HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 08/16/2016 - FIRST READING OF ORDINANCE NO. 104, 2016, MAKINGAgenda Item 26
Item # 26 Page 1
AGENDA ITEM SUMMARY August 16, 2016
City Council
STAFF
Lisa Rosintoski, Utilities Customer Connections Manager
Randy Reuscher, Utility Rate Analyst
SUBJECT
First Reading of Ordinance No. 104, 2016, Making Certain Amendments to Chapter 26 of the Code of the City
of Fort Collins Pertaining to Electric, Water and Wastewater Rates, Fees and Charges Associated with the
Income Qualified Rate Pilot Study.
EXECUTIVE SUMMARY
The purpose of this item is to seek adoption of an ordinance implementing a two year Income-Qualified Rate
(IQR) pilot study, effective January 1, 2017. IQR is a discount rate structure for qualified low-income
households for electric, water, and wastewater utility services. The rate is designed to increase the adoption of
efficiency and resource conservation practices by providing affordable utility services to income-qualified
customers. In order to manage IQR administrative costs effectively and provide a convenient and accessible
application process, staff recommends partnering with the state sponsored Low-Income Energy Assistance
Program (LEAP), locally administered by Larimer County Department of Human Services, to qualify customers
for IQR. Using LEAP to qualify customers for the IQR will also increase the number of local locations at which
customers may apply for assistance, from one to four.
Staff has determined that adequate utility enterprise fund reserves are available to offset the revenue impact of
the proposed IQR discounts during the 2017-2018 two-year pilot study, at an estimated total cost of
$2,544,145, based on a 65% enrollment rate, thus no 2017 or 2018 rate increases related to IQR are
proposed. If adopted, the pilot study will occur between 2017 through end of year 2018. Staff will provide City
Council with a one-year evaluation memorandum in the first quarter of 2018, and a two-year evaluation in the
first quarter of 2019, in order to assess the impact of the IQR, the efficacy of the IQR in serving the energy and
resource conservation purposes, and determine whether the IQR should be continued. If after the pilot study,
it is determined the IQR effectively serves its intended resource conservation and utility affordability purposes,
staff propose adjusting rates across all classes to continually fund the IQR.
STAFF RECOMMENDATION
Staff recommends adoption of the Ordinance on First Reading.
BACKGROUND / DISCUSSION
The IQR was presented to City Council at the June 14, 2016 Work Session. City Council supported bringing
the item forward as part of the August 16 City Council agenda. City Council requested the following
information be included in the City Council Agenda Item Summary (AIS):
Timeline for communications outreach once rate ordinance is approved; see slide 5 of presentation.
Clarification on how LEAP income qualifies customers and manages potential fraud; see page 2 of AIS
Utilities staff, in collaboration with internal and community stakeholders, has determined that an effective
conservation strategy addressing energy affordability for low-income customers includes the development of
an Income-Qualified Rate. Incorporating IQR will enable Utilities to refine and improve conservation and
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Item # 26 Page 2
efficiency programs as they relate to low-income customers while providing participating customers financial
relief. This customer segment’s limited participation in efficiency programs is often due to a lack of financial
resources to meet upfront conservation or efficiency program costs, and is frequently exacerbated by
transportation and time constraints.
Utilities does not currently have comprehensive ongoing assistance for low-income customers. The Utilities
emergency assistance program, Payment Assistance Fund (PAF), is not adequate or appropriate to address
the needs of customers with persistent financial difficulty in paying for utility services month after month. In
addition, any future rate increases required to either support Utilities increasing costs of service, or to support
accepted utility purposes such as resource conservation efforts, are likely to intensify a low-income customer’s
difficulty in paying utility bills. Thus, IQR is an opportunity to both encourage participation in energy efficiency
and renewable energy conservation programs through a customized rate structure and address the financial
hardships of the low-income customer segment.
Table 1 below highlights the average bills for customers that may qualify for the IQR at the current 2016 rates
and the potential impacts on 2017 rates based on proposed increases. In 2017, an average customer
qualifying for the IQR could expect to see a credit on their bill of $47.99 per month if they receive all three
services from Fort Collins Utilities. The blended discount for the three services combined is 42%, given the
average consumption levels. The actual total discount amounts, in dollars, will vary depending on which
services they receive and their specific consumption levels for the month.
Table 1
LEAP Program
A thorough qualification process is important to the success of the IQR, however, a well-developed process
can be difficult to establish and maintain. Staff recommends qualifying customers through the well-established
and time-tested LEAP process. In Larimer County, LEAP staffs eight full-time team members who process
thousands of applications for state energy assistance each qualification season (November-April). Additionally,
LEAP maintains a fraud prevention department to avoid any systematic misuse of public benefits. By
leveraging this resource, Utilities is assured a thorough, high quality qualification process for IQR customers,
and LEAP is seizing an opportunity to expand its reach to more eligible customers. Leveraging the LEAP
qualification process has several specific City and customer benefits:
1. It is highly accessible: Qualified case managers are standing by to accept applications via phone, fax,
mail, email, or in person.
2. It offers a simple process: Customers fill out one application for LEAP and IQR, relieving transportation
and time constraints, and enhancing accessibility.
3. It avoids the immediate need for additional FTE’s and keeps administrative needs to a minimum.
4. It ensures the customer receives both state and Utilities benefits, further reducing the customer cost
burden and potential need for PAF assistance, allowing PAF to help more customers each year.
In 2017 LEAP will qualify applicants at 165% of the Federal Poverty Level (FPL). This threshold is evaluated
by the state LEAP office on an annual basis and may change periodically. IQR qualifications will track the
established statewide LEAP threshold each program cycle. Customers will be required to reapply each
program cycle.
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Once a customer is on IQR, conservation efforts will be targeted with low-cost and no-cost conservation
behavior change and direct install opportunities designed to reduce energy and water consumption.
