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HomeMy WebLinkAboutCOUNCIL - COMPLETE AGENDA - 11/28/2017 - COMPLETE AGENDACity of Fort Collins Page 1 Wade Troxell, Mayor City Council Chambers Gerry Horak, District 6, Mayor Pro Tem City Hall West Bob Overbeck, District 1 300 LaPorte Avenue Ray Martinez, District 2 Fort Collins, Colorado Ken Summers, District 3 Kristin Stephens, District 4 Cablecast on FCTV Channel 14 Ross Cunniff, District 5 and Channel 881 on the Comcast cable system Carrie Daggett Darin Atteberry Delynn Coldiron City Attorney City Manager 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 (V/TDD: Dial 711 for Relay Colorado) for assistance. Adjourned Meeting November 28, 2017 6:00 p.m.  CALL MEETING TO ORDER  ROLL CALL 1. Executive Session Authorized The meeting of November 21, 2017, was adjourned to this date and time to allow City Council to consider adjourning into executive session for the purpose of conducting the yearly evaluation of the Municipal Judge.  OTHER BUSINESS  ADJOURNMENT City of Fort Collins Page 1 Wade Troxell, Mayor Council Information Center (CIC) Gerry Horak, District 6, Mayor Pro Tem City Hall West Bob Overbeck, District 1 300 LaPorte Avenue Ray Martinez, District 2 Fort Collins, Colorado Ken Summers, District 3 Kristin Stephens, District 4 Cablecast on FCTV Channel 14 Ross Cunniff, District 5 and Channel 881 on the Comcast cable system Carrie Daggett Darin Atteberry Delynn Coldiron City Attorney City Manager 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 (V/TDD: Dial 711 for Relay Colorado) for assistance. City Council Work Session November 28, 2017 7:00 PM • CALL TO ORDER. 1. Broadband Update. (staff: SeonAh Kendall; Mike Beckstead; Colman Keane, EPB - Consultant; 15 minute staff presentation; 60 minute discussion) The purpose of this item is to provide City Council broadband updates including an estimated timeline, major milestones, appropriation and governance recommendations. 2. Metropolitan District Policy Changes. (Part two). (staff: Josh Birks and Tom Leeson; 12 minute staff presentation; 45 minute discussion) The purpose of this item is to review and consider changes to the City policy concerning Title 32 Metropolitan (Metro) Districts to better align the policy with desired outcomes and introduce other process improvements. • OTHER BUSINESS. • ADJOURNMENT. DATE: STAFF: November 28, 2017 SeonAh Kendall, Economic Health Manager Mike Beckstead, Chief Financial Officer WORK SESSION ITEM City Council SUBJECT FOR DISCUSSION Broadband Update. EXECUTIVE SUMMARY The purpose of this item is to provide City Council broadband updates including an estimated timeline, major milestones, appropriation and governance recommendations. GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED 1. Staff is seeking feedback on broadband next steps. 2. Staff is seeking feedback on the governance proposal. BACKGROUND / DISCUSSION In 2016 the City identified access to broadband as a strategic objective. Broadband is defined by the FCC as internet download speed of 25 megabits per second (“Mbps”) and upload of 3 Mbps or faster. The 2016 Strategic Plan Objective 3.9 states - “Encourage the development of reliable high-speed internet services throughout the community.” Additional benefits sought through the broadband plan include: • Competitive pricing (residential market pricing at $70/month or less for 1 Gbps and an affordable internet tier); • Universal coverage across the Growth Management Area; • Underground service for improved reliability; and • Timely implementation to providing services within a reasonable timeframe (less than five years). The City has been engaged in a multi-year process of research, due diligence, and community engagement that resulted in two successful ballot measures. The first in November 2015 gave the City the authority to provide high-speed broadband services to the community, the second, in November 2017 added telecom activity to the City Charter and demonstrated support for borrowing up to $150 million to provide fiber to the premise infrastructure. For the past two years, the City has focused on both a municipal retail model and a public-private partnership model of broadband service. Public-Private Partnership (P3) Status Based on Council feedback staff conducted extensive due diligence on the P3 model through both the recent RFP and a prior Request for Information (RFI) in 2016 and 2017. Efforts to find viable partner(s) that would bring experience and capability with the willingness to share in the financial risk and benefits with the City have not been successful to date. This information along with more detail has been provided to Council in an October memo. (Attachment 1) Funding/Resource Needs 1 Packet Pg. 2 November 28, 2017 Page 2 Implementing a municipal broadband operation will require a multiphase/multi-year approach and will include needed personnel, equipment, workspace and assets (fiber, equipment, etc.) Figure 1 ($ 000's) Q1 Q2 Q3 Q4 Full Time Equivalent 4 5 7 13 Quarter End Headcount 4 7 7 17 Personnel $ 128 $ 148 $ 187 $ 295 $ 758 Consulting 120 120 88 88 415 Branding/Web Site 63 63 30 30 185 Legal 60 20 - - 80 Office & Equipment 53 49 63 92 256 Contingency 25 25 25 25 100 Total Operations & Maintenance $ 449 $ 424 $ 392 $ 529 $ 1,794 Total Capital $ 40 $ 1,755 $ 1,550 $ 1,490 $ 4,835 Year 1 Full Year Initial start-up costs, estimated at $1.8 million, will be appropriated from the General Fund and ultimately reimbursed from the bond proceeds. Debt issuance is backed by revenue bonds issued by Utilities Light and Power (L&P). Revenue bonds are municipal bonds that are secured by L&P revenue and rate-making capacity. Currently, staff anticipates the issuance of two series of bonds: Series A, which have a three-year expenditure requirement and are tax-exempt; Series B can be carried forward for a longer period of time and are taxable. Timeline Following the appropriation of the $1.8M startup operational costs initial work would include: Months 1 - 4 • Issue Request for Proposals (RFPs), interview and negotiate contracts. RFPs to be released include, but are not limited to: o Engineer/design o Combined Computer Information System o Construction o Hardware/equipment • Recruitment and staffing (prioritization of key personnel) o Broadband Director o Sr. Network Engineer o Marketing Manager o Outside Plant Manager o Additional staffing • Code updates/modifications with City Attorney’s Office • Bond Issuance (target close - Month 5) • Branding, Marketing and Sales Plan (continuous) Month 6+ • Begin engineering/design work • Implementation of CIS system (billing/customer relationship management tool) • Commence construction (Month 10+) • Customer connections (estimated at Month 18) 1 Packet Pg. 3 November 28, 2017 Page 3 Governance In fall 2016, the City Manager, Deputy City Manager and Chief Financial Officer visited with several municipal-run broadband communities, both successful and struggling. The site visits allowed the attendees to openly discuss the challenges and opportunities that come with a municipal-owned retail service. A primary lesson learned from the site visits is that governance is important to the success of the broadband operations. Governance is the process of decision-making. Figure 2 describes the differences between broadband and a single-source utility, and why governance structure is different and important to the success of the broadband enterprise. Figure 2 Broadband/Best Practice Single-Source Utility/ Current Practice Objectives/ Environment Market-driven Competition - customer acquisition and retention focus; additional choice/options Social/Political - serving all within the community as a sole provider Timeliness of Cost and Service Changes Streamlined/Fast market- based decision making Slower due to public process (i.e., ordinances require two readings during Council regular sessions, plus a 10-day waiting period for public protests) Confidentiality of Decision-Making Factors Strategic - Not all information is public because of competitive practices Public/Open Records - Significant public discussion Staff Experience Business expertise in a competitive market Industry expertise as a sole provider The governance models have taken timeliness, staff and Council capacity, agility, and expertise into consideration, as well as best practices from other communities. The three-options address governance for start- up phase (first 3-4 years). Each option defines roles and responsibilities of the City Manager (or their delegate), City Council and/or Broadband Advisor(s), which is critical to be clear and without overlap. Option A - Similar to Longmont NextLight. 