor Bus Rapid Transit (Opportunity)
Proximity to NOAA Super Computer (Opportunity)
Proximity to Alternative Energy Activity (Opportunity)
Natural resources, especially local federal labs and CSU (Strength/Opportunity)
POTENTIAL BENCHMARK COMMUNITIES:
City Councilmembers shared the following thoughts regarding the potential benchmark
communities:
A multifaceted approach makes sense
The proposed benchmarks need additional consideration
Recreational Getaways may not be an accurate category to consider
Staff/consultants should mine the benchmarks used in previous analyses
1
ECONOMIC HEALTH STRATEGIC PLAN
City Council Workshop
December 13, 2011
City of Fort Collins, Colorado
1
agenda
Project update
EHSP
Implementation tools
Discussion
2
ATTACHMENT 3
2
3 project update
progress to date
Austin Visit in October
Draft EHSP complete
Draft Communications Strategy complete
4
3
MAY JUN JUL AUG SEPT OCT NOV DEC
Discovery
Opportunity
Implementation
Final
project timeline
Kick-off, stakeholder interviews, assessments, benchmarking, SWOT
Finalize strategies, action items, implementation, budget, measures, etc.
Guiding principles, preliminary opportunity identification, Austin visit
We are Roll-out
here.
5
next steps
Refinement and completion of draft plans
Complete benchmarking and innovation sector
profiles
Develop implementation tools and performance
metrics
Next trip
Dec: Isaac Barchas to meet with RMI board
Jan: Plan roll-out
6
4
7 2011 Economic Health Strategic Plan
Systemic Issue #1: Under-employment
Implications:
Talent retention
Commuting patterns
Transportation networks
Sales tax revenues
8
HIGHEST LEVEL OF EDUCATION ACHIEVED BY THE
POPULATION AGE 25 OR OLDER
Source: U.S. Census Bureau (American Community Survey, 2009)
THE THRESHOLD SKILL LEVEL REQUIRED OF THE MSA'S
EXISTING JOB BASE
Source: EMSI Complete Employment - 2011.2
no high school diploma
high school diploma or GED
some college but less than a 4-year degree
bachelor's degree or higher
Fort Collins City of
USA Colorado MSA Fort Collins
15%
28%
29%
28%
11%
23%
31%
36%
7%
20%
32%
41%
6%
15%
30%
49%
On-the-job training or previous experience
Vocational or 2-year degree
4-year degree or higher
2001 2011 2021
25%
65% 9%
27%
62% 11%
28%
12%
60%
5
Systemic Issue #2: Fiscal Sustainability
Implications:
Vulnerability of
revenues
Tax burden
9
The major sources of the city's revenue
SOURCES: City of Fort Collins, 2011-2012 Biennial Budget; Larimer County Assessor's Office
Systemic Issue #3: Economic Diversification
Implications:
Job quality
Tax base
Manufacturing sector
10
Job base by industry sector in the Fort
Collins MSA, 2010
Source: EMSI Complete Employment - 2011.2
6
The Response
11
A sustained and intensified economic health initiative
1. Strengthen & formalize partnerships to improve service delivery and
leverage resources.
2. Enhance innovation ecosystem to better support business formation,
retention, and expansion.
3. Create a talent management program to ensure a strong pipeline to
support local employers.
4. Catalyze development with strategic projects implemented in partnership
with private enterprise, academia, and non-profits.
The Plan
12
Framework
Objectives
Strategies
7
Framework: Guiding Principles
13
A Vibrant, Resilient Economy
The collaboration of government, academia, companies,
and non-profits is the foundation of this approach.
Create more and better economic opportunity for residents
Diversify the tax base to help insulate Fort Collins from
economic shocks
Preserve Fort Collins’ unique quality of place and culture
Framework: Vision
14
Fort Collins will be a living laboratory for the
application and development of innovative systems
to support cities of the future.
The vision should be the unifying thread / theme across
the principle projects, collaboration, research, and city
policies geared toward promoting economic health in
Fort Collins.
8
Framework: Objectives
15
1. A comprehensive, collaborative, and effective
structure for managing economic development in
Fort Collins.
2. A robust innovation ecosystem and economy that
supports companies at all stages of growth.
3. A complete system for talent management that
meets the needs of current and future employers.
4. High quality community assets and infrastructure
necessary to attract and retain employers and
talent.
OBJECTIVE 1
A comprehensive & collaborative structure for economic development
1. Clearly define the role of
the City in economic health.
2. Contract with local service
providers to manage basic
economic development
programs.
3. Refine and improve existing
foundational economic
development initiatives
(business creation, attraction,
retention, and expansion).
16
9
OBJECTIVE 2
An innovation ecosystem that supports companies at all stages of growth.
17
1. Expand RMI’s role as the nexus for innovation in both Fort
Collins and the Front Range.
2. Attract, develop, and retain entrepreneurs and cutting-edge
companies.
OBJECTIVE 3
A talent management system that anticipates employers’ needs
18
1. Create and staff a workforce development program.
2. Promote opportunities for leadership training, professional
development, and networking.
3. Strengthen the talent pipeline.
4. Use tourism and visitation as a talent and business outreach
strategy to support industry cluster development.
10
OBJECTIVE 4
A variety of high-quality amenities that reflect the values of the community
19
1. Create a new model for a downtown conference center
2. Ensure that companies in Fort Collins have options for
expansion and relocation within the city limits.
3. Continue to encourage the development of vibrant business
districts, commercial nodes, and commercial corridors through
infill and redevelopment projects.
4. Continue to improve the business climate as a means of
retaining companies and fostering their expansion.
5. Continue to explore options for improving the delivery of
high quality early childhood education to support working
families.
20 Implementation tools
11
Implementation tools
21
Implementation tools (cont.)
22
IMPLEMENTATION PROGRESS
Goal Status Count
Not Started 11
In Progress 0
Complete 0
On-Going 6
Not Started 14
In Progress 0
Complete 0
On-Going 3
Not Started 9
In Progress 0
Complete 0
On-Going 2
Not Started 9
In Progress 0
Complete 0
On-Going 2
OBJECTIVE ONE: A comprehensive & collaborative structure for
economic development
OBJECTIVE TWO: An innovation ecosystem that supports companies at
all stages of growth.
OBJECTIVE THREE: A talent management system that anticipates
employers’ needs
OBJECTIVE FOUR: A variety of high-quality amenities that reflect the
values of the community
12
Implementation tools (cont.)
23
Trendline
(2005-2008)
Metric
2008
Most Recent Year Performance Compared to Low and
High Figures (2005-2008)
Number of Private Establishments
2,428
Private Employment, All Industries
44,829
Manufacturing Employment, Private
11,755
Professional and Business Employment, Private
5,921
2,000
2,400
2,800
2005 2007 2009 2011 2013 2015 2017 2019
40,000
45,000
50,000
2005 2007 2009 2011 2013 2015 2017 2019
10,000
15,000
20,000
2005 2007 2009 2011 2013 2015 2017 2019
4,500
7,000
9,500
2005 2007 2009 2011 2013 2015 2017 2019
24 discussion
13
THANK YOU
TIP Strategies, Inc.
106 East 6th Street, Suite 550
Austin, Texas 78701
512.343.9113
www.tipstrategies.com
4-year degree or higher
2001 2011 2021
25%
65% 9%
27%
62% 11%
28%
12%
60%
20
Review
Detailed
Review
of UFS
Model &
Suggestions
City Staff
Discussions
(with UFS)
Aug 2010
Platte River
Board
Review
Board
Direction
To
Develop
Detailed
Model &
Draft Rate
Options
“Phase II”
Dec 2010
Platte River
Board
Review
Sep –
Nov 2010
Rate
Options
Development
Integration
of UFS
Suggestions
to In-House
Model
UFS
Support
Management
Team
Review
In-house
Rate
Model
Complete
Draft
Options
Presented
Dec 2010 –
Feb 2011
City Staff
Review
Meetings
With City
Rate staffs
UFS
Support
Feb 2011
Platte River
Board
Review
Final
Rate
Structure
Proposal
11
7
cooperatives
often
share
borders
with
the
Municipalities’
city
limits
and
are
also
not-for-profit
retail electric
suppliers.
About
10
years
ago,
wholesale
rates
to
these
cooperatives
were
about
the
same
as
those
to
Platte
River’s
Municipalities.
Now
these
rates
are
about
38%
higher
than
Platte
River
rates.
Figure
7
shows
a
comparison
of
Platte
River
rate
changes relative
to
changes
in
the
national
average
for
retail
electric
rates.
Since
1982,
Platte
River’s
rates
have
increased
about
20%
while
national
retail
rates
have increased
over
60%.
Though
rates
will
increase
for
2012
and
2013,
Platte
River’s
wholesale
rates
are
the
lowest
in
the
state
and
have
increased
less
than
other
utilities
in
the
region
and
the
nation.
Customers
served
by the
owner
Municipalities
pay
less
for
electricity
than
they
would
if
located
elsewhere.
Figure
5 —
Trends
for
Residential
Electric
Cost
in
Colorado
$90
$85
$80
$75
-
$70
4-.
$65
$60
clj
>
$55
$50
$45
$40
Jan06
Jul06
Jan07
Jul07
Jan08
Jul08
Jan09
Jul09
Jan
10
Jul
10
ian
11
6
are
currently anticipated
in
2014
or
2015
and
an
increase
of
about
3%
is
anticipated
in
2016.
Future
rates
are
difficult
to
predict
due
to
significant
uncertainty
regarding
coal
prices,
surplus
sales
market
prices,
impacts
of
proposed
environmental
regulations,
the
need
for
firming
of
future
water
supply, timing
of
a
new resource
and
transmission
for
the
new
resource, changes
to
capital
project
plans,
addition
of
renewable
energy
sources,
potential
climate
change
regulations and
other
factors.
Each
of
these
factors
would
impact
the
demand
and energy rates
differently.
For
example,
climate
change
regulations
would
increase
energy
charges while
new
gas-peaking
generation
costs
would
increase
demand
charges.
Wholesale
Rate
Comparisons
Platte
River’s
rates
are
increasing.
However,
the
wholesale
rates
from
Platte
River
to
its
owner
Municipalities
remain
relatively
low.
Figure
4
shows
the
rates
for
the
four wholesale
power
suppliers
in Colorado.
Tn-State
serves
rural
electric
cooperatives,
ARPA
(Arkansas
River
Power
Authority)
serves
municipalities
in
southern
Colorado
and
Xcel
Energy
(via
Public
Service
Company
of
Colorado)
serves
wholesale
purchasers
as
well
as
a
large
portion
of
the
retail
customers
in the
state.
Figure
4
—
Wholesale
Rates
in
Colorado
Platte
River
Tn-State
ARPA
Xcel
7-
5
the
wholesale
rate
structure
is
provided
below.
•
Summer
cost
increases
—
Costs
to
provide
electricity
to
the
Municipalities
is
higher
in
the
summer than
in
other months
and therefore rates
are
higher
in
the
summer.
Municipal
loads peaked
in the
winter
until
the
early
1990’s;
1996
was
the
last
year
that
winter
peak
exceeded
summer
peak.
Platte
River
added
gas-fired
combustion turbine units
in
2002,
2004
and
2008
to
help meet
the
Municipalities’
growing
summer
peak
demand.
These
units
added
capital
and operating
costs,
as
well
as
fuel
costs,
which
increase
wholesale
costs in
the
summer
season.
In
2011,
the
summer
peak
was
21%
higher
than
the
winter
peak and
summer
peak
is
expected
to
significantly
exceed
winter
peak
into
the
foreseeable
future.
•
Credit
for
suiplus
sales
—
Historically,
all
revenues
from
surplus
sales
were
credited
to
energy.
This
held
energy
rates
lower
than
they
would
otherwise
have
been.
In
the
new
rate,
surplus
sales
are
credited
on
a
prorated
basis
to
both
demand and
energy
charges.
This
reduces
the
variability
of
energy
and
demand
allocations
associated
with
surplus
sales
(volume
and
market
prices).
•
Coal
units
—
Historically,
100%
of
debt
was allocated
to
demand
charges
and
100%
of
fixed
operating
and maintenance
cost
was
allocated
to
energy
charges. Going
forward,
the
allocation
for
coal
unit
fixed costs
is
about
75%
to
energy
charges
and
25%
to
demand
charges.
This
allocation
is
based
on
charging
the
average
loading
on
the
baseload
resources
to
energy
(average load
is 75%
of
maximum)
and charging
the
difference
between
maximum loading
and
average
loading
to
demand
(maximum
less
average
is
25%
of
maximum).
More
coal
generation
is
used
to
serve
the
Municipalities
during
peak periods
than
at
other
times,
but
a
large
portion
of
this
generation
is
needed
at
all
times.
The
bulk
of
these
costs
are
allocated
to
energy,
since
most
of
the
generation
capability
is
needed
to
serve
load
during
all
hours
of
the
year.
•
Hydropower
purchases
—
En
the
past,
hydropower
could
be
operated
with
more
flexibility
to
meet
changing
Municipal
loads.
Due
to
operational
restrictions
imposed
on
federal
hydropower
units,
hydropower
now
operates
like
a
haseload
resource,
similar
to
the
coal
units.
Costs
for
hydropower
are
now
allocated
to
demand
and
energy charges
using
the
same
approach
as
that
for
allocating
coal
plant
fixed
costs.
4
time-of-use rates
(among
other
options).
The
same
basic
wholesale
rate
structure
has been
in
place
for
over
30
years,
although
much
has
changed
since
the
original
rate
was
designed. Changes
include
higher
increases
in
some
cost
categories
relative
to
others,
reduced
flexibility
of
hydropower
operations
over
time,
addition
of
new
gas-fired
combustion
turbines
at the
Rawhide
site,
upgraded
and
expanded
transmission
infrastructure and
falling
surplus
sales
market
prices.
In
addition
to
these factors,
new
technologies
for
controlling
and/or
displacing
electric
loads
at
time
of
peak
have
expanded
considerably.
Platte
River
and
the
Municipalities
began
evaluating
potential
new wholesale
rate
structures
in
the
fall
of
2009.
This
effort
was
driven
by the
fundamental
goal
of
aligning rate
charges
with
current
costs
—
particularly
as
these
costs
change
with
time (seasonally,
time-of-day,
etc.).
A
team
of
staff
from
the
Municipalities
and Platte
River
worked
together
with
a
rates
consultant
(Utility
Financial Solutions)
to
develop options
for
consideration
by the
Platte
River Board
of
Directors.
Historical
cost
allocations
were
updated
and
detailed
rate
models
were
developed
to
evaluate
changes.
An
initial
draft
set
of
rate options
was
reviewed
with
the
Plate
River
Board
in
April
2010
and evaluation
of
options
continued
through
February
2011.
Five
rate
options were considered:
(1)
single
demand
and
single
energy
charge
—similar
to
the
current
structure,
but with
updated
cost
allocations,
(2)
single
demand
rate
with
on-peak and
off-peak
energy
charges,
(3)
seasonal
rates
with
a
single
demand
and
energy rate
for
each
of
two
seasons
—
summer and
other
months,
(4)
seasonal rates
with
two
peak
demand
charges
—
one
for
summer and
one
for
other
months,
with
on-peak
and
off-peak
energy
charges
for
each season,
and
(5)
seasonal time-of-use
energy
rates
with
no
demand
charge. At
their
February
2011
meeting,
the Board
directed
staff
to
proceed
in
finalizing
a
simple
seasonal
demand/energy
rate
(option
3)
for
implementation
beginning
January
2012.
This
rate
was
reviewed
in
detail
with
staff
from
the
Municipalities
during
2011
and
presented
to
the
Fort
Collins
Electric
Board
in
April
2011.
The
Platte
River
Board
gave
preliminary
approval
to
the
new
rate
structure
in
May
2011
and
final
approval
was
given
at
the
October
27
Board
meeting.
The
table
below
summarizes
the
2012
wholesale rate
(Tariff
1)
and
the projected
impacts
to
each
of
the Municipalities.
As
indicated
in
the
table,
wholesale energy
costs
increased
while
peak
demand
charges
decreased
—
relative
to
the
historical
rate
structure.
Also,
charges
are
higher
in
the
summer
months
than
in
the
winter. Note
that
the
values
in
the
table are
wholesale
rates.
approved
for
sales
to
the
Municipalities
in
2012.
The
Platte
River
Board
approved
these
wholesale
charges,
recognizing that
each
Municipality
allocates
wholesale
costs
and
other
expenses
to
their
customers
as
they
see
fit.
Individual
allocations
are
made
by
each
Municipality
based
on
their
particular
approach
to
retail
rate design.
Decisions
regarding
timing
for
implementation
of
rate changes
at
the
retail
level
are
also
made
by
each
individual
Municipality.
3
for
2012.
Increased
interest
payments
on
debt
for
new
transmission
facilities
and
reduced
interest
income
(net
interest
cost)
are
also
significant,
as
are
increased
depreciation
expenses.
The
remaining
portion
of
the
increase
is
due
to
rising
fuel
costs
and
other
minor
expense
changes.
Figure
2
—
Reasons for
2011
to
2012
Rate
Increase
Other
Factors
Depreciation
5%
Net
Interest
Cost
9
0/
/0
The
price received
for
surplus
sales
is
based
on the
regional
electricity
market, which continues
to
soften.
Figure
3
shows
the
decline
in
monthly average
wholesale prices
since
2008.
Figure
3 —
Wholesale
Surplus
Sales
Prices
, ,
$/MWh
60
55
50
45
40
35
30
25
20
.r___
I
2
sales
in
the
Municipalities
are
70.5%
of
wholesale
sales).
Individual
Municipalities
will
see
wholesale
rate
increases
from
5.5%
to
8.3%;
thu
increase
in Fort
Collins
is
6.4%.
Individual
homes
and
businesses
in
the
Municipalities
will
see
a
range
of
increases,
depending
on
how
(and
when)
the
Municipalities pass
through
the
new
wholesale
rates
to
their
retail
customers.
The
wholesale rate
change
in
2012
is
made
up
of
two
components:
(1)
additional revenue
requirements
to
cover
an overall increase
in
costs
for
providing
electricity
to
the
Municipalities,
and
(2)
changes
to
the
structure
of
the
wholesale
rate.
Additional
background
on
these
changes
is
provided
below.
Wholesale
Rate
Trends
Platte
River
is
a
not-for-profit
entity. Revenues collected from the
Municipalities
are
used
to
cover
wholesale
costs
and
rates
are
based
on
cost
of
electric
service
to
the
Municipalities.
Wholesale
rates
were
relatively
flat
between
1982
and
2003,
as
shown
in
Figure
1.
During
this
period,
no
new
generation
was
built
by
Platte
River,
debt financing
rates
were
generally
declining
and
surplus
sales
revenues
were
a
large
portion
of
total
sales.
“Surplus
sales”
revenues
come
from
electricity
sales
made
to
other
wholesale
purchasers
in
the
region
(beyond
sales
made
to
the
four
owner
Municipalities).
These
additional
sales
reduce
the
need
for
revenues
from the
Municipalities and therefore
reduce
wholesale
rates.
Figure
1 —
Wholesale
Rate
History
Beginning
in
2004,
rates
began
to
increase
due
to
several
factors.
These
included
the
addition
of
new generation
(five
new
natural
gas-fired
combustion turbine
units
at Rawhide
with
a
new
gas
pipeline
and
other
infrastructure),
reduced
surplus
sales
(both
volume
and
price),
increased
fuel
costs
(coal
and
natural
gas),
changes
in
hydropower
operations,
increased
hydropower
purchase
costs,
capital
costs
for
upgrading
transmission
system
reliability and
increased
operation
and
maintenance
costs
for
the
power plants.
50
-
40
30
20
10
-10%
-5%
0%
5%
10%
15%
20%
25%
R RD GS GS25 GS50 GS750 System
Rate Class
% of total increase
PP Demand PP Energy Dist fac Total Increase