Opportunities will leverage existing resources and include City, state, county and non-profit administered
programs. Conservation opportunities with a range of customer participation levels will be available in an
attempt to reach a spectrum of customers within the low-income segment. In this way, the IQR will serve the
specific utility purposes of energy and resource conservation and affordable utility rates beneficial to the
ratepayers as further outlined in the AIS for the June 14, 2016 City Council Work Session and required by
Article XIII, Section 6 of the City Charter.
The IQR planning and implementation timeline is driven by the need for a strong outreach effort in line with
LEAP’s 2016-2017 program cycle, beginning November 1. Staff needs adequate time to prepare messaging
and marketing materials, informing community action partners and preparing a list of potential participants to
contact for heavy outreach throughout October. Critical path project components being developed in advance
of approval include managing the requirements for rate deployment in the Customer Information Billing System
(CIS), and the establishment and testing of new administrative business processes that support the customer’s
trust and convenience.
Using data collected throughout 2017, staff will provide City Council a memorandum in the first quarter of 2018
outlining the execution results, which will evaluate the effectiveness of the rate to reduce service interruptions
and determine IQR participation and energy and water conservation program participation among the low
income segment. After monitoring and collecting data for two years a full analysis and evaluation will be
conducted and brought to City Council for consideration of continued implementation in the first quarter of
2019.
Impact on the Medical Assistance Program (MAP)
IQR offers a larger discount than MAP, yet the income qualifications are very similar. Staff recommends using
the 2017 and 2018 IQR qualification process to migrate existing MAP customers to IQR. At the end of the IQR
pilot (December 2018) period, it is possible some MAP customer’s income will be too high to qualify for IQR. If
that is the case, staff recommends these customers continue with MAP but eliminate the rate to new
customers.
After monitoring and collecting data on the IQP pilot study for two years, a full analysis and evaluation will be
conducted and brought to City Council for consideration of continued implementation in the first quarter of
2019. It is anticipated that this evaluation will consider the continuation or modification of MAP as well.
Second Reading of Ordinance No. 104, 2016-September 20, 2016
Second reading for this ordinance is scheduled for September 20, 2016. This allows time for the necessary
30-day notice by publication and mailing to City electric customers outside of the City limits prior to second
reading, as required by Colorado statute.
CITY FINANCIAL IMPACTS
In our community, the average household with income less than or at 165% of the Federal Poverty Level (FPL)
pays 4.6% of their income for electric, water and wastewater services compared to the 2.6% of household
income paid by those households earning the Area Median Income (AMI) (see Graph 1). To address this
disparity IQR as proposed would align the percentage of household income spent for these services by a
household at 165% of FPL to that of a household at the AMI. In order to maintain the same rate structure as
that of all other residential customers this could be accomplished by reducing both the fixed and variable
charges for the IQR customers 35% for electricity, 45% for water, and 50% for waste water. By maintaining the
same ratio of fixed to variable charges and relative household income for utility service, the same conservation
signals will be conveyed to all customers. The proposed ordinance amends portions of Chapter 26 of the City
Code to include language establishing the IQR for each utility service (electric, water and wastewater) and
amending the standard residential rates for electric, water and wastewater. The amendments also establish
Agenda Item 26
Item # 26 Page 4
the qualifications for the rate and show the percentage discount that will be applied to the base/fixed charges,
as well as the volumetric charges for each service.
Graph 1: Based on 2009-2013 US Census data
Staff has determined that adequate utility enterprise fund reserves are available to offset the revenue impact of
the proposed IQR discounts during the 2017-2018 two-year pilot study and no 2017 rate increase related to
IQR is proposed. If after the pilot study it is determined the IQR effectively serves its intended resource
conservation and utility affordability purposes, staff propose adjusting rates across all classes to continually
fund the IQR.
In order to estimate how many potential households may qualify for IQR, staff utilized the latest American
Community Survey (ACS) data to estimate household incomes for Fort Collins. Based on that data there are
as many as 9,000 eligible households, or approximately 16% of the City’s residential customers, potentially
eligible for the IQR (See Graph 2). ACS data is the same as US Census data (2009-2013) which indicates
18.6% of people in the City of Fort Collins are below Federal poverty level, compared to 13.2% in the state of
Colorado and 15.4% nationwide.
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Item # 26 Page 5
Graph 2: Based on 2009-2013 US Census data.
The actual cost of IQR depends on the level of enrollment. Table 2, below, shows cost by utility at various
enrollment levels.
enrollment % Electric Water Wastewater
25% $ 350,307 $ 57,679 $ 96,309
50% $ 700,614 $ 115,358 $ 192,618
75% $ 1,050,922 $ 173,037 $ 288,926
100% $ 1,401,229 $ 230,716 $ 385,235
IQR Annual Cost
Table 2
Assuming 100% enrollment, Table 3 shows the necessary post-pilot rate increase to fund this program if the
increase is kept within the residential rate class and if the increase is shared across all rate classes. Staff
recommends increasing all rate classes because the specific utility purposes of energy and resource
conservation and affordable utility rates will provide a benefit to all ratepayers, as further outlined in the AIS for
the June 14, 2016 City Council Work Session and required by Article XIII, Section 6 of the City Charter.
Achieving an enrollment rate less than 100% would scale the rate impact accordingly. Based on the
experiences of other communities, enrollment above 75% of eligible households is difficult to achieve.
Electric Water Wastewater
Residential Rate Class Only 3.0% 1.3% 2.4%
All Rate Classes 1.2% 0.8% 1.8%
% Increase By Utility Service
(Assuming 100% Enrollment)
Table 3
The intent of IQR is to reduce overall cost of utility services to the same relative level experienced by a
household with income at the Area Median Income (AMI), so each utility service would see a different discount
rate (See Table 4). The discount would be applied to both the fixed and variable charges for each utility,
ensuring the same price signals are communicated to this segment of residential customers as are to the
entire residential rate class.