1 Packet Pg. 4 November 28, 2017 Page 4 Option B - rates/fees, strategic plan, financial planning, marketing & promotional plan are moved to an appointed board. Option C - City Council retains rate-/fee-setting, strategic plan, financial planning, marketing & promotional plan. (Current City Utility model.) 1 Packet Pg. 5 November 28, 2017 Page 5 Next Steps • Finalization of the governance model. • Appropriation of the $1.8M startup costs from the General Fund to support efforts prior to the bond closing. • Internal prioritization and resourcing for first four to five months while key staff are recruited and hired. • Issuance of RFPs, CAO code modifications and bond issuances • Develop detailed 2018 - 2020 Financial Plan ATTACHMENTS 1. Memo 10-12-2017 (PDF) 2. Powerpoint presentation (PDF) 1 Packet Pg. 6 ATTACHMENT 1 1.1 Packet Pg. 7 Attachment: Memo 10-12-2017 (6195 : Broadband Update) ATTACHMENT 1 1.1 Packet Pg. 8 Attachment: Memo 10-12-2017 (6195 : Broadband Update) BROADBAND November 28 2017 ATTACHMENT 2 1.2 Packet Pg. 9 Attachment: Powerpoint presentation (6195 : Broadband Update) Overview / Questions 2 • Feedback on Governance Proposal • Feedback on Broadband Next Steps ATTACHMENT 2 1.2 Packet Pg. 10 Attachment: Powerpoint presentation (6195 : Broadband Update) Broadband Update • 3rd Party Partnership Status • Implementation Readiness • Work completed to date • First year cash flow • Macro timeline • Debt Issue • Governance Structure • Alternatives • Resource Needs / Next Steps 3 ATTACHMENT 2 1.2 Packet Pg. 11 Attachment: Powerpoint presentation (6195 : Broadband Update) Overall Policy Objectives Strategic Objective 3.9 • Encourage the development of reliable, high-speed internet services throughout the community Secondary Factors • Network reaching all residents of Fort Collins GMA • Timely implementation requires base network build <5 years • Competitive market pricing • Outstanding customer service 4 ATTACHMENT 2 1.2 Packet Pg. 12 Attachment: Powerpoint presentation (6195 : Broadband Update) Decision Timeline 5 August September October November December January Aug 8 1st reading Aug 15 2nd reading Aug 29 Intergovernmental agreement with County calling for special election Sept 8 Last day for City Clerk certification Nov 7 Election Council Decision to Launch Broadband & Appropriate Funding ATTACHMENT 2 1.2 Packet Pg. 13 Attachment: Powerpoint presentation (6195 : Broadband Update) 6 3rd Party Status • 11 Respondents – 2 interviewed • 2 incumbents responded, nothing new proposed • Did not meet objectives – shared risk • 8 proposals – largely described as “Aggregators” or “Project Leaders” • Responded would act as lead project manager and bring in other companies for construction or network operations. • All had City bearing majority if not all financial risk • Efforts from RFI & RFP have not produced a viable P3 candidate with industry expertise & willingness to share financial risks Recommendation: The P3 Efforts Have Not Produced a Viable Alternative ATTACHMENT 2 1.2 Packet Pg. 14 Attachment: Powerpoint presentation (6195 : Broadband Update) 7 Implementation Readiness ATTACHMENT 2 1.2 Packet Pg. 15 Attachment: Powerpoint presentation (6195 : Broadband Update) 8 Internal Planning Status • Position Descriptions • 4 Key Positions Nov ‘17 • Ready start Recruitment on critical positions • RFP’s ready for issue: • Design Work Dec ‘17 • Construction Dec ‘17 • Billing system/GIS Jan ‘18 • Phone & Video Jan ‘18 • Construction QC TBD • Ready to issue RFPs early January • Start up Details •1st year cash flow summary Nov ‘17 • Facility location and requirements Nov ‘17 • Clarity on lead times various equip Nov ‘17 • Equipment details Dec ‘17 • Decision on Video & Phone Dec ‘17 • Marketing / Brand strategy TBD ATTACHMENT 2 1.2 Packet Pg. 16 Attachment: Powerpoint presentation (6195 : Broadband Update) 9 Macro Timeline From “Go” Objective: Align key hires, vendors and contracts while working on bond issuance to support aggressive timeline after bonds close Month from "Go" 123456789101112Q1 Q2 Q3 Q4 Go Decision & Appropriation Preparatory Work Issue RFPs & Negotiate Contracts Recruitment for Key Position CAO Code Updates Bond Issuance Close on Bonds & Sign Contracts Business Launch Begin Staffing, Office, Policies, Operations Begin Design work Begin Billing/CRM system implementation Begin mobilizing construction Marketing & Sales plan development First Customer Live Year 1Year 2 ATTACHMENT 2 1.2 Packet Pg. 17 Attachment: Powerpoint presentation (6195 : Broadband Update) 10 Year 1 Cashflow O&M Funded From Initial Funding Appropriation….. Capital Funded from Bond Issue ($ 000's) Q1 Q2 Q3 Q4 Full Time Equivalent 4 5 7 13 Quarter End Headcount 4 7 7 17 Personnel $ 128 $ 148 $ 187 $ 295 $ 758 Consulting 120 120 88 88 415 Branding/Web Site 63 63 30 30 185 Legal 60 20 - - 80 Office & Equipment 53 49 63 92 256 Contingency 25 25 25 25 100 Total O&M $ 449 $ 424 $ 392 $ 529 $ 1,794 Total Capital $ 40 $ 1,755 $ 1,550 $ 1,490 $ 4,835 Year 1 Full Year ATTACHMENT 2 1.2 Packet Pg. 18 Attachment: Powerpoint presentation (6195 : Broadband Update) 11 Debt Issuance • Revenue Bonds issued by L&P • Backed by revenue & rate making of L&P & current debt coverage capability • Anticipate single issue with two series • Series A – Tax Exempt – 3 year spend requirement • Series B – Taxable • Anticipate term of 15 years for risk mitigation • Will also evaluate a longer term option that could be paid back early • Anticipate reimbursement of GF $1.8M appropriate from bond proceeds ATTACHMENT 2 1.2 Packet Pg. 19 Attachment: Powerpoint presentation (6195 : Broadband Update) 12 Governance ATTACHMENT 2 1.2 Packet Pg. 20 Attachment: Powerpoint presentation (6195 : Broadband Update) 13 Why Governance is Important Commercial / Competitive Single Source Utility Commercial Objectives Social / Political Objectives Market-Based Decision Timeliness Slower Decision Timeliness Strategic Confidentiality Material Public Discussion all Material Business/Competitive Expertise Business Expertise ATTACHMENT 2 1.2 Packet Pg. 21 Attachment: Powerpoint presentation (6195 : Broadband Update) 14 Governance – First 3-4 Years Option A govern Broadband Director Utility ED City Manager City Council • Budget / Financial Approval • P&L / Balance Sheet budget • Debt authorization • Other authority per below Broadband Advisory • Advice and guidance to CM regarding Broadband operations City Manager • Setting rates, fees and charges • Promotions & Marketing • Planning • Strategic, Marketing, Financial, Capital, etc. • Operational & Administrative Customer Connection L&P Most Like Longmont – Successful in Multiple Municipalities ATTACHMENT 2 1.2 Packet Pg. 22 Attachment: Powerpoint presentation (6195 : Broadband Update) 15 Governance – Option A Authority govern Council City Manager Broadband Advisory 1. Budgets & Appropriation 2. Debt Authorization 3. Approval Procurement Contracts 4. IGA agreements 5. Authorization sale, lease or exchange of real property 6. Power of eminent domain 7. Rules & regulations that are enforceable as a Code violation 8. Semi-Annual BB Executive Session • Strategic Plan Review • Financial Plan Review 1. Establishing pricing & fees 2. Strategic plan review 3. Financial planning & reporting 4. Marketing & Promotional programs 5. CIP & Long Term Financial Plan 6. Operational decisions within Council Approved budget a) Staffing b) Equipment 1. Advisory role to CM on operating decisions 2. Advisory resources TBD Bold Text = Legal Requirements ATTACHMENT 2 1.2 Packet Pg. 23 Attachment: Powerpoint presentation (6195 : Broadband Update) 16 Governance – First 3-4 Years Option B govern Broadband Director Utility ED City Manager City Council • Budget / Financial Approval • P&L / Balance Sheet budget • Debt authorization • Other authority per below Broadband Board • Setting rates, fees and charges • Promotions & Marketing • Review of Plans • Strategic, Marketing, Financial, Capital, etc. Customer Connection L&P Critical That Authority and Responsibility Be Very Clear and Without Overlap ATTACHMENT 2 1.2 Packet Pg. 24 Attachment: Powerpoint presentation (6195 : Broadband Update) 17 Governance – Option B Authority govern Council City Manager Broadband Board 1. Budgets & Appropriation 2. Debt Authorization 3. Approval Procurement Contracts 4. IGA agreements 5. Authorization sale, lease or exchange of real property 6. Power of eminent domain 7. Rules & regulations that are enforceable as a Code violation 