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HomeMy WebLinkAboutMINUTES-05/17/1988-RegularMay 17, 1988 COUNCIL OF THE CITY OF FORT COLLINS, COLORADO Council -Manager Form of Government Regular Meeting - 6:30 p.m. A regular meeting of the Council of the City of Fort Collins was held on Tuesday, May 17,.1988, at 6:30 p.m. in the Council Chambers in the City of Fort Collins City Hall. Roll call was answered by the following Councilmembers: Estrada, Horak, Kirkpatrick, Mabry, Maxey, Stoner, and Winokur. Staff Members Present: Burkett, Huisjen, Krajicek Citizen Participation A. Proclamation Naming May 18 as Transfort Support Appreciation Day was accepted by Transfort Manager Ken Sylvester. B. Proclamation Naminq the third week in Mav as Fort Collins Tourism Week was accepted by John Dowd, president, Convention and Visitors Bureau Board of Directors. ' C. Proclamation Naming May 27 as A Day of Fasting was accepted by Bob Taylor, state president of the Church of Jesus Christ of Latter Day Saints. D. Proclamation Naming May 15-21 as National Public Works Week was forwarded to the appropriate persons. E. Proclamation Naming May 15-21 as NAIW Week was accepted by Sandy Dodder, president, Insurance Women of Larimer County. F. Proclamation Naming May 23-30 as Buckle -Up Week was accepted by Ernie Rogers, member of the Fort Collins Area Safety Council. Mayor Stoner presented an English bobby helmet to Chief Glasscock which was donated by Chris Polefrey from England. Daniel Gomino, Buckingham homeowner, requested a meeting with Council regarding the Catholic Community Services Northern homeless shelter planned for construction in the Buckingham neighborhood. -105- May 17, 1988 Agenda Review: City Manager ' City Manager Burkett stated a revised Ordinance had been prepared and provided to Council for Item #30, Hearing and Second Reading of Ordinance No. 95, 1987, Authorizing the Issuance of City of Fort Collins Downtown Development Authority Tax Increment Revenue Refunding and Improvement Bonds. He noted revised Resolutions had also been provided for Item #31, Resolution 88-83 Authorizing the City Manager to Amend the Agreement Relating to the Opera House Galleria Project, and Item #33, Resolution 88-84 Assigning Councilmembers as Liaison Representatives to Various Boards and Commissions and Appointing Councilmembers to Various Committee Assignments. Bruce Lockhart, 2500 East Harmony Road, requested Item #14, Hearing and First Reading of Ordinance No. 75, 1988, Appropriating Prior Year Reserves in the Storm Drainage Fund, be withdrawn from the Consent Calendar. Consent Calendar This Calendar is intended to allow the City Council to spend its time and energy on the important items on a lengthy agenda. Staff recommends approval of the Consent Calendar. Anyone may request an item on this calendar be "pulled" off the Consent Calendar and considered separately. Agenda items pulled from the Consent Calendar will be considered separately under Agenda Item #22, Pulled Consent Items. ' 5. Consider approval of the minutes of the regular meeting of April 19 6. Second Readinq of Ordinance No. 69. 1988 Rezonina Certain Prnnprty to This Ordinance, which was unanimously adopted on First Reading on May 3, rezones approximately 37.905 acres from T Transition to B-P Planned Business District and to rezone approximately 100.287 acres from T Transition to I-P Industrial Park District. The property is located south of Harmony Road and west of County Road 9. The property is presently undeveloped. APPLICANT: G.T. Land Colorado Inc. 3555 Stanford Road Suite 100 Stanford Plaza Fort Collins, CO 80525 OWNER: Wild Wood Farm Inc. c/o G.T. Land Colorado Inc. 3555 Stanford Road Suite 100 Stanford Plaza Fort Collins, CO 80525 P 106- May 17, 1988 On May 3, Council unanimously adopted Resolution 88-61 Authorizing the Purchase of 1,610 units of Colorado Big Thompson (CBT) Water and 250 Shares of North Poudre Irrigation Company Water and Resolution 88-62 Approving Temporary Use Permits with the Northern Colorado Water Conservancy District for 1,610 units of CBT water. On May 3, Council also unanimously adopted on First Reading Ordinance No. 70, 1988, which appropriates $2,196,250 from the Utility's reserves in the Water Fund. Growth in the Fort Collins service area is expected to continue at a moderate pace during the next several decades. Projections indicate a need for approximately 30,000 acre feet of raw water supplies during the next 50 years. With present market conditions, it is believed that acquiring some water supplies in advance of the City's actual needs is prudent. =1 The state legislature has passed enabling legislation to provide local liquor licensing authorities the option of accepting fines in lieu of ' suspension under certain circumstances. This Ordinance, which was unanimously adopted on First Reading on May 3, revises the local liquor code to incorporate the state -authorized procedure for imposing fines in lieu of suspension. Monies received from the fines would be deposited into the General Fund. Payment of a fine in lieu of a suspension would be at the request of the license holder and at the discretion of the Liquor Licensing Authority. 