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Table 4
BOARD / COMMISSION RECOMMENDATION
Utilities staff presented the IQR pilot study to and received support from the following boards and
commissions:
1. Affordable Housing Board (recommendation attached to Work Session AIS)
2. Water Board (recommendation attached to Work Session AIS)
3. Energy Board (recommendation attached to Work Session AIS)
4. Senior Advisory Board
5. Commission on Disability
6. Community Development Block Grant Commissions
7. Economic Advisory Committee
8. Human Relations Commission
PUBLIC OUTREACH
External stakeholder involvement has included focus groups, presentations and meetings. Stakeholder
organizations represent diverse constituents, ranging from the business community to citizens in need of
assistance. Discussions have provided a forum to give feedback for staff to consider and incorporate into the
pilot strategy. Stakeholder organizations include: Chamber of Commerce, Colorado Energy Office
(recommendation attached to Work Session AIS), Larimer County Department of Human Services, Energy
Outreach Colorado (recommendation attached to Work Session AIS), Volunteers of America, United Way,
Office on Aging, Catholic Charities, La Familia/The Family Center, Discover Goodwill, Social Sustainability
Grantee Training participants (26 community action agencies), Fort Collins Housing Authority, Neighbor to
Neighbor, Care Housing, and multi-family group-metered properties.
Future outreach will be intentional in reaching a spectrum of customers within the low-income segment and
include widely accessible mass communication tactics such as website and social media, direct mail to
potential participants, and targeted communication disseminated through internal and community action
partners. Through partnerships with the City Rebate program and LEAP, as well as utilizing information from
Utilities assistance programs, staff has developed a comprehensive list of potential customers to contact and
encourage to applying for LEAP. A training session will be offered to Customer Service Representatives so
they are able to answer questions about the new program. Notice of the proposed change to the Municipal
Code to include this type of program will be published in the Coloradoan and a mailing will be sent to City
electric customers outside of the city limits thirty days before Second reading in the same manner as provided
to annual rate update ordinances.
MAP customers will have communications specific to them and their unique circumstances. Staff will continue
to be available to assist in the migration from MAP to IQR through the pilot period and beyond as necessary.
Agenda Item 26
Item # 26 Page 7
ATTACHMENTS
1. Commission on Disability minutes, September 24 and December 10, 2015 (PDF)
2. Senior Advisory Board minutes, September 9, 2015 (PDF)
3. Human Relations Commission minutes, November 12, 2015 (PDF)
4. Community Development Block Grant Commission minutes, September 10, 2015 (PDF)
5. Economic Advisory Commission, January 20, 2016 (PDF)
6. Powerpoint presentation (PDF)
COMMISSION ON DISABILITY
Fort Collins City Hall 12:15 p.m.
Thursday September 24, 2015
Present: Marilee Boylan, Michael Marr, Terry Schlicting, Leslie Efird, Sherri
Reichow, Michael Marr, Hettie Hueber, Michael Devereaux, Rose Luna
Absent: Michelle Miller (with contact)
City: Ethan Cozzens, Dawn Nelson
Guests: Peter Iengo-Fort Collins Utilities, Emma Belmont-Transfort, Travis Paige-
Fort Collins Utilities, Craig Dubin -Transfort, Angela Byrne, Mandy Morgan
Call to Order: 12:24 p.m.
1. Introductions
2. Approval of August Minutes: Schlicting moved to approve. Boylan seconded.
3. Open Discussion:
a. Boylan handed out an action alert about the bus stops in Fort Collins and
asked commission members to attend the Oct. 6th
City Council meeting.
b. Marr told the commission about the 15-minute delay for Dial-A-Ride and
talked about the need for automated system. Craig Dubin informed the
COD about the Dial-A-Ride automated system cost and said the system
can be set up for an automated system at an additional cost to the City.
4. New Business:
a. Peter Iengo from Fort Collins Utilities spoke about a comprehensive
portfolio of assistance programs that assist low-income electric
customers. He asked the COD for feedback. The pilot would be approved
by City Council early 2016. Iengo would appreciate a letter of support
from the commission.
b. Angela Byrne informed the COD about her difficulties using Fort Collins
transportation. She feels Dial-A-Taxi drivers are taking longer routes to
run up the meter, taking advantage of people with disabilities. Schlicting
and Dubin brainstormed with Byrne and offered some information on
who she could contact with more of her concerns.
c. Mayors Awards where voted on. This year the Mayors Awards will have a
name change. Mayors Awards are October 15, 2015.
5. Old Business:
a. No old business.
ATTACHMENT 1
COMMISSION ON DISABILITY
Fort Collins City Hall 12:15 p.m.
Thursday December 10, 2015
Present: Terry Schlicting, Marilee Boylan, Hettie Hueber, Michael Devereaux, Michelle
Miller
Absent: Michael Marr, Leslie Efird, Rose Luna (with contact), Sherri Reichow
City: Ethan Cozzens, Dawn Nelson
Guests: Maureen McCarthy-City of Fort Collins, Ginny Sawyer-City of Fort Collins, Dan
Weinheimer-City of Fort Collins, Pete Iengo-City of Fort Collins
Call to Order: 12:16 p.m.
1. Introductions
2. Approval of Minutes: November Minutes – Terry Schlicting moved to approve the
November minutes and Michele Miller seconded. The minutes were approved.