8. Semi-Annual BB Executive Session • Strategic Plan Review • Financial Plan Review 1. Establishing pricing & fees 2. Strategic plan review 3. Financial plan & reporting 4. CIP & Long Term Financial Plan 5. Marketing & Promotional programs 1. Operational decisions within Council Approved budget a) Staffing b) Equipment 2. Financial reporting • Council appointed Bold Text = Legal Requirements ATTACHMENT 2 1.2 Packet Pg. 25 Attachment: Powerpoint presentation (6195 : Broadband Update) 18 Governance – First 3-4 Years Option C govern Broadband Director Customer Connection Utility ED L&P City Manager City Council • Budget / Financial Approval • P&L / Balance Sheet budget • Debt authorization • Other authority per below • Establishing pricing & fees • Marketing & Promotional programs • Strategic plan review • Financial plan & reporting • CIP & Long Term Financial Plan Governance Same as Existing Utilities ATTACHMENT 2 1.2 Packet Pg. 26 Attachment: Powerpoint presentation (6195 : Broadband Update) 19 Governance – Option C Authority govern Council City Manager 1. Budgets & Appropriation 2. Debt Authorization 3. Approval Procurement Contracts 4. IGA agreements 5. Authorization sale, lease or exchange 6. Power of eminent domain 7. Rules & regulations that are enforceable as a Code violation 8. Establishing pricing & fees 9. Strategic plan review 10.Financial plan & reporting 11.CIP & Long Term Financial Plan 12.Marketing & Promotional programs 13.Semi-Annual BB Executive Session • Strategic Plan Review • Financial Plan Review 1. Operational decisions within Council Approved budget a) Staffing b) Equipment 2. Financial reporting Bold Text = Legal Requirements ATTACHMENT 2 1.2 Packet Pg. 27 Attachment: Powerpoint presentation (6195 : Broadband Update) 20 Resource & Position Needs / Next Steps • Finalize Governance Model • Initial appropriation of $1.8M from GF to support efforts prior to Bonds closing • Internal resources first 4-5 months while key hires & staff are recruited (30%-40% time) • Critical position recruiting, Issue RFPs, CAO code modifications, Bond issuance • Develop detailed 2018-2020 Financial Plan ATTACHMENT 2 1.2 Packet Pg. 28 Attachment: Powerpoint presentation (6195 : Broadband Update) Overview / Questions 21 • Feedback on Governance Proposal • Feedback on Broadband Next Steps ATTACHMENT 2 1.2 Packet Pg. 29 Attachment: Powerpoint presentation (6195 : Broadband Update) DATE: STAFF: November 28, 2017 Patrick Rowe, Redevelopment Program Coordinator Tom Leeson, Director, Comm Dev & Neighborhood Svrs Josh Birks, Economic Health Director WORK SESSION ITEM City Council SUBJECT FOR DISCUSSION Metropolitan District Policy Changes. (Part two). EXECUTIVE SUMMARY The purpose of this item is to review and consider changes to the City policy concerning Title 32 Metropolitan (Metro) Districts to better align the policy with desired outcomes and introduce other process improvements. GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED Staff is seeking input and direction from Council on potential revisions to the City’s current policy concerning metro districts. More particularly, staff seeks Council’s input on revising the policy to make a number of process improvements, including changes to make the policy more outcomes focused. Improving the policy in this way will: 1. provide greater clarity to the development community on what Fort Collins is looking for 2. inform staff’s evaluation process 3. provide an improved framework for Council’s review and evaluation of a proposed district. 4. Improve alignment with City goals and objectives Specific questions for Council: 1. What does City Council want to achieve with the City’s Metropolitan District Policy? 2. Does Council support amending the Metropolitan District Policy in the following ways? a. Outcomes-focused (non-prescriptive) b. Highly selective review process c. Other process improvements (e.g., model service plan) BACKGROUND / DISCUSSION In response to increased interest in utilizing metro districts to address infrastructure and development challenges and the opportunity to introduce a number of process improvements to the existing policy adopted in 2008 (Attachment 1), staff proposes that Council consider potential revisions to its existing policy. Generally, staff proposes revising the policy to: 1. Re-orient the policy towards outcomes (pairing back some prescriptive elements of the existing policy). 2. Incorporate a robust and highly selective review process to better screen and evaluate proposals. 3. Introduce additional process improvements and best practices gleaned from peer research (e.g., model service plan, application process, etc.) Proposed Policy Purpose Statement and Key Principles The work session and materials focus on a proposed new/updated policy at a principled level. With Council’s input, and if directed, out of this discussion staff will expand upon and develop a draft policy for Council’s review. 2 Packet Pg. 30 November 28, 2017 Page 2 This may be presented to Council for consideration as part of the adoption process by Ordinance, or may be presented at a future Council Finance or Work Session meeting. Proposed metro district policy purpose statement: The City of Fort Collins may consider the use of a metropolitan district where a district will deliver significant public benefit that aligns with the goals and objectives of the City. The City will evaluate a district proposal based on its ability to affect enhanced development outcomes in the following areas: 1. Deliver on Strategic Planning Priorities: Deliver on priorities specified by long term strategic planning documents (City Plan, Strategic Plan, Climate Action Plan, Affordable Housing Plan, Economic Health Office Plan, Sub-Area Plans, etc., as amended and updated); 2. Advance Sustainability Outcomes: Sustainable design, multimodal transportation, water conservation, infill and redevelopment, community resiliency, energy efficiency, renewable energy, housing affordability, enhanced employment opportunities, economic vitality, etc. 3. Produce High Quality and Unique Development: High quality design, walkable and pedestrian friendly, transit and multimodal oriented, use of quality construction materials, compelling public spaces, mixed-use (live, work, play integration), etc. 4. Provide Lacking and/or Enhanced Public Infrastructure. Address key and significant infrastructure challenges, provide enhancements such as urban design elements, beautification, etc. Enhanced development outcomes must be specific and sufficiently detailed for Staff review and Council consideration. Commitments will be assured through the entitlement process and/or in the district service plan that must be approved by Council. The City will only consider metropolitan districts that provide unique or enhanced public benefit which could not be practically provided by the City or an existing public entity, within a reasonable time and on a comparable basis. It is not the intent of the City to create multiple entities which would be construed as competing or duplicative. District approval will be at Council’s sole discretion and nothing in this document is intended, nor shall it be construed, to limit the discretion of City Council. Proposed Key Policy Principles • Selective Use. The City wishes to set a high standard for use of metropolitan districts, thereby limiting use. • Evaluation – process, not prescription. To preserve creativity and flexibility, and in acknowledgement of the wide-ranging potential uses of metropolitan districts, the City will rely on a robust evaluation process that will assess proposals in the following ways: o Outcomes and public benefit evaluation via interdisciplinary staff team (Planning, Finance, Sustainability Services, and others as needed). o Necessity of a district, and potential alternatives. o Conformance with model service plan and standards. Note: This is the evaluation process only, approval authority belongs to City Council, at its discretion. • Outcomes Focused. The policy will be written with a focus towards outcomes and will pair back some of the prescriptive elements of the existing policy. • Process Improvements. o Multi-step application process to provide early vetting and feedback on potential proposals. o Model service plan for streamlined legal review and greater transparency of City requirements. 2 Packet Pg. 31 November 28, 2017 Page 3 o Revised fee structure to accommodate multi-step application process and add fees for non- standard review, service plan amendments, etc. o Inclusion of other miscellaneous best practices (e.g., resident transition plan, improved disclosures, etc.). • Other Notable Policy Provisions. o Aggregate Max Mill Levy: 50 mills, of which no more than 10 mills may be used for operations and maintenance; additional mills within total limit may be considered when district is used in lieu of a homeowners association. A 50 mill max is consistent with other communities around the state. (This represents a 10 mill increase from the 2008 policy). o Governance: It is the intent of the City that owner/resident control of districts occur as early as feasible. The City may consider authority structures to accommodate this. When feasible, the City will discourage the use of control districts (aka managing districts). o Debt Mill Levy Term: Debt must be discharged no more than 40 years after approval of the service plan, with some provision for refundings when that is in the best interest of the district and future owners and residents. (Generally consistent with the existing policy). [Denver – 40 years, except for refundings w/ End User controlled district] o Financial Plan must be certified and reviewed by an independent municipal finance advisor as to whether debt issuances are in the best interest of the district at the time of issuance. Many concepts of the existing policy will remain either in the policy, or as part of the model service plan. The areas where the proposed policy differs, as currently conceived, results from a shift away from the prescriptive approach of the current policy to an outcome based approach that relies on process. Two key changes are: 1. Elimination of the provision limiting district use to projects that are no less than 90% commercial by assessed value. Rationale: There are a number of instances where Council may wish to authorize a district for a mixed- use or residential project. Staff suggests the alternative approach of having high standards and a rigorous review process versus restriction with consideration for exceptions. 2. Elimination of the provision that states the City will have a bias against using metro districts to fund “basic infrastructure improvements required from new development”. Rationale: Limiting district use to extraordinary infrastructure improvements would significantly limit the applications for districts and likely preclude projects which might otherwise be highly desirable. Both existing fully functional metro districts in Fort Collins (Harmony Tech Park and Foothills Mall) were used to fund basic infrastructure. Peer research did not find any other communities that restrict district use in this. Community Research and Takeaways Regional and State Wide Use o Metro districts are the most common special district utilized in Colorado. Currently there are approximately 1,576 metro districts state wide. o Metro district use varies widely by community (Attachment 2), but generally the landscape can be divided into those that are using it as part of the routine development process, or those that are using it in a more focused and selective manner. o The following table highlights community usage according to total number of districts (as per State Department of Local Affairs mapping) and on a land area basis (metro district land area as a percentage of total municipal land area): 2 Packet Pg. 32 November 28, 2017 Page 4 % of municipal land area # of metro districts Regional Fort Collins 0.5% 3 Loveland 13% 26 Greeley 2% 3 Johnstown 22% 18 Timnath 50% 18 Windsor 42% 52 State Aurora 27% 205 Denver 10% 45 Littleton 8% 6 Longmont 1% 3 To better understand community use and outcomes, staff interviewed 9 different communities along the front range. Some of the key takeaways are as follows: • Most communities reported positive experiences and outcomes with metro districts, though some challenges were noted as well. Specifically, several reported issues with residents/owners not being aware that their property was within a district until after purchasing (note: there are state disclosure requirements that are part of a property transaction, but they can be lost in the complexity and volume of materials that are part of a real estate transaction). Additionally, there was a community example where a high mill levy charge and slow delivery of a community amenity caused issue with a number of residents. • Mill Levy Limits – Combined mill levies ranged from 39 to 65 mills, with most communities restricting to a combined 50 mills. Many communities did not specify a separate operations and maintenance mill levy cap; several communities specify a 10 mill cap. • Model Service Plan – Most communities are using a model service plan. • Several communities reported at least some challenges with residents/owners having awareness that their property was within a district. There are state disclosure requirements that are part of a property transaction, but they can be lost in the complexity and volume of materials that are part of a real estate transaction. • Owner/Tenant/Resident Transition Plan – Improve board transition through the use of a transition plan that is required by the service plan. • Fees – City charges for service plan review varied, with most communities charging between $2,500 and $5,000. The City’s fee is currently $12,000 ($2,000 fee and $10,000 deposit). • Best practices in the area of transparency and accountability. • Impact on new tax appetite – None of the 9 communities reported seeing any indication that the existence of a metro district had an impact on a resident’s willingness to support additional tax/bond initiatives. Staff anecdotally evaluated electoral results from Larimer, Adams, and Arapahoe County (all counties with high usage of Metro Districts) and found little to no correlation between the presence of Metro Districts and the passage/rejection of tax and bond measures in communities with high rates of Metro District use. Note: Summary table of community information and notes is enclosed (Attachment 3). Existing City Policy Summary In July 2008, the City Council adopted Resolution 2008-069 establishing the guidelines and parameters under which City staff is to review and evaluate metro district service plans filed with the City (the Policy). While the Policy provides guidance to the Council in making its decision of whether or not to approve a service plan, the Policy makes it clear that it is intended to only be a guide for Council and that nothing in the Policy “is intended, 2 Packet Pg. 33 November 28, 2017 Page 5 nor shall it be construed, to limit the discretion of City Council, which retains full discretion and authority regarding the terms and limitations of all District Service Plans.” The guidelines and parameters set in the Policy for evaluating metro district service plans include: • Total assessed value of the taxable improvements within the metro district at full build-out should be at least $10 million plus CPI increases since 2008 • Development should be “predominantly commercial,” meaning no less than 90% non-residential and no more than 10% residential • Bias against using metro district to fund “basic infrastructure improvements normally required from new development” • Service plan should “enumerate and describe all powers” of the district for which there is a demonstrated need and those powers not needed should not be approved in the plan • The district should not have the power of eminent domain • 40 mills should be the “Maximum Mill Levy” for both debt service and district operations and maintenance • District’s “Financial Plan” should be prepared by an investment bank or financial advisor listed in “Bond Buyer’s Market Place.” • Financial plan should include a “Total Debt Limitation” for the district that should not exceed “100% at projected maximum debt capacity as shown in the Financial Plan” • Service plan should include an “Infrastructure Preliminary Development Plan” • No development fees may be charged by the district unless identified with particularity in service and financial plan. • Bonded indebtedness should be limited to what can be serviced by the Maximum Mill Levy • All debt under financial plan should be issued within 15 years of the district’s formation • Debt issued should have a 30-year maximum maturity date, except for a refunding that results in net present value savings • All debt should be paid and district dissolved no more than 40 years after service plan approved • Service plans should require additional Council approval 20 years after district formation and every 10 years thereafter if the district is to continue to provide operation and maintenance services • No issuance of additional debt if district is in default in payment of existing debt, except to refund debt • If multiple districts are to be used, the proposed absorption of the project and the improvements to be financed should be reasonably projected to occur over an extended period of time or it should be a mixed- use project with a minimum of its assessed value derived from non-residential uses • Certain “Material Modifications” of the service plan should be defined in the plan, as well as what are not considered “Material Modifications” (“Material Modification” to a service plan require prior Council approval under the Special District Act) 2 Packet Pg. 34 November 28, 2017 Page 6 • Service plan should require the district to provide the City with an annual report • Service plan should expressly allow City to impose certain sanctions if district is in material default of the service plan • Again, the Policy provides that it “is intended as a guide only” and not intended “to limit the discretion of the City Council.” Consequently, the Council is free to waive any of the requirements and limitations listed above, as well as impose any other reasonable requirements or limitations in the service plan as a condition of its approval Metro District General Information Overview A metro district is a type of special district derived from Colorado’s Special District Act (Title 32, Article 1, Colorado Revised Statutes). In practice, metro districts are a preferred public financing tool used to pay for public infrastructure and/or services which the municipality is not able or unwilling to provide, or provide in a reasonable time frame, address challenging site conditions, and/or allow for unique and amenitized development. More broadly, the tool may be used to further community specific objectives through private development, such as a specific form of land use pattern, sustainability goals, and other community goals. Formation A metro district is a quasi-governmental entity formed by a district court process following the approval of the district(s) service plan by the governing body (municipal or county). The process is outlined below: Step 1: Application of Service Plan Consideration to City Step 2: City Review/Consideration/Approval Step 3: Petition by District Electors Filed with Court Step 4: District Court Hearing - court orders election on organization (board election and financial matters) Step 5: Election - authorizes the creation and elects the district’s first board of directors *TABOR election and process is also required before a district may take on multiple-fiscal year debt and levy property taxes. City Role When a district is proposed to be organized within the City, the City Council has the authority to approve, approve with conditions or disapprove the service plan. In exercising this authority, the Council has considerable discretion and the Council’s decision is subject to judicial review only on the basis that its decision was “arbitrary, capricious or unreasonable result.” Through this approval process, the City also has the authority to limit the metro district’s powers and operations under its service plan, such as by limiting the public infrastructure and services that the district can finance and provide under the service plan. The City can also require in the service plan that some or all of the public infrastructure to be constructed be dedicated to the City. For example, utility improvements and streets are typically dedicated to the municipality, but park and recreation improvements are often not. The City can also impose in the service plan a maximum cap on the metro district’s mill levy and on the amount of bonds and other debt the district can issue. If a metro district takes an action that is a material departure from the requirements or limitations of the approved service plan, the municipality approving the plan may file an action in court to enjoin that action. Also, the approved service plan can grant additional enforcement remedies to the municipality. District Powers/Authorized Uses State law permits metro districts to be utilized for a broad range of purposes including the construction and financing of public improvements -transportation, water, sanitary systems, parks and recreation improvements, and others - and/or the operation and maintenance of these public improvements. They may also perform some 2 Packet Pg. 35 November 28, 2017 Page 7 of the functions that property-owner and homeowner associations typically perform, such as covenant enforcement. And, unless limited in the service plan, a metro district has these powers: (a) to levy property taxes; (b) impose fees and other charges for the facilities and services it provides; (c) issue debt, like bonds; (d) exercise the power of eminent domain; (e) construct authorized public improvements both within and outside its boundaries; and (f) to provide its services directly or through intergovernmental agreements with other governmental entities, such as a municipality, county or other metro district. While metro districts are often used to provide ongoing services, they are more often used to finance public improvements for the use and benefit of the district’s property owners and residents. Eligible capital costs are usually financed through the district’s issuance of general obligation bonds paid from the property taxes levied by the district. When its bonds are properly issued and used for eligible public purposes, the income earned from them by a bond purchaser can be exempt from the purchaser’s federal and state income taxes. It should be noted that the municipality is not financially liable for any financial obligations made by a metro district. The tax-exempt nature of metro district bonds usually results in lower infrastructure financing costs than would be the case with private financing alternatives. Once the initial infrastructure has been completed, a metro district will continue to exist while the infrastructure bonds are being paid, but are often dissolved once the bonds are retired. However, a metro district is permitted, again unless limited by its service plan, to exist in perpetuity in order to provide certain ongoing services to the district’s inhabitants, such as: trash removal and recycling; security services; architectural design review and covenant enforcement; maintenance and administration of the common areas; and the operation and maintenance of the district’s facilities. Governance, Election Process, and Public Participation A metro district is a separate governmental entity governed by its elected board of directors (5 or 7 individuals), subject to the requirements and limitations of its approved service plans, the Special District Act, and other applicable law. The electors of a district are those individuals who are registered to vote in Colorado who either: (1) reside in the district, or (2) own taxable real or personal property within the district (i.e., those that will be paying the tax within the district). As a quasi-municipal entity, a Metro district is subject to many of the same transparency and accountability laws required of a municipality and other Colorado governmental entities, including: Colorado Open Records Act, Taxpayer Bill of Rights (TABOR), and Title 1, C.R.S. pertaining to elections. Elections are held each November or in May of even-numbered years. A notice of election must be provided to eligible electors, designate the location for regular meetings, current financial information, and the date of election. In practice, a developer will typically have control of the district(s) through the buildout phase of a project, after which point it's common for residents and/or business owners to assume control. The public has various opportunities to interface with the board. Metro District boards have regular open meetings and publish regular annual and financial reports that are available to the public. These reports are submitted to the Colorado Department of Local Affairs (DOLA) for review. Additionally, if a property is purchased by a new resident, disclosure of special taxes, debt obligation, and location in a Metro District must be provided to the buyer upon time of sale (38-36.7-101, C.R.S; 10-11-122 C.R.S). Miscellaneous • Metro Districts vs. Homeowner’s Associations (HOAs) o Metro districts and HOA’s are similar, but ultimately differ in their legal structure and outcomes that can be achieved. A key difference between the two organizations is that a metro district is a public entity, subject