9. Second Readina of Ordinance No. 72. 1988_ Annrnnriatinn 11nantirinatari This Ordinance, which was unanimously adopted on First Reading on May 3, appropriates $15,000 to fund Commuter Pool. Commuter Pool is a computerized ridesharing/matching service operated by the City of Fort Collins since October 1, 1987, for citizens of Larimer and Weld Counties. A state grant has been received which will provide $10,000 of matchable revenue for the project. These funds will be coupled with $5,000 from operating expenses (transferred from the City Manager's contingency) and $5,000 in "in -kind" support to cover program expenses. On -going costs of $5,000/year are expected. 10. Items Relating to the Union Pacific South First Annexation and Zoning. A. Hearing to Make Determinations and Findings Concerning the Union Pacific South First Annexation. -107- May 17, 1988 11 Resolution 88-67 Setting Forth Findings of Fact and Determinations Regarding the Union Pacific South First Annexation. Second Reading of Ordinance No. 43, 1988, Annexing Approximately 15.6957 Acres, Known as the Union Pacific South First Annexation. Second Reading of Ordinance No. 44, 1988, Zoning Approximately 15.6957 Acres, Known as the Union Pacific South First Annexation, into the T Transition District. APPLICANT: Union Pacific Railroad OWNER: Same 1416 Dodge Street Omaha, NE This Resolution sets forth findings and determinations that the area is eligible for annexation pursuant to Colorado state law. Ordinance No. 43, 1988 and Ordinance No. 44, 1988, which were unanimously adopted on April 5 on First Reading, annex and zone approximately 15.6957 acres located east of Riverside Drive and north of Prospect Road. The requested zoning is the T Transition District. The property is presently developed as railroad right-of-way. Items Relating to Union Pacific South Second Annexation and Zoning. A. Hearing to Make Determinations and Findings Concerning the Union Pacific South Second Annexation. Resolution 88-68 Setting Forth Findings of Fact and Determinations Regarding the Union Pacific South Second Annexation. Second Reading of Ordinance No. 45, 1988, Annexing Approximately 14.888 Acres, Known as the Union Pacific South Second Annexation. Second Reading of Ordinance No. 14.888 Acres, Known as the Union into the T Transition District. APPLICANT: Union Pacific Railroad 1416 Dodge Street Omaha, NE 46, 1988, Zoning Approximately Pacific South Second Annexation, OWNER: Same This Resolution sets forth findings and determinations that the area is eligible for annexation pursuant to Colorado state law. Ordinance No. 45, 1988 and Ordinance No. 46, 1988, which were unanimously adopted on April 5 on First Reading, annex and zone approximately 14.8 acres located west of Timberline Road and north of Drake Road. The requested zoning is the T Transition District. The property is presently developed as railroad right-of-way. Im May 17, 1988 12 13. 14. Items Relating to Union Pacific South Fourth Annexation and Zoning. A. Hearing to Make Determinations and Findings Concerning the Union Pacific South Fourth Annexation. Resolution 88-69 Setting Forth Findings of Fact and Determinations Regarding the Union Pacific South Fourth Annexation. Second Reading of Ordinance No. 47, 1988, Annexing Approximately 76.0532 Acres, Known as the Union Pacific South Fourth Annexation. D. Second Reading of Ordinance No. 48, 1988, Zoning Approximately 76.0532 Acres, Known as the Union Pacific South Fourth Annexation, into the T Transition District. APPLICANT: Union Pacific Railroad OWNER: Same 1416 Dodge Street Omaha, NE This Resolution sets forth findings and determinations that the area is eligible for annexation pursuant to Colorado state law. Ordinance No. 47, 1988 and Ordinance No. 48, 1988, which were unanimously adopted on April 5 on First Reading, annex and zone approximately 