HomeMy WebLinkAboutMINUTES-11/04/2003-RegularNovember 4, 2003
COUNCIL OF THE CITY OF FORT COLLINS, COLORADO
Council -Manager Form of Government
Regular Meeting - 6:00 p.m.
A regular meeting of the Council of the City of Fort Collins was held on .Tuesday, November 4,
2003, at 6:00 p.m. in the Council Chambers of the City of Fort Collins City Hall. Roll Call was
answered by the following Councilmembers: Bertschy, Hamrick, Kastein, Martinez, Roy, Tharp and
Weitkunat.
Staff Members Present: Fischbach, Krajicek, Roy.
Citizen Participation
Joyce Schneider, representing the property owner at 2600 East Vine Drive, spoke in favor of
realignment of Vine Drive north of the properties and so as to protect the historic Plummer School.
She stated she was in the process of obtaining historic designation for her property across from the
Plummer School. She expressed a concern that the grade separation might mean backing up the
historical properties with a mound of dirt.
Citizen Participation Follow-up
Councilmember Bertschy thanked the citizen for her comment and stated he would like to see the
City look into the issue.
Agenda Review
City Manager Fischbach stated item #9 Second Reading of Ordinance No. 142, 2003, Authorizing
the Issuance of City of Fort Collins, Colorado, Downtown Development Authority Taxable
Subordinate Tax Increment Revenue Bonds, Series 2003, Dated Their Delivery Date, in the
Aggregate Principal Amount of $1,000,000 for the Purpose of Financing Certain Capital
Improvements and Capital Projects; and Providing for the Pledge of Certain Incremental Ad
Valorem Tax Revenues to Pay the Principal of, Interest on and Any Premium Due in Connection
with the Redemption of the Bonds would be withdrawn from the Consent Calendar for discussion
as requested by Councilmember Roy.
CONSENT CALENDAR
Consideration and adoption of the Council meeting minutes of September 16, October 7 and
October 21, 2003.
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Second Reading of Ordinance No. 141, 2003, Appropriating Revenue from the Colorado
Department of Transportation in the Transportation Fund for the US 287/South College
Avenue Bicycle Lane Proiect.
The City of Fort Collins Transportation Planning office received a grant from CDOT
Enhancement Funds for FY 2003-05 to construct on -street bicycle lanes on South College
Avenue/US 287 from Harmony Road/SH68 southward to Carpenter Road/CR32. Ordinance
No. 141, 2003, was unanimously adopted on First Reading on October 21, 2003.
9. Second Reading of Ordinance No. 142, 2003, Authorizing the Issuance of City of Fort
Collins, Colorado, Downtown Development Authority Taxable Subordinate Tax Increment
Revenue Bonds, Series 2003, Dated Their Delivery Date, in the Aggregate Principal Amount
of $1,000,000 for the Purpose of Financing Certain Capital Improvements and Capital
Proiects; and Providing for the Pledge of Certain Incremental Ad Valorem Tax Revenues to
Pay the Principal of, Interest on and Any Premium Due in Connection with the Redemption
of the Bonds.
The City of Fort Collins created the Downtown Development Authority to make desired
improvements in the downtown area. Through tax increment financing, the DDA has made
significant contributions to the redevelopment and improvement ofthe downtown area. This
Ordinance, which was unanimously adopted on First Reading on October 21, 2004, provides
funding from unreserved fund balance in the DDA Debt Service Fund to make additional
improvements in the downtown area. This Ordinance also authorizes the issuance of $1
million of short term bonds for the projects which will be paid from the tax increment
10. Second Reading of Ordinance No. 143,2003, Authorizing the Conveyance ofAwrOXimatelV
4,561 Square Feet of City Land to the Hetzel Family in Exchange for Certain Easements for
the LaPorte Trail Connection and Additional Compensation.
Through negotiations with the Hetzel family, the City will acquire needed easements for the
La Porte Trail project in exchange for monetary considerations and land not needed for the
trail. The Hetzel driveway is located on a portion of the land the City will be deeding to the
Hetzels. This Ordinance was unanimously adopted on First Reading on October 21, 2003.
11. Items Relating to Various Code Changes.
A. First Reading of Ordinance No. 144, 2003, Amending Sections 20-2 and 20-3 ofthe
City Code Pertaining to the Abatement of Unsanitary or Dangerous Premises.
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B. First Reading of Ordinance No. 145, 2003, Amending Section 9-2 of the City Code
Pertaining to the Uniform Fire Code.
C. First Readingof OrdinanceNo. 146,2003, Amending Section 2-671 ofthe City Code
Pertaining to the Powers and Duties of the Director of the Office of Emergency
Management.
Following the blizzard of March, 2003, City and Poudre Fire Authority staff reviewed the
need for any City Code amendments that would be helpful in effectively dealing with future
emergency situations. The three proposed Ordinances are intended to clarify the authority of
the City and PEA to take emergency actions, provide for the publication of emergency rules
and regulations adopted by the City Manager, and provide a penalty for a knowing violation
of such emergency rules and regulations.
12. Resolution 2003-118 Adopting Amendments to the Financial Management Policies.
The budget process for the City of Fort Collins is driven by many financial management
policies. To facilitate comprehensive review of the financial management policies, the
management staff compiles the policies into a separate document. Each year, staff reviews
and updates the policies. Staff presents the updated and revised policies to the Council for
adoption by Resolution. The policies remain in effect until subsequently amended or
repealed by Council action. Pursuant to Council direction, Section 3.4 of the policies
pertaining to Human Resource Management and Productivity has not been changed, pending
further review and discussion by the Council.
13. Resolution 2003-119 Authorizing the City Manager to Grant Revocable Permits to Xcel
Energy and the U.S. Environmental Protection Agency on Certain City Property Under and
Adjacent to the Poudre River for Environmental Investigation and Remediation Activities.
In order to facilitate environmental investigation and remediation work to proceed in and
adjacent to the Poudre River between Gustav Swanson Natural Area and the Northside
Aztlan Center property, the City will need to grant revocable permits, in the form of license
agreements, to Xcel Energy and the U.S. Environmental Protection Agency. At this time the
specific work plans for the work to be carried out are not completed. However, because there
is an ongoing release of tarry material into the Poudre River, the work will need to proceed
promptly once the details of the plans are completed. Consequently, staff is recommending
that the City Council adopt this Resolution in order to authorize the City Manager to enter
into the necessary license agreements, including such terms and conditions as may be
necessary to protect the interests of the City and minimize impacts to the City's property.
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14. Resolution 2003-120 Authorizing the City Manager to Execute an Agreement with Great
Lakes Airlines to Provide Scheduled Bus Service at the Fort Collins -Loveland Municipal
Airport.
Great Lakes Airlines desires to operate scheduled bus service from the Fort Collins/Loveland
Municipal Airport to Denver International Airport (DIA). The bus service will operate
initially with 4 round trips per day during the week and 3 round trips on Saturday and
Sunday. The bus service is very unique because it allows ticketed airline passengers to go
through security check -in here and be dropped off at Concourse "A" at DIA, thereby
bypassing security screening, baggage check -in and more expensive pay parking at DIA.
This is the first time such gate -to -gate service has been offered between two airports. The
Transportation Security Administration (TSA) is processing final approval of the service and
DIA has approved the service to operate from their airport.
***END CONSENT***
Ordinances on Second Reading were read by title by City Clerk Krajicek.
8. Second Reading of Ordinance No. 141, 2003, Appropriating Revenue from the Colorado
Department of Transportation in the Transportation Fund for the US 287/South College
Avenue Bicycle Lane Project.
9. Second Reading of Ordinance No. 142. 2003. Authorizing the Issuance of City of Fort
Collins, Colorado, Downtown Development Authority Taxable Subordinate Tax Increment
Revenue Bonds, Series 2003, Dated Their Delivery Date, in the Aggregate Principal Amount
of $1,000,000 for the Purpose of Financing Certain Capital Improvements and Capital
Proiects; and Providing for the Pledge of Certain Incremental Ad Valorem Tax Revenues to
Pay the Principal of, Interest on and Any Premium Due in Connection with the Redemption
of the Bonds.
10. Second Reading of Ordinance No. 143,2003, Authorizing the Conveyance ofApproximately
4,561 Square Feet of City Land to the Hetzel Family in Exchange for Certain Easements for
the LaPorte Trail Connection and Additional Compensation.
Ordinances on First Reading were read by title by City Clerk Krajicek.
11. Items Relating to Various Code Changes.
A. First Reading of Ordinance No. 144, 2003, Amending Sections 20-2 and 20-3 of the
City Code Pertaining to the Abatement of Unsanitary or Dangerous Premises.
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November 4, 2003
B. First Reading of Ordinance No. 145, 2003, Amending Section 9-2 of the City Code
Pertaining to the Uniform Fire Code.
C. First Reading of Ordinance No. 146, 2003, Amending Section 2-671 of the City Code
Pertaining to the Powers and Duties of the Director of the Office of Emergency
Management.
Councilmember Tharp made a motion, seconded by Councilmember, to adopt and approve all items
not withdrawn from the Consent Calendar. The vote on the motion was as follows: Yeas:
Councilmembers Bertschy, Hamrick, Kastein, Martinez, Roy, Tharp and Weitkunat. Nays: None.
THE MOTION CARRIED
Staff Reports
City Manager Fischbach reported on staff follow-ups to items listed on the City Council status
report. He also reported that the Sheldon Lake drainage improvement project received the Gold
Hard Hat Award from Colorado Construction Magazine in a statewide competition. He stated the
project removed 250 structures from the 100-year floodplain and included improvements to the water
quality and fish habitat of the lake and other benefits. He reported that the Library was recently
ranked tenth in the nation in the Hennin's Public LibraryRatings Index (HAPLR) for public libraries
serving between 100,000-250,000 people. He reported that Natural Resources had received a
$23,000 EPA grant to conduct Care for the Air teacher workshops.
Councilmember Reports
Mayor Martinez stated he has asked for more information about how the Police Department could
realign to put more officers on the street. He asked for an update on collective bargaining. City
Manager Fischbach stated he had four meetings with the police officers and would be meeting with
the Police Chief this week. He stated a written report would be prepared regarding police
redeployment and that Fort Collins continues to be a safe community. Councilmember Kastein
asked about police vacancies. City Manager Fischbach stated there were two vacancies that had been
recently filled and that 10 people were out on light duty or injuries.
Councilmember Tharp reported on the Legislative Review Committee discussions regarding
proposed legislation that would be of interest to the City. She also reported on the I-25 Policy
Committee quarterly meeting.
Councilmember Hamrick asked if the I-25 Policy Committee would be continuing discussions in
light of Weld County's statement that the County is not interested in the open space component of
the corridor.
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Councilmember Tharp stated the group was operating under a memorandum of understanding rather
than an intergovernmental agreement.
Councilmember Kastein reported on the MPO subcommittee discussions relating to funding
strategies for interchange projects.
Resolution 2003-121
Approving the Exercise of the City's Option from
North Poudre Irrigation Company to Proceed with
the Development of the Halligan Reservoir Enlargement
Project and to Authorize Other Related Actions, Adopted.
The following is staffs memorandum on this item.
"Financial Impact
The development and construction of the Halligan Reservoir Enlargement Project is estimated to
cost the City about $14 million during the next 5-7 years. Approximately $4.2 million is budgeted
for 2004 and 2005, and the remainder will be budgeted in subsequent years. Bonds will be sold to
fund the project and repaid using cash collected under the City's raw water requirements. At the
time of exercising the option, the City must pay to North Poudre Irrigation Company a payment in
the amount of $188,223.51. In addition, a non -interest bearing revenue bond will be issued to
secure the City's remaining $4.15 million payment obligation to North Poudre for the rights it will
convey to the City.
Executive Summary
This Resolution will authorize the City to exercise the option the City has with the North Poudre
Irrigation Company (NPIQ to acquire from NPIC its property rights and the right to proceed with
the permitting and development of the Halligan Reservoir Enlargement Project. Under the option
agreement, the City will acquire all property and other rights necessary for the proposed
enlargement and this will allow the City to pursue permitting, design and construction of the
enlargement. This resolution also provides direction and authority to enter into agreements with
permitting agencies, NPIC, potential participants in the project and other entities necessary to
develop and ultimately to construct the project.
BACKGROUND
Halligan Reservoir, located on the North Fork of the Poudre River, currently has a capacity of 6, 408
acre-feet, but could be enlarged to about 40, 000 acre-feet. The project would supply the City with
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long-term carryover storage that would be used primarily to supplement supplies during a multi-
year drought. The Halligan Reservoir project was identified in the 1980's as an excellent project
for developing long-term storage capacity. The projected unit cost of constructing an enlarged
reservoir at that site is much lower than most sites because of the topography. Since the project
would enlarge an existing reservoir, the environmental impacts would be relatively minor. Recent
studies of the City's water supply system have shown that additional storage capacity is needed to
effectively manage the City's water rights portfolio and provide long-term drought protection. The
enlargement of Halligan Reservoir would be a key component in meeting the future water supply
needs of residents in the Fort Collins area.
The City has paid approximately $1.025 million in annual option payments since 1993 in order to
preserve its option to proceed with the Halligan Reservoir project. After the payment of
$188,223.51 is made at the time of exercise of the option, annual payments continue under the
Option Agreement through the year 2030, in the total additional amount of approximately $4.15
million. Ifthe City chooses not to exercise its option and the agreement terminates, NPIC is entitled
to retain the City's prior payments and the City relinquishes its conditional storage rights in
Halligan Reservoir and has no.further rights under the agreement. If the City exercises its option
to proceed with the project, but fails to proceed to construct the project, it is required to relinquish
its rights in the property, conditional storage and the project to NPIC, together with all amounts
previously paid to NPIC.
Development of additional storage capacity at Halligan Reservoir is consistent with the Water
Supply and Demand Management Policy that was adopted by City Council in September of this year.
This policy provides that the City shall pursue new storage capacity in the range of 12,500 acre-feet
to 14, 000 acre-feet to meet both operational and long-term carryover storage needs. It has been
determined that approximately 12, 000 acre-feet of storage capacity at Halligan Reservoir would
meet projected long-term carryover storage needs and help meet future water demands during a I-
in-50 type drought.
Under the Halligan Option Agreement, NPIC retains the storage rights for the first 6,400 acre-feet
in the reservoir. With the 12, 000 acre-feet desired by Fort Collins, a reservoir with a minimum of
18,400 acre-feet is needed. Since the enlarged Halligan Reservoir may have a capacity of up to
40,000 acre-feet, there is an opportunity to form partnerships with other local entities and provide
needed storage capacityfor others in this area. The Utilities'projected cost for Halligan would be
about $26 million if the City were to build a reservoir large enough to meet only the needs of
Utilities' customers. By building the 40,000 acre-foot reservoir with partners to serve the region
in and around Fort Collins, Utilities'cost would be about $14 million. These estimated costs include
engineering and environmental studies, environmental mitigation, project management, design and
construction. NPIC has expressed adesireforanadditional 5,000acre-feet ofnewstorage capacity
at Halligan and the three water districts that serve areas in and around Fort Collins are interested
in acquiring the remaining capacity that maybe available. This resolution would authorize the City
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to enter into agreements with partners and others to work toward the cooperative development of
the project.
The City's share of the Halligan Enlargement Project will be paid by development fees collected by
the City. Projections show that approximately $90 million in cash is expected to be turned over from
developers in satisfaction ofraw water requirements during the planningperiod from 2000 to 2040.
This assumes that about 50%ofthe City's raw water requirements for typical new developments will
be turned over in theform ofcash-in-lieu payments. The balance will be in theform ofwater rights.
The cash turned over will be available during theplanningperiod forfinancingfor the enlargement
of Halligan Reservoir as well as for the development of gravel pits for storage and for other
improvements to the City's raw water system.
Engineering and environmental studies on Halligan Reservoir have been ongoing during the last
couple ofyears. Discussions have been held with federal and state agencies, adjacent landowners,
potential partners, and other interested parties. The City currently holds an option to acquire some
of the land surrounding the existing Reservoirfor enlargement ofthe Reservoir, in exchangefor the
grant of certain surface rights on the Reservoir upon completion of the project. Further progress
on completing the acquisition of these property rights, along with other property needed for the
enlargement project, is expected in the coming months.
City staff continues to believe the project will provide significant benefits to the City, is cost
effective, can provide environmental enhancements, and will be permitted by the necessaryfederal,
state, and local agencies. The National Environmental Policy Act (NEPA) permitting process will
require an environmental impact statement (EIS) that will require an extensive public process that
will include an analysis of alternatives and an evaluation of potential impacts. This process is
expected to take 2-3 years. Federal agencies will have final permit approval of the project. If the
project is successfully permitted, it will take another 3-4 years for design and construction, and the
enlarged reservoir could be completed and ready to use by 2009 or 2010.
Approval of this resolution allows the City of Fort Collins to be the project proponent on behalf of
the Halligan Enlargement Project. It does not assure that the Halligan Project will be built nor that
enlargement of Halligan Reservoir will be the selected option by thefederal permitting agencies in
the EIS process. NEPA requires federal agencies to use the EIS process to evaluate potential
adverse impacts of the project, consider all potential alternatives, and permit the least
environmentally damaging alternative. Therefore, the EIS process will evaluate all practicable
alternatives, including a no -action alternative, that can meet the basic project purpose and need.
This can be a complex and protracted process, and will involve the evaluation of other alternatives
such as Northern Colorado Water Conservancy District's Northern Integrated Supply Project
(NISP). As a result, it could result in the permitting of a project other than Halligan to meet
regional water storage needs. As the project proponent, City staff will work with other interested
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parties and theparticipants to develop an environmentally sound, cost-effective approach to meeting
the Fort Collins regional water needs and to propose the most permittable project to do so.
The City is required, under the Option Agreement, to operate and maintain the Reservoir upon the
exercise ofthe Option. City staffhas discussed with NPIC thepossibility ofan agreement that would
provide for operation and maintenance of the Reservoir by NPIC. The Resolution authorizes the
City Manager to enter into such an agreement, along with other agreements related to the process
of evaluating, planning and obtaining environmental approvals for the project.