to public accountability requirements of the state. This includes Colorado Open Meeting Laws (§24-6-402, C.R.S.), Colorado Open Records Act (CORA), requirements for the adoption and publishing of annual budgets (§29-1-106, C.R.S.), the provision of public information regarding the district (§32-1-809, C.R.S.), and the district is subject to Colorado’s Taxpayer Bill of Rights (TABOR). As a private, non-profit corporation, a HOA is only accountable 2 Packet Pg. 36 November 28, 2017 Page 8 to its membership and is not subjected to the public accountability laws listed above. The adoption of an annual budget is required, but audits are only required after reaching certain financial thresholds. o Metro districts have a broader focus on the public benefit of financed amenities. Under a metro district, all district facilities must generally remain open to the public. With this stipulation in mind, metro districts are authorized to construct, maintain, and operate public improvements such as streets, water, sewer, infrastructure, park and recreational improvements, which a HOA is not generally tasked with. HOA improvements are primarily focused on covenant enforcement, design review, trash removal, and general upkeep services. o Revenue generation is also a key difference between the two entity types. In a metro district, revenue can be generated through ad valorem property taxes, which are tax deductible by residents. These districts also have the ability to issue tax exempt bonds and are eligible for a variety of government grants that can potentially lower the costs of funding. In an HOA, revenue is generated primarily through fees and assessments on residents within the community. Whereas property tax is much easier to collect, there is a greater chance that HOA fees will go unpaid. o These differences between metro districts and HOAs allow them to be used for different desired outcomes. A metro district, with its taxing authority, public accountability standards, public benefit requirements, and legal protections, make it a preferable mechanism to fund public infrastructure projects such as streets, water, sanitation, and other public goods in a district. An HOA, conversely, is better suited to provide beatification and improvements to private property within a residential community. • Risk Considerations o Municipal Risk: The City has no legal or obligation for any financial obligations of a metro district. Legal and industry financial professionals are not aware of any instances where metro district default/failure/distress has indirectly impacted a municipality’s credit rating. o Risk of Failure: Due in part to changes in state law pertaining to special districts, the risk of failure is very low. As per Colorado Department of Local Affairs records, there has been only one recorded bankruptcy filing for a metropolitan district since 2000 (and this petition was later rejected by the court). o Financial Distress: Financial distress can occur, however, the effect of financial distress is most often a non-event. As per state law, with few exceptions metro districts can only commit a limited tax revenue stream (i.e., a limited mill levy) to service debt. If a payment is unable to be made, the unpaid principal and interest is added to the principal balance of the debt. This means that as long as a district is levying at the maximum authorized rate and complying with other loan covenants, the bonds are generally not in default. This contrasts with what occurred in the late 1980’s and early 1990’s following an economic down turn when approximately one dozen districts filed for bankruptcy. At that time, metro district debt was a general obligation and not limited by a specific mill levy. This resulted in districts being forced to dramatically raise mill levies in an attempt to meet required debt service and forestall default, which in the midst of a market down turn, very likely exacerbated the situation. o Political Risk: As stated above, the risk of failure is very low and the impact of a financially distressed district may largely be limited to the extension of the payment term. That said, should a metro district fail to deliver on its commitments, residents/property owners may have an expectation that the municipality will step in to assume the district’s responsibilities and the residents could bring political pressure on the City’s leaders to do so. Further, with the higher property taxes from metro districts it has been hypothesized that citizens may be less willing to pass additional local tax initiatives. There are a number of communities that utilize metro districts to a significant degree (see Regional and State Wide Use, below) and yet evidence of this relationship has not been produced. With limited and focused use this hypothetical risk would seem even more remote for Fort Collins. o Other Risk Considerations. 2 Packet Pg. 37 November 28, 2017 Page 9 ▪ Underwriting / Market Requirements: There are considerable underwriting and market requirements for district debt issuance. The earlier in the development process the greater the risk and associated market/underwriting requirements - greater debt coverage and reserves, higher interest rates, etc. ▪ Basic Infrastructure Assurances: The city requires development to construct essential infrastructure according to the obligations of the Development Agreement and the Development Construction Permit and approved construction plans. This is assured with a bond, letter of credit, or cash, according to City requirements. A district service plan also requires that the infrastructure be constructed to the City’s standards. ▪ Financial Phasing: For financial and other reasons it’s very common for metro districts to phase both the financing and construction of improvements. This phasing can mitigate risk through the incremental financing and construction of improvements. ▪ Development Plan Changes: The nature of a majority of the proposed improvements is such that they may be scaled down to account for buildout / product absorption issues (e.g., a community center may be delayed, downsized, or eliminated in response to market conditions). ATTACHMENTS 1. Existing Policy (PDF) 2. Case Studies (PDF) 3. Metro Districts Research Table (PDF) 4. Presentation (PDF) 2 Packet Pg. 38 ATTACHMENT 1 2.1 Packet Pg. 39 Attachment: Existing Policy (6178 : Metro District Policy Discussion Pt. 2) ATTACHMENT 1 2.1 Packet Pg. 40 Attachment: Existing Policy (6178 : Metro District Policy Discussion Pt. 2) ATTACHMENT 1 2.1 Packet Pg. 41 Attachment: Existing Policy (6178 : Metro District Policy Discussion Pt. 2) ATTACHMENT 1 2.1 Packet Pg. 42 Attachment: Existing Policy (6178 : Metro District Policy Discussion Pt. 2) ATTACHMENT 1 2.1 Packet Pg. 43 Attachment: Existing Policy (6178 : Metro District Policy Discussion Pt. 2) ATTACHMENT 1 2.1 Packet Pg. 44 Attachment: Existing Policy (6178 : Metro District Policy Discussion Pt. 2) ATTACHMENT 1 2.1 Packet Pg. 45 Attachment: Existing Policy (6178 : Metro District Policy Discussion Pt. 2) ATTACHMENT 1 2.1 Packet Pg. 46 Attachment: Existing Policy (6178 : Metro District Policy Discussion Pt. 2) Case Studies To better understand how districts can be used to help finance projects that are highly amenitized and aligned with the community objectives of the City of Fort Collins, several case studies were compiled by staff. Examples were gathered primarily from the Denver Metropolitan area, as Metro District use in Northern Colorado is primarily used to support the normal course of development activity. Case Study One: Bel Mar Location: Lakewood, CO This project was facilitated partly through the creation of three metro districts to aide phased development starting in 2000. This development currently offers a variety of amenities and uses for its residents and the community at large. These include: • 1.1 Million square feet of retail space • 900,000 square feet of office space • 1300 residential units • 250-room hotel • 9 acres of parks, plazas, and other public spaces Previously, this property was the site of the Villa Italia Mall that had fallen into significant decline since the 1960’s and classified as a brownfield by 2000. This project created Metro Districts to finance public improvements and enable the construction of a new mixed-use project that serves as a centerpiece for community events, gatherings, and serves as a catalyst for the City of Lakewood to reimagine their community sense of place and redevelop a underperforming commercial area within the city. In this project, Metro Districts aided with the provision of: • Streets infrastructure • Environmental Remediation • Public plaza, sidewalk, and other right of way improvements While most of the case studies staff examined have been new projects, the Bel Mar project has been a long-standing district, with its first phase completed in 2004. Since the creation of phase one, the City of Lakewood has been able to gain a more productive use of the former Villa Italia Mall space, increasing the assessed valuation of the surrounding area by 500% from 2000. ATTACHMENT 2 2.2 Packet Pg. 47 Attachment: Case Studies (6178 : Metro District Policy Discussion Pt. 2) Additionally, vacancy rates for the residential apartments and townhomes in the project were reported at 13% for 2016. Case Study Two: Geos Neighborhood Location: Arvada, CO The GEOS project is a unique net-zero energy mixed-use community. This project is currently under construction and when finished, will include: • Various net-zero housing types including houses, townhomes, and apartments • Public squares/gathering places • Dedicated commercial space for small businesses • Preserved open space • Community solar infrastructure • Electric vehicle charging stations • Water-efficient landscaping This is a smaller-scale project than Bel-Mar, at only 25 acres, but demonstrates the broad range of amenities that can be provided by a metro district, including some that may align with the land use and sustainability goals of the City of Fort Collins. Improvements include: • A ground-source heating system • Photovoltaic cells and associated electric lines • 5 acre open space park • Pocket parks • Integrated detention system Note on above image: The Geos Neighborhood is a development that is currently in progress. Therefore, there are no pictures to be shared of the development at this time. The above image is an example of a Net Zero housing development, showcasing the possible design/end state of the Geos project. ATTACHMENT 2 2.2 Packet Pg. 48 Attachment: Case Studies (6178 : Metro District Policy Discussion Pt. 2) Case Study Three: Midtown Industrial Center Location: Denver, CO This project, located in the North Central “River North Art District” of Denver is an example of how a district can be focused on basic infrastructure to allow for advanced development outcomes overall. This project presents an opportunity for urban revitalization in the previously depressed and blighted areas within this district, especially along the Brighton Avenue corridor north of Broadway Boulevard and downtown Denver. This area has received a great amount of attention from residents, the art community, and developers alike who see the opportunities present in a new urbanist development located near the urban core of Denver. This project is on the smaller side of districts as well, incorporating 17 acres of property around Brighton Boulevard near the 38 th and Blake light rail station. This project is also a mixed-use development with a variety of elements including: • 600 residential housing units. 80-100 of these units are set aside as affordable artist lofts; • A 150 room hotel • 500,000 square feet of office space • A 60,000 square foot entertainment venue • 63,000 square feet of greenhouse space • A parking structure with 1200 parking spaces (20-40% private) • Other public space amenities such as pocket parks and open seating areas The Metro District itself is focused on providing basic infrastructure to help achieve developmental efficiencies and allow the other aspects of this project to be financed. This includes: • Public roads • Public plaza • Parking Structure • Landscaping • Lighting • Signage • Benches ATTACHMENT 2 2.2 Packet Pg. 49 Attachment: Case Studies (6178 : Metro District Policy Discussion Pt. 2) Case Study Four: Stapleton Location: Denver, CO This project originated from the closure of the Stapleton airport in Denver following the opening of Denver International Airport. With this dramatic shift, the property of the former Stapleton airport became a significant development challenge. Large portions of runway would need to be cleared, environmental remediation conducted, and significant development costs would be incurred by any developer looking to redevelop the area without additional financing mechanisms. With this development challenge and the significant interest of the City and County of Denver to redevelop this area to create a desirable and sustainability-minded, mixed-use community, the Westerly Creek Metropolitan District was created. At project buildout, this project includes 4,700 acres of redevelopment, with: • 12,000 planned housing units, many designed at a variety of LEED standards. The development is also the largest Energy Star project in Colorado. Additionally, some units are marked for affordable housing • 1,074 acres of parks and open space • 3.3 Million square feet of flex/industrial space • 10 million square feet of office space • 2.5 million square feet of retail space To help meet some of the significant development challenges present with this project, the Westerly Creek Metro District provided/provides the following public improvements: • Runway material removal • Runway site recovery • Environmental remediation • Public streets and utilities • Public parks and pools ATTACHMENT 2 2.2 Packet Pg. 50 Attachment: Case Studies (6178 : Metro District Policy Discussion Pt. 2) As another long-standing-district (formed in 2000), staff has been able to see the long-standing impact of the district and its public improvements. As of 2017, the neighborhood has won a variety of awards connected to environmental stewardship including: • LEED Homes Multi-family Development of the Year • Best Sustainable Developer from Pacific Coast Builders • 2006 Awards for Excellence from the Urban Land Institute Case Study Five: Parker-Jordan Metro District Location: Centennial, CO This district highlights the expansiveness of the Metro District tool to finance public improvements pertaining to open space preservation and other public amenties unique to outdoor recreation and the creation of neighborhoods that integrate a variety of land use types. The Parker- Jordan Metropolitan district is a project that is coordinated between the district and the City of Centennial and primarily supports open space preservation and parks maintenance. The district and its various projects are spread out over a 1,047 acre space that integrates: • Traditional residential neighborhoods • Commercial property • Open space and parks • Public access trails. The district itself is focused primarily on a 107-acre open space development in Centennial. Created in 2009, the district is focused primarily on the following public improvements: • Open space development, preservation, and construction • Trail improvements and maintenance • Parks and other outdoor amenities ATTACHMENT 2 2.2 Packet Pg. 51 Attachment: Case Studies (6178 : Metro District Policy Discussion Pt. 2) Case Study Six: Transit-Oriented Development Projects Location: Denver, CO Given the large infrastructure requirements and regional public benefits that can be seen from transit-oriented development (TOD) projects, Metro Districts are commonly used for TOD projects. These several large projects within the City and County of Denver: • Pena Station • Broadway Station • Denver Union Station The majority of these projects are focused on funding the key infrastructure necessary for the construction of the stations/stops for light rail access, pedestrian bridges over highways and arterial roads, and often help the public streets and utility infrastructure for accompanying mixed use development nearby these stops. ATTACHMENT 2 2.2 Packet Pg. 52 Attachment: Case Studies (6178 : Metro District Policy Discussion Pt. 2) Community # of Districts Portion of the City within a Metro District Total Mill Levy Cap Debt Mill Levy Cap O & M Mill Levy Cap Debt Retirement Fees Notes Arvada 27 26% 40 mills Not Specified Not Specified 40 years $2,500 Used for both residential and commercial Aurora 205 27% 50 mills Not Specified 10 mills 40 years $4,273 Core component of the existing development process. Districts are approved at the same time each year. City and County of Denver 45 10% 50 mills Not Specified 10 mills 40 years $15,000 Highly selective process. Approved districts must conform to Denver comprehensive plan, provide sustainable design including multimodal transportation, water conserving landscape, green building design, and formation of, and, participation in transportation management programs. Recently revised their Metro District policy Fort Collins 2 0.47% 40 mills Not Specified Not Specified 40 years $12,500 Greeley 3 1.63% Not Specified Not Specified Not Specified Longmont 2 0.83% 50 mills Not Specified Not Specified 40 years $5000+ $1,000 document review fee Highly selective process, projects must be mixed-use. Loveland 26 13% 65 mills Not Specified Not Specified 40 years 5000 with a $10,000 deposit for future fees Districts are used to address major infrastructure gaps, development challenges, and achieve urban redevelopment objectives. New districts have been created in 2017, but have yet to see development activity. Timnath 18 50% 50 mills 35 mills Not Specified Not specified Development fee negotiated after the creation of the district for residential developers. Districts are used to aid the normal course of development. Timnath has had some challenges with insuring the level of service from developers as well as ensuring codes are compliant with Town standards. Windsor 52 42% 39 mills 35 mills 4 mills 30 years $1,000 up front fee with an additional $5,000 deposit for additional staff, legal, and consultant time Districts are used to aid the normal course of development. Windsor has experienced concern from residents regarding transparency of district mill levies as well as accountability laws that have since been addressed by state statute. Windsor has just recently wrapped up a year long process to develop a new Metro District policy. 1 Metro District Policy Discussion Josh Birks and Tom Leeson 11-28-17 2.4 Packet Pg. 55 Attachment: Presentation (6178 : Metro District Policy Discussion Pt. 2) Questions for City Council • What does City Council want to achieve with the City's Metropolitan District Policy? • Does Council support amending the Metropolitan District policy in the following ways: • Outcomes-focused (non-prescriptive) • Highly selective review process • Other process improvements (e.g. model service plan) 2 2.4 Packet Pg. 56 Attachment: Presentation (6178 : Metro District Policy Discussion Pt. 2) Introduction 3 5/15 and 8/29 Council Finance Committee Meetings • Preview options; solicit input from the Committee 10/24 Work Session • Overview of Metro Districts 11/28 Work Session • TODAY: Discussion of policy changes Next Steps • Provide revised policy for approval 2.4 Packet Pg. 57 Attachment: Presentation (6178 : Metro District Policy Discussion Pt. 2) Case Studies: Bel Mar (Lakewood) • Brownfield redevelopment • Reimagine a new community center/public gathering place • Incentivize “New Suburban” design Photo Credit: Congress for New Urbanism 4 2.4 Packet Pg. 58 Attachment: Presentation (6178 : Metro District Policy Discussion Pt. 2) Case Studies: GEOS (Arvada) • Aid in the creation of a net zero residential community • Pay for “enhanced” infrastructure such as: • Ground source heating system • Photovoltaic Cells • 5 acre open space park and pocket parks 5 2.4 Packet Pg. 59 Attachment: Presentation (6178 : Metro District Policy Discussion Pt. 2) Regional Community Findings • Highly used, mostly positive performance • Zero defaults in the area • Impact on resident tax appetite – none observed 6 2.4 Packet Pg. 60 Attachment: Presentation (6178 : Metro District Policy Discussion Pt. 2) Metro District Policy Context • City Council is approving authority • Policy informs market, staff review and process, and can be instructive to Council Current policy: • Not outcome-focused/strategic • Opportunities for process improvements 7 2.4 Packet Pg. 61 Attachment: Presentation (6178 : Metro District Policy Discussion Pt. 2) Opportunities 8 Alignment with Community Objectives Creative, unique, enhanced development outcomes More useful policy – fewer exemptions Instructive / Outcome Driven Policy Selective Review Process, Not Prescription Best Practices / Process Improvements 2.4 Packet Pg. 62 Attachment: Presentation (6178 : Metro District Policy Discussion Pt. 2) Metro District Policy Objectives Outcomes based: Long term strategic priorities Sustainability goals High- quality/unique development Key and lacking infrastructure 9 Selective/Robust review process: Ensure high standards Limited use for exceptional projects Cross- functional staff reviews Ultimate decision made by City Council Process Improvements: Model service plan modifications Application Process Fee Structure Best Practices 2.4 Packet Pg. 63 Attachment: Presentation (6178 : Metro District Policy Discussion Pt. 2) Principles of Proposed Policy • Selective Use • Inter-disciplinary review process • Multi-step application process • Model service plan for streamlined review • Revised fee structure • Other process improvements 10 2.4 Packet Pg. 64 Attachment: Presentation (6178 : Metro District Policy Discussion Pt. 2) Next Steps • Confirm policy direction with Council • Develop policy and model service plan • Deeper dive with involved departments • Expand on review/evaluation process • Legal review • Development community input • Present policy for review/adoption – Future Work Session or Council Meeting 11 2.4 Packet Pg. 65 Attachment: Presentation (6178 : Metro District Policy Discussion Pt. 2) Questions for City Council • What does City Council want to achieve with the City's Metropolitan District Policy? • Does Council support amending the Metropolitan District policy in the following ways: • Outcomes-focused (non-prescriptive) • Highly selective review processes • Other process improvements (e.g. model service plan) 12 2.4 Packet Pg. 66 Attachment: Presentation (6178 : Metro District Policy Discussion Pt. 2) 13 2.4 Packet Pg. 67 Attachment: Presentation (6178 : Metro District Policy Discussion Pt. 2) 14 BACKUPS 2.4 Packet Pg. 68 Attachment: Presentation (6178 : Metro District Policy Discussion Pt. 2) Case Studies: Midtown Industrial Center (Denver) • Redevelopment and infill of the River North district of Denver • Need for significant public infrastructure to be installed before development could occur 15 2.4 Packet Pg. 69 Attachment: Presentation (6178 : Metro District Policy Discussion Pt. 2) Case Studies: Stapleton (Denver) • Challenging redevelopment with little redevelopment interest • Used to finance local streets, drainage, pocket parks, and pools • Resulted in an enhanced development outcome Photo Credit: Denise Gammon, Holland Partner Group 16 2.4 Packet Pg. 70 Attachment: Presentation (6178 : Metro District Policy Discussion Pt. 2) Case Studies: Parker-Jordan (Centennial) • District used to finance open space/environmental conservation outcomes • Enhanced infrastructure: • 107 acres of open space preservation and maintenance • Trail construction • Public access easement • Regional recreation center 17 2.4 Packet Pg. 71 Attachment: Presentation (6178 : Metro District Policy Discussion Pt. 2) Case Studies: Pena Station (Denver) • Transit-oriented development to enhance development around DIA • Enhanced infrastructure: • Light rail station and platform • Roadways • Traffic lights • Parks, trail systems, open space 18 2.4 Packet Pg. 72 Attachment: Presentation (6178 : Metro District Policy Discussion Pt. 2) Metro Districts vs. HOAs 19 Metropolitan Districts HOAs Political subdivisions of the state of Colorado Private, non-profit corporations District subject to all public accountability requirements of the City of Fort Collins (i.e. open meeting laws, open records requests, etc.) Accountability only to dues paying members District subject to all financial accountability requirements of the City of Fort Collins Adoption of an annual budget required All district facilities must generally remain open to the public Exists as a private entity, can limit membership and use of facilities Revenue can be generated through property tax, which are tax deductible by residents Revenue generated through fees 2.4 Packet Pg. 73 Attachment: Presentation (6178 : Metro District Policy Discussion Pt. 2) ATTACHMENT 3 2.3 Packet Pg. 54 Attachment: Metro Districts Research Table (6178 : Metro District Policy Discussion Pt. 2) Not Specified $5,000 Very limited use, approved districts must be in alignment with the City's comprehensive plan Johnstown 18 22% 50 mills commercial, 40 mills residential Not Specified Not Specified 20 years No specific fee specified, the district is responsible for paying any and all expenses relating to professional service fees. Has had challenges with residential- only districts. O&M costs of these districts have grown and residents have expressed frustrations with the Town. ATTACHMENT 3 2.3 Packet Pg. 53 Attachment: Metro Districts Research Table (6178 : Metro District Policy Discussion Pt. 2)