76.0532 acres located south of Harmony Road and east of Lemay Avenue. The requested zoning is the T Transition District. The property is presently developed as a railroad right-of-way. This Ordinance appropriates unanticipated revenue to cover the costs of the consultant contract for the Poudre River NRA Study. The appropriation will be used to pay the consultant, who will be reimbursed according to terms set forth in the consultant contract. Pursuant to the stipulations of the Grant Agreement with the USDA Forest Service, the City will be reimbursed by quarterly disbursements from the federal government. Special Improvement District ("SID") #72 was created to provide for the widening of Lemay Avenue from Drake Road to Boltz and Drake Road from Stover to Lemay. Included in the construction was a portion of the East Drake Road storm sewer. It was intended that the cost of construction of that storm sewer should be paid from the Seven Year Capital Projects Fund, however, no transfer from 7-Year Capital into the SID #72 fund was made and the 7-Year Capital Fund was closed out in 1984. Bonds issued for this district mature on July 1, 1988. Payment of those bonds can be made if money is now transferred from prior year reserves in the Storm Drainage Fund to cover the amount -109- May 17, 1988 15. 16. 17. Nf� that should have been paid to the district from the 7-Year Capital I Fund. This Resolution authorizes the Mayor to sign an Addendum to the Intergovernmental Agreement between the City of Fort Collins and the Poudre Valley Fire Protection District which continues the existence of the Poudre Fire Authority. The Addendum authorizes the provision of services outside the Authority's boundaries by agreement in exchange for payment or reciprocal services. In 1974, the City entered into an agreement with the State Board of Agriculture concerning the furnishing of water and sewer service by the City to Colorado State University. Since that time, the agreement has been amended numerous times to adjust service fees as the City rates change. Percentage rate adjustments for CSU correspond to the rate adjustments for all other customers served by the City. The addendum increases CSU's sewer rate from $.94 to b.98 per 1000 gallons, or 4%. Rate adjustments for CSU are made effective July 1st ' of each year to accommodate its budgeting cycle. The addendum has been approved by CSU. This Resolution authorizes an agreement with the State of Colorado, in which the City will receive $50,000 to enhance the marketing effort for the newly developed Fort Collins Residential Energy Rating System. The State Office of Energy Conservation, which is conducting a statewide project on home energy rating systems, recognizes the potential of the system developed by Fort Collins. It has chosen to fund enhanced promotion of the Fort Collins system in order to get timely feedback on the operation of a rating system of this type. Council approval is required for Cases Not Requiring Bidding exceeding $20,000. Staff is requesting a Case Not Requiring Bidding purchase from Advanced Control Systems, Inc., the supplier of the MPR-7010 Remote Terminal Unit required to interface between the existing ' Supervisory Control and Data Acquisition computer system and the -110- May 17, 1988 1 Rp1A E 21 electrical substation switchgear, in a total amount of $31,768. The supply of a compatible Remote Terminal Unit is so limited that the normal bid process cannot be used. This purchase is based on the proprietary nature of the Remote Terminal Unit and the compatibility with the existing Supervisory Control and Data Acquisition computer system. Council approval is required for Cases Not Requiring Bidding exceeding $20,000. Staff is proposing to pay Rose Chemical Administrative Fund a total amount of $21,427.32 to properly dispose of PCB waste shipped to the Rose Chemical site by the City. Award of this contract is based on the professional advice of the Light & Power Utility Engineering staff. The Rose Chemical Administrative Fund Steering Committee was formed due to the bankruptcy and resulting inability of the original vendor (Rose Chemical) to dispose of PCB items shipped to Rose by various generators of PCB waste. The City of Fort Collins shipped PCB items to Rose Chemical between November 1982 and October 1983. The Administrative Fund is recognized by the U.S. Environmental Protection Agency as the organization responsible for disposal of PCB waste on the Rose site and, as such, is the only party available