Water Board and City staffrecommend that the resolution be approved that would authorize the City
Manager to:
1. exercise the City's option contingent upon final approval of the issuance of the revenue
bond to secure the Water Utility Enterprise obligations for future payments to NPIC,•
2. proceed with such work as may be necessary to pursue enlargement of Halligan
Reservoir to a capacity of up to 40,000 acre-feet, to the extent economically and
environmentallyfeasible, including acquisition ofadditional property rights required for
the enlargement project;
3. enterinto an agreement with NPICfor operation and maintenance ofHalligan Reservoir
pending the enlargement project;
4. negotiate and enter into agreements with NPIC and other local water suppliers to
cooperatively investigate, plan and obtain regulatory approvals for the project and share
related costs;
S. negotiate and enter into an agreement with the City of Greeley for cooperation,
coordination and cost-sharingfor environmental approvals.for the Halligan Reservoir
project and Greeley's proposed Seaman Reservoir enlargement project;
6. negotiate and enter into one or more agreements with the U.S. Army Corps of Engineers
for cooperation, coordination, investigation and analysis related to federal
environmental regulatory requirements; and
7. enter into negotiations with other interested parties to develop agreements for
cooperative financing of construction of the project and ongoing operation, in exchange
for shared use of the new water storage capacity to result, for presentation to the City
Council for approval. "
City Manager Fischbach introduced the agenda item.
Brian Janonis, Treatment Plant Design Engineer, presented background information regarding the
project, the option agreement with North Poudre Irrigation Company, recent studies and staffs
recommendation. He stated the Water Supply and Demand Management Policy was adopted by
Council on September 16, 2003. He stated this was a multifaceted policy that provided direction
regarding conservation efforts, water rates and water storage. He stated the policy set out a
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requirement of 12,500 to14,000 acre-feet of storage capacity and that staff had identified 12,000
acre-feet of carry over storage for drought protection. He stated the policy directed staff to promote
regional cooperation and encouraged stream flow and ecosystem protection. He stated Halligan
Reservoir was an irrigation reservoir built in 1909 northwest of Livermore, was owned and operated
by North Poudre Irrigation Company and stored about 6,400 acre-feet of water. He stated Council
adopted an agreement with the Phantom Canyon Ranches in 1987 that laid the foundation for the
development of Halligan Reservoir by providing the City with an option to acquire property that
would be inundated with an expansion of the reservoir. He stated staff completed a feasibility study
in 1989 that confirmed that Halligan Reservoir was a good option and that in 1993 Council approved
an option agreement with the North Poudre Irrigation Company for the transfer of ownership of the
reservoir, NPIC property and conditional water right to the City. He stated two extension agreements
would expire in December of 2003. He outlined the key provisions of the option agreement: (1) a
conditional decree for 33,462 acre-feet of enlargement; (2) transfer of400 acres ofNPIC land around
the reservoir and the dam; (3) payments by the City to NPIC totaling about $5.4 million until 2030.
He stated if the option was not exercised that the City would lose its payments to date amounting to
over $1 million. He stated the 1989 study was updated in 2002 with regard to three dam sites and
that environmental issues were identified (the Preble's jumping mouse and wetlands). He stated the
recommendation after further study was to enlarge Halligan Reservoir to 40,000 acre-feet and to
construct a roller compacted concrete (RCC) dam at the middle site. He presented visual
information showing the reservoir, the existing dam, the middle site and NPIC property. He stated
the 40,000 RCC dam at the middle site would be built with partners and would result in the City
obtaining 12,000 acre-feet at a cost to the City of $14 million. He stated building the reservoir just
for the City's needs (12,000 acre-feet at the middle site) would cost the City about $26 million. He
stated a Preble's jumping mouse trapping study was conducted in the area that would be inundated
and that DNA studies were being conducted. He stated a wetlands delineation study had also been
completed and that about 3 acres of wetlands would be impacted in the inundation area. He spoke
regarding additional wildlife and geotechnical studies and property ownership and mining claim
research. He stated the project was considered to be cost effective and feasible and that staff was
continuing to work with interested parties to develop an environmentally sound solution to meet
regional water needs. He stated staff was recommending: exercising the Halligan option with NPIC
contingent upon Council bond approval which was scheduled on the Enterprise Board meeting
agenda; pursuing the reservoir enlargement for up to 40,000 acre-feet, including property
acquisitions; entering into agreements with NPIC for O&M of the existing reservoir, with O&M
shifting to the City once the title transfer was complete; entering into agreements with potential
partners regarding the project development; entering into agreements with the City of Greeley
regarding environmental approvals and permitting for Halligan and Greeley's Seaman Reservoir
project; entering into agreements with the US Army Corps of Engineers for the National
Environmental Policy Act (NEPA) permitting process and environmental impact study; and
negotiating with potential partners regarding sharing of reservoir capacity and project costs. He
stated if the option was exercised that staff anticipated exploring partnership agreements in 2003-
2004, entering the NEPA process in the spring of 2004, completing the environmental impact
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statement in 2005, receiving a project permit in 2006, completing design in 2007 and constructing
in 2008/2009 to have a completed project in 2010.
David Wright, Citizen Planners, spoke in favor of the exercise of the option and supported the
maintenance of the site, agreements with Greeley and working with the Corps of Engineers. He
stated Citizen Planners is concerned with a maximum of 40,000 acre-feet and favored not locking
in a maximum. He supported leaving other options open instead because smaller options might best
serve the community. He stated there would be value in having the City own the project by itself
with no other partners because there were many complaints about sprawl outside of the City. He
stated if the City owned the project and had control over the water that this would be a tool to control
the quality of growth and leave the City in a leadership position. He stated Citizen Planners did not
support partnering with other entities on the project. He stated the larger project might mean more
runaway sprawl outside of the City and that there would be pollution and other costs to the City. He
stated the smaller reservoir would cost more per acre-foot and that he would argue that "spending
less might make a mess" because of urban sprawl.
Tom Honn, 1601 Quail Hollow Drive, supported the exercise of the option because of the City's
investment. He stated he would like to see the City take a leadership role and cooperatively
participate with other entities. He stated the responsibility of the City is to take care of the City's
needs with a spirit of cooperation and in an economically sound manner. He stated the staffs
recommendation is valid and that there are a number of decisions to be made with regard to the
project. He stated the drought situation has made it clear that additional water storage is needed to
take care of current and future needs.
Kelly Ohlson, 2040 Bennington Circle, stated there is a trend in the country to decommission dams
that were no longer necessary and were economically and environmentally damaging. He stated he
supported the City exercising the option and that he did have some concerns. He stated the City is
the best entity to take the lead on this project and that there are long-term storage needs for drought
and growth management area build -out. He stated the City should take responsibility "in its own
backyard" to meet those needs. He stated he had concerns that Section 2 of the Resolution indicated
that 40,000 acre-feet of storage would be built. He suggested clarification language to make it clear
that the storage could go to 40,000 acre-feet if all economic and environmental standards are met.
He suggested additional discussions about the number of acre-feet needed to meet the City's needs.
He asked that the language be clarified or that the Council make it clear for the record that the City
is exercising an option that could allow up to 40,000 acre-feet to be built. He stated Section 2 also
referred to economic and environmental standards and stated he hoped that this was not referring
only to federal standards, which are not that strict. He asked that the City require additional
appropriate environmental mitigation, stream flows and recreational flows. He asked that the
Resolution's language regarding standards be clarified and strengthened. He noted that the Water
Board vote on the matter was 5-3 and that many of these issues were discussed by the Board.
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Councilmember Tharp stated she had concerns about the Water Board's split vote and asked a Board
representative to explain the concems.
Tom Sanders, Water Board Chairman, stated the Board discussed the matter last July and that the
vote was 5-3. He stated no Board members opposed the exercise of the option and that one of the
main issues was how specific the wording of the recommendation to the Council would be. He
stated the issues discussed were environmental issues and that the Board felt that the City should be
the lead agency on this project. He stated the Water Board did not have enough information to make
a determination that 40,000 acre-feet of storage was needed and that the Board wanted to be less
specific on that. He stated the Board also did not want to go with the minimum amount of storage
(12,500 acre-feet) because the Board wanted the City to work in cooperation with regional partners.
He stated some Board members voted against the motion because they wanted a differently worded
motion to be considered.
Councilmember Tharp asked about the relationship between Halligan Reservoir and Greeley and the
Seaman Reservoir. She stated her hope was for one dam rather than more dams. Janonis stated
Greeley is evaluating whether to be part of the partnership or to develop its own project at Seaman
Reservoir at the existing site. He stated one advantage of having a reservoir downstream is that the
City can release environmental flows and capture those flows in Seaman Reservoir to create better
riparian habitat without losing the water. He stated the two reservoirs would operate in conjunction
with each other.
Councilmember Tharp asked if the enlarged Halligan Reservoir will meet the needs of the existing
partners and Greeley so that it will not be necessary to enlarge the Seaman Reservoir dam. Janonis
stated it was unknown whether this would be possible. He stated Greeley is looking at a Seaman
Reservoir project in 10-20 years. He stated the two reservoirs could work jointly in providing some
environmental benefits.
Councilmember Tharp stated she would prefer enlarging Halligan Reservoir rather than seeing a
project at Seaman Reservoir as well, recognizing that might not be an option because the City did
not own Seaman Reservoir.
Councilmember Roy asked about the cost of property acquisition. Janonis stated the budget for the
40,000 acre-foot project includes $500,000 for land acquisition and $8.9 million for property
acquisition for environmental mitigation. He stated the environmental impact statements are
budgeted at $1 million.
Councilmember Roy asked about the Water Board concems regarding how an enlarged Seaman
Reservoir would take water from the main stem of the Poudre River and stream flow of the North
Fork. Dennis Bode, Water Resources Manager, stated part of the question is whether there is enough
water in the North Fork to meet Greeley's needs at Seaman Reservoir. He stated there might not be
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enough water at all times and that Greeley is looking at taking water out of the main stem of the
Poudre River. He stated this would primarily involve releasing water from existing facilities in the
upper Poudre River.
Councilmember Roy asked for more information about the two Seaman projects. Janonis and Bode
stated under the Northern Colorado Integrated Supply Project, Greeley would have an option to
enlarge Seaman Reservoir to 160,000 acre-feet. Janonis stated Greeley is talking about the smaller
project that would involve enlarging the dam at the existing site.
Councilmember Roy asked what the City's acre-foot need would be at build -out. Janonis stated an
additional 12,000 acre-feet will be needed.
Councilmember Roy asked what the projected population would be at that 12,000 acre-feet. Bode
stated long-term planning to 2040 projected a total population of 165,000 people served by water
delivered by the City Water Utility. He stated other water rights would help satisfy the needs.
Councilmember Kastein asked about the $14 million quoted as the City's share for the 40,000 acre-
feet of storage and the total project cost for that larger dam. Janonis stated the total project cost is
estimated at $39 million.
Councilmember Kastein noted that the City's share would be roughly one-third of the total cost. He
asked what the effect would be on ratepayers for either of the project options. Janonis stated there
would be effect on ratepayers in terms of the monthly service charge and that funding would be
through the cash -in -lieu -of water requirement for development. He stated about 50% of the raw
water requirement is paid for by the cash -in -lieu -of water revenue.
Councilmember Kastein asked about the benefit to ratepayers if $14 million is paid by the City for
raw water that could cost $26 million. Bode stated the effect is reliability and having additional
money available for additional water rights or other projects.
Councilmember Bertschy asked if his reading of the language of the Resolution was correct and that
the maximum of 40,000 acre-feet would not necessarily be built. Janonis stated the intent is that the
project would be up to 40,000 acre-feet.
Councilmember Bertschy asked for clarification from legal staff. City Attorney Roy stated the
Resolution as written would authorize any project up to 40,000 acre-feet and that the language did
not imply that the project would be 40,000 acre-feet. He stated the language could be further
clarified.
Councilmember Bertschy asked about the approval process for the size of the reservoir. Janonis
stated an environmental impact statement process will include a public comment and participation
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period, review by the U.S. Fish and Wildlife Service on endangered species, and review by the Corps
of Engineers on demand management.
Councilmember Bertschy asked if the City would retain ownership if partnership agreements were
entered into with other entities. Janonis stated the intent is that North Poudre Irrigation Company
will have the first 6,500 acre-feet, that the City will have the next 12,000 acre-feet and that other
partners will receive a pro rata share of what was permitted.
Councilmember Bertschy asked about ownership of the reservoir and land. Janonis stated he
anticipated that the City will retain control in some way. Carrie Daggett, Senior Assistant City
Attorney, stated the Resolution is written to require the agreements to comeback to the Council for
approval. She stated this Resolution will authorize staff to proceed and work on negotiations for the
ultimate arrangement with any partners.
Councilmember Bertschy asked about the agreement with Greeley for sharing of expenses on an
environmental review and how that would work when the two cities are not on the same timetable.
Janonis stated there will be aprogrammatic environmental impact studybecause the federal agencies
are interested in cumulative environmental impacts. He stated Greeley would receive preliminary
program approval and would seek final approval at the time it was ready to proceed with its project.
Councilmember Hamrick stated one of his major concerns was the approval process. He noted that
one Water Board member was concerned about stating the maximum size of the reservoir. He
stated he was interested in language in the Resolution that would preclude blanket approval to
proceed with a certain size of reservoir. He asked about language that would require the matter to
come back to the Council for review. Daggett stated the Resolution does not specifically provide
for the reservoir plan to come back to the Council for approval. She stated there will be a number
of steps in the process that will require the Council to take action i.e. the issuance of bonds,
appropriations, etc. She stated the Resolution does not specify that Council approval would be
required for the actual size of the reservoir.
Councilmember Bertschy asked for clarification about Section 7, which requires the agreement to
be presented to the Council for final approval. Daggett stated staff will be proceeding with the
permitting process and planning of the reservoir and that the agreements with other parties will come
to the Council early in the process.
Councilmember Hamrick stated he would like to see some interim steps to determine the optimum
size of the reservoir and to have that come back to the Council for review. He expressed a concern
that the Resolution gives "carte blanche" approval to negotiate all the way up to 40,000 feet before
coming back to Council. City Manager Fischbach stated Section 2 could be revised to read "to
pursue the enlargement of Halligan Reservoir, provided that the final capacity and design shall be
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economically feasible and in compliance with all applicable environmental standards and
requirements, and be subject to Council approval."
Councilmember Hamrick stated he would like staff to touch bases with Council throughout the
process rather than at the end of the process. He asked if the existing water storage for the City is
adequate to cover our water needs for the current population. Janonis replied in the affirmative.
Councilmember Hamrick asked if the recent drought was a 100-year drought. Janonis stated the
drought may not yet be over.
Councilmember Hamrick asked if this project would be needed if the population is not expanded.
Janonis replied in the negative. He stated the City spent a lot of money renting water to help get
through the drought situation.
Councilmember Weitkunat asked about the money already spent for the option and the continuance
of payments for the option. Janonis stated payments are made to continue the option and that a
decision needs to be made to avoid continued option payments. He stated if the City decides to
exercise the option that the money already paid would go toward the cost.
Councilmember Weitkunat noted that there are checks and balances throughout the process that
could "squelch the deal." Janonis stated 26 different permits and approvals are required from about
16 different agencies to get to the final end product.
Councilmember Weitkunat stated this is a time to be decisive to ensure water for future generations.
She asked if an even greater capacity for Halligan Reservoir had been discussed. Janonis stated three
different levels up to 40,000 acre-feet were discussed. He stated 40,000 makes sense economically.
Councilmember Weitkunat asked if the minimum requirement for Fort Collins would be about
12,600 acre-feet. Janonis stated 12,000 acre-feet would be the minimum requirement.
Councilmember Weitkunat stated she would be more concerned that a minimum was written in the
Resolution instead of a maximum capacity.
Councilmember Weitkunat stated she believed that the wording relating to a maximum of 40,000
acre-feet will meet the need.
Councilmember Tharp stated the City would be exercising the option and authorizing the City
Manager to proceed. She asked if such a role was usually assigned to the City Manager. City
Attorney Roy stated it was appropriate to assign the role to the City Manager as the chief
administrative official of the City.
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Councilmember Tharp stated she would like to see language requiring the capacity issue to come
back to the Council for approval. She asked if there are other places in the Resolution where it
would be prudent to bring issues back to the Council as interim steps were made. City Manager
Fischbach suggested the following language in Section 2: to strike the reference of a capacity of up
to 40,000 acre-feet and to read "the enlargement of Halligan Reservoir, provided that the capacity
and design shall be economically feasible and in compliance with all applicable environmental
standards and requirements, and subject to semi-annual review by the City Council."
Councilmember Tharp asked about the population figure of 165,000 for build -out for the City when
other departments use the figure250,000. City Manager Fischbach stated the Water Utility build -out
figure was being used and that other utilities would be serving the additional residents. Janonis
stated the Water Utility provided water service to 49% of the Urban Growth Area.
Councilmember Roy asked how wetland mitigation will occur. Janonis stated wetland mitigation
is site specific and depends on the direction given by the Fish and Wildlife Service.
Councilmember Roy asked how long the environmental impact study will take. Janonis stated it
would typically take about 2-3 years.
Councilmember Hamrick asked about the impact on fees. Janonis spoke regarding the projections
regarding cash -in -lieu -of water rights fees received from development that would amount to about
$90 million.
Councilmember Hamrick asked what would be done with the money that was not spent. Janonis
stated there are other projects in addition to Halligan, including gravel pit storage along the Poudre
River and purchase of water rights when available.
Councilmember Hamrick asked if working with Greeley will impact Gateway Park. Janonis replied
in the negative and stated Greeley is sensitive to Fort Collins' concerns about Gateway Park.
Councilmember Hamrick asked about the downside of partnering with Tri-State water companies.
Bode stated there would be benefits to Fort Collins.
Councilmember Hamrick requested a follow-up memo on the downside (environmental or other) of
such partnerships. Janonis stated the federal agencies are encouraging the City to seek out such
partnerships for more regional solutions.
Councilmember Kastein made a motion, seconded by Councilmember Weitkunat, to adopt
Resolution 2003-121 with the following amendment in Section 2: "The City Manager is hereby
authorized upon the exercise of the option to proceed with such investigation, planning, regulatory
review processes, site acquisition, design and construction work as he determines to be necessary
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to pursue the enlargement of Halligan Reservoir to a capacity not to exceed 40,000 acre-feet,
provided that the final capacity and design shall be the most economically feasible and in compliance
with all applicable environmental standards and requirements"
City Attorney Roy asked if the intent is to have final or periodic Council review of the design and
capacity.
Councilmember Kastein stated it would be fine to include a semi-annual review by the Council.
The consensus was to include the language relating to the semi-annual review.
Councilmember Kastein stated there should be language relating to a maximum size of 40,000 acre-
feet and that it is also important to say that 40,000 acre-feet was the maximum that would be
economical. He stated the language will indicate that the City wants to optimize the economic
benefit to the City.
Councilmember Bertschy asked for clarification regarding the language that specified "the most
economically feasible."
Councilmember Kastein stated he was unsure if the language would tie the City into the most
economically feasible solution.
Councilmember Bertschy stated the most economically feasible option could be not exercising the
option.
Councilmember Kastein stated he would like a statement that the City does intend to build storage
capacity, that the need is for something between 12,000 and 14,000 acre-feet and that this should be
accomplished with the most economical option.
Mayor Martinez offered a friendly amendment to leave off the word "most' and state that the option
selected will be "economically feasible."
Councilmembers Kastein and Weitkunat accepted the friendly amendment.
Councilmember Hamrick stated he would like clarification regarding how the statement "not to
exceed 40,000 acre-feet' would be interpreted. City Attorney Roy stated his interpretation would
be that the storage capacity will not exceed 40,000 acre-feet. He stated he would interpret it to mean
that the capacity could be anything up to 40,000 acre-feet. He stated implicitly it would give a target
and that a literal interpretation would be that the capacity could be anything from zero to 40,000
acre-feet.
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Councilmember Roy asked the City Attorney to restate the motion. City Attorney Roy restated the
motion as follows: "The City Manager is hereby authorized upon exercise of the option to proceed
with such investigation, planning, regulatory review processes, site acquisition, design and
construction work as he determines to be necessary to pursue the enlargement of Halligan Reservoir
to a capacity not to exceed 40,000 acre-feet, provided that the final capacity and design shall be
economically feasible, shall comply with all applicable environmental standards and requirements,
and shall be subject to semi-annual review by the City Council."
Councilmember Roy stated the citizens ofFort Collins participated in a strong conservation program.
He stated tiered water rates and a willingness of the citizens to conserve made it possible for him to
support the motion. He stated the community is willing to conserve water and that the Council could
reasonably go forth with this project.
Councilmember Tharp stated she was convinced that the City needed additional water storage. She
stated she would continue to support the concept of one dam shared by regional partners. She noted
that a strong conservation program is one of the criteria that would be looked at during the permitting
process. She stated she supported having the issue brought back to the Council periodically. She
stated it is true the project could provide water for growth outside of the region and that water could
be a tool to control growth. She stated she did not see this as the role of the City and that there
should be sharing with neighbors. She stated the City could show leadership with regard to good
development.
Councilmember Hamrick stated he was concerned about the areas outside of the City that do not use
water in an environmentally sensitive manner. He stated the City's values should not be sacrificed
in a cooperative venture and that other entities should be held to a higher standard. He expressed
concern about cooperation with other entities and what they would intend to do with the water. He
stated he was in support of exercising the option because it made financial sense. He stated he would
not support going all the way to a capacity of 40,000 acre-feet if it does not suit the City's needs.
Councilmember Bertschy stated he supported exercising the option. He stated he had concerns about
the environmental impact of any design at that location. He noted that there was a lengthy process
and that it was good that the Council will be reviewing the matter periodically.
Councilmember Kastein thanked the staff for its work on the issue. He stated it made a lot of sense
to cooperate with the City's neighbors when the City could get the water it needed at half the cost.
He stated this was an opportunity for the Council to add storage capacity for the future.
Councilmember Weitkunat stated it was extremely important for the City to exercise the option. She
stated this should be done with a vision for the future. She stated the review process will cover all
environmental concerns and that the City should work cooperatively with other entities.
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Mayor Martinez stated he would support the motion. He stated it was not the City's job to leverage
how things happened for other entities.
The vote on the motion to adopt Resolution 2003-121 with the amendment as stated by the City
Attorney was as follows: Yeas: Councilmembers Bertschy, Hamrick, Kastein, Martinez, Roy, Tharp
and Weitkunat. Nays: None.
THE MOTION CARRIED
Resolution 2003-122
Accepting a Property Owner Petition Regarding the
Initiation of a Special Improvement District, Stating the
Need For, the Nature Of, and the Location of the
Improvements to Be Made, Describing the Area to Be
Assessed for the Same, and Directing the Director of Community
Planning and Environmental Services to Prepare and Present
to the City Council the Necessary Information for the
Formation of Said District, Adopted.
The following is staff s memorandum on this item.
"Financial Impact
This Special Improvement District will be financed privately by property owners developing in the
proposed district, with normal Street Oversizing Program participation. There will not be any City
of Fort Collins Special Improvement District Bonds issued.
Executive Summary
Traffic congestion at the Timberline/Prospect intersection is well below the City's Level of Service
requirements, with almost all legs and turn movements failing during the AM and PM peak rush
hours. In accordance with the Adequate Public Facilities Ordinance, any new development which
impacts this intersection cannot proceed until these existing deficiencies are corrected. In the
absence ofany City Capital Improvementfundingfor this intersection, two impacted developers are
electing to privately fund these improvements in order to proceed with their development projects.
These developers are expected to constitute the majority of the property owners within the proposed
District. They are proposing the initiation of the District to spread a portion of the costs to other
undeveloped property in the area benefited by the improvements through assessments.
This Resolution accepts thepetition ofone of theparticipatingproperty owners and directs Citystaff
to prepare the plans and cost estimates. The Resolution is the first step in creating the District. In
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subsequent actions, City Council will be asked to accept the completed plans, approve the
assessment method, hold a public hearing, and then create the SID by Ordinance.
Timberline Road, from Drake to Prospect is currently the highest deficiency segment in the City's
street network. The Timberline/Prospect intersection experiences failing levels of service in both
the AM and PM peak hours. Attempts by the City to create a funding mechanism for the necessary
improvements have not been successful.
BACKGROUND
The City's Adequate Public Facilities (APF) Ordinance does not allow any additional development
to impact failing intersections. A conceptual estimate indicates that $2.3 million is needed to
improve the intersection to meet minimum levels of service necessary to allow additional
development in the area. The improvements contemplated are:
• Dedicated right turn lanes on all legs of the intersection
• Double left turn lanes on Timberline
• Additional through lanes on Timberline
These interim improvements will add capacity to the intersection, but will not include landscaped
medians, concretepaving, enhanced crosswalks, or other elements not necessary to increase levels
of service.
There are two large development parcels which are currently affected by the APF Ordinance. The
James Company controls 221 acres on the east side of Timberline and north of Drake and is
proposing development ofapproximately 925 residential lots. Timberline -Drake, Inc. is proposing
448 to 682 residential units and 7.2 acres of employment on the west side of Timberline and north
of Drake. Neither of these developments can build in the absence of improvements to
Timberline/Prospect. These developers have elected to fund the $2.3 million APF improvements in
order to proceed with their development projects.
There are other smaller undeveloped parcels in the one -mile radius area around
Timberline/Prospect that are also affected by the City's APF Ordinance. Some have expressed
interest in participating in the cost of improving the Timberline/Prospect intersection while others
have indicated a desire to wait until the improvements are made before developing.
The James Company and Timberline -Drake Investments have proposed the formation of an SID as
a financing mechanism to allowforfair and equitable assessment ofall benefittingproperty owners.
The terms of the district would generally be:
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1. The amount financed is estimated to be $2.3 million, or the amount needed to make the
"APF" improvements to the Timberline/Prospect intersection.
2. No municipal or City -backed bonds will be issued. Financing will be by the developers,
using cash or private placement bonds. The City would be the collection agency for
assessments, but would not incur anyfinancial liability. Actual payment of the $2.3 million
by the James Company and Timberline -Drake Investments will not occur until construction
bidding (February 2005) to avoid capitalized interest. Security in the estimated amount of
$2.3 million will be necessary in order for development to continue during the formation of
the Special Improvement District.
3. It is anticipated that theproposed assessment method will be based on twofactors associated
with benefitting undeveloped property. These factors are trip generation and proximity to
the intersection within a one -mile radius. Efforts will be made to obtain consent of any
potentially assessable property owner prior to the creation of the District.
4. The properties included in the SID will begin repayment of their proportionate share (the
assessments) upon completion of the construction and final accounting of the costs
(tentatively in late 2006).
Providing a 10 year repayment schedule for properties being assessed could be an incentive for
properties to participate in the SID without opposition. However, in accordance with the TABOR
Amendment, a vote of district properties may be necessary to allow the City to enter into a multi-
year obligation to collect assessments over time. The alternative to a 10 year payback is an
immediate one time assessment of the full amount due. This one time assessment, without the option
to pay in installments, would likely produce a greater protest from any involuntary participants in
the District.
The initiating developers will also immediately provide $100,000 in funds to allow the City to
prepare the plans, estimate of costs, and maps of the district in order to complete the engineering
design without cost to the City.
The improvements to Timberline along the frontage of the developing parcels will be funded in
accordance with normal Street OversizingProgramparticipation. The entire segment of Timberline
from Drake to Prospect, and the Timberline Prospect intersection improvements, are planned to be
constructed at the same time in order to reduce the impacts ofconstruction on motorists and to take
advantage of cost savings due to economies of scale. A tentative timeline would be:
• November 2003 -- Acceptance of the petition
• November 2003 to August 2004 — Engineering design
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• August/September2004—Second Resolution Accepting Plans,SIDCreationOrdinance,call
election within the District for TABOR requirement if necessary
• August 2004 to February 2005 — ROWAcquisition
• March 2005 to August 2006 — Construction
• Assessment Ordinance immediately after construction
Staff has reviewed the form of the petition of the proposed District and find it in compliance with
adopted City Council policies regarding Special Improvement Districts. Staff believes the SID
proposed for financing the corrections to the Adequate Public Facilities deficiencies is:
Fair and equitable to undeveloped property owners in the District
In the public's interest due to the health and safety problems associated with the
Timberline/Prospect intersection
A no risk financial solution to the City to fund improvements
The petition states that the Petitioner can withdraw the petition, as long as the Petitioner does so
within five days of the passage of the resolution approving the plans, specifications, map and
estimate of the City Engineer. Staff anticipates that this resolution will likely be presented to the
Council in the summer or fall of 2004. If the Petitioner does withdraw the petition, it will still be
up to the Council to decide whether to rescind the SID proceedings and call a halt to the SID. Even
if the SID is terminated, however, the improvements will still be made, assuming that the property
owners choose to construct their developments. The developers would then be limited to seeking
reimbursement of their funding through reimbursement agreements rather than through the SID. "
City Manager Fischbach introduced the agenda item.
Matt Baker, Street Oversizing Coordinator, presented background information regarding the agenda
item and the proposed improvement district. He presented visual information regarding the traffic
conditions at this intersection and spoke regarding proposed project costs to be funded through the
SID mechanism and street oversizing. He stated developers will be responsible for local access costs
adjacent to their developments. He stated the total project cost for these interim improvements
would be $6.9 million. He spoke regarding proposed developments and undeveloped parcels in the
area. He stated developers had elected to advance the City $2.3 million for Adequate Public
Facilities (APF) improvements in order to proceed with their development projects and that the
developers are petitioning for the formation of a Special Improvement District to allow some of the
cost of the APF improvements to be fairly apportioned to all of the undeveloped property that would
benefit. He stated the amount financed will be the $2.3 million needed to construct the APF
improvements at the Timberline/Prospect intersection. He stated there will be no City -backed bonds,
that the entire funding will be from the developers in a security interest instrument and that the City
will collect assessments but will not incur any financial liability. He stated this Resolution is the first
step in the creation of a Special Improvement District and that Council will be asked for other
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approvals for the creation of the SID and an assessment ordinance. He stated the petitioner will
provide money for the engineering design in the amount of about $100,000. He stated the formation
of a SID will take several months and that the developers will have to post security in the entire
amount of $2.3 million if they want to proceed with development prior to the establishment of the
SID. He spoke regarding the process for payment of assessments and the possibility of a TABOR
election in 2004. He outlined the remaining steps in the process. He stated the creation of a SID will
allow the completion of the Prospect/Timberline intersection improvements when there is no other
available funding source. He stated there will be no financial risk to the City and that the developers
will pay about 70% of the assessments. He stated the ultimate improvements will not be built with
this project. He stated staff s recommendation is to proceed with adoption of the Resolution.
("Secretary's Note: Council took a brief recess at this point.)
Councilmember Hamrick asked why a TABOR election might be required. City Attorney Roy spoke
regarding the possible TABOR election.
Councilmember Hamrick asked about the elements (landscaped medians, concrete paving, enhanced
sight crosswalks, etc.) that will not be included in the interim improvements because they are not
needed to increase levels of service. He asked if the SID would be able to legally pay for those types
of improvements and when those improvements will be done. Ron Phillips, Transportation Services
Director, stated staff hoped to obtain federal funds for the project and that will determine when and
if the full improvements will be made with this project. He stated the full improvements will be
designed and that the interim improvements will be constructed if federal funding is not obtained.
Councilmember Hamrick asked if the improvements will be done when developments on either side
of Timberline would be done. Baker stated they would be partially done and noted that there were
City properties adjacent to Timberline on the west side of the road and that those properties would
not develop.
Councilmember Hamrick noted that there are existing bicycle lanes and asked if they will still be
there. Baker replied in the affirmative.
Councilmember Roy asked how many other road projects had been funded with Special
Improvement Districts in Fort Collins. Baker stated there have been 6 to7 Special Improvement
Districts since 1978.
Councilmember Roy asked if they were structured the same as this SID. Baker stated the previous
SIDS were traditional SIDs in which the City issued Special Assessment District bonds and the
assessments were collected to pay off the bonds. He stated this SID is not being backed by City
bonds and that the special assessments will be collected to pay back the advance to the petitioners.
He stated the City will not be incurring any financial liability for this District.
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Councilmember Roy asked what it will cost to retrofit the improvements at this intersection when
improvements are eventually made at a higher level. Baker stated the intent of the interim
improvements is to build the east side of the roadway with curb, gutter and sidewalk and with
permanent roadway improvements to where the median will eventually be. He stated asphalt paving
will be used from there to add capacity and bike lanes. He stated retrofitting will involve removing
asphalt, adding medians and widening the west side to have curb, gutter and sidewalk.
Councilmember Roy asked if this SID will be paying for that retrofitting. Baker replied in the
negative.
Councilmember Roy asked what the retrofitting will cost. Baker stated the right-of-way on the west
side will be funded by the SID. He stated the interim right-of-way will be much less expensive that
the ultimate right-of-way. He stated the estimates are not available and that he could follow-up with
a memo to the Council.
Councilmember Roy stated he would be interested in seeing the estimates. He stated the staff memo
referenced "involuntary special improvement district" and asked for an explanation of that phrase.
Baker stated a SID is voluntary when every property that was assessed is involved in the petition for
the SID. He stated a SID is involuntary if it includes properties that would benefit but have not
volunteered to be in the District.
Councilmember Roy asked about a reference in a staff memo to "features that would not be
affordable" under this proposal (concrete pavement, improving the intersection to its full
configuration, landscaped medians, and curb/gutter/sidewalk). He asked who would not be able to
afford these improvements. Phillips stated the full improvements ($11.4 million) would not be
affordable under the interim project ($6.9 million). He stated the interim project would address
health and safety and congestion issues for the near -term.
Councilmember Roy asked if the City's street standards will be lessened under this proposal.
Phillips replied in the affirmative for the interim project and stated the full project will eventually
be built to the City's full standards. He stated the City's construction standards will not be lessened
and that the full arterial street will not be built with the interim project.
Councilmember Roy asked how much it would cost to build the full improvements. Phillips stated
that there is about a $4 million difference between building the full project compared with the
interim project.
Councilmember Roy asked if that $4 million will eventually be paid by the City. Phillips stated that
that was one possibility and that staff was working to obtain federal money for the project.
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Councilmember Tharp asked if other money was available to accomplish the full project if a federal
grant is obtained. City Manager Fischbach stated staff is working on the funding package. He stated
this action will not preclude that possibility and that this entire project will be done if federal funding
is obtained. He stated the question is whether Harmony and Shields could also be done.
Councilmember Kastein asked if staff could look at a configuration that would mean not having to
rip up any interim improvements later. He noted that Harmony was also a high priority project for
safety reasons. Baker stated Council will be asked to accept the construction plans during the
process for establishment of the SID.
Councilmember W eitkunat made a motion, seconded by Councilmember Tharp, to adopt Resolution
2003-122,
Councilmember Roy stated he would not support the motion and expressed a concern that there had
been no road projects like this one. He stated the City's standards would be lessened in the interim
project and that this could cost the City more than if the project was done correctly the first time.
He stated he was concerned with setting a precedent for projects in which developers create their
own funding mechanisms for solutions to specific problems rather than having a unified approach
by the City to such projects. He stated he believed that this could end up costing the City more
money in the long run.
Councilmember Hamrick asked for comments regarding whether this could actually cost the City
more in the long run. Phillips stated inflationary costs will be added to the project cost for every year
of delay. He stated there will be some additional costs because of pavement that would be put in and
then eventually removed to put in a median. He stated there will be some additional costs to the
City if a project is done in stages. He spoke regarding the costs to the public if no improvements are
made.
Councilmember Hamrick asked when this issue would be coming back to Council. Phillips stated
the Council will see the matter in August and then twice more after that.
Councilmember Hamrick asked if the Council could vote to stop the process at that time based on
any additional cost information. City Attorney Roy stated Council would have the option at anytime
to rescind the proceedings. He stated there would be some complications after notice goes out to the
other property owners and that notice will not be given until after the next Resolution at which time
more information will be available.
Councilmember Hamrick stated he shared Councilmember Roy's concerns about setting a precedent.
He stated he would support the motion because Council will have another chance to take a look at
the SID when more information is available about costs.
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Councilmember Weitkunat stated a petition was received, that it followed adopted policy with regard
to Special Improvement Districts, and that private citizens have "stepped up to the plate" to help the
City address a problem with inadequate public facilities. She spoke regarding health and safety
issues at the Prospect/Timberline intersection. She stated there would be no financial risk to the City
and that she strongly supported this direction. She urged the Council to take advantage of this
opportunity to address the problem at the intersection.
Councilmember Bertschy stated he would support the Resolution and that this is an example of
growth paying its way. He expressed hope that federal money will help the City finish the entire
intersection.
Councilmember Tharp stated she was in support of the motion and expressed a concern that the City
address the issue of long term funding for transportation needs.
Mayor Martinez stated he would support the motion.
Councilmember Kastein stated he would support the motion. He stated development will be paying
its own way at the cost of more expensive houses within the development. He stated there were 26
high priority roadway projects in the transportation master plan and that this SID will address part
of the need for one of the projects.
Mayor Martinez asked if there are any other Special Improvement Districts at this time. Baker stated
all of the SIDS had been paid off and closed out. Phillips stated benefits of the $2.3 million far
outweigh any future increased costs due to the phasing.
Mayor Martinez asked if there is any "bad debt' from previous SIDS. Alan Krcmarik, Finance
Director, stated there were some problems with previous SIDs. City Manager Fischbach stated those
SIDS were structured differently. He stated there is no possibility of bad debt on the proposed SID.
Krcmarik stated the City was able to sell off the property and pay the City back in the previous
instances. City Attorney Roy emphasized the difference between the previous situations and the
current situation and stated the City will not be issuing any debt for this District. He stated the
developers who are advancing the money are the ones who will be at risk for the nonpayment of the
assessment.
Mayor Martinez stated this should go forward because the developers are putting their money up
front to pay for the project and that development is paying its own way in this case. He stated this
project is needed.
Councilmember Hamrick asked how much the cost of houses in the development will increase due
to this SID. Phillips stated the average per residential dwelling unit is in the $1,800 to $2,500 range.
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The vote on the motion was as follows: Yeas: Councilmembers Bertschy, Hamrick, Kastein,
Martinez, Tharp and Weitkunat. Nays: Councilmember Roy.
THE MOTION CARRIED
Ordinance No. 142, 2003
Authorizing the Issuance of City of Fort Collins, Colorado,
Downtown Development Authority Taxable Subordinate Tax
Increment Revenue Bonds, Series 2003, Dated Their Delivery Date,
in the Aggregate Principal Amount of $1,000,000 for the Purpose
of Financing Certain Capital Improvements and Capital Projects; and
Providing for the Pledge of Certain Incremental Ad Valorem Tax Revenues
to Pay the Principal of, Interest on and Any Premium Due in Connection
with the Redemption of the Bonds. Adopted on Second Reading.
The following is staff s memorandum on this item.
"Executive Summary
The City of Fort Collins created the Downtown Development Authority to make desired
improvements in the downtown area. Through tax increment financing, the DDA has made
significant contributions to the redevelopment and improvement of the downtown area. This
Ordinance, which was unanimously adopted on First Reading on October 21, 2003, provides
,funding from unreserved fund balance in the DDA Debt Service Fund to make additional
improvements in the downtown area. This Ordinance also authorizes the issuance of $1 million of
short term bonds for the projects which will be paid from the tax increment revenue. "
City Manager Fischbach stated staff was available to answer any questions.
Councilmember Roy asked about the DDA criteria i.e. the effects on and proximity to the Poudre
River Corridor. He stated he had similar concerns about Project Bluestream at the last meeting and
asked about the criteria used in determining funding eligibility for the First National Bank project.
He asked if the project would "provide seeds for the future in an area in need of redevelopment,
including but not limited to infrastructure, parking, transportation" and how the First National Bank
project was "winnowed" onto the list of funded projects. Chip Steiner, Executive Director of the
Downtown Development Authority, cited the objectives and purposes in the DDA Plan of
Development: to maintain the District as a regional center for commercial, financial, governmental,
social, recreational, cultural activities; to encourage private restoration, rehabilitation and
development within the District through public improvements and assistance; to improve usefulness
and accessibility of sites and streets, thereby promoting the growth of the District and retarding
economic, physical and social decline in the District; and promotion of, participation in and
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assistance to private and public developments consistent with the priorities of the DDA, by all means
permitted by federal, state and local laws. He stated the Downtown Plan policies supported the
retention and expansion of existing businesses while attracting and encouraging new businesses and
enhancement of the downtown's dominance in finance, government, professional services, cultural
services and entertainment. He stated those were the criteria on which the DDA based its decision.
Councilmember Roy expressed a concern that First National Bank had nearly $13 billion in managed
assets and over 7,000 employees and that the Bank was growing fast and profitably in national and
international markets. He asked if this sort of taxpayer assistance to a firm that was worth $13
billion would have been considered to be appropriate in the beginning of the DDA. Steiner stated
the local branch of the bank was not worth $13 billion and that the local bank had been one of the
strongest supporters of the central business district. He stated the bank anchored downtown as the
financial center of the community. He stated the renovation of the building ensured a better
presentation to the street and the role of the DDA was to assist in that kind of public improvement.
He stated in 1985 the DDA considered participating in a 12-story bank building so this was not the
first time the idea had been considered.
Councilmember Roy asked about giving taxpayer money to Project Bluestream after it sought a
variance to encroach on an area that was ostensibly one of the key reasons for the existence of the
DDA i.e. the protection of the Poudre River Corridor. Steiner stated the Plan of Development
provided for the promotion of and assistance to private and public developments consistent with the
priorities of the DDA by all means permitted by federal, state and local laws and regulations. He
stated this included light manufacturing. He also cited policies in the Downtown Plan relating to
destination retail uses, light manufacturing, research and scientific laboratories and similar uses at
locations within the Poudre River Corridor District that were compatible with the scenic, natural,
recreational and historical values of the river.
Councilmember Roy expressed a concern with giving taxpayer dollars to a project that would "go
against" one of the goals of the DDA i.e. the future vision for the Poudre River Corridor. Kim
Jordan, Downtown Development Authority Chair, stated an encroachment in the buffer area was not
necessarily the equivalent of environmental degradation. She stated there were possibilities for
mitigation, including planting of wetland area. She stated the DDA had a fairly high degree of
confidence that the project's efforts with regard to the encroachment could be seen as complementary
to the buffer area.
Councilmember Roy stated he had reservations regarding whether the project took the City's
regulations seriously when it sought a 250 foot view and a reduced buffer on the river. He expressed
concern that the company would receive taxpayer dollars from an organization which had among its
goals the protection of the river corridor. Ms. Jordan stated the DDA also looked at the impact on
property values and whether the DDA would be able to recoup the funding through tax increment
increases.
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November 4, 2003
Councilmember Kastein stated the formal position of the Council was that the encroachment was
allowable.
Councilmember Roy asked how other Councilmembers felt about giving taxpayer dollars to a firm
that was worth $13 billion.
Councilmember Kastein stated all businesses within the DDA paid into the DDA and that at some
point that benefit returned to those who paid for the improvements. He stated the bank
improvements fell within the DDA guidelines and that it was a worthwhile project for the downtown.
Councilmember Hamrick stated he did not see criteria regarding providing financial incentives to
relocate companies from other towns to the downtown. He asked how financial incentives to
relocate the company from Laramie came about. Ms. Jordan stated the DDA relied primarily on
Policy 15A relating to fostering and developing new jobs in the downtown. She stated this is tax
increment financing and that there would be a higher tax payment that would come into the City for
that property, which would constitute an offset. Steiner stated jobs were a critical component of the
success of the downtown because they provide employment and income to spend.
Councilmember Hamrick asked where the policy referenced by Ms. Jordan was located. Steiner
stated Policy 15A was in the Downtown Plan.
Councilmember Hamrick asked about references by Mr. Steiner and if those were in the Plan of
Development. Steiner replied in the affirmative.
Councilmember Hamrick stated he did not have a copy of the Plan of Development. Steiner stated
it is a document required by the State and which was adopted by City Council in order to create a
Downtown Development Authority.
Councilmember Hamrick asked if the Plan of Development referenced financial incentives. Steiner
stated it is almost entirely about using tax increment financing and that it listed priorities, projects
and objectives and the methods that could be used by the DDA to achieve the goals and objectives.
Councilmember Hamrick asked if the DDA worked through any kind of economic impact model in
reviewing projects. Steiner stated the DDA worked through the impact of property taxes.
Councilmember Hamrick expressed concern that the DDA is narrowly focused on some criteria and
did not do a full financial analysis of all of the impacts. Ms. Jordan stated the money was spent for
public improvements (facade, sidewalk, public infrastructure, etc.).
Councilmember Hamrick stated the Council had adopted an economic development policy and asked
how the DDA's actions corresponded with overall City policy. He stated the City's policy stated
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financial incentives will be considered on a case -by -case basis after thorough staff analysis and
Council discussion of the merits of each individual proposal. He noted that this DDA agenda item
was presented to the City Council on the Consent Calendar and questioned whether the Council had
been monitoring such expenditures carefully. He asked how the City's economic policy would
correspond with DDA policy. Steiner stated the policies followed by the DDA had been cited i.e.
foster and develop new jobs; permit destination retail uses, light manufacturing in the Poudre River
Corridor; and promote and support private developments that were consistent with the plans and
objectives of the DDA (including light manufacturing).
Councilmember Hamrick stated once the DDA made its decision, it should be brought back to the
Council for thorough analysis and discussion of the merits of the proposal. He stated he did not
believe that happened in this process.
Councilmember Weitkunat stated the discussion related to an analysis of the DDA and how it
functioned and what is on the table for discussion is a list of projects for approval and bonding. She
objected to discussing the DDA's operations at this meeting.
Mayor Martinez stated the discussion was outside of the arena of the motion.
Councilmember Hamrick disagreed and stated the focus of the discussion is spending taxpayer
money to relocate a project from Laramie to Fort Collins and that it is up to Council to make sure
that the money is spent appropriately.
Councilmember Weitkunat stated the funding is not for the purpose of relocating the company.
Councilmember Kastein made a motion, seconded by Councilmember Weitkunat, to terminate the
discussion because of the time needed to discuss the budget. The vote on the motion was as follows:
Yeas: Councilmembers Bertschy, Kastein, Martinez and Weitkunat. Nays: Councilmember
Hamrick, Roy and Tharp.
THE MOTION CARRIED
Councilmember Weitkunat made a motion, seconded by Councilmember Bertschy, to adopt
Ordinance No.142, 2003 on Second Reading.
Councilmember Hamrick asked the motion maker to consider a friendly amendment striking the First
National Bank facade improvements project and the Project Bluestream improvements project.
Councilmember Weitkunat did not accept the amendment as a friendly amendment.
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Councilmember Bertschy stated he voted forboth projects that had been questioned as a DDA board
member after due consideration, lengthy discussion and a great deal of analysis. He stated the DDA
meetings were open to the public. He stated the City owns the facades so that in perpetuity, the
facade for the structure will remain appropriate to the downtown. He stated much more is involved
than looking at the bank's assets. He stated the second project is for public improvements that will
remain and will increase the value of the property significantly. He stated the investment in
improvements will be paid back in taxes. He stated it may be possible to disagree on the projects
but that the process should not be in question. He stated he would support the Ordinance.
Councilmember Roy stated he supported a downtown that would remain vibrant and the heart of Fort
Collins and that he would work hard to protect the Poudre River Corridor through the downtown.
He stated there are competing issues with the projects that could not satisfy his two goals. He spoke
regarding the "humble" origins of the DDA and the simple projects that were approved. He stated
the ownership is a plus for the City. He stated he would not be able to support the motion because
of his concern regarding the Poudre River.
Councilmember Hamrick stated he would not support the motion because he did not believe that
there should be automatic approval simply because one Councilmember served on the DDA Board.
He stated it was irresponsible for Council to shirk its responsibility for taxpayer expenditures,
especially if there were questions about the process. He stated it is clear that the financial policies
provided for Council review of such projects.
Councilmember Weitkunat stated she would support the motion and that she believed that the work
of the DDA was well thought through. She stated she saw "enrichment and enhancement" rather
than "encroachment." She stated she did not see the negativity with the projects that had been
expressed by others. She reminded that all Councilmembers have the opportunity to attend DDA
meetings when decisions are made.
Councilmember Kastein stated he did not see anything out of the ordinary with this agenda item.
He stated there are Council representatives on many boards and that they are trusted with the work
of City Council. He asked that Councilmember Bertschy advise the Council if anything out of the
ordinary is presented from the DDA for Council consideration.
Mayor Martinez stated he would support the motion and that he was sorry to see the continuing
discussion about In -Situ. He stated this would be an investment of money.
The vote on the motion was as follows: Yeas: Councilmembers Bertschy, Kastein, Martinez, Tharp
and Weitkunat. Nays Councilmembers Hamrick and Roy.
THE MOTION CARRIED
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Mayor Martinez stated the 2004-2005 Budget items would now be heard.
Mayor Martinez pulled item #22 First Reading of Ordinance No. 148, 2003, Amending the Code of
the City of Fort Collins to Increase the Capital Improvement Expansion Fee, Street Oversizing Fee
and Neighborhood Parkland Fee to Reflect Inflation in Associated Costs of Services and item #24
Items Relating to Utility Rates and Charges for 2004 from the Budget Consent Calendar.
BUDGET CONSENT CALENDAR
ITEMS RELATING TO THE 2004 - 2005 BUDGET
BUDGET CONSENT ITEMS
Items Numbers 21 through 25 are being presented together in the Consent Calendar format. These
items have been reviewed and discussed at Budget Study Sessions and are being presented in this
manner to expedite their adoption. Any item may be withdrawn for discussion by any member of
the Council, staff or public and will be considered after the balance of the Budget Consent is
adopted.
21. First Reading of Ordinance No. 147, 2003, Appropriating Prior Year Reserves in the
Wastewater Fund for Prepayment of Debt Service.
Each year, the Finance Department reviews all of the City's debt instruments to determine
if there are opportunities to lower interest payments. This year, staff evaluated an
opportunity to save interest by prepaying debt service from reserves held in the Wastewater
fund. In 1995, the City of Fort Collins issued $13,800,000 of refunding bonds to lower
annual costs of the Wastewater fund. The bonds mature in 2005. Under the conditions of
the bond ordinance, the City may prepay the bonds that mature in 2004 and 2005 without any
prepayment penalty. By prepaying the bonds, the City can avoid $147,500 of interest costs
on the bonds.
22. First Reading of Ordinance No. 148, 2003, Amending the Code of the City of Fort Collins
to Increase the Capital Improvement Expansion Fee, Street Oversizing Fee and
Neighborhood Parkland Fee to Reflect Inflation in Associated Costs of Services.
Ordinance No. 148, 2003, increases the fee schedules for the Capital Improvement
Expansion Fees and Neighborhood Parkland Fee by the estimated change in the 2003
Denver -Boulder -Greeley Consumer Price Index. Costs in the Capital Improvement
Expansion Fees ("CIEF") Study and the fee schedule for the Neighborhood Parkland Fees
were calculated using costs from 1995. The City Code requires that increases keep up with
annual inflation. The fees were last adjusted in late 2002. This Ordinance increases the
CIEF and the neighborhood parkland fees by the projected increase in the CPI-U of 2.00%,
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November 4, 2003
and the Street Oversizing fees by 1.7%, which reflects the projected increase reported in the
Engineering News Record.
23. Items Relating to the 2004 Downtown Development Authority Budget.
A. First Reading of Ordinance No. 149, 2003, Appropriating Operating Funds and
Approving the Budget of the Downtown Development Authority for the Fiscal Year
Beginning January 1, 2004, and Fixing the Mill Levy for the Downtown
Development Authority for 2004.
The Downtown Development Authority (the "DDA") adopted the proposed DDA budget for
2003, totaling $2,307,470, and determined the mill levy necessary to provide for payment of
administrative costs incurred by the District, at its regular meeting of October 2, 2003.
B. First Reading of Ordinance No. 150, 2003, Appropriating Revenue in the Downtown
Development Authority Debt Service Fund for Payment of Debt Service for the Year
2004.
This Ordinance appropriates funds for 2004 from the tax increment received by the City for
the DDA for debt service payments. Debt service and annual lease payments include: the
semi-annual payments of the 2001 DDA Refunding Revenue Bonds in the amount of
$1,382,038, the DDA share of the Parking Structure lease payment of $281,224, the amount
of $35,112 for the annual interest payment on the subordinate revenue bonds issued in 2000,
and $1,000,000 for various projects identified by the DDA board from tax increment
revenues.
24. Items Relating to Utility Rates and Charges for 2004.
A. First Reading of Ordinance No. 151, 2003, Amending Chapter 26, Article XII, of the
Code of the City Relating to Utility Connection Fees and Miscellaneous Charges.
B. First Reading of Ordinance No. 152, 2003, Amending Chapter 26, Article III,
Division 4 of the Code of the City Relating to User Fees and Charges for Water.
C. First Reading of Ordinance No. 153, 2003, Amending Chapter 26, Article IV,
Division 4 of the Code of the City Relating to Wastewater Fees.
D. First Reading of Ordinance No. 154, 2003, Amending Chapter 26, Article VI,
Division 4 of the Code of the City Relating to Electric Rates and Charges.
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November 4, 2003
E. First Reading of Ordinance No. 155, 2003, Amending Chapter 26, Article VII,
Division 2 of the Code of the City Relating to Stormwater Fees.
This item consists of five ordinances establishing the Utilities rates and various charges for
2004,
25. Resolution 2003-123 Adopting a Revenue Allocation Formula to Define the City of Fort
Collins' Contribution to the Poudre Fire Authority Budget for the Year 2004 for Operations
and Maintenance.
In December 1981, the Council entered into an agreement with the Poudre Valley Fire
Protection District, creating the Poudre Fire Authority.
According to the Intergovernmental Agreement between the City of Fort Collins and the
Poudre Valley Fire Protection District, the City will contribute funding for maintenance and
operating costs to the Authority based on a "Revenue Allocation Formula" ("RAF"). The
RAF is to be set annually based upon a percentage of sales and use tax revenues (excluding
dedicated sales and use tax revenues that must be spent on specific projects) and a portion
of the operating mill levy of the City's property tax. Article X, Section 20 of the State
Constitution ("TABOR") limits the rate of growth to a combination of the Denver -Boulder -
Greeley Consumer Price Index and additions to the local property tax base primarily due to
construction and annexation. Although voters passed a ballot measure in November, 1997
allowing the City to retain excess revenues over the growth limits imposed by TABOR, the
RAF is still reviewed annually and proportionately reduced, if necessary, if City revenues
exceed the estimated annual percentage increase in revenues that the City would be permitted
to retain under TABOR.
***END BUDGET CONSENT***
26. Pulled Budget Consent Items.
ITEMS NEEDING INDIVIDUAL CONSIDERATION
27. First Reading of Ordinance No. 156, 2003, Being the Annual Appropriation Ordinance
Relating to the Annual Appropriations for the Fiscal Year 20K Adopting the Budget for the
Fiscal Years Beginning January 1, 2004, and Ending December 31, 2005: and Fixing the Mill
Levy for Fiscal Year 2004. (1 hour)
There have been four study sessions involving discussion of the 2004-2005 budget for the
City of Fort Collins. In addition, two public hearings were held. With City Council direction,
the City of Fort Collins 2004-2005 Biennial Budget was developed and is now presented to
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City Council for consideration and adoption and to appropriate the necessary monies to fund
the budget for fiscal year 2004. The Second Reading of this ordinance is scheduled for
November 18, 2003.
***END BUDGET CONSENT***
Ordinances on First Reading relating to the budget were read by title by City Clerk Krajicek.
21. First Reading of Ordinance No. 147, 2003, Appropriating Prior Year Reserves in the
Wastewater Fund for Prepayment of Debt Service.
22. First Reading of Ordinance No. 148, 2003, Amending the Code of the City of Fort Collins
to Increase the Capital Improvement Expansion Fee, Street Oversizing Fee and
Neighborhood Parkland Fee to Reflect Inflation in Associated Costs of Services.
23. Items Relating to the 2004 Downtown Development Authority Budd
A. First Reading of Ordinance No. 149, 2003, Appropriating Operating Funds and
Approving the Budget of the Downtown Development Authority for the Fiscal Year
Beginning January 1, 2004, and Fixing the Mill Levy for the Downtown
Development Authority for 2004.
B. First Reading of Ordinance No. 150, 2003, Appropriating Revenue in the Downtown
Development Authority Debt Service Fund for Payment of Debt Service for the Year
2004.
24. Items Relating to Utility Rates and Charges for 2004.
A. First Reading of Ordinance No. 151, 2003, Amending Chapter 26, Article XII, of the
Code of the City Relating to Utility Connection Fees and Miscellaneous Charges.
B. First Reading of Ordinance No. 152, 2003, Amending Chapter 26, Article III,
Division 4 of the Code of the City Relating to User Fees and Charges for Water.
C. First Reading of Ordinance No. 153, 2003, Amending Chapter 26, Article IV,
Division 4 of the Code of the City Relating to Wastewater Fees,
D. First Reading of Ordinance No. 154, 2003, Amending Chapter 26, Article VI,
Division 4 of the Code of the City Relating to Electric Rates and Charges.
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November 4, 2003
E. First Reading of Ordinance No. 155, 2003, Amending Chapter 26, Article VII,
Division 2 of the Code of the City Relating to Stormwater Fees.
27. First Reading of Ordinance No. 156, 2003, Being the Annual Appropriation Ordinance
Relating to the Annual Appropriations for the Fiscal Year 2004; Adopting the Budget for the
Fiscal Years Beginning January 1, 2004, and Ending December 31, 2005; and Fixing the Mill
Levy for Fiscal Year 2004.
Councilmember Bertschy made a motion, seconded by Councilmember Roy, to adopt and approve
all items not withdrawn from the Budget Consent Calendar. The vote on the motion was as follows:
Yeas: Councilmembers Bertschy, Hamrick, Kastein, Martinez, Roy, Tharp and Weitkunat. Nays:
None.
THE MOTION CARRIED
Ordinance No. 148, 2003
Amending the Code of the City of Fort Collins to
Increase the Capital Improvement Expansion Fee,
Street Oversizing Fee and Neighborhood Parkland Fee to
Reflect Inflation in Associated Costs of Services, Adopted on First Reading.
The following is staff s memorandum on this item.
"Financial Impact
In 2002 (the last full audited year), the City collected $3.8 million of Capital Improvement
Expansion fees, $2 million of Neighborhood Parkland fees, and $3.2 million of Street Oversizing
fees. For 2004, with the increasesfor inflation and construction costs, the City estimates that it will
collect$3.3 million of CapitallmprovementExpansionfees,$1.3 million ofNeighborhoodParkland
fees, and $3.7 million of Street Oversizing fees. The fees are collected when building permits are
issued forprojects. The decreases are due to the expectation that buildingpermits, on which thefees
are based, will be lower in 2004 than they were in 2002 and the estimates for 2003. At year-end of
2003, staff estimates that the total available balance in the Capital Improvement Expansion Fund
will be approximately $18.2 million. The Neighborhood Parkland Fund will have about $1.8
million. The Street Oversizing Fund is estimated to have nearly $1.3 million at the end of the year.
Executive Summary
Ordinance No. 148, 2003, increases the fee schedules for the Capital Improvement Expansion Fees
and Neighborhood Parkland Fee by the estimated change in the 2003 Denver -Boulder -Greeley
Consumer Price Index. Costs in the Capital Improvement Expansion Fees ('CLEF) Study and the
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November 4, 2003
fee schedule for the Neighborhood Parkland Fees were calculated using costs from 1995. The City
Code requires that increases keep up with annual inflation. The fees were last adjusted in late 2002.
This Ordinance increases the CIEF and the neighborhood parkland fees by the projected increase
in the CPI-U of 2.00%, and the Street Oversizingfees by 1.7%, which reflects the projected increase
reported in the Engineering News Record.
BACKGROUND
In May of 1996, Council adopted Ordinance No. 51, 1996, which established capital improvement
expansion fees for Library, Community Parkland, Police, Fire, and General Government services.
The purpose of the fees is to have new development pay a proportionate share of the capital
improvements and equipment that will be necessary to provide services to the development. The
Code provisions approved by the Ordinance provide for the annual adjustment of the fees to keep
up with inflation, using the Denver -Boulder (nowDenver-Boulder-Greeley)Consumer Price Index.
The City has imposed a Parkland Fee for neighborhood parks since 1968. In August of 1996,
Council adopted Ordinance No. 105, 1996, which conformed the Neighborhood Parkland Fee to the
housing size differentials in the Capital Improvement Expansion Fee ordinance, and updated the fee
schedule to reflect pre-1996 inflation. The Neighborhood Parkland fees were adjusted for inflation
in 1997-2002, along with the Capital Improvement Expansion Fees. Based on the Denver -Boulder -
Greeley Consumer Price Index for all urban consumers, the inflation level since the last annual
adjustment is an increase of 2.00%. This Ordinance adjusts the fee schedules in Chapter 7.5 and
Chapter 23 of the Code to account for inflation. In the Ordinance, all amounts for the capital
improvement expansion fees have been rounded to the nearest dollar. "
Mayor Martinez stated he disapproved of all of the fee increases and stated he would prefer to look
at ways to trim the budget.
Councilmember Tharp expressed a concern with fee increases and stated she had been assured that
fees were being raised to cover actual costs and inflation. She stated she would like to see the budget
tightened up even more.
City Manager Fischbach stated these fees were raised because of the Code requirement enacted by
Council in 1996 to make annual adjustments to reflect the Denver -Boulder -Greeley Consumer Price
Index.
Mayor Martinez asked if the fees were being increased because there is more expense and what the
additional expense was. City Manager Fischbach replied in the affirmative and stated the fee
increase reflects an increase in the cost of living.
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Mayor Martinez asked if more personnel and labor contributed to increased costs. City Manager
Fischbach stated these are fees that do not cover labor and personnel. Alan Krcmarik, Finance
Director, stated these fees cover the increased cost of construction. He stated the Denver -Boulder -
Greeley Consumer Price Index was utilized because it is in the State Constitution and because the
cost of providing governmental services (parkland, library, police, etc.) is increasing as the cost of
improvements go up. He stated there was a policy debate in 1996 and that Council supported
keeping up with the costs. He stated it is not known if the fee increases will keep up with costs until
the next projects are built.
Mayor Martinez asked if the fee increases are intended to keep up with new construction. Krcmarik
stated these fees were instituted in 1996 knowing that it might be a number of years before a project
such as the police building, would be built. He stated the cost of construction of the police building
will likely outstrip the inflation that has been experienced. He stated the intent is to try to keep up
with the cost. He stated the idea is that the people who pay for the facility will pay in "fair dollars"
and that an inflationary adjustment is necessary to keep the fee relatively equitable.
Mayor Martinez asked if this had anything to do with adding staff or personnel. Krcmarik replied
in the negative. City Manager Fischbach cited the Code requirement relating to annual adjustment
of the fee in accordance with the Consumer Price Index.
Councilmember Kastein stated he did not have an issue with making an adjustment in accordance
with standards that had been set by the Council. He stated the question is whether the standards are
correct and whether the standards should be changed.
Mayor Martinez stated he would like to see a discussion on the standards at some point.
Councilmember Weitkunat stated this adjustment is required by the Code and that Council adopted
the Code provision. She asked when the Code provision and any amendments were adopted.
Krcmarik spoke regarding the addition of specific fees to the Code section.
Councilmember Weitkunat made a motion, seconded by Councilmember Kastein, to adopt
Ordinance No. 148, 2003 on First Reading.
The vote on the motion was as follows: Yeas: Councilmembers Bertschy, Hamrick, Kastein,
Martinez, Roy, Tharp and Weitkunat. Nays: None.
THE MOTION CARRIED
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Ordinances Relating to Utility Rates and Charges for 2004,
Adopted on First Reading,
The following is staffs memorandum on this item.
"Financial Impact
These ordinances are projected to increase annual Light and Power Fund Revenues by 5.3%,
Wastewater Fund operating revenues by 5%, and Storm Drainage Fund operating revenues are
projected to increase 10%. There are no changes to operating revenues in the Water Fund.
Executive Summary
A. First Reading of Ordinance No. 151, 2003, Amending Chapter 26, Article X11, of the Code
of the City Relating to Utility Connection Fees and Miscellaneous Charges.
B. First Reading of Ordinance No. 152, 2003, Amending Chapter 26, Article III, Division 4 of
the Code of the City Relating to User Fees and Charges for Water.
C. First Reading of Ordinance No. 153, 2003, Amending Chapter 26, Article IV, Division 4 of
the Code of the City Relating to Wastewater Fees.
D. First Reading of Ordinance No. 154, 2003, Amending Chapter 26, Article VI, Division 4 of
the Code of the City Relating to Electric Rates and Charges.
E. First Reading of Ordinance No. 155, 2003, Amending Chapter 26, Article VII, Division 2 of
the Code of the City Relating to Stormwater Fees.
This item consists of five ordinances establishing the Utilities rates and various charges for 2004.
Overall, rates for utility services are proposed to increase as follows:
Water No changes at this time.
Wastewater
5.0%
Electric
5.3%
Stormwater
10.0%
In total, a "typical" residential customer's utility bill will increase $5.38 per month.
Both the Electric Board and Water Board reviewed the average rate increases in conjunction with
their consideration and recommendations to approve the Utilities' 2004-2005 Budget.
PM
November 4, 2003
The proposed ordinance relating to utility connection fees and miscellaneous charges creates
uniform charges for all services related to establishing and servicing customer accounts. The
connection and service fees replace miscellaneous utilityfees scattered throughout Chapter 26 of
the Code and codify others that had previously been set administratively.
Other than minor housekeeping changes, no significant changes in the rates for water service are
proposed at this time. Alternative water rate options will be addressed by City Council at the
December 9, 2003 study session. If water rate changes are supported, those changes would be
implemented by Ordinance before the spring of 2004.
A 5% increase is proposed for wastewater and a 10% increase is proposed for stormwater.
These increases will be "across the board" and do not vary by customer class.
The electric rates increases will vary by customer class (residential, commercial, industrial) and for
individual customers within the class. Based on the cost of service, residential customers will
experience larger increases than the commercial and industrial customers. Included in the overall
5.3% increase is a 2% increase for the initial implementation of City's Energy Supply Policy for
renewables and demand side management and energy conservation. 2.8% of the increase is a pass
through ofhighercostsfrom the City's wholesale energy supplier, Platte River Power Authority and
the remaining 0.5% is to recover increase costs of the distribution system including a the costs
related to a reduced load factor due mainly to summer air conditioning loads.
Theproposed ordinance also establishes a new section of the Code related to development charges
for new construction and customers who increase electric loads. These charges recover electric
system costs related to new development including development review. The fees have been in
existence since 1968 and are updated annually by the electric utility staff under the authorization
of the "Electric Service Rules and Regulations" and the "Construction Policies Practices and
Procedures " but the fee schedules have not been specifically included in the City Code in the past.
Theproposed ordinances will be effective January 1, 2004 orforbillings issued with meter readings
made after January 1, 2004.
BACKGROUND
Connection Fees and Miscellaneous Charges
The Utilities Customer Service Division incurs the costs for initiating accounts, delinquencies,
returned checks, and other miscellaneous customer services. In the past some of these fees have
been included in the water and electric sections of the Code while others were set administratively.
A new section of Code is proposed to consolidate the connection and miscellaneous utility billing
charges in one place. The established fees in other Code sections are being deleted. Theproposed
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November 4, 2003
fees are based on the cost to provide service and are billed to the specific customers who have
received the service. The fees will be billed and collected on the monthly utility bills by the
Customer Service Division, a part of the Utilities Customer Service and Administration Internal
Service Fund. The fees collected will offset the four utilities payments for the Division's services.
The most frequently billed fee is the one-time service connection fee which applies to all new
accounts. For those new accounts with at least one metered utility service (electric and/or water
plus any unmetered services), the proposed charge is $19.65. Without a metered service the cost is
$10.00. This compares to the current charge of $15.65 for the initiation of a metered electric
account. The new charge, which now includes all utilities, is based on an analysis of the field and
office expenses incurred to establish a new account.
The proposed fee schedule follows:
Proposed Utilities Connection Fees and Misc. Service Charges
Service connection fee for account with one or more metered services
(including all non -metered services for the same account).
$19.65
Customer initiated rate change (after 90 days of new service).
$19.65
Service connection fee for account with only non -metered services
(stormwater, wastewater, wind, flat commercial electric, sprinkler clocks,
cable towers, and floodlights).
$10.00
Service fee to reinstate an account to the owner / property manager between
tenants.
$10.00
Tum-off notice fee.
$7.00
Reconnect fee per service for water or electric following disconnection for
delinquency.
$20.00
After hours reconnect — Water (after 5:00 pm, weekends, and holidays)
$46.00
After hours reconnect — Electric (after 5:00 pm, weekends, and holidays) $55.45
Return item fee (check, electronic fund transfer, credit card, etc.) $ 15.00
Owner requested repair disconnect or reconnect fee, per trip. $ 20.00
Research / document fee per hour. $ 20.00
Other miscellaneous charges will be based on direct costs plus 15% for
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November 4, 2003
Water
The proposed Ordinance does not change the tiered and seasonal rates that were approved by City
Council in November 2002. The Council will address options for the water rates at the December
9, 2003 Study Session. The ordinance does make a few housekeeping changes that are needed,
including the elimination of the residential flat rates since all water customers are now metered.
It also makes reference to the connection and services charges proposed for the Billing Procedure
Section of the Code.
Wastewater
The Ordinance increases the City's wastewater rates by 5916. The increase is applied "across the
board"for all customers. With the proposed rates, atypical single family residential customer's
monthly bill will increase from $16.61 to $17.44 or 83 cents per month. This is based on a system
average 5,456 gallons per month winter quarter water use. The wastewater rate ordinance also
establishes a minimum winter quarter usage for single family residential customers of 3, 000gallons
(4,000forduplexes). The vast majority ofthe customers affected by the new minimum are snowbirds
and other winter vacancies.
The wastewater rate increase is needed to fund the operations and maintenance of the City's
wastewater system and to meet debt service coverage requirements. Wastewater revenues have
lagged projections since the Wastewater rates are based on metered water consumption. For
residential customers and some commercial customers, the water use billed during December,
January and February determines their wastewater billings for the next year. The remaining
commercial customers are billed for their metered water use each month. Since the community has
strongly supported both the water restrictions and voluntary water conservation throughout the past
year, the Utilities' wastewater revenues inadvertently declined as well. In addition, the Wastewater
Fund experienced a reduction in per customer revenue as flat rate customers were converted to
water meters.
Electric
Electric rates are proposed to increase an average of 5.3%. The rate adjustments to the individual
rate classes and customers will varyfrom the 5.3% average based on cost ofservice. The increases
are due to three factors. Platte River Power Authority, the City's wholesale energy supplier, has
increased its rates 3.9% effective January 1, 2004. This wholesale increase equates to a 2.8%
increase to Fort Collins customers. The second factor in the 5.3% overall rate adjustment is a 2%
increase to begin to implement the Energy Supply Policy adopted by Council Resolution 2003-038.
Approximately I % is being targeted for renewables to achieve the goal of 2% of the City's power
supply delivered from renewable energy sources by the end of 2004. The additional 1 % will be
earmarked for the implementation of conservation and demand side management programs to
reduce per capita energy consumption and peak demand. The remaining 0.5% is to recover
increased costs of operations and maintenance and the reduction in system wide load factor. The
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November 4, 2003
reduction in load factor is likely related to increased use of air conditioning within the residential
sector.
The proposed rate increases by customer class are as follows. Individual customers within these
rate classes will varyfrom the class average. This is particularly true in the GS750 (industrial/large
commercial) rate class. While the class average is 3%, the 15 customers in this class will have
increases of between 12.8% and 2.2%. This shift is a result of a rate design change to smooth the
rate transition between the GS50 and GS750 rate classes. With the proposed rates, atypical single
family residential customer's monthly bill will increase 7.5%,from $43.34 to $46.58 or $3.24 cents
per month. This is based on a system average 700k" per month.
Proposed Electric Increases by Customer Rate Class
Residential Energy Service
7.5%
Residential Demand Service
10.0%
General Service (Small Commercial)
4.2%
General Service 50 (Medium Commercial)
3.3%
General Service 750
3.0%
(Large Commercial & Industrial)
Floodlighting
10.0%
Traffic Signals
1.0%
The Ordinance also removes the services charges detailed in each electric rate schedule. These
charges are being replaced by the connection and services charges proposed for the Utility Bill and
Account Charges Authorized, Procedures -Section 26-712. The rate schedules reference the fees
in the new Code section.
Further, this Ordinance adopts new sections of Code dealing with the electric development charges
for new construction and existing customers who increase electric loads. The fees recover the costs
of both on -site and off -site facilities required to provide electric service to the new development.
These fees have been collected since 1968 under the authorization of the Utilities"Electric Service
Rules and Regulations" and "Construction Policies Practices and Procedures ", which was most
recently revised by Council Ordinance 083, 2002. The charges will continue to be updated annually
based on current labor and materials costs.
Development fees and/or charges apply to all construction, new development, redevelopment or
remodeling ofstructures served by the City electric system. Development fees include development
review, actual on -site costs incurred by the Utility to provide electric services and an allocated
portion of the cost of the electric distribution system that has been or will be added to serve new
loads. Fees are based on capacity requirements as determined by the Utility, and lot size and lineal
feet of dedicated roadway as determined by an approved plat.
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November 4, 2003
Fifty percent (50%) of calculated fees are payable prior to scheduling installation of electric
facilities, and the remaining fees are payable prior to energizing the electric system. Building site
charges related to the installation ofsecondary electric servicesfrom the property line to the service
panel are collected on residential development at the time a building permit is issued.
The fees are proposed as follows:
Residential Electric Development Fees
Residential Development Fees = Electric Capacity Fee (ECF) +
Building Site Charges (BSC)
A. Residential Electric Capacity Fee (ECF):
The ECF recovers the allocated cost of the electric distribution system from the lot corner
of the development to the electric substation. The cost of street lighting is also included.
ECF = Site Footage Fees+ Dwelling Unit Fees +
System Modifications
1) Site Footage (Single/Multifamily)
$0.03395 per square foot of developed area
$7.24 per foot of dedicated roadway
2) Single Family Panel Size
• 150 amp service (non -electric heat) $891 per dwelling unit
• 200 amp service (non -electric heat or electric heat) $1,572 per dwelling unit
Multifamily Panel Size
• 150 amp service (non -electric heat) $625 per dwelling unit
• 200 amp service (non -electric heat or electric heat) $1,049 per dwelling unit
3) System Modifications:
Additional capacity charges or credits will result from any required system
modification differing from that of the base electrical system model. Estimated
charges will be provided prior to construction.
The total electric capacityfeefora "typical"singlefamilydwelling unit is $2,216for a 150
amp service and $3,040for a 200 amp service. The total electric capacityfeefora "typical"
multifamily unit is $1, 004 for 150 amps and $1,441 for 200 amps.
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November 4, 2003
B. Residential Building Site Charges (BSC):
Building site charges provide for electric service from the property line to the service panel.
Unit costs for all building site charges including labor, equipment and materials are
recalculated on an annual basis. Additional charges apply for conditions such as frozen or
rocky soil, concrete cutting, asphalt replacement, and other site conditions that increase the
cost of installation.
Included as part ofthe building site charges is the secondary electric service charge which recovers
the cost of the electric service between the customers meter and the Utilities' transformer.
Secondary service charges are as follows:
Single -Family and Multi -Family Residential Secondary Service Charges
Secondary Service Size Charge (up to 65 feet) Charge (over 65 feet)
1/0service $413.00 $3.44/Foot
410 service
$556.00
$4.02 /Foot
350 kCM Service
$606.00
$4.08/Foot
1/0 Mobile Home
$310.00
N/A
Service
410 Mobile Home
$435.00
N4A
Service
Commercial/Industrial Electric Development Fees
A. Commercial/Industrial Electric Capacity Fee (ECF):
The ECF recovers the allocated cost ofthe electric distribution system from the lot corner ofthe
development to the electric substation. The cost of street lighting is also included.
ECF = Site Footage Fee + Service Entrance Capacity Fee + System
Modifications
1) Site Footage:
$0.03395 per square foot of developed area
$26.27 per foot of dedicated roadway
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November 4, 2003
1) Service Entrance Capacity:
a) Single -Phase
$624.90 per 100 amps @ 208 volts
$721.04 per 100 amps @ 240 volts
b) Three -Phase
$1,082.33 per 100 amps @ 208 volts
$1,248.84 per 100 amps @ 240 volts
$2,497.69per 100 amps @ 480 volts
3) System Modifications:
Additional capacity charges or credits will result from any required system modification
differingfrom that of the base electrical system model. Estimated charges will be provided
prior to construction.
B. Commercial/Industrial Building Site Charges (BSC:
Building site charges provide for electric service from the corner of the property to the
transformer. Secondary service is provided by the customer.
Single phase
$6.32 per foot of primary circuit
$1, 049.62 per transformer
Three-phase
$10.91 per foot ofprimary circuit
$1, 789.32 per transformer
Additional charges may apply for conditions such as frozen or rocky soil, concrete cutting, asphalt
replacement, and other site conditions that increase the cost of installation. These development
charges do not apply to individual services above 5,000 kilowatts for which the fees shall be
determined on a case -by -case basis to recover direct and indirect costs.
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November 4, 2003
Stormwater
If adopted by City Council, the City's stormwater rates will increase 10% "across the board "for
all customers. The 10% increase is consistent with the 2001 Stormwater Financing Plan adopted
by City Council Resolution 2001-93. The increase is necessary to fund the operations and
maintenance ofthe City's stormwater system, to pay debt service and to continue the accelerationof
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November 4, 2003
the citywide capital improvements program. A typical single family residential customer's monthly
bill will increase from $12.96 to $14.26 or $1.30 per month. The typical bill is based on an 8600
square foot lot with light run off. The proposed increase is to be effective on billings issued on or
after January 1, 2004.
Impact on Typical Residential Customer
The following tablesummarizes the impact ofthe proposed electric, wastewater andstormwater rate
adjustments on a typical single family residential customer's monthly utility bill. In total, this
"typical "customer's utility bill will increase $5.38permonth. Any changes to the 2004 water rates
will be determined at a later date.
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November 4, 2003
Typical Residential Customer — Monthiv Utilitv Bill
Current
2003
Proposed
2004
$
Increase
%
Increase
Electric
$ 43.34
$ 46.58
$ 3.24
7.5%
700 kWh per month
Wastewater
$ 16,61
$ 17.45
$ 0.84
5.0%
5,456 gallons/month
winter quarter use
M
runoff
gallons $ 21.62 $ 21.62 time.
July 21,000 No changes at this
gallons $ 63.77 $ 63.77 time.
Bill
Jan Water Use
$ 94.53 1 $ 99.91 1 $ 5.38 1 5.7%
Bill* 1 $ 1,274.40 1 $1,338.96 1 $ 64.56 1 5.1%
1 *Annual water use 50th ,percentile or 117.131 oallons
Front Range Rate Comparison — Typical Residential Customer
The following graphs show rate comparisons for several front range cities. The data is based on
rates in effect September 1, 2003 for the following residential use:
Electric 700 kWh/month
Wastewater 5,600 gallons winter quarter water use
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November 4, 2003
Stormwater 8,600 square foot lot, light run off
Water — January 5, 000 gallons
Water — July 21, 000 gallons "
Mayor Martinez stated he was concerned about the fee increases and asked if there is a legal
requirement for the Council to raise these fees as there was on the previous agenda item. City
Attorney Roy stated the Charter provides that the Council is to fix the rate fees and charges at a level
that will defray the operating costs of the Utilities. He stated staff believes these adjustments better
reflect the costs.
Mayor Martinez asked if these fees are being increased because of staff increases or if there are
additional hard costs being incurred. Wendy Williams, Utilities Deputy General Manager, stated
the 5.3% electric rate increase is due to a pass -through increase from Platte River Power
Authority, the energy supply policy recently adopted by Council, demand side management
programs, renewables, and increased distribution costs related to load factor.
Mayor Martinez asked why the full increase was needed. Williams stated the energy supply
policy requires a rate increase to meet the objectives.
Mayor Martinez asked why the increase could not be absorbed in the existing budget. Williams
stated there is no current funding to accomplish the goals of the energy supply policy. She stated
staff pointed out the need for a rate increase when the energy supply policy was presented to the
Council.
Mayor Martinez asked if more staff will be added. Williams stated there is a pass -through to
Platte River Power Authority on the renewables, that there will be programs provided, and that
an additional engineer will be hired to work on overseeing the programs.
Mayor Martinez asked how many staff people will be added. Williams stated one additional
engineer is being added.
Mayor Martinez asked about the payment to Platte River Power Authority for renewable energy.
Williams stated 1 % will pay for additional wind power provided by PRPA.
Mayor Martinez asked if the customer demand for wind energy is increasing. City Manager
Fischbach stated the City paid what was asked for by PRPA. Williams stated the energy supply
policy requires the City to increase its mix of renewables, and a 1 % rate increase will be required
to do that. She stated additional rate increases will be required to accomplish the goals of the
energy supply policy.
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November 4, 2003
Mayor Martinez asked what the new engineer would do. Williams stated the engineer will be
involved in organizing, planning and implementing demand side management programs that are
part of the energy supply policy. She stated those programs will help customers conserve energy
and reduce demand.
Councilmember Tharp stated she shared some of the Mayor's concerns. She asked what the
inducement is to contain costs if the rates can always be raised to cover expenses. She asked if
the Council could be assured that this is the most economical approach. She noted that wind
energy is being bought by some providers because it is cheaper and that PRPA is raising the
City's rates. She stated she would like to be convinced that the Utilities contain costs at every
possible level so that these constant rate increases are not necessary.
Councilmember Tharp stated she had concerns about the increase in wastewater rates. She stated
with water conservation there should be less water added to the system and that costs should be
less. She stated the agenda materials indicated that wastewater had lagged and that this meant
paying more. She stated staff had also indicated that most wastewater utility costs are fixed and
do not vary with the flow processed. She asked why people will be charged more when less
wastewater was being processed. Williams stated over 90% of the costs are fixed for water and
wastewater. She stated the metering program was accelerated and that flat rate customers paid a
flat rate for wastewater service while meter customers paid based on winter quarter consumption.
She stated conservation efforts resulted in less use during winter months and that the impact of
the reduced use is that there would be an individual wastewater rate that is fixed for a year based
on winter month consumption. She stated the result was a lag in wastewater revenues although
costs did not go down and debt service must still be met. She stated the Utilities work to contain
costs and that a number of capital programs have been delayed as a result of the lag in revenue.
Mayor Martinez asked if the Charter requires the Council to vote for these rate increases. City
Attorney Roy stated this is not an automatic increase as was the case with the capital
improvement expansion fees. He stated the Charter requires the Council to fix rates sufficient to
cover expenses.
Mayor Martinez asked how costs would be cut if the Council voted down these rate increases.
Williams stated reserves would have to be used to pay for the pass -through costs to PRPA and
that the energy supply policy would not be implemented.
Mayor Martinez asked how many rate increases there are for utilities. City Manager Fischbach
stated there was an annual rate adjustment.
Councilmember Weitkunat stated stormwater rate increases are due to a direct Council policy to
fast track improvements.
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November 4, 2003
Mayor Martinez asked how much the Utilities would have to dip into reserves if the rate
increases did not pass and how much is available in reserves. Ellen Switzer, Utilities Financial
and Budget Manager, stated approximately $3.5 million in reserves would have to be used and
that there is approximately $20 million in reserves. City Manager Fischbach stated all of these
rate increases are consistent with Council policy. He stated Council had recently approved the
energy supply policy.
Mayor Martinez stated he did not vote for the energy supply policy. He asked if a certain level
must be maintained in reserves. Switzer stated the financial policies approved by Council set the
Light and Power Fund capital reserve, the operating reserve, the purchase power reserve and the
art in public places reserve.
Mayor Martinez asked how much total reserves are required. Switzer stated approximately $14
million is required to be kept in reserves.
Mayor Martinez asked if $3 million could be used for one year while retaining the minimum
required in reserves. Switzer stated the Utilities would then have negative net income. City
Manager Fischbach suggested that staff be given time to prepare a specific response to Council
questions.
Mayor Martinez stated he would like to see a staff follow-up on Second Reading.
Councilmember Bertschy made a motion, seconded by Councilmember Roy, to adopt Ordinance
No. 151, 2003, Ordinance No. 152, 2003, Ordinance No. 153, 2003, Ordinance No. 154, 2003
and Ordinance No. 155, 2003 on First Reading.
Councilmember Kastein commented that the water rates are not being increased and that there
would be a discussion in December regarding tiered water rates. He stated if the Council was
worried about fees, they should "zero in" on that issue.
Mayor Martinez stated he would support the motion and that he would like to have his questions
satisfied on Second Reading.
Councilmember Roy stated it was important to remember during the discussion on water rates
that the citizens of the City saved over $3 million on their water bills with the water rate
structure.
Councilmember Kastein stated he disagreed and that would be an issue for discussion at the time
water rates are discussed.
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November 4, 2003
The vote on the motion was as follows: Yeas: Councilmembers Bertschy, Hamrick, Kastein,
Martinez, Roy, Tharp and Weitkunat. Nays: None.
THE MOTION CARRIED
Ordinance No. 156, 2003
Being the Annual Appropriation Ordinance Relating to
the Annual Appropriations for the Fiscal Year 2004
and Adopting the Budget for the Fiscal Years Beginning
January 1.2004 and Ending December 31, 2005, and Fixing
the Mill Levy for Fiscal Year 2004, Adopted on First Reading.
The following is staffs memorandum on this item.
"Financial Impact
This Ordinance represents the annual appropriation for fiscal year 2004, and adopts the total
City budget for fiscal year 2004 at $438,069,004 and for fiscal year 2005 at $450,174,400. This
Ordinance also sets the City mill levy at 9.797 mills, unchanged since 1991, for fiscal year 2004.
Executive Summary
Preparing our financial and service plan for 2004 and 2005 has been very challenging. Our
sales and use tax revenues, a primary source of funding for general City services, have been
below projections and previous year levels for the first time in Fort Collins' history.
To adjust to declining revenues, in spite of a growing population and increasing demands for
services, the City's General Fund budget has been cut--$526,067 in 2002; $2,550,000 in 2003
and a proposed reduction of $3,339,000 in 2004. The 2002 and 2003 reductions are ongoing
budget reductions, meaning that the reductions are in effect for 2004, 2005 and future years.
Other funds, such as Recreation, Transportation, Golf and some of the Utility Funds, have also
experienced sluggish revenues.
There have been four study sessions involving discussion of the 2004-2005 budget for the City of
Fort Collins. In addition, two public hearings were held. With City Council direction, the City of
Fort Collins 2004-2005 Biennial Budget was developed and is now presented to City Council for
consideration and adoption and to appropriate the necessary monies to fund the budget for fiscal
year 2004. The Second Reading of this ordinance is scheduled for November 18, 2003.
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November 4, 2003
BACKGROUND
The budget goals for 2004 and 2005 are focused on maintaining as many of our services as
possible in these challenging economic times:
• Maintain to the degree possible existing services, i.e., minimize service reductions
• As services are provided by employees, avoid or minimize layoffs to the degree possible
• Maintain and, ifpossible, expand Police services
• Maintain to the degree possible current levels of Primary services
The reductions over the past year and many of those proposed in 2004 have focused on delaying
repairs and renovations, delaying equipment replacements, reducing training and staff
development, cutting supplies and materials and operational services. We have whittled away
all that we can of materials, equipment and some significant secondary and support services. In
preparation for the 2005 budget "exception" process and anticipating Council approval of a
Budget Advisory Committee, staff will work with the committee to reassess what our core
services are and how they can be delivered in a more effective and cost-efficient manner within
the resources actually available.
The Net City Budget, which excludes internal transfers between funds is $343,709,418 for 2004
and $356,613,804 for 2005. The following table compares the 2003 budget with the 2004 and
2005 recommended budgets, including the net operating budgets, capital improvement budgets
and debt service (in millions):
In Millions
2003
2004
% Change
2005
% Change
Net Operating
$292.7
$308.5
5.4%
$320.3
3.8%
Debt
$ 4.6
$ 4.4
-5.6%
$ 4.4
1.2%
Capital
$ 38.2
$ 30.8
-19.2%
$ 31.9
3.2%
Total Net City
$335.5
$343.7
2.4%
$356.6
3.8%
Internal Transfers
$104.9
$ 94.4
-10.1 %
$ 93.6
-0.8%
Total City Budget $440.4 $438.1 -0.5% $450.2 2.8%
The total City budget for 2004 is $438.1 million and for 2005 is $450.2 million. The Net
Operating Budget (the money necessary for operating day-to-day services, excluding transfers
between funds, debt service and capital projects) for 2004 totals $308.5 million and for 2005
totals $320.3 million. A substantial portion ($13.2 million) of the increase in 2004 over 2003 is
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November 4, 2003
due to the recommendation of our outside auditor that natural areas (BCC) and Pavement
Management (BCC) be moved from Capital Improvements to the Operating budget.
The Capital Improvement expenditures for 2004 total $30.8 million and for 2005 total $31.9
million
Debt Service will be $4.4 million in 2004 and 2005. The debt service for both years is within the
Council's policy debt target of 15% of the combined general debt service and Special District
Funds' revenue. It is also the lowest since 1981.
HIGHLIGHTS OF THE 2004-1005 BIENNIAL BUDGET
GENERAL FUND
The General Fund supports (either totally or partially) most of our general government services,
such as police, libraries, museum, park maintenance, facilities maintenance, neighborhood
programs, natural resources, development review, building, zoning, affordable housing,
recreation, performing arts and our support services such as finance, budget, legal, information
technology and general administration.
In addition to prior year reductions, the 2004 General Fund ongoing operations will be reduced
by a total of $3,339,000. The 2004 ongoing reductions include:
• Cultural, Library, Recreation ........................$
741,837
• Planning and Environmental ........................
$
368,591
• Administrative services ..............................
$
239,945
• Transportation services ..............................
$
683,500
• Executive, legislative, judicial ......................
$
231,085
• Poudre Fire Authority ................................
$
348,700
• Communication and Technology ...................
$
205,344
• Police services .........................................
$
520,000
Total Reductions .............................. $3,339,002
Our revenues have dropped and these reductions were necessary in order to balance projected
revenues and projected expenses.
We go into 2005 on this reduced base of ongoing service and expense reductions. However,
projections indicate revenues will be stronger in 2005. As a result, we anticipate reinstating and
expanding a few services in 2005 and these include:
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November 4, 2003
a. Expand Police staffing ..............................................
$
799,763 ongoing
$
261,998 one-time
b. Resume Police Building set aside .................................
$
320,000 ongoing
c. Resume Labor Market Adjustments ..............................
$1, 900, 000 ongoing
d. Resume Street Maintenance expanded funding .................
$
200,000 ongoing
e. Resume full amount of PFA allocation ..........................
$
594, 000 ongoing
TABOR
Funds that exceeded the growth limit imposed by Article X, Section 10 (TABOR) in 2001 and
2002 are to be used for transportation capital and street maintenance in 2004 and 2005. In
2004, approximately $2.3 million will be allocated for street maintenance and in 2005, $1.0
million will be reserved for transportation capital projects as they become identified. This $1.0
million will be added to $1.0 million reserved in 2003.
FINAL BUDGETADIUSTMENTS
In the course of the Council's review and discussions of the next biennial budget, there are
several items for which interest was expressed to find a way to retain or fund in the budget.
Here is an update on the status ofseveral items.
Funded Services
1. Rivendell Recycling Center ($18,000) —funded in 2004 with 2003 carryover (one-time)
dollars. We project that an additional $18,000 will be needed to sustain the recycling
operations at the Center in 2004. As we near the end of this fiscal year (2003) we will
have some funds from CPES to carry over into 2004 to cover the recycling operations.
Also, we are beginning to receive some additional income from haulers that will help to
cover the operational costs. We will monitor this closely for 2005.
1. Environmental Business Outreach/Climatewise ($20,000) —funded in 2004 through a
grant award and 2003 carryover (one-time) dollars. The purpose is to work with local
businesses to help reduce greenhouse gas emissions. We have been using one-time
monies (from the General Fund and from Utilities) to support this effort. To cover the
anticipated 2004 shortfall, the City received notification of a grant award late this
summer that will be suf icient to cover program costs through 2004. We will monitor
closely for 2005.
This is a very preliminary estimate for the General Fund. Staff is working on a performance review system
that considers all compensation adjustments — labor market, merit and skill.
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November 4, 2003
3. Environmental Planner ($20,000) —funded in 2004 and beyond through reallocation of
personnel resources (ongoing). Approximately .25 FIE of an Environmental Planner's
time has to be picked up by the General Fund. Early in the budget planning process,
there was no source offunding. With some staffing changes over the last few weeks, we
are able to cover this for 2004 and beyond.
Sustain Reductions as Recommended
During the Budget Study Session discussions and review of the proposed service reductions,
several Council members expressed a desire to reconsider some select items. Listed below are
the ones most frequently mentioned by City Council. While none of these are "added -back" or
included in the recommended budget for the first reading of the budget adoption and
appropriation ordinances, Council may decide to add -back one or more of these services. If so,
the items) will be included in the second reading of the ordinances on November 18. I would
request that Council seriously consider adding back one-time monies for the Boys and Girls
Club ($40, 000 for 2004) and the Summer Bilingual Program ($18, 500 for 2004).
4. Advertising (Museum $5,000 and Lincoln Center Room Rental $6,000) — The Museum
advertising budget was increased in 2003 through some internal reallocation. The
reduction for 2004 (from $10,000 to $5,000) leaves the Museum at the same level at the
beginning for the 2003 fiscal year. For the Lincoln Center, this portion of the advertising
budget relates to advertising for room rentals. During 2003 funds internal to the Lincoln
Center budget were reallocated and the advertising budget was increased by $6, 000. The
reduction (for 2004) actually cuts back the advertising to the original level in their 2003
budget ($15,000). As an added note, the Lincoln Center advertising budget for
performances is $190, 000 for 2004.
5. Traffic Calming ($50,000 allowance for speed humps) — Transportation Services
reported (1012112003) that the City has no lasting success reducing speeds or volumes of
traffic in neighborhoods using current methods and resources. Traffic speed studies in
Fort Collins, Colorado Springs, and Golden indicate that average speeds are not lowered
by speed humps. To reach the greatest number of drivers, the remaining budget for 2004
($50,000) is to be used for education programs (yard signs, traffic tamers, radio ads,
trash can stickers, back to school efforts, and the speed trailer).
6. Affordable Housing ($158,000 reduction) -- The total allocation for the Affordable
Housing Trust Fund (this is for the production of affordable housing units and excludes
Land Bank resources) since inception (1993-2003) is $4,370,875. The City expended
$3,179,090 in this time period ($410,000 of this expenditure was transferred to the Land
Bank program), leaving a projected balance at the end of 2003 of $1,191, 785. The
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November 4, 2003
annual, ongoing General Fund allocation for affordable housing units is $893,962-- with
the reduction of $158,000 this will drop to an annual allocation of $735,898 in 2004.
Given the history of expenditures, if the annual allocation remains at $735,898 and the
expenditures ratios remain fairly constant, the projected balance at the end of 2010 for
the Affordable Housing Trust Fund is $1,217, 696.
In support of the long-range goals for increasing the number of affordable housing units
in Fort Collins, the plan has been to increase the General Fund appropriation for the
Affordable Housing Trust Fund each year through 2008. The target was an annual
appropriation of approximately $2.4 million per year. With the combination of not
increasing the appropriation and an actual reduction in 2004 of $158,000 as proposed, it
is estimated that the potential production of actual affordable homes will be reduced by
126 units or approximately 28% of our total production goal (456 units) for 2004.
Projects recommended for funding from the Affordable Housing Trust Fund in 2003 are
asfollows:
1. Home Buyer Assistance $ 200, 000
2. Habitat for Humanity $ 445,500 (multi family ownership project)
3. Habitat for Humanity $ 32,424 (lot acquisition)
4. Land Bank $ 410,000
Total $1, 087,924
In addition, CDBG and HOME funding for affordable housing projects in 2003 is
expected to be approximately $2,898,208. The grand total the City is expected to invest
in affordable housing in 2003 is $3,986,132.
7. Boys and Girls Club ($40,000 for 2004) — the City has supported the programs at the
Boys' and Girls' Club for several years. Because many of the services and activities
overlap with the City's recreation services for youth, Council agreed to gradually reduce
the funding so that by 2008 the City would no longer allocate funds to the Boys' and
Girls' Club. With the current financial picture and the reductions in Cultural, Library
and Recreation Services ($488,068 was cut in 2003; $740,000 was the proposed cut in
2004), the allocation to the Boys' and Girls' Club was eliminated beginning in 2004. If
Council wishes to sustain some level of allocation in 2004, an allocation from the
General Fund available reserves (one-time funds of $2,000,000 are available) would
need to be included in the 2004 appropriation.
8. Summer Bilingual Program ($18,500) — this is a summer program implemented through
eight part-time youths and two part-time adults. The program introduces young people
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to the library and employs them for outreach programs in the Hispanic community. If the
Council wishes to sustain some level of allocation in 2004, an allocation from the
General Fund available reserves (one-time funds of $2,000,000 are available) would
need to be included in the 2004 appropriation.
9. Weekend Swimming Pool Hours ($8, 000) — this was a reduction in the weekend hours at
the Mulberry Pool (open for 3-hour Saturday sessions during the school year; closed
Sundays for drop -in swimming) and Senior Center Pool. If the Council wishes to sustain
some level of allocation in 2004, an allocation from the General Fund Undesignated
Reserves (one-time funds of $2,000,000 are available) would need to be included in the
2004 appropriation.
10. Human Rights' Coordinator ($67,500) — this was a contractual position, originally
supported by a private donation in 2000 and 2001. For 2002-2003, the contractual
position was funded with one-time monies. Base budgets (ongoing, operating budgets)
do not include one-time dollars. The Human Rights' Coordinator provided support to a
wide -variety of educational programs including the Youth Multicultural Retreat, Martin
Luther King events, Public Dialogue series, Multicultural Community retreat, PSD
Leadership conferences, etc. Without the Coordinator, much of the work will have to be
picked up by volunteers, if available. If the Council wishes to sustain some level of
allocation in 2004, an allocation from the General Fund available reserves (one-time
funds of $2,000,000 are available) would need to be included in the 2004 appropriation.
11. Street Oversizing ($110,000) -- the General Fund contribution to Street Oversizing was
cut by approximately $23, 000 in 2003, from $550, 000 to $523, 050. The impact of that
has been negligible. The proposed 2004-2005 budget further reduces the General Fund
contribution by $110,000 to $413,050, for each of these two budget years. It also
projects this same level of General Fund contribution thru 2008. The cumulative effect of
this reduction may begin to have an adverse impact over time unless the recommended
level of General Fund contribution is reinstated in an upcoming budget cycle.
During each budget cycle we have a number of projects scheduled related to the Street
Oversizing Fund. For example, in 2004 we anticipate Street Oversizing project costs in
the amount of $3.3 million. Revenues, even with the anticipated reduction of the General
Fund allocation, are projected at $4.1 million. The difference goes into the Street
Oversizing fund reserve. The $110,000 cut for 2004 represents about 2.6% of the total
revenue expected.
The estimated project costs are very rough estimates --projects are often scaled back or
savings are realized based on the actual design and engineering. That said, we project a
reserve balance of $1.3 million at the end of 2004. So, while we are planning to reduce
November 4, 2003
the General Fund allocation for Street Oversizing in 2004 , between our management
approaches and our reserves, the Street Oversizing program should remain financially
sound. Preliminary projections of the Street Oversizing revenues and expenses for 2006
through 2008 indicate an adequate reserve balance.
However, the fund will have to be closely monitored. The General Fund is still
responsible for a portion of the Street Oversizing program. As revenues begin to come
back, the General Fund allocation to Street Oversizing is one that should be considered
for reinstatement ahead of adding any new or expanding existing services.
If Council wishes to reinstate some or all of these service items in 2004 with dollars from
General Fund available reserves, here is a summary of the impact to the one-time reserves:
Estimated One-time Dollars Available for 2004 $ 2,004,878
Potential Uses:
a. LC and Museum advertising ($ 9,000)
b. Traffic Calming
($
50,000)
c. Affordable Housing
($158,000)
d. Boys & Girls Club
($
40,000)
e. Summer Bilingual Program
($
18,500)
f. Weekend Swimming Hours
($
8,000)
g. Human Rights' Coordinator
($
67,500)
h. Street Oversizing
($
110,000)
Totalpotential uses - $ 461,000
Net available after potential uses $ 1,543,878
I continue to advise caution concerning the use of any one-time reserves to fund these items.
There remains a good deal of uncertainty about the economy. The budget plan reflects the best
financial planning information and data available. To fund ongoing, operating services with the
scarce one-time dollars in 2004 is in my estimation not financially prudent.
PERSONNEL IMPACTS
Given current economic conditions, the projected gap between expenses and revenues and the
goal of minimizing service reductions (and therefore minimizing staff reductions), the budget
excludes any employee salary adjustments for 2004 and 2005. This means no Labor Market
Adjustments for three years (2003, 2004, 2005). For 66% of the City's workforce, this means
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November 4, 2003
potentially no pay increase for three years because they are at the top of their range and are not
eligible for merit or skill adjustments. In addition to the suspension of Labor Market
Adjustments, there will be no merit and or skill adjustments for employees not at the top of their
pay range for two years (2004, 2005)—the one exception is for Police personnel who will be
eligible for skill ladder increases in 2004 and 2005.
In addition to no salary adjustments, we are increasing the amount employees must pay for their
medical benefits. In keeping with our targets for employees paying a larger share of the
premium costs, on average, employees will be going from paying 5% of their premium costs in
2003 to 10% in 2004 and 15% in 2005.
The structure and design of the benefits that are offered and the cost is also being changed. For
most employees, this will mean greater out-of-pocket costs. In other words, they will be paying
more for the medications and services they use.
Based on Council's direction at the October 14 budget study session, more work is to be done in
conjunction with the Personnel Board to prepare a recommendation for the scheduled changes
to the benefits' premium costs. The recommendation(s) will be considered during the "exception
process "for the 2005 budget.
CONCLUSION.•
Our fiscal plan is sound for continuing to provide quality services to our community. While our
service levels have been reduced and our future challenges are many, employees remain
optimistic and ready to serve our citizens in the best way possible. I appreciate the persistence
and dedication of Council to adopt a balanced and sound financial plan for municipal services. "
City Manager Fischbach introduced the agenda item. He stated the total recommended City
budget is $438,069,004 for 2004 and $450,174,400 for 2005, compared with a budget of
$440,400,000 for 2003. He stated the mill levy for property taxes remains at 9.797 and that has
not changed since 1991. He stated the 2.25% sales and use tax rate has remained unchanged
(except for the Building Community Choices sales and use tax) since 1982. He stated revenues
over the last two years have declined, yet demands were expanded and services were added for a
growing population. He stated cuts and delays were necessary to balance the budget. He stated
the 2004-2005 recommended budget reflected numerous cuts and reduced resources for every
general governmental operation, frozen salaries for all employees, no labor market adjustments
or merit increases, and no skill ladder increases except for eligible police officer staff. He stated
the General Fund had suffered significant reductions over the last few years and that the total
base declined each year. He stated the City had cut over $6.3 million from the General Fund, not
including salary adjustments. He stated labor market adjustments for 2003 were suspended for
additional savings of approximately $1.85 million. He stated City-wide all operating funds
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November 4, 2003
experienced savings of roughly $3.7 million. He stated a number of positions had been frozen in
2003 to save an additional $909,000 to cover lagging revenues in 2003. He stated there were
significant reductions to municipal services. He stated with the 2004-2005 budget plan the focus
was on the following principles established by the City Council: (1) to maintain to the degree
possible existing services, (2) to maintain employees because they deliver services to citizens, (3)
to maintain and if possible expand Police Services, and (4) to maintain to the degree possible
current levels of primary services. He stated despite flat sales and use tax projections for 2004
and a slightly more optimistic project for 2005 the proposed budget adhered closely to the
Council budget targets. He stated at the final budget work session on October 24 the Council
gave direction to proceed and prepare the budget including the following: (1) sustaining the
recommendation to not expand Police Services for 2004 and expanding staffing for Police
Services in 2005; (2) sustaining the recommendation based on the model that projects sales and
use tax revenues in 2005 at 4.7%; (3) and sustaining the recommendation that employees pay
10% of the benefits premium cost for 2004 and 15% of the benefits premium cost for 2005 with
the understanding that this would be reviewed and possibly changed during the 2005 budget
exception process, and as of January 1, 2004 require any new employees hired to pay 15% of the
benefits premium cost. He stated Council expressed an interest in finding a way to fund or retain
several items. He stated three Natural Resources items were funded due to carry-over dollars,
unanticipated grant funding and reallocation of resources. He stated the budget included $18,000
for the Rivendell recycling center, $20,000 for the environmental business outreach climate -wise
program, and $20,000 for an environmental planner. He stated the one-year costs for eight other
items and the amount of available one-time funds ($2,004,878) have been provided. He stated
the Council should direct that none, some or all of the items could be added to the 2004 budget.
Kelly Ohlson, 2040 Bennington Circle, stated it is important to be fair to the City employees and
to the taxpayers and that the employees should be asked to pay a bigger share of the benefits
premium costs. He stated the way the City sets salaries and benefits is not reflective of the true
market. He urged a true market analysis for the next round of salary setting rather than a
continuation of comparisons with 11 other cities. He stated other cities are asking employees to
pay 18% of the benefits premium costs. He stated the agenda material indicated that the City
plans to resume labor market adjustments with the 2005 budget. He urged a more realistic
approach with deductibles. He stated the City must be fair to the employees and taxpayers and
that the current system is not fair. He stated this budget would be a "disaster" if funds were not
being taken out of a benefit reserve fund. He noted that the funds now being allocated for
Natural Resources are not new or permanent funding. He opposed a human resources position
for $67,000.
J. J. Johnston, Northern Colorado Economic Development Corporation, requested funding in the
amount of $30,000 and reported on the activities of the Corporation to help grow the economy
and get unemployed and underemployed people back to work.
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Councilmember Tharp asked if the request from the Northern Colorado Economic Development
Corporation was included in the budget. City Manager Fischbach replied in the negative and
stated the staff is working on an information package for Council that looks at economic
opportunities and funding possibilities. He stated proposals such as the one from the Northern
Colorado Economic Development Corporation will be included.
Councilmember Tharp asked if there would be another opportunity to look at that item and other
economic items. City Manager Fischbach replied in the affirmative.
Councilmember Hamrick asked about the funding for the three Natural Resources items and what
services are being cut to fund those items. City Manager Fischbach stated the reallocation is not
affecting the department. Deputy City Manager Jones stated there are carry-over dollars and
revenues from the haulers used for the Rivendell Recycling Center for 2004. She stated the
business outreach climate -wise position is funded in part from the General Fund and Utilities
Fund and that some of those monies could be carried over because of the late start of the program
and will be coupled with an unanticipated grant. She stated the environmental planner will be
staffed through a voluntary reallocation of existing staff time.
Councilmember Hamrick stated these were important items for environmental support and that it
appears that funding is being accomplished piecemeal. He stated this seemed to be a haphazard
approach. He asked if consideration was given to making these items fully funded on an ongoing
basis. City Manager Fischbach stated this was considered and rejected because of the guidelines
given by Council for the preparation of the budget. He stated these are not primary services and
that the piecemeal approach will continue until there are adequate revenues to make them
ongoing or until Council gives direction to find a way to make these ongoing.
Councilmember Weitkunat asked if the adjustments for the Natural Resources items are
independent of the recommended budget. City Manager Fischbach stated those items are being
taken care of in the recommended budget.
Councilmember Weitkunat asked for confirmation that the other items listed are not in the
budget unless Council comes up with a recommendation through discussion. She asked if the
budget is as discussed without the addition of the other items. City Manager Fischbach replied in
the affirmative.
Councilmember Weitkunat recommended that the Council proceed with the budget as
recommend and then deal with any items that Councilmembers want to add.
("Secretary's Note: Council took a brief recess at this point.)
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Mayor Martinez asked Councilmembers to make a motion on the budget and then offer any
amendments for consideration.
Councilmember Tharp made a motion, seconded by Councilmember Bertschy, to adopt
Ordinance No. 156, 2003 on First Reading.
Councilmember Tharp made a motion, seconded by Councilmember Hamrick, to amend the
Ordinance to include $50,000 for traffic calming.
Councilmember Weitkunat asked that the source of funding be indicated.
Councilmember Tharp stated there was an estimated $2,004,878 in one-time money available
and that she suggested that this item come from that source.
Councilmember Weitkunat stated she did not see this as an essential addition to the budget at this
time and that there are other ways to look at traffic calming that will not require dollars.
Councilmember Kastein asked if the traffic calming fund would be depleted if this money was
not included in the budget. City Manager Fischbach stated the fund would be lowered by
$50,000 and that the fund would remain at $50,000.
Councilmember Tharp noted that the total of $100,000 had been used each year. She stated it is
a significant priority among citizens that the City deal with traffic issues.
Mayor Martinez asked if the traffic calming money could be put toward police staffing or
overtime work for problem areas. City Manager Fischbach stated staff would look at that issue.
Councilmember Weitkunat stated other alternatives to traffic calming needs to be explored.
The vote on the motion to amend to include $50,000 for traffic calming was as follows: Yeas:
Councilmembers Bertschy, Hamrick, Roy and Tharp. Nays: Councilmembers Kastein, Martinez
and Weitkunat.
THE MOTION CARRIED
Councilmember Bertschy made a motion, seconded by Councilmember Roy, to include $18,500
for the summer bilingual program from reserves.
Councilmember Kastein stated there has been some indication from CSU that it might be
interested in finding volunteers to help with the program.
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November 4, 2003
Councilmember Bertschy stated this program will provide employment and experience for some
youths.
Councilmember Weitkunat stated "some things have to go" in a budget crunch. She stated she
would support foregoing the program for one year.
The vote on the motion was as follows: Yeas Councilmembers Bertschy, Hamrick, Martinez,
Roy and Tharp. Nays: Councilmembers Kastein and Weitkunat.
THE MOTION CARRIED
Councilmember Kastein made a motion, seconded by Councilmember Tharp, to add $20,000 for
the Boys and Girls Club from reserves. The vote on the motion was as follows: Yeas:
Councilmembers Bertschy, Hamrick, Kastein, Martinez, Roy, Tharp and Weitkunat. Nays:
None.
THE MOTION CARRIED
Mayor Martinez made a motion, seconded by Councilmember Roy, to add $110,000 for street
oversizing as a primary service and $158,000 for affordable housing as a primary service.
Councilmember Tharp stated she would like to discuss the two items separately.
Councilmember Tharp made a motion to amend the motion made by Mayor Martinez, seconded
by Councilmember Hamrick, to divide the two questions. The vote on the motion to divide the
two questions was as follows: Yeas: Councilmembers Bertschy, Hamrick, Kastein, Roy, Tharp
and Weitkunat. Nays: Mayor Martinez.
THE MOTION CARRIED
Mayor Martinez asked if there was a motion for $110,000 for street oversizing.
Mayor Martinez made a motion, seconded by Councilmember Roy, to include $110,000 for street
oversizing.
The vote on the motion was as follows: Yeas: Councilmembers Martinez, Roy and Weitkunat.
Nays Councilmembers Bertschy, Hamrick, Kastein and Tharp.
THE MOTION FAILED
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Councilmember Tharp made a motion, seconded by Councilmember Bertschy, to include
$158,000 for affordable housing. The vote on the motion was as follows: Yeas: Councilmembers
Bertschy, Hamrick, Martinez, Roy and Tharp. Nays Councilmembers Kastein and Weitkunat.
THE MOTION CARRIED
Councilmember Roy made a motion, seconded by Councilmember Hamrick, to increase the
employees' benefit costs from 10% to 15% for 2004 and to 20% for 2005. The vote on the
motion was as follows: Yeas: Councilmembers Hamrick and Roy. Nays: Councilmembers
Bertschy, Kastein, Martinez, Tharp and Weitkunat.
THE MOTION FAILED
Councilmember Tharp made a motion, seconded by Councilmember Hamrick, to include
$67,500 for a contract Human Rights Coordinator position.
Councilmember Weitkunat stated she had difficulty with adding a $67,500 job back into the
budget when positions are frozen and there were no increases in salaries.
The vote on the motion was as follows: Yeas Councilmembers Bertschy, Hamrick, Roy and
Tharp. Nays Councilmembers Kastein, Martinez and Weitkunat.
THE MOTION CARRIED
Councilmember Hamrick made a motion, seconded by Councilmember Roy, to revise projected
sales and use tax revenues to 2% for 2005.
Councilmember Kastein asked where the resulting cuts would come from. City Manager
Fischbach stated it would mean about $1.5 million to change the projection from 4.7% to 2%.
Councilmember Kastein stated he would like to hear suggestions regarding where the $1.5
million in cuts would be made for ongoing money.
Councilmember Hamrick stated there was a list of items for possible increases in 2005 and that
the funding for those items would simply not happen. City Manager Fischbach stated the labor
market adjustments are not included and that the list of possible additions includes additional
police officers and the police building.
Councilmember Tharp asked for clarification that the $1.5 million would come from the list of
add -backs proposed by the City Manager.
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November 4, 2003
Councilmember Kastein asked if those add -backs would total $1.5 million. City Manager
Fischbach stated they totaled $1.9 million.
Councilmember Kastein asked which specific items would not be included.
Councilmember Hamrick stated he would recommend that the City Manager come back to the
Council during the exception process and present new information for 2005.
The vote on the motion was as follows: Yeas: Councilmembers Bertschy, Hamrick, and Roy.
Nays: Councilmembers Kastein, Martinez, Tharp and Weitkunat.
THE MOTION FAILED
Councilmember Tharp made a motion, seconded by Councilmember Roy, to add $8,000 for
weekend swimming hours from available one-time money. The vote on the motion was as
follows: Yeas: Councilmembers Bertschy, Hamrick, Roy and Tharp. Nays: Councilmembers
Kastein, Martinez and Weitkunat.
THE MOTION CARRIED
Councilmember Roy made a motion, seconded by Councilmember Hamrick, to unfreeze the
adult bilingual library coordinator position immediately.
City Manager Fischbach stated the positions had been frozen administratively and that staff will
be looking at the funding for those frozen positions in February and March. He noted that money
is budgeted for that frozen position.
Mayor Martinez asked what the effective date would be for unfreezing the position.
Councilmember Roy stated it would be upon the effective date of adoption of the Ordinance.
Councilmember Tharp stated if this was not part of the budget that is being adopted, it could be
discussed under Other Business. He stated the issue will not impact the 2004-2005 budget. City
Attorney Roy stated the matter could be postponed to Other Business on the grounds that the
motion was not germane to the main motion, which is the adoption of the budget. He stated the
motion maker could withdraw the motion and bring the matter back under Other Business or that
there could be a motion to that effect.
Councilmember Roy stated he would not withdraw the motion because it was a constituent
concern.
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November 4, 2003
Councilmember Tharp made a motion, seconded by Councilmember Weitkunat, to postpone
consideration of Councilmember Roy's motion until Other Business on the grounds that it was
not germane to the main motion.
Councilmember Kastein offered a friendly amendment to postpone indefinitely because there
will not be time for discussion under Other Business.
Councilmember Tharp did not accept this as a friendly amendment to her motion to postpone.
The vote on Councilmember Tharp's motion to postpone was as follows: Yeas: Councilmembers
Bertschy, Martinez, Tharp and Weitkunat. Nays: Councilmembers Hamrick, Kastein and Roy.
THE MOTION CARRIED
Councilmember Kastein made a motion, seconded by Councilmember Weitkunat, to amend the
2004 budget by adding in a minimum growth package for Police Services ($799,763 for ongoing
services and $261,998 in one-time funding) with the one-time resources to come from building -
set -aside funds for Police Services buildings not expended in 2003 and with ongoing money
sources to be researched by the City Manager prior to Second Reading.
Councilmember Tharp asked if the proposal was different than the proposal for 2005.
Councilmember Kastein asked for clarification regarding whether the 2005 proposal was for half
of the officers needed. City Manager Fischbach stated the 2005 proposal was for the full package
of officers. He stated he understood the motion to move that up to 2004.
Councilmember Kastein stated the agenda material referenced the minimum growth package and
asked why the minimum growth package would represent the full level of police staffing that had
been discussed. City Manager Fischbach stated this would represent five officers and 2-3
civilians.
Councilmember Kastein stated he is not recommending the full level of service for 2004 and that
his motion should read one-half of the growth package that was recommended for 2005.
The vote on the motion (as clarified by Councilmember Kastein above) was as follows: Yeas:
Councilmembers Kastein, Martinez and Weitkunat. Nays: Councilmembers Bertschy, Hamrick,
Roy and Tharp.
THE MOTION FAILED
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Councilmember Kastein asked for a summary of what had been added back into the budget by
motion to amend the budget. Jones stated the following items had been added back into the
budget: $50,000 for traffic calming, $18,500 for the summer bilingual program, $20,000 for the
Boys and Girls Club, $158,000 for affordable housing, $67,500 for a Human Rights Coordinator,
and $8,000 for weekend swimming. City Manager Fischbach stated this would total $322,000.
Councilmember Kastein asked if the $322,000 would come from reserves. City Manager
Fischbach stated was the direction given in the adopted motions.
The vote on the motion to adopt Ordinance No. 156, 2003 on First Reading as amended was as
follows: Yeas: Councilmembers Bertschy and Tharp. Nays: Councilmembers Hamrick, Kastein,
Martinez, Roy and Weitkunat.
THE MOTION FAILED
Mayor Martinez stated police and fire are the most important primary and basic services and that
this should be the focus rather than "fluff' services. He stated too many services are included in
primary services.
Councilmember Tharp stated 72% of the budget went to primary services and that there are
reserves that could be used for one-time money for the $322,000. She stated if one-time moneyis
devoted to police services, there will be no money to carry it forward. She stated simple one-
time money was being put back in. She stated the budget has been cut significantly and that the
budget should be passed at this point.
Mayor Martinez stated adding services such as the Rivendell Recycling Center or the
environmental planner are examples of what he had said. He stated Council should be in the
"cutting mode" instead of the "expanding mode." He stated Council needs to first take care of
basic primary services.
Councilmember Hamrick stated he could not vote for the Ordinance because Council is not
including an increase in benefits' premiums by employees. He stated if a greater contribution is
required that other items could be funded. He stated future budgets will face more dramatic
increases and impacts on employees because the City failed to act now.
Councilmember Roy stated he agreed with Councilmember Hamrick regarding the need to
increase the employees benefits premiums. He stated the City needs to recover a more realistic
share of health care costs and that it was a fact of life that people are having to pay more for
health insurance.
Mayor Martinez stated City employees were "real people."
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Councilmember Kastein asked if it was Councilmember Tharp's intent to fund the one-time
items in 2004 and to not include those items in the 2005 budget.
Councilmember Tharp stated was her intent. She stated the items could be reviewed in the
budget exception process if there are substantial increases in revenue.
Councilmember Kastein asked if that is how staff will view the intent. City Manager Fischbach
replied in the affirmative.
Councilmember Bertschy suggested that the add -ins be deleted at this point, that the budget be
approved on First Reading and that the Council negotiate.
Councilmember Weitkunat agreed and stated it was important to find out where the differences
are. She noted that the health insurance had been an issue throughout the discussions. She stated
the money for some of the items that were added in could have gone to more police officers. She
stated the Council identified certain things as important and that the funds were not directed to
those important items. She stated she believed that the employees would pay a fair proportion of
their health insurance premiums with the 10%. She stated she believed that percentage to be fair,
proportionate and in the direction that Council wanted to take. She expressed a concern that
Council was not adhering to its goals and was tapping a "savings account" for programs that
could be delayed for a year.
Mayor Martinez stated he agreed with Councilmember Weitkunat.
Councilmember Tharp stated the small items that were put back into the budget do not involve
ongoing money and that adding the police funding will mean ongoing money. She stated the
Police Chief indicated that the police funding was not required. She favored looking at health
care costs and making gradual increases to get to a realistic and fair point.
Mayor Martinez stated police services are diminishing and are a primary service and that the
money was there for ongoing funding for additional police services. He stated there are
continuing demands for more police services.
Councilmember Kastein stated police services has been ranked as the number one priority by
Council. He suggested approval of the budget without adding in other items and directing staff
to look one more time at where ongoing money for police officers will come from.
Mayor Martinez stated he would agree with that. He stated there was a need to look "deep and
wide" and not at "pet projects" that Council is not willing to give up.
Councilmember Tharp asked how additional police officers could be hired with one-time money
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November 4, 2003
Councilmember Kastein stated ongoing money would need to be committed.
Councilmember Weitkunat made a motion, seconded by Councilmember Kastein, to adopt
Ordinance No. 156, 2003 on First Reading as written and to direct staff by Second Reading to
look at police services (the addition of four police officers) at a cost of $375,000 in ongoing
funding and $120,000 in one-time funding.
Councilmember Hamrick stated he would not support the motion. He stated he had seen no
analysis that led him to believe that there is a crime crisis in Fort Collins. He stated he had seen
no analysis to justify the need for new officers.
Mayor Martinez stated the motion directs the City Manager to determine how this would work in
the budget. He spoke in favor of additional police funding.
Councilmember Weitkunat noted that the Council has asked for additional police enforcement
and that is a rationale for more personnel.
Councilmember Bertschy stated he would support the motion because he would like to see the
information on the additional police funding. He stated any additional funding might have to
come from the police building funds.
Councilmember Tharp stated the City Manager had presented alternatives regarding where the
money could come from and that none of the alternatives had been acceptable to the Council.
Mayor Martinez stated he was not interested in making internal cuts to hire new officers and that
he was interested in how the Police Chief could realign personnel to put more officers on the
street.
Councilmember Weitkunat asked that Councilmembers indicate where they were not willing to
"bend" on the budget.
Councilmember Roy stated he had concerns that the revenue projections were "too rosy" and that
the health care costs for employees were not in line with reality.
Councilmember Weitkunat stated five Councilmembers would not support that change. She
stated in reality it will probably not be possible to get five Councilmembers to support the police
services changes. She stated a compromise might be possible if an amended budget is adopted
without those two changes.
Councilmember Roy stated he was willing to continue to discuss the issue.
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November 4, 2003
Councilmember Kastein called for the question.
Councilmember Tharp requested clarification regarding the motion on the floor.
Councilmember Kastein stated the motion was to approve the budget as written and to direct the
City Manager to give Council feedback on how to account for $375,000 in ongoing money in the
2004 budget for four police officers.
Councilmember Tharp asked if this meant that the items put back into the budget are now being
taken out.
Councilmember Kastein stated the intent was to return to the originally stated budget without any
of the add -ins.
The vote on the motion was as follows: Yeas Councilmembers Bertschy, Kastein, Martinez and
Weitkunat. Nays: Councilmembers Hamrick, Roy and Tharp.
THE MOTION CARRIED
Other Business
Mayor Martinez asked if the items scheduled on the GID and Water Utility Enterprise Board
meetings were time sensitive. City Manager Fischbach replied in the affirmative. City Attorney
Roy spoke regarding the time constraints regarding the items scheduled at the two Board
meetings. Alan Krcmarik, Finance Director, spoke regarding the time constraints on the Halligan
bonding.
Mayor Martinez stated he would like a legal opinion on how to handle this type of situation in
the future and the impact of not conducting a Board meeting. City Attorney Roy stated the
consequences will vary depending on the nature of the agenda items that will not be acted upon.
Mayor Martinez stated he would like the legal opinion to look at the agenda items on the two
Board meetings as examples so that there would be guidance for the future.
Councilmember Hamrick made a motion, seconded by Councilmember to suspend the rules to
allow the Council to proceed with the two Board meetings. The vote on the motion was as
follows: Yeas: Councilmembers Bertschy, Hamrick, Kastein, Martinez, Roy, Tharp and
Weitkunat. Nays: None.
THE MOTION CARRIED
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November 4, 2003
Adjournment
The meeting adjourned at 11:10 p.m.
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ATTEST:
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