HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 05/05/2020 - FIRST READING OF ORDINANCE NO. 066, 2020, APPROPRAgenda Item 6
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AGENDA ITEM SUMMARY May 5, 2020
City Council
STAFF
Adam Bromley, Director of Operations & Technology
Lance Smith, Utilities Strategic Finance Director
Tim McCollough, Deputy Director, Utilities Light and Power
Cyril Vidergar, Legal
SUBJECT
First Reading of Ordinance No. 066, 2020, Appropriating Prior Year Reserves and Authorizing the Transfer of
Previously Appropriated Funds in the Light and Power Fund for the 700 Wood Street Remodel Project and
Related Art in Public Places.
EXECUTIVE SUMMARY
This item is coming to Council because it meets the following Priorities: (5) will directly support a council driven
timeline for an operational space for the network operations and engineering staff in Connexion and (6)
provides funding for a project that the City must continue despite the current crisis.
The requested off-cycle appropriation will provide funds necessary to complete the joint control room and
associated 700 Wood Street remodel project for Fort Collins Connexion (Connexion) and Electric Utility/Light &
Power (L&P) operations. L&P is requesting an appropriation of $900,000 from uncommitted reserves, which
has been included in the Utilities’ financial rate strategy and 2019 Capital Improvement Plan (CIP). Since this
appropriation request is for the purpose of capital construction, City Code also requires a $9,000 contribution
(1% of the amount being appropriated) to the Art in Public Places (APP) program. This amount is also being
requested from uncommitted L&P reserves, bringing the total use of L&P reserves in this request to $909,000.
In addition to the appropriation from available reserves, L&P is requesting a transfer of $770,000 in funds
previously appropriated for the Substation capital parent account to obtain the remaining funds for the 700
Wood Street remodel project. Council Finance Committee considered and supported this approach on April 20,
2020.
STAFF RECOMMENDATION
Staff recommends adoption of the Ordinance on First Reading.
BACKGROUND / DISCUSSION
In 2018, L&P included a budget offer in the 2019/20 BFO process to update the Supervisory Control
Operations (SCO) center; Council approved that offer as part of the 2019/20 budget. SCO is the control room
for the electric distribution center; electric system operators direct switching operations in the field and monitor
substation and distribution equipment status to maintain safe, reliable operations of the electric system. SCO is
the only area within 700 Wood Street that was not part of the 2016/17 remodel of the 700 Wood Street
facilities.
The 2019/20 budget offer is $950,000 for the following scope of work:
• New electric operator consoles replacing existing consoles that are over 30 years old
• A video display system to integrate the new enterprise level software systems to display operational
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system maps, manage outages, perform advanced distribution management and replace the existing
paper wall map
• Replacing existing raised floors at the end of their useful life
• Upgrading lighting and acoustics
• Asbestos remediation
In 2019, it was determined that several functional groups within Connexion (at least 20 employees) need to be
located at 700 Wood Street. L&P previously moved employees out of the building to accommodate Connexion
Outside Plant employees; as such, little space remains for additional personnel. Therefore, Connexion and
L&P began a conceptual design to remodel 700 Wood Street to meet the following criteria:
• Integrate the network operations (Connexion) and electric system operations (L&P) groups into a
transparent joint control room facility
• Maintain or exceed the existing level of conference room space
• Accommodate the network engineering staff from Connexion
• Provide workspaces for L&P staff displaced by incoming Connexion personnel or the new remodel
Connexion and L&P also worked with Operations Services, the contracted architect, the control room design
consultant, and general contractor on the proposed conceptual design for the joint control room and associated
700 Wood Street remodel. This conceptual design multiplies the affected square footage of the original
approved budget item by more than 5-times (original - 1,823 square feet proposed - 9,829 square feet). It also
includes the following necessary improvements not originally budgeted:
• Reconfiguration (moving walls) of SCO, e.g., moving kitchen, break room, and existing bathroom to create
two bathrooms
• Eliminating existing Poudre, Energy, Horsetooth, and Jetson conference spaces, and adding six new
conference spaces
• Reconfiguring/displacing L&P employee workspaces
• Incorporating network engineering and operations employee workspaces
• Adding Connexion lab space
Due to the expanded scope of the project, the estimated cost has grown considerably. The current total
estimated cost for the project is $4.37 million; current estimates for each department’s share are $1.75 million
for Connexion and $2.62 million for L&P. Staff is currently at about 50% design/20% contingency budget and
we expect to refine these estimates as we reach an 80% design/20% contingency. Staff has already reduced
the total cost by over $400,000 by value-engineering line items, e.g., adding a coffee station and reconfiguring
a small bathroom/locker room. Staff is in process to identify other areas for potential value-engineering and
cost reductions that do not degrade the quality of the end product.
L&P has $950,000 appropriated for this work through the 2019/20 budget; and, in an effort to follow City
financial guidance regarding potential delays in capital expenditures to help match expected revenue
shortcomings, this appropriation does not rely solely on reserves for the entire budget shortfall ($1.7 million).
Staff proposes a two-pronged approach that Council Finance Committee reviewed and supported to obtain the
funds necessary for the remodel project as described above:
• Obtain a portion ($900,000) by appropriating the amount included in the CIP from L&P reserves and
• Obtain the remaining funds ($770,000) by reallocating from other capital accounts within L&P.
The off-cycle appropriation amount is included in L&P’s current rate strategy (i.e., rate setting
recommendations) as it was planned for in the 2019 CIP.
L&P provides proposed capital expenditures for each budget cycle to the Utilities finance division to inform
electric rates strategy and future increases. As part of L&P’s 2019 CIP, staff anticipated a budget shortfall once
discussions with Connexion began and attempted to include the additional funds necessary through an
appropriation to complete the remodel project. This approach allows the appropriation to be funded directly
through electric rate revenues. The line item in the CIP for this appropriation was for $900,000, which is just
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short of the current project estimates. However, this action demonstrates that more than half of the money
needed in the appropriation is already projected in existing electric rate revenues and only $770,000 additional
is needed to fully fund the additional remodeling work.
With support from Council Finance Committee and Utilities finance, staff recommends Council re-appropriate
unused capital dollars in the L&P Substation parent account to obtain the remaining budget necessary; all
capital work currently planned for in the Substations area is included in the budget and the parent account is
able to accommodate this re-appropriation.
Not funding this appropriation results in the delay of a permanent working space for Connexion network
operations and engineering personnel and limits the value of upgraded enterprise software systems (Advanced
Distribution Management System and SCADA system) in L&P. L&P staff realizes the timing of this request is
unfortunate given the current financial unpredictability; however, staff is also mindful of the potential for
revenues to be below budgeted levels and does not anticipate other off-cycle appropriations in 2020. As such,
staff is confident in the timeliness of this off-cycle appropriation recommendation.
CITY FINANCIAL IMPACTS
Staff does not anticipate any negative financial impacts related to the appropriation from L&P reserves or the
Substation capital parent account, which will both maintain healthy positive balances after the appropriations.
L&P has all Substation capital projects budgeted for 2020 and will not need any funds from the parent account.
Even with this appropriation from the Substation parent account, L&P would be able to utilize the remaining
balance to fund planned 2021 projects, which will reduce pressure to rely solely on rates to fund the projects
included in the CIP. The impacts to these funds are shown below.
The following is a summary of the existing project funding and additional funding resources:
Prior Appropriated Funds
2020 BFO item $950,000
Funds to be Appropriated with this Action
Off-cycle Supplemental Appropriation from L&P reserves $900,000
Re-allocation of unused capital dollars in L&P Substation Parent $770,000
L&P Portion of Estimated Total Project Cost $2,620,000
The following is a summary of the status of L&P available reserves before and after this appropriation:
Estimated L&P reserves available at end of 2019 $10,500,000
L&P reserves available after CAP Mitigation & Resiliency Appropriation $6,753,862
(Ordinance No. 006, 2020)
Wood Street Remodel Appropriation $900,000
Wood Street Remodel APP Contribution $9,000
Remaining L&P reserves available $5,844,862
The following is a summary of the status of the L&P Substation Parent account before and after the re-
appropriation:
Substation Parent Account Balance $1,907,354
Re-appropriation Amount to Wood St. Remodel $770,000
Remaining Substation Parent Account Balance $1,137,354
BOARD / COMMISSION RECOMMENDATION
The staff recommendation included in this AIS was supported by Council Finance Committee on April 20,
2020.
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ORDINANCE NO. 066, 2020
OF THE COUNCIL OF THE CITY OF FORT COLLINS
APPROPRIATING PRIOR YEAR RESERVES AND AUTHORIZING THE TRANSFER OF
PREVIOUSLY APPROPRIATED FUNDS IN THE LIGHT AND POWER FUND FOR THE
700 WOOD STREET REMODEL PROJECT AND RELATED ART IN PUBLIC PLACES
WHEREAS, the 2016-2017 City Budget included costs to renovate the Utility Service
Center (USC) located at 700 Wood Street, focusing on modification to meet Electric
Utility/Light & Power staff needs, improving building security and energy efficiency, and
replacing the Heating, Ventilation and Air Conditioning (HVAC) system; and
WHEREAS, since the 2016-2017 renovations, the City began a telecommunications
service and facilities division (FC Connexion) and certain FC Connexion personnel began using
USC workspaces, which was an unanticipated use at the time of the 2016-2017 renovations; and
WHEREAS, FC Connexion service deployment has matured to the point where network
control needs to be centrally managed with Light & Power facilities to accommodate efficient
delivery of FC Connexion services along with reliable operation of the City’s electric system;
and
WHEREAS, the Supervisory Control Operations center (SCO) located in the USC is the
control room from which electric system operators direct operations and monitor distribution
status to maintain safe, reliable operations of the City’s electric system, and additional technical
and functional spaces, and related value-engineering improvements are needed to the SCO to co-
manage FC Connexion services from this space; and
WHEREAS, the facility upgrades needed to manage FC Connexion operations from the
SCO will also require related improvements at the USC to minimize displacement burdens on
Light & Power staff currently using affected facilities; and
WHEREAS, Utilities staff recommends appropriating approximately $2.6 million in
Light & Power fund reserves and unexpended Substation Parent fund monies to complete the
SCO and related renovations to locate FC Connexion functional staff and technical facilities at
the USC; and
WHEREAS, this proposed appropriation benefits public health, safety and welfare of the
citizens of Fort Collins and serves the public purpose of utilizing existing Utility facilities to
provide cost-effective centralized management of City electric distribution services and
broadband services, while maintaining a high level of service for ratepayers of both service; and
WHEREAS, this project involves construction estimated to cost more than $250,000, as
such, City Code Section 23-304 requires one percent of these qualified appropriations to be
transferred to the Cultural Services and Facilities Fund for a contribution to the Art in Public
Places (APP) program; and
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WHEREAS, contributions to Art in Public Places for each Utility are kept and spent in
such Utility’s own fund, except for maintenance, administration, repair and display costs
pursuant to City Code Section 23-303 which are paid from the Cultural Services and Facilities
Fund; and
WHEREAS, City Charter Art. V, Section 9 permits the City Council, upon the
recommendation of the City Manager, to appropriate by ordinance at any time during the fiscal
year such funds for expenditure as may be available from reserves accumulated in prior years,
notwithstanding that such reserves were not previously appropriated; and
WHEREAS, the City Manager has recommended the appropriation described herein and
determined that this appropriation is available and previously unappropriated from the Light &
Power Fund and will not cause the total amount appropriated in the Light & Power Fund to
exceed the current estimate of actual and anticipated revenues to be received in that Fund during
this fiscal year; and
WHEREAS, City Charter Art. V, Section 10 authorizes the City Council, upon
recommendation by the City Manager, to transfer by ordinance any unexpended and
unencumbered appropriated amount or portion thereof from one fund or capital project to
another fund or capital project, provided that the purpose for which the transferred funds are to
be expended remains unchanged, the purpose for which the funds were initially appropriated no
longer exists, or the proposed transfer is from a fund or capital project in which the amount
appropriated exceeds the amount needed to accomplish the purpose specified in the appropriation
ordinance; and
WHEREAS, the City Manager has recommended the transfer of $770,000 from the
Substations capital project parent account to the 700 Wood Street remodel capital project and
determined that the proposed transfer is from a capital project account in which the amount
appropriated exceeds the amount needed to accomplish the purpose specified in the appropriation
ordinance; and
WHEREAS, the City Manager has recommended the transfer of $1,980 from the Light &
Power Fund to the Cultural Services & Facilities Fund and determined that the purpose for which
the transferred funds are to be expended remains unchanged; and
WHEREAS, in accordance with City Charter Art. V, Section 10, the appropriation of
reserves for the Project from the Light & Power Fund and the transfer of a portion of those
unexpended and unencumbered appropriated funds to the APP program established by City Code
Section 23-304(a) will be used for Light & Power purposes and improvements in connection
with the Project.
NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF
FORT COLLINS as follows:
Section 1. That the City Council hereby makes and adopts the determinations and
findings contained in the recitals set forth above.
Section 2. That there is hereby appropriated for expenditure from prior year reserves
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in the Light & Power Fund the sum of NINE HUNDRED NINE THOUSAND DOLLARS
($909,000) for the 700 Wood Street Remodel Project and appropriated therein as follows:
• 700 Wood Street Remodel Project $900,000
• Art in Public Places Project (Artwork) 7,020
• Art in Public Places Project (transfer to Cultural Services
Fund for APP Operations)
1,800
• Art in Public Places Project (transfer to Cultural Services
Fund for APP Maintenance)
180
TOTAL $909,000
Section 3. That the unexpended and unencumbered appropriated amount of ONE
THOUSAND EIGHT HUNDRED DOLLARS ($1,800) in the Light & Power Fund is authorized
for transfer to the Cultural Services & Facilities Fund and appropriated therein for the Art in
Public Places Program Operations.
Section 4. That the unexpended and unencumbered appropriated amount of ONE
HUNDRED EIGHTY DOLLARS ($180) in the Light & Power Fund is authorized for transfer to
the Cultural Services & Facilities Fund and appropriated therein for the Art in Public Places
Program Maintenance.
Section 5. That the unexpended and unencumbered appropriated amount of SEVEN
HUNDRED SEVENTY THOUSAND DOLLARS ($770,000) is hereby authorized for transfer
from the Substations Capital Projects parent account to the 700 Wood Street Remodel Project.
Introduced, considered favorably on first reading, and ordered published this 5th
day of May, A.D. 2020, and to be presented for final passage on the 19th day of May, A.D. 2020.
__________________________________
Mayor
ATTEST:
_______________________________
City Clerk
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Passed and adopted on final reading on the 19th day of May, A.D. 2020.
__________________________________
Mayor
ATTEST:
_______________________________
City Clerk