for the required disposal services. Funds raised by the Administrative Fund will be used to pay Clean Sites, Incorporated, for the actual cleanup of the Rose site. Resolution 88-75 Relating to Hazardous Materials Route Designation. The Colorado State Patrol is in the process of seeking input from local governments prior to designating which public roads in the state will and will not be used by motor vehicles transporting hazardous materials. This Resolution authorizes the Mayor to request that the Colorado Department of Highways petition the Colorado State Patrol, on behalf of the City, not to designate any routes through Fort Collins for the transportation of hazardous materials. Routine Deeds and Easements. Dedication of an off -site access easement from Everitt Enterprises Limited Partnership No. 1 for the construction, operation, and maintenance of an entrance driveway to serve the Centre for Advanced Technology 6th Filing. Consideration: None. Dedication of a temporary off -site drainage easement from Everitt Enterprises Limited Partnership No. 1 for the construction, operation, and maintenance of drainage facilities to serve the Centre for Advanced Technology 6th Filing. Consideration: None. Dedication of an off -site utility easement from Everitt Enterprises Limited Partnership No. 1 for the construction, -111- May 17, 1988 operation, and maintenance of a sanitary sewer to serve the Centre , for Advanced Technology 6th Filing. Consideration: None. d. Dedication of right-of-way from John 0. Fuhr and Adrian J. Fuhr at University Mobile Manor, 3717 South Taft Hill Road. This 50' by 1320' right-of-way is needed for the Taft Hill/Horsetooth Road intersection project and for the future widening of Horsetooth Road. Consideration: None. Ordinances on Second Reading were read by title by Wanda Krajicek, City Clerk. Item #6. Second Readinq of Ordinance No. 69. 1988 Rezonina Certain Rezoning. Item #7. Item #8. Item #9. Pool. Item #10. C. Second Reading of Ordinance No. 43, 1988, Annexing ADDrox- ' imately 15.6957 Acres_ Known as tha Union Parifir South First Item #11. C. [DIN Item #12. C. Q -112- May 17, 1988 Ordinances on First Reading were read by title by Wanda Krajicek, City Clerk. Item #13. Item #14. Councilmember Maxey made a motion, seconded by Councilmember Winokur, to adopt and approve all items not removed from the Consent Calendar. Yeas: Councilmembers Estrada, Horak, Kirkpatrick, Mabry, Maxey, Stoner, and Winokur. Nays: None. THE MOTION CARRIED. Ordinance No. 75, 1988, Appropriating Prior Year Reserves in the Storm Drainage Fund, Adopted on First Reading Following is staff's memorandum on this item: "FINANCIAL IMPACT ' Cash reserves in the Storm Drainage Fund will be reduced by $121,282. The current balance as reflected in the 1987 CAFR is $810,921. EXECUTIVE SUMMARY Special Improvement District ("SID") #72 was created to provide for the widening of Lemay Avenue from Drake Road to Boltz and Drake Road from Stover to Lemay. Included in the construction was a portion of the East Drake Road storm sewer. It was intended that the cost of construction of that storm sewer should be paid from the Seven Year Capital Projects Fund, however, no transfer from 7-Year Capital into the SID #72 fund was made and the 7-Year Capital Fund was closed out in 1984. Bonds issued for this district mature on July 1, 1988. Payment of those bonds can be made if money is now transferred from prior year reserves in the Storm Drainage Fund to cover the amount that should have been paid to the district from the 7-Year Capital Fund. BACKGROUND On June 6, 1978 the City Council authorized the issuance of special assessment district bonds in the amount of $614,000 for the construction of street improvements in SIDS #70, 71, 72, and 73. SID #72 was the most unique of the four districts with multiple funding sources including bond ' proceeds, 7-Year Capital, General Fund via Capital Projects and contributions from both private sources and in -kind services from Federal -113- May 17, 1988 Aid to Urban Systems. Funds should have been transferred from the 7-Year ' Capital Fund to pay for the construction of a portion of the Drake Road storm sewer, but were not transferred before the 7-Year Capital Fund closed out in 1984. Bonds for this consolidated district mature on July 1, 1988. A transfer of money from the prior year reserves in the Storm Drainage Fund will provide the funds that should have been transferred for the storm sewer construction and will enable the City to pay the district's bonds on their maturity date. This transfer will leave the storm drainage prior year cash reserves with a balance of $689,639. Without this transfer, the City would have the options of defaulting on the bonds, paying the total deficit from the Surplus and Deficiency Fund, or paying a portion from the Surplus and Deficiency Fund and the final 25% from additional ad valorem taxes levied as required by the City Charter. The option of default has never been exercised by the City as it could adversely affect the City's overall bond rating and the marketing of future special improvement district bonds. Taking the funds from the Surplus and Deficiency Fund would result in an additional transfer of money from the General Fund reserves than is presently anticipated and as the $121,282 is not an assessable amount, the money would not be reimbursed to the General Fund in the future. Since the $121,282 is attributable to the City's share in the cost of the district and there are reserves available to cover this cost, it is ' unlikely that levying ad valorem taxes to cover the deficit is an acceptable solution. Since the funds in question were used to construct a storm sewer facility, the most equitable method of solving the deficit problem in to use storm drainage money now held in reserve. The Director of the Storm Drainage Utility has approved this transfer." Bruce Lockhart, 2500 East Harmony Road, stated he believed the transfer of funds should come from the General Fund, not the Storm Drainage Fund. Councilmember Mabry made a motion, seconded by Councilmember Kirkpatrick, to adopt Ordinance No. 75, 1988 on First Reading. Finance Director Alan Krcmarik and Utility Services Director Rich Shannon responded to questions from Council. The vote on Councilmember Mabry's motion to adopt Ordinance No. 75, 1988 on First Reading was as follows: Yeas: Councilmembers Horak, Kirkpatrick, Mabry, Maxey, Stoner, and Winokur. Nays: None. (Councilmember Estrada was out of the room.) THE MOTION CARRIED. -114- May 17, 1988 Councilmember Reports Councilmember Kirkpatrick mentioned Item #17, Resolution 88-72 Authorizing the Mayor to Enter into an Intergovernmental Agreement with the State of Colorado (Office of Energy Conservation) for Enhanced Promotion of the Fort Collins Residential Energy Rating System, which was approved on the Consent Agenda. Items Relating to Implementation of Recommendations from Boards and Commissions Review Subcommittee Following is staff's memorandum on this item: "On March 4 after a six month review process, the City Council Boards and Commissions Review Subcommittee presented its recommendations to the entire Council. A Public Hearing was held on May 3 to receive input from board and commission members and the general public. At the May 10 worksession, Council reviewed the recommendations in detail and gave staff direction to schedule many of the recommendations for consideration at the May 17 Council meeting. Based on Public Hearing input, Council eliminated several recommendations from further consideration. The following Ordinances and Resolutions were prepared in response to Council direction: I Boards and Commission Review Consent Items Items A through F are being presented in the Consent Agenda Format. These items were reviewed at the May 10 worksession and are being presented in this manner to expedite their adoption. As with the regular Consent Calendar, any item may be withdrawn for discussion by any member of Council, staff, or public and will be considered after the balance of the Board and Commission Review Consent is adopted. G� 91 This Ordinance would dissolve the Parking Commission and place the primary responsibility for parking issues with Development Services staff. Staff would request advice from the Downtown Development Authority on downtown parking issues as necessary. This Ordinance dissolves the Quality of Life Commission and places primary responsibility for coordinating community surveys with City staff. -115- May 17, 1988 C. Resolution 88-76 Creating- a Council Finance Committee and Making Appointments Thereto. This Resolution formally creates a Council Finance Committee that has been in existence informally since 1975. The Resolution appoints Councilmembers Estrada, Horak, and Winokur to serve as the Council Finance Committee. D. Resolution 88-77 Creating an Ad -Hoc Transportation Committee. This Resolution creates an Ad -Hoc Transportation Committee to serve as an advisory body to Council on transportation policy issues. It is anticipated that appointments to this Committee would be announced at the July 5 regular Council meeting after the advertising and interview process has been completed. E. Resolution 88-78 Defining the Role of Council Liaisons to Boards and Commissions. F. G. H. This Resolution formally defines the role of the Council board and commission liaisons. This Resolution dissolves the Council Subcommittee on Economic Development. This recommendation was not a part of the report from the Boards and Commissions Review Subcommittee but was suggested by Subcommittee member Winokur and accepted by the entire Council. END BOARDS AND COMMISSIONS REVIEW CONSENT Boards and Commission Review Items Needing Individual Consideration This Ordinance makes all the necessary Code changes to transfer the historic preservation functions of the Cultural Resources Board to the Landmark Preservation Commission AND amends the Code to include administration of the Cultural Development and Programming Account as a function of the Cultural Resources Board (Section 2). This Resolution establishes and makes appointments to a Council Health I and Safety Subcommittee that will review policies and issues related to 116- May 17, 1988 J I. public health and safety concerns including but not limited to police, fire, and emergency services, hazardous materials, and underground chemical storage. Councilmembers Kirkpatrick, Stoner, and Winokur have agreed to serve on this Subcommittee. This Ordinance directs all boards and commissions to prepare work plans on an annual basis. Work plans will be used as a tool to improve communication and enhance the effectiveness of the various boards and commissions and to insure board goals and objective mesh with City Council goals and objectives. The work plans are to be submitted by November 30 of each year for the upcoming year." Councilmember Mabry made a motion, seconded by Councilmember Maxey, to adopt Items A through F on the Boards and Commissions Review Consent Agenda. Yeas: Councilmembers Estrada, Horak, Kirkpatrick, Mabry, Maxey, Stoner, and Winokur. Nays: None. THE MOTION CARRIED. Councilmember Kirkpatrick made a motion, seconded by Councilmember Winokur, to adopt Ordinance No. 78, 1988 (Item G) on First Reading. Yeas: Councilmembers Estrada, Kirkpatrick, Mabry, Maxey, Stoner, and Winokur. Nays: Councilmember Horak. THE MOTION CARRIED. Councilmember Horak made a motion, seconded by Councilmember Mabry, to adopt Resolution 88-70 (Item H). Yeas: Councilmembers Estrada, Horak, Kirkpatrick, Mabry, Maxey, Stoner, and Winokur. Nays: None. THE MOTION CARRIED. Councilmember Winokur made a motion, seconded by Councilmember Maxey, to adopt Ordinance No. 79, 1988 (Item I) on First Reading. Yeas: Councilmembers Estrada, Horak, Maxey, Stoner, and Winokur. Nays: Councilmembers Kirkpatrick and Mabry. THE MOTION CARRIED. Resolution 88-81 Regarding Housing Authority Fees, Option B Adopted Following is staff's memorandum on this item: "At the City Council worksession of April 12, 1988, Council reviewed the provisions of Section 29-4-227, C.R.S., as it applies to the exemption of certain fees and taxes for the fort Collins Housing Authority. -117- May 17, 1988 A broad interpretation of the statute suggests that City development review fees should not be imposed. State legislation is specific that housing ' authorities are exempt from the payment of taxes, including property taxes. The City recognized this point last year when it refunded the property tax payments the Housing Authority had made. Two resolutions have been prepared at the request of Council. Option A exempts the Housing Authority from certain fees, while Option B additionally exempts street oversizing and parkland fees." Planning Director Tom Peterson gave a brief background of this item and explained the provisions of Option A and Option B of the Resolution. City Attorney Huisjen spoke of the City's interpretation of the state statute relating to the exemption of certain fees. He and Tom Peterson responded to questions from Council. Councilmember Winokur made a motion, seconded by Councilmember Kirkpatrick, to adopt Resolution 88-81 (Option B). Greg Denton, attorney representing the Housing Authority, spoke of case law which supports the Housing Authority's request for exemption. Larry Scott, 2821 Eagle Drive, questioned who would benefit from the exemption of fees. He stated he believed contractors would benefit from the exemption. City Attorney Huisjen stated the statute applies to Housing ' only Authