HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 08/16/2016 - SECOND READING OF ORDINANCE NO. 096, 2016, APPROPRAgenda Item 25
Item # 25 Page 1
AGENDA ITEM SUMMARY August 16, 2016
City Council
STAFF
Lindsay Ex, Environmental Program Manager
Jeff Mihelich, Deputy City Manager
Kevin Gertig, Utilities Executive Director
Jackie Kozak-Thiel, Chief Sustainability Officer
Laurie Kadrich, Director of PDT
Lucinda Smith, Environmental Sustainability Director
John Phelan, Energy Services Manager
SUBJECT
Second Reading of Ordinance No. 096, 2016, Appropriating Prior Year Reserves in the General Fund and in
the Light and Power Fund for Continuation of Energy Efficiency Initiatives Associated with the 2020 Climate
Action Plan (CAP) Strategic Plan and Rescinding Ordinance No. 081, 2016.
EXECUTIVE SUMMARY
This Ordinance, adopted on First Reading by a vote of 4-2 (Nays: Campana, Martinez; Overbeck absent)
rescinds Ordinance No. 081, 2016 (Adopted on July 19, 2016) and amends the $1,460,000 appropriated by
Ordinance No. 081, 2016; appropriating from the General Fund $730,000, and $730,000 from the Electric
Utility Light & Power fund, for continuation of energy efficiency programs in 2016, as outlined in the draft 2020
Climate Action Plan (CAP) Strategic Plan. Ordinance No. 081, 2016 will become effective as originally adopted
and shall provide funding until this Ordinance becomes effective, i.e., funding for the Energy Efficiency
Programs up to $730,000 will not be further delayed pending Second Reading of this Ordinance.
STAFF RECOMMENDATION
Staff recommends adoption of the Ordinance on Second Reading.
ATTACHMENTS
1. First Reading Agenda Item Summary, July 26, 2016 (w/o attachments) (PDF)
2. Ordinance No. 096, 2016 (PDF)
Agenda Item 3
Item # 3 Page 1
AGENDA ITEM SUMMARY July 26, 2016
City Council
STAFF
Lindsay Ex, Environmental Program Manager
Jeff Mihelich, Deputy City Manager
Kevin Gertig, Utilities Executive Director
Mike Beckstead, Chief Financial Officer
Jackie Kozak-Thiel, Chief Sustainability Officer
Laurie Kadrich, Director of PDT
Lucinda Smith, Environmental Sustainability Director
John Phelan, Energy Services Manager
SUBJECT
First Reading of Ordinance No. 096, 2016, Appropriating Prior Year Reserves in the General Fund and in the
Light and Power Fund for Continuation of Energy Efficiency Initiatives Associated with the 2020 Climate Action
Plan (CAP) Strategic Plan and Rescinding Ordinance No. 081, 2016.
EXECUTIVE SUMMARY
The purpose of this item is to rescind Ordinance No. 081, 2016 (Adopted on July 19, 2016) and amend the
$1,460,000 appropriated by Ordinance No. 081, 2016; appropriating from the General Fund $730,000, and
$730,000 from the Electric Utility Light & Power fund, for continuation of energy efficiency programs in 2016,
as outlined in the draft 2020 Climate Action Plan (CAP) Strategic Plan. Ordinance No. 081, 2016 will become
effective as originally adopted and shall provide funding until this Ordinance becomes effective, i.e., funding for
the Energy Efficiency Programs up to $730,000 will not be further delayed pending Second Reading of this
Ordinance.
STAFF RECOMMENDATION
Staff recommends adoption of this Ordinance on First Reading.
BACKGROUND / DISCUSSION
On June 21, 2016, City Council unanimously approved Ordinance No. 081, 2016 on first reading to fund the
municipal green waste initiative (in the amount of $85,000) with one amendment: the amended Ordinance fully
funded the energy efficiency incentives for the business community and the Efficiency Works Neighborhoods
Pilot through 2016 out of General Fund Reserves (in the amount of $1,460,000). On July 19, 2016, City
Council adopted Ordinance No. 081, 2016 as amended on second reading.
During Council consideration of the Ordinance, Council recognized the level of engagement by the private
sector in 2016 in energy efficiency incentives programs, their significant contributions to the 2020 CAP Goals
of reducing community emissions 20% below 2005 levels, their leverage of private sector dollars, and the
overall program benefits to the community.
In addition to adopting Ordinance No. 081, 2016, on July 19, 2016, Council requested staff return with
responses on the following issues for the continued Council meeting on July 26, 2016.
ATTACHMENT 1
Agenda Item 3
Item # 3 Page 2
1. Splitting funding appropriated by Ordinance No. 081, 2016 for energy efficiency programs between
General and Light & Power fund reserves
Staff response: Staff from the Utilities and Environmental Services departments recommend the full
funding for energy efficiency programs approved by Ordinance No. 081, 2016 be split equally between
General Fund reserves and Light & Power fund reserves. Such a split is appropriate under the City Charter
when program results provide citywide outcomes as well as utility enterprise specific objectives. The
funded energy efficiency programs serve to meet the 2016 Energy Policy efficiency target and the Climate
Action Plan 2020 target. In addition, it is a best practice to provide equitable co-funding for personnel costs
that advance General Fund and Utility goals (e.g., personnel cost division for the Energy Code Compliance
Specialist FTE approved during the 2015 mid-cycle budget process).
The proposed Ordinance affirms funding in the full amount of $1,460,000 (as appropriated by Ordinance
No. 081, 2016 which will be rescinded), amending the source of those funds to $730,000 from Light &
Power fund reserves and a maximum of $730,000 from the General Fund.
2. Proposed revision to energy efficiency program funding in 2016.
Staff Response: At this time, no new information is available by which to evaluate changing the funding
approved in Ordinance No. 081-2016 for energy efficiency incentives. As noted at the regular Council
meeting on July 19, 2016, the amount of business funding is dedicated in full to customer incentives, which
are inherently performance based. If sufficient projects are not identified and funds committed during the
remainder of 2016, any remaining funding will lapse to the reserve source from which it was appropriated
and shall become available for reappropriation in later cycles.
3. Proposed changes to the structure, rules or incentive levels for the Efficiency Works Business
program.
Staff response: A staff team from Utilities, Platte River Power Authority and the other three Platte River
member cities will continue to meet regularly to review the progress, results and parameters of the
Efficiency Works Business program. While changes to the program are typically made on an annual basis,
including incentive levels for specific measures, mid-year changes are made as needed. This collaborative
decision making process will continue for the remainder of 2016.
CITY FINANCIAL IMPACTS
Adoption of this Ordinance has a bottom line impact of $730,000 to Electric Utility Light & Power fund reserves
in 2016, with no ongoing commitment to the City budget. The appropriation from the General Fund is also
reduced to $730,000.
BOARD / COMMISSION RECOMMENDATION
Boards and commissions have not been briefed on this proposed Ordinance due to the timing between the
second reading of Ordinance No. 08, 2016 on the July 19, 2016 regular Council meeting and Council’s request
that staff return with additional information at the July 23, 2016 continued Council meeting. However, both the
Energy and Air Quality Boards previously provided recommendations related to the adopted Ordinance No.
081, 2016 prior to its adoption.
On June 23, 2016, the Energy Board unanimously recommended support for Ordinance No. 081, 2016, to
implement the three initiatives identified in that Ordinance. The Energy Board expressed support for the use of
General Fund dollars to fund the business energy efficiency incentives for the remainder of 2016, as the Board
believed it demonstrated the importance of energy efficiency to Council and the communitywide impact this
program has beyond the Light & Power Fund.
On July 18, 2016, the Air Quality Board submitted a memo in support of the proposed energy efficiency
program funding from General Fund reserves as adopted in Ordinance No. 081, 2016.
Agenda Item 3
Item # 3 Page 3
PUBLIC OUTREACH
Staff has reviewed the initiatives and BFO Offers associated with the 2020 CAP Strategic Plan with the
Climate Action Plan’s Community Advisory Committee. Staff is beginning to schedule public outreach events,
including an Open House with former Governor Bill Ritter to gather community feedback on the Climate Action
Plan. However, the status of these off-cycle funding decisions has not been discussed.
ATTACHMENTS
1. Powerpoint presentation (PDF)
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ORDINANCE NO. 096, 2016
OF THE COUNCIL OF THE CITY OF FORT COLLINS
APPROPRIATING PRIOR YEAR RESERVES IN THE GENERAL FUND
AND IN THE LIGHT AND POWER FUND FOR 2016 PROJECTS
ASSOCIATED WITH THE 2020 CLIMATE ACTION PLAN (CAP)
STRATEGIC PLAN AND RESCINDING ORDINANCE NO. 081, 2016
WHEREAS, on March 3, 2015, City Council adopted Resolution 2015-030, updating
community greenhouse gas goals and targets to be achieved by 2020, 2030, and 2050; and
WHEREAS, staff has developed an implementation plan based on the accelerated goals
of the Climate Action Plan (“CAP”) and has identified several initiatives for immediate action
and investment based on guidance provided by the City Council; and
WHEREAS, on April 19, 2016, City Council adopted Ordinance No. 046, 2016,
appropriating funds toward four projects identified for immediate action and investment (1)
Building energy Disclosure and Scoring, (2) CAP Program Support, (3) CAP Pilot
Project/Innovation Fund, and (4) Biomass Burner Feasibility Study; and
WHEREAS, on June 21, 2016 City Council considered on first reading Ordinance No.
081, 2016 appropriating funds for two additional projects identified and proposed for immediate
action and investment: (1) Solar Incentives and Rebates, and (2) Municipal Green Waste
(Composting) Sites; and
WHEREAS, appropriated, but unexpended and unencumbered, funds are available in
2016 from the Solar Purchase Power Program (SP3) and the Community Shared Solar program
in the Light and Power fund to support the Solar Incentives and Rebates Program; and
WHEREAS, staff requested $85,000 for the Municipal Green Waste (Composting) Site
Initiative, including compost-turning equipment of $51,000 and other expenses, outlined in the
Draft 2020 Climate Action Plan (CAP) Strategic Plan, from funds accumulated during 2015 and
prior years in the Waste Innovation Program account in the City’s General Fund; and
WHEREAS, the Municipal Green Waste (Composting) Site will enable municipal
composting for organic landscape debris through a small-scale (100 tons/year) composting
facility at the Hoffman Mill Road Crushing Facility, including site grading at the Hoffman Mill
Road Crushing Facility, purchase of compost-turning equipment, and ongoing composting
operations and management by the Streets Department; and
WHEREAS, composting capability will increase landfill waste diversion by City
departments that generate organic debris from municipal maintenance activities, including Parks,
Streets, Forestry, Natural Areas, Stormwater, and Light and Power; and
WHEREAS, in 2010, the City created the Waste Innovation Program (the “WIP”) fund
where revenues collected for the program are held in a reserve account in the General Fund; and
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WHEREAS, the WIP funds are used to administer grants that allow City departments to
initiate new waste diversion and recycling projects with special attention to departments that
have larger quantities of waste that is self-hauled to the Larimer County Landfill; and
WHEREAS, a team of interdepartmental employees (the “WIP Team”) acts as a liaison
for incorporating waste reduction, promoting recycling strategies, and awarding WIP funds when
requests are received from participating City departments; and
WHEREAS, the WIP Team voted unanimously to recommend the funding request for the
Municipal Green Waste (Composting) Site Initiative; and
WHEREAS, the City has implemented certain energy efficiency programs identified in
the 2020 Climate Action Plan (CAP) Strategic Plan (“Energy Efficiency Programs”), and has
operated these programs using funds appropriated in the Light and Power Fund; and
WHEREAS, the funds appropriated for the Energy Efficiency Programs for 2016 have
been fully committed, preventing new participation in those Programs until such time as
additional funds have been made available; and
WHEREAS, on June 21, 2016, City Council adopted on First Reading Ordinance No.
081, 2016, to include an additional appropriation of $1,460,000 from General Fund reserves for
Energy Efficiency Programs as described in the CAP Strategic Plan; and
WHEREAS, on July 19, 2016, Council adopted on Second Reading Ordinance No. 081,
2016, and at that time requested that staff examine the Energy Efficiency Programs for any
appropriate modification of the project amount or source of funding for it in 2016; and
WHEREAS, staff has examined the funding source for the Energy Efficiency Programs
approved in Ordinance No. 081, 2016, and identified an alternate and more preferable source of
funding for the purposes described in that Ordinance; and
WHEREAS, based on new funding information provided by staff, Council desires to
rescind Ordinance No. 081, 2016, and reestablish the appropriation described therein in
furtherance of the Energy Efficiency Programs and Composting Initiative; and
WHEREAS, consistent with Article XII, Section 6 of the Charter of the City of Fort
Collins, funding of a portion of the total cost of the Energy Efficiency Programs from Light and
Power Fund reserves serves electric utility purposes and reflects a proportionate benefit expected
to accrue to Light and Power electric utility ratepayers by seeking to manage and minimize
overall future capital needs, and resulting rate impacts, that would otherwise be required to
support increasing peak demand and overall electric service loads; and
WHEREAS, Article V, Section 9 of the City Charter permits the City Council to
appropriate by ordinance at any time during the fiscal year such funds for expenditure as may
be available from reserves accumulated in prior years, notwithstanding that such reserves were
not previously appropriated.
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NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF
FORT COLLINS as follows:
Section 1. That the City Council hereby makes and adopts the determinations
and findings contained in the recitals set forth above.
Section 2. That the City Council hereby rescinds adoption of Ordinance No. 081,
2016.
Section 3 That there is hereby appropriated from prior year reserves in the General
Fund the sum of EIGHTY-FIVE THOUSAND ($85,000) for expenditure in the General
Fund for the City of Fort Collins for the Municipal Green Waste (Composting) Site Initiative
as part of the Waste Innovation Program.
Section 4. That there is hereby appropriated from prior year reserves in the General
Fund the sum of SEVEN HUNDRED THIRTY THOUSAND DOLLARS ($730,000)
for expenditure in the General Fund for Energy Efficiency Programs as described in the CAP
Strategic Plan.
Section 5. That there is hereby appropriated from prior year reserves in the Light
and Power Fund the sum of SEVEN HUNDRED THIRTY THOUSAND DOLLARS
($730,000) for expenditure in the Light and Power Fund for Energy Efficiency Programs as
described in the CAP Strategic Plan.
Introduced, considered favorably on first reading, and ordered published this 26th day of
July, A.D. 2016, and to be presented for final passage on the 16th day of August, A.D. 2016.
__________________________________
Mayor
ATTEST:
_______________________________
City Clerk
Passed and adopted on final reading on the 16th day of August, A.D. 2016.
__________________________________
Mayor
ATTEST:
_______________________________
City Clerk