3. Open Discussion: None.
4. New Business:
a. Ginny Sawyer and Dan Weinheimer presented on current plans to review the impact
of Uber, Airbnb, VRBO, etc. in the City for the purpose of determining how or if they
should be regulated. Currently, there are approximately 300 of these
listings/providers including home rentals and even bedroom rentals. Discussion
centered on accessibility issues and the importance of including the perspective of
people with disabilities as decisions are made.
b. Pete Iengo came to review progress on the utility low income/medical assistance
survey. He reviewed the current rate structure, as well as the proposed rate
structure and reported that requalification letters have been mailed that include
questions regarding income to identify those making between 50-60% of median
income. He will report back again when the majority of the surveys have been
returned and he knows how many households will be excluded from the new
program due to income criteria. At that time we can make a final decision
regarding COD support for program.
Senior Advisory Board
Regular Meeting Minutes
Wednesday, September 9, 2015
Fort Collins Senior Center
1200 Raintree Drive
Fort Collins, CO 80526
Mission: The Senior Advisory Board shall serve in an advisory capacity to the Fort Collins City
Council on programs and policies that help aging citizens live full and interesting lives and
continue to contribute, participate, and share in the life of the community.
Board Members Present:
Diane Smith
Patricia Housley
Rich Feller
Suzanne King
Excused Absence:
Angela Condit
Ann Leffler
Joann Thomas
I. Call to Order
Staff Present:
Katie Stieber
Guests:
Caroline Mitchell-Community Recycling
Ordinance
lrisa Luft
Pete Iengo- Utilities Low Income Assistance
Unexcused Absence:
Alan Beatty
Lawrence Bontempo
Meeting was called to order at 11:26 a.m.
II. Administrative Items
A. Attendance sheet was passed around for signatures.
B. Approval of Minutes from August 12, 2015
Approved by members.
C. Correspondence
Bridging the Gap Postcard and Aging Mastery Flyer
D. Update on SAB Activities of the last month
III. Public Participation
A. Comments on Public Participation vs Speakers
Discussion on the fact that a speaker was brought in that happened to be a for profit
business. Per board liaison, City representative speakers cannot be a for-profit
individual or business. This can occur during the public participation time.
IV. Speakers
A. Pete Iengo- Utilities Low Income Assistance
ATTACHMENT 2
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Human Relations Commission
November 12, 2015 ATTACHMENT 3
1
COMMUNITY DEVELOPMENT BLOCK GRANT COMMISSION
REGULAR MEETING MINUTES
321 Maple Street, Fort Collins
SEPTEMBER 10, 2015, 6:00PM
COMMISSION MEMBERS PRESENT:
Margaret Long (Chair) Anita Basham Steve Backsen Taylor Dunn
COMMISSION MEMBERS ABSENT:
Holly Carrol, Stephanie Crookston, Catherine Costlow
STAFF PRESENT: Sharon Thomas
OTHERS PRESENT: Pete Iengo, Utilities Program Coordinator
The meeting was called to order by Chair, Margaret Long at 6:01 pm without a quorum present.
PUBLIC COMMENT: None
APROVAL OF MINUTES:
Minutes were discussed from the August meeting and minor changes were made. A quorum
was not present so a vote was not taken.
DISCUSSION WITH PETE IENGO WITH FORT COLLINS UTILITIES
Sharon Thomas introduced Pete Iengo to discuss the Low-Income Utilities Energy Assistance
program which is planned at this time to go before City Council in the spring of 2016. The
program will provide assistance to low-income households at 50% Area Median Income (AMI)
or below.
It is recognized that that there are two types of assistance needed; temporary assistance
(medical emergency, car problems, etc.) and on-going assistance. People with temporary
assistance needs would be able to get assistance any time during the year. Those with on-going
needs will qualify once a year during the rebate qualification period from August to October.
Currently about 12% of customers, or 7500 households, could benefit from this program. Those
earning 50% AMI and below pay twice as much of their income on electricity as those earning
100% AMI and above. Households earning 30% AMI would be eligible to receive a 50%
reduction on their electric rate and those earning 50% AMI would be eligible to receive a 35%
reduction.
Households will be able to apply for energy assistance through the City’s rebate program. This
program is established in the finance department. The hope is this will keep administrative
costs down. Hopefully new employees will not need to be hired to handle the extra workload.
Eligible households will be required to qualify every year.
ATTACHMENT 4
2
Concerns were raised that households receiving assistance might get used to the lower rates
and will not be as concerned with conserving electricity. Iengo noted that there will likely be an
educational component with the program and monitoring of usage is possible.
CDBG COMMISSION VACANCIES AND TERM EXPIRATIONS
Sharon Thomas noted that there will be five total vacancies on the CDBG Commission at the
end of 2015. Catherine Costlow will be term limited after serving two four-year terms. Margaret
Long and Anita Basham will be completing their first four-year term and will need to re-apply to
remain on the Commission. The other vacancies occurred when Kristin Stephens was voted in
as a City Councilmember and Jamaal Curry resigned his position when he moved out of the City
limits.
GRANTEE TRAINING
Sharon Thomas shared information from the Grantee Training – training given to all FY2015
grantees. During the training the nonprofit agency participants were asked for feedback
regarding how the Competitive Process was conducted. Most responses were very favorable.
The comments of note were:
x Would like site visits to nonprofits by Commission members
x Transparency in funding decisions by the Commission (scoresheet/rating system)
x Balance presentations with questions
x Agencies would like questions ahead of time
x Would like to have information about each Commission member
Thomas agreed to provide short biographies of each Commission member to applicants in the
2016 Competitive Process. The Commission wanted to visit agencies this fall but decided to try
for the spring after new Commission members have been appointed. Although there is a
mechanism to provide questions to applicants in advance of their presentations many
questions come up during the presentations and can’t be given ahead of time.
STAFF REPORTS & PROGRAM UPDATES
Sharon Thomas reported on the It’s On Us Campaign and shared the requested funding
information provided by United Way. The requested three year history was not included with
the information received. Thomas shared the responses by SERVE 6.8 to the audit report
written by the City.
OTHER
Steve Backsen discussed the status of the letter written by the Commission to Council
concerning the need for more funding for the human service agencies. He will meet with Kristin
Stephens to see what more can be done.
Accessing capital is not purpose. Can add value in way university connects with
industry. Bureaucratic nature of large institutions. Opportunity to refine internal
processes to have better customer service.
Real value is self-reflection required to apply. Designation is nice to have.
In ideal world this is step one. Looking at gaps, opportunities, and coming
together with community to chart a new course.
x What is goal? If want to become Silicon Valley or Austin will grow population faster. Record
number of people in poverty, stresses on infrastructure (I-25 and schools), affordable housing
issues. We are doing very well in this area. Afraid we might achieve our goals. Clusters are
backward looking. Be careful where headed and what it will do to the community. Recognize all
the other issues that come with being a fast growing economy.
x “Asset Map” but not seeing any actual maps. Where does this fit with mapping North College.
o In North College had talked about innovation corridor—working on a plan for
redevelopment potential. Timing with application process. Have looked at what other
places do, literature review, metrics. Now engaged in process of feedback and
stakeholder engagement, understanding business perspective. Once data collected, will
create asset and liability map.
o North College URA branding space going away?
Downtown Plan has 14 subareas. One is innovation district, which is same area
that was being looked at previously.
AGENDA ITEM 3— Utilities Low Income Assistance Program Evaluation Recommendations —
Lisa Rosintoski & Randy Reuscher
In 2004 started looking at tiered rate structures and Council asked how it would affect low income
citizens. Started Payment Assistance Fund (PAF) as result. Later, developed medical assistance program.
In 2014 completed comprehensive evaluation of low income assistance programs. Included nonprofits
and other key stakeholders. In 2015 put together implementation strategy. Recommendation is to launch
components in 2016, with income qualified rate effective in 2017. Looked at demographics, qualifications
for assistance, conditions, barriers, etc. Conditions of low income are either temporary or ongoing.
Barriers include location of trust, convenience, and transportation. Utility role is in rates, funding,
efficiency and conservation education, and administration. Gaps are in rate structure for ongoing low
income and in ability for PAF to meet need. Have average of $35K donations for PAF annually, but need
regularly exceeds that. Have a need to create more alliances and donation support for PAF—Energy
Outreach Colorado can provide matching funds. Working to do better donation solicitation, and more
work on state and county resources. For ongoing need, looking at income qualified rate (IQR). Also
looking at low income solar and direct installs. Direct installs can impact renters—changing light bulbs
and adding low flow fixtures and toilets. With IQR can determine specific group to reach out to with
education. Going to Council to request unclaimed funds be transferred to PAF. Ordinance required to
implement IQR. Medical assistance program could phase out and fold into IQR.
IQR: Using census track data to target about 9000 households at 165% FPL and below; households that
make ~$33K and below. Comparing average customer’s percent income spent on water, wastewater and
electricity to low income person’s percent of income on same. Idea is to create a discount that equalizes
the percentage of income spent on these utilities. Customers must meet qualifications. If reached full
enrollment, would see 1.2% overall rate increase. Work session in February.
Discussion/Q & A:
x Source of funding is from other rate payers?
o Would be an increase to other rate payers, or from other funding sources.
o Unclaimed funds could roll into IQR.
o Good model.
x Specific recommendations?
o Implement portfolio with integrated service model. Utility’s role would be ongoing and
temporary assistance, with efficiency and conservation education.
Exciting to see work is being moved forward in logical manner.
4 | Page
Economic Advisory Commission, January 20, 2016 ATTACHMENT 5
x How does program intersect with sales tax rebate program that has been sorely underutilized?
Opportunity for two City programs to collaborate to get better use of both programs?
o As organization need to understand how supporting individuals through general fund and
utility fund. Aspiration is to have one place to qualify and get all programs. Looking at
Parks and Recreation and City rebates.
o Ideally one stop shop, places throughout community in nonprofits, churches, etc. one
avenue to get help?
Correct.
Sensitive to general fund versus utility fund, but want convenience for customer.
x Shifting funds from vacant accounts? How much? Where would it go?
o It has stayed in same place for 10 years. Put the money to higher and better use. Before
any noticing, estimate about $400K. If put robust crediting processes in place, could have
about $15K per year that would go to PAF.
AGENDA ITEM 4— Historic Growth Rates & Patterns—Katie Ricketts
Looking at growth rates, demographic changes, impacts on standard of living, poverty, inequality, etc. Per
decade rate of population growth has actually gone down as city gets larger. Aggregate growth continues
going up. Around 20% rate of growth per decade. Age demographics for county include projection for
2030 of 25% youth, 25% young adults, 33% experienced working age, and 17% seniors. Seeing faster
growth in senior population. Fort Collins is tracking patters of Colorado and US for employment, seeing
less unemployment. Unemployment rate is at about ~5%. Low unemployment has repercussions in
movement, underemployment, inability to accelerate careers, etc. Census data on industry categories
shows 18/20 having expansion in Fort Collins over last 10 years. Construction and manufacturing have
done less well. Wage growth is on the rise, with persistent gap between male and female wage (~38%).
Gap narrows for 20-29 year olds, but widens again for women at 35+. Time off during child bearing years
has significant impact on long term earning potential. Poverty in Larimer County is tracking US and
Colorado averages, but not much progress since 1970s. 45K people in Larimer below poverty level
(~$24K for family of 4). Single mothers of children under 18 comprise largest group of those in poverty.
Average home prices have gone up 42% over last 15 years. Hard costs and land prices have driven
increase. As less land is available puts pressure on market. People have argued that fees, taxes and profits
are problem, but fees have remained consistent percentage of overall cost and profit percentages have
gone down. Average rent in Fort Collins continues to increase—~$1250/mth. in 2015. Distressed
populations in housing are cost burdened (over 30% of income on housing), fixed income, in poverty,
first time homebuyers and mobile home residents. New pressures include land use, controlling sprawl,
resources, short term versus long term solutions, and waste and footprint issues. Opportunities include
urban density improvements, more efficient use of resources, ability to reach CAP goals, and more
diverse community.
Discussion/Q & A:
x Suggest including absolute population growth in presentation.
x Surprising that construction has not done as well with population growth.
o Building permit data would be good to show. Lower aggregate for new single family
homes. Peaked in 2000/01. Also know that had rise in oil and gas extraction after
recession, so workers migrated to other industry. Labor constriction.
o Bounce back—haven’t recovered. May see numbers rise.
Katie and Josh will look into this more.
x Issues on gender pay gap, suggest telling the whole story. Many reasons for income inequality.
o Impactful to talk about at local level when national issue?
o CSU is looking at pay rates for faculty and made major changes. Look at 1970 forward.
Possible to splice out by industry?
x Yes.
x Data by county could be very different than just Fort Collins.
o True. Using available data.
x Article on poverty in paper—city or county data?
o Will have to check.
5 | Page
Utilities Income Qualified Rate
Lisa Rosintoski, Customer Connections Manager
Randy Reuscher, Rate Analyst
1
08.16.16
ATTACHMENT 6
Our Role as a Utility
2
Efficiency and
Conservation
Education
Rates
Funding
Administration
Efficiency and
Conservation
Education
Funding
Rates
Develop Income-
Qualified Rate
Enhance Payment
Assistance Fund
Ongoing
Temporary
3
Low-Income Assistance
Integrated Approach
Community Outreach
• Mass Communication
• Traditional execution
• Targeted Communication
• Deliberate outreach (letters, presentations, etc.)
• Stakeholder Collaboration
• Social Sustainability and Neighborhood Services
• Government Partners
• Nonprofits
• Education and Direct Installs
• Larimer County Conservation Programs
• Neighbor to Neighbor Homeowner Education
4
Community Outreach Timeline
5
August 16
1st Reading
August 19
30 Day Notice
Published
Sept 20
2nd Reading
Community
Outreach
LEAP 2016-2017 Enrollment
Nov 1, 2016
Qualification
Begins
2017
April 30, 2017
Qualification
Ends
2.0%
1.3% 1.3%
0.7%
1.3%
0.6%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
165% FPL AMI
% of Income
Income Threshold
Utility Costs as % of Income
Electric Water Wastewater
Avg Bill
~$48
Avg Bill
~$62
Avg Bill
~$30
Avg Bill
~$32
Avg Bill
~$34
Avg Bill
~$32
Data: Utility Costs
Total 2.6%
Total 4.6%
Reduce
percentages to
align with AMI
6
$335,271
$670,542
$1,005,813
$1,341,084
$57,679 $115,358
$173,037 $230,716
$96,309 $192,618
$288,926
$385,235
$-
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
$1,400,000
$1,600,000
25% 50% 75% 100%
Fund Impact
Enrollment %
Potential $ Impact by Fund
Electric Water Wastewater
$489,259 $978,518 $1,467,776 $1,957,035
~0.28% of revenue ~0.55% of revenue ~0.83% of revenue ~1.14% of revenue
Data: Utility Costs
7
Plan, Do, Check, Act
Staff Commitment:
1. Two Year Pilot - 2017 through 2018
2. 2019 present results to City Council
3. Measures for success
a. Participation
b. Efficiency Projects
c. Conservation
8
-1-
ORDINANCE NO. 104, 2016
OF THE COUNCIL OF THE CITY OF FORT COLLINS
MAKING CERTAIN AMENDMENTS TO CHAPTER 26 OF THE
CODE OF THE CITY OF FORT COLLINS PERTAINING TO ELECTRIC,
WATER AND WASTEWATER RATES, FEES AND CHARGES
ASSOCIATED WITH THE INCOME QUALIFIED RATE PILOT STUDY
WHEREAS, the City Council is empowered and directed by Article XII, Section 6, of the
City Charter to fix, establish, maintain and provide for the collection of such rates, fees or
charges for utility services furnished by the City as will produce revenues sufficient to pay the
costs, expenses and other obligations of the electric utility, as set forth therein; and
WHEREAS, on December 6, 2011, the City Council adopted Ordinance No. 166, 2011,
adjusting the Residential Class Electric Rates to support conservation values through a tiered rate
structure, effective January 1, 2012; and
WHEREAS, in April 2012, the City Council directed staff to develop electric service rate
alternatives for low-income customers who operate durable medical equipment and air
conditioning due to medical conditions, recognizing that such customers may not be able to
adjust their energy consumption in response to conservation incentives as significantly as other
customers; and
WHEREAS, on May 1, 2012, the City Council adopted Ordinance No. 034, 2012,
creating a Medical Assistance Program (MAP) to equalize, relative to typical residential
customers, the electric service rate charged to qualifying low-income customers who operated
certain medically-necessary equipment and air conditioners; and
WHEREAS, since 2012, advanced electric and water meter data has enabled City
Utilities staff to develop improved rate structure models and identify opportunities to increase
City utility customer adoption of conservation behaviors and practices; and
WHEREAS, staff believes that many low-income utility customers who do not qualify
for the MAP, experience similar obstacles to adoption of conservation behaviors and practices as
the customers for which MAP was designed; and
WHEREAS, in 2014, the City engaged in a comprehensive low-income program review
which led to several staff recommendations to improve conservation and efficiency program
participation by low-income customers; and
WHEREAS, at the January 27, 2015, City Council work session, staff presented customer
efficiency program data and recommendations for incorporating education, income qualification,
accessibility, internal and local non-profit collaboration, and creative funding into City utility
rate structures to incentivize conservation practices by low-income customers; and
WHEREAS, in 2015, staff studied and concluded that development of an Income-
Qualified Rate (IQR) may be an effective utility conservation strategy, if aimed at equalizing,
-2-
relative to typical residential customers, the utility costs paid by low-income customers, who
may not have the ability to participate in conservation programs due to transportation issues, lack
of time, or lack of financial resources to pay conservation or efficiency program costs; and
WHEREAS, at the January 25, 2016, City Council Finance Committee meeting, staff
presented preliminary options to improve the City’s utility conservation and efficiency programs
by adoption of a discounted utility service rate structure for low income households, based on
state and regional census income data; and
WHEREAS, at the June 14, 2016, City Council work session, staff incorporated City
Council feedback from January 25, 2016, and presented revised options to improve the City’s
utility conservation and efficiency programs, including a discounted utility service rate structure
for households with incomes at or below 165% of the Federal Poverty Level (FPL) as
determined under the poverty guidelines updated periodically in the Federal Register by the U.S.
Department of Health and Human Services; and
WHEREAS, Larimer County administers the state sponsored Low Income Energy
Assistance Program (LEAP), which qualifies low income applicants for energy assistance based
on a statewide percentage of FPL, which for 2017 is anticipated to be 165% of FPL; and
WHEREAS, staff recommends that the Larimer County Department of Human Services
LEAP qualification process be utilized to determine eligibility for the IQR to achieve
administrative efficiencies and ease of application for customers; and
WHEREAS, based on City Council feedback from June 14, 2016, staff recommends
implementation of the IQR for residential water, wastewater, and electric customers through a
two-year pilot study, beginning January 1, 2017; and
WHEREAS, staff has determined that adequate utility enterprise fund reserves are
available to offset the revenue impact of the proposed IQR discounts and satisfy the Utilities’
costs of service requirements under the City Charter, without increasing the service rates paid by
other utility customers during the pilot study; and
WHEREAS, at its February 4, 2016, meeting the Energy Board considered the proposed
electric rates, fees and charges, associated with IQR and recommended approval of the rate
changes associated with the pilot study; and
WHEREAS, at its January 21, 2016, meeting the Water Board considered the proposed
water and wastewater rates, fees and charges, associated with IQR and recommended approval of
the rate changes associated with the pilot study; and
WHEREAS, the City Manager and staff have recommended to the City Council the
water, wastewater, and electric rate adjustments and City Code rate language additions for all
participating customer billings issued with meter readings on or after January 1, 2017 as
described herein; and
-3-
WHEREAS, staff believes that an IQR will serve the specific utility purposes of
facilitating energy and resource conservation by and affordable utility rates for income qualified
customers, which is beneficial to the ratepayers as further outlined in the agenda item summary
for the June 14, 2016 City Council Work Session and required by Article XIII, Section 6 of the
City Charter; and
WHEREAS, staff is prepared to mail and publish notice of the recommended utility rate
changes described herein as required by law after adoption of this Ordinance on first reading and
second reading will be scheduled accordingly; and
WHEREAS, based on the foregoing, it is the desire of the City Council to amend Chapter
26 of the City Code to revise the water, wastewater, and electric rates, fees and charges
associated with an IQR pilot study.
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, including but not limited to the finding that the
IQR pilot study will serve the specific utility purposes of facilitating energy and resource
conservation by and affordable utility rates for income qualified customers, which is beneficial to
all ratepayers of the utilities as contemplated in Article XIII, Section 6 of the City Charter.
Section 2. That Section 26-127 of the Code of the City of Fort Collins, regarding
meter rates for residential customers of the water utility, is hereby amended by the adoption of a
new subsection (a)(4) to read as follows:
Sec. 26-127. - Schedule B, meter rates.
…
(a) Residential rates
…
(4) Income qualified rate (IQR) for residential customers-pilot study.
a. Objective. The City has identified potential benefits available through a
water rate discount for income-qualified residential customers, including
encouraging customer participation in water conservation education and
efficiency programs, and lowering the threshold for customer investments in
residential water system upgrades. In order to study these benefits, Utility
Services shall conduct a temporary pilot study implementing a residential income
qualified rate (IQR) beginning with first the billing cycle commencing on or after
January 1, 2017, and concluding after twenty four (24) full billing cycles (the
pilot study period).
b. Scope. During the pilot study period, the IQR shall be charged to all
residential customers accepted into and enrolled in the Larimer County Low
Income Energy Assistance Program (LEAP) and identified as a Utilities Services
-4-
customer. To receive the IQR discount, customers must apply and be qualified for
LEAP.
c. Rate. During the pilot study period, customers qualified for the IQR as set
forth herein shall receive a discount of forty-five percent (45%) off their total
monthly water utility service charges based on the fixed and volumetric rates in
Subsections (a) (1)-(3) above.
d. PILOT. IQR customers shall pay the full charge for payments in lieu of
taxes (PILOT) and franchise due under Code Section 26-118, without any
discount of the six percent (6%) rate set forth therein.
Section 3. That Section 26-278 of the Code of the City of Fort Collins, regarding
classification of wastewater utility users, is hereby amended by the adoption of a new subsection
(9) to read as follows:
Sec. 26-278. – Classification of users.
…
(9) Category I - Income qualified rate (IQR) pilot study. Users in this category shall
include Category A, B, and C customers participating in the IQR pilot study, as described
in Section 26-279.
Section 4. That Section 26-279 of the Code of the City of Fort Collins, regarding
monthly service charges for wastewater utility services, is hereby amended by the adoption of a
new Subsection (c)(7) to read as follows:
Sec. 26-279. – Service charges; categories.
…
(c)
…
(7) The rate for users in Category I shall be based on the rates for Categories
A, B, and C, discounted for participating income qualified residential customers
as follows:
a. Objective. The City has identified potential benefits available
through wastewater rate discount for income-qualified residential users,
including encouraging user participation in water conservation education
and efficiency programs, and lowering the threshold for user investments
in residential water and wastewater system upgrades. In order to study
these benefits, Utility Services shall conduct a temporary pilot study
implementing a residential income qualified rate (IQR) beginning with the
first billing cycle commencing on or after January 1, 2017, and concluding
after twenty four (24) full billing cycles (the pilot study period).
-5-
b. Scope. During the pilot study period, the IQR shall be charged to
all users in Categories A, B, and C who are accepted into and enrolled in
the Larimer County Low Income Energy Assistance Program (LEAP) and
identified as a Utilities Services customer. To receive the IQR discount,
users must apply and be qualified for LEAP.
c. Rate. During the pilot study period, users qualified for the IQR as
set forth herein shall receive a discount of fifty percent (50%) off their
total monthly wastewater utility service charges based on the Category A,
B, and C fixed and volumetric rates in Section 26-280.
d. PILOT. IQR customers shall pay the full charge for payments in
lieu of taxes (PILOT) and franchise due under Code Section 26-118,
without any discount of the six percent (6%) rate set forth therein.
Section 5. That Section 26-280 of the Code of the City of Fort Collins, regarding the
schedule of rates for waste water users by category, is hereby amended by the adoption of a new
category row to the schedule of rates to read as follows:
Sec. 26-280. - Service charges established by category.
…
Category
Class of
Customer
Rate
…
I
Single-family residential user (flat rate); Single-
family residential user (metered water use);
Duplex (two-family) residential users (flat rate);
Duplex (two-family) residential users (metered
water use); and Multi-family residential user
(more than two dwelling units including mobile
home parks).
50% discount on total monthly
wastewater utility service
charges, on the Category A, B,
and C fixed and volumetric rates
in Section 26-280 (charged to
users participating in IQR pilot
study)
Section 6. That Section 26-464 of the Code of the City of Fort Collins, regarding
residential electric rates (Schedule R), is hereby amended by the adoption of a new Subsection (t)
to read as follows:
Sec. 26-464. Residential energy service, schedule R.
. . .
(t) Income Qualified Rate (IQR) Pilot Study.
(1) Objective. The City has identified potential benefits available through an
electric rate discount for income-qualified residential customers, including
encouraging customer participation in electricity conservation education and
efficiency programs, and lowering the threshold for customer investments in
-6-
residential electric system upgrades. In order to study these benefits, Utility
Services shall conduct a temporary pilot study implementing a residential income
qualified rate (IQR) beginning with the first billing cycle commencing on or after
January 1, 2017, and concluding after twenty four (24) full billing cycles (the
pilot study period).
(2) Scope. During the pilot study period, the IQR shall be charged to all
residential customers accepted into and enrolled in the Larimer County Low
Income Energy Assistance Program (LEAP), identified as a Utilities Services
customer and who are not net-metering customers. To receive the IQR discount,
customers must apply and be qualified for LEAP.
(3) Rate. During the pilot study period, customers qualified for the IQR as set
forth herein shall receive the following discount off the total monthly Schedule R
electric utility service charges in Subsection (c):
IQR discount on total monthly fixed, distribution facilities,
and energy and demand charges (but not on payment in
lieu of taxes (PILOT) and franchise amounts due)
35%
(4) PILOT. IQR customers shall pay the full charge for payments in lieu of
taxes (PILOT) and franchise due under this Section 26-464, without any discount
of the six percent (6%) rate set forth herein.
Section 7. That Section 26-465 of the Code of the City of Fort Collins, regarding
residential demand service electric rates (Schedule RD) is hereby amended by the adoption of a
new subsection (t) to read as follows:
Sec. 26-465. Residential demand service, schedule RD.
. . .
(t) Income Qualified Rate (IQR) Pilot Study.
(1) Objective. The City has identified potential benefits available through an
electric rate discount for income-qualified residential customers, including
encouraging customer participation in electricity conservation education and
efficiency programs, and lowering the threshold for customer investments in
residential electric system upgrades. In order to study these benefits, Utility
Services shall conduct a temporary pilot study implementing a residential income
qualified rate (IQR) beginning with the first billing cycle commencing on or after
January 1, 2017, and concluding after twenty four (24) full billing cycles (the
pilot study period).
(2) Scope. During the pilot study period, the IQR shall be charged to all
residential customers accepted into and enrolled in the Larimer County Low
Income Energy Assistance Program (LEAP), identified as a Utilities Services
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customer and who are not net-metering customers. To receive the IQR discount,
customers must apply and be qualified for LEAP.
(3) Rate. During the pilot study period, customers qualified for the IQR as set
forth herein shall receive the following percentage discount off the total monthly
Schedule RD electric utility service charges in Subsection (c) above:
IQR discount on total monthly fixed, demand, distribution
facilities, and energy charges (but not payment in lieu of
taxes (PILOT) and franchise amounts due)
35%
(4) PILOT. IQR customers shall pay the full charge for payments in lieu of
taxes (PILOT) and franchise due under this Section 26-465, without any discount
of the six percent (6%) rate set forth herein
Section 8. That the amendments herein are effective and shall go into effect as
follows:
A. IQR pilot study discounted water rates shall apply to water service charges
on the basis of meter readings on or after January 1, 2017; and
B. IQR pilot study discounted wastewater rates shall apply to wastewater
service charges on the basis of meter readings on or after January 1, 2017.;
and
C. IQR pilot study discounted electric rates shall apply to energy consumed
on or after January 1, 2017.
Introduced, considered favorably on first reading, and ordered published this 16th day of
August, A.D. 2016, and to be presented for final passage on the 20th day of September, A.D.
2016.
__________________________________
Mayor
ATTEST:
_______________________________
City Clerk
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Passed and adopted on final reading on the 20th day of September, A.D. 2016.
__________________________________
Mayor
ATTEST:
_______________________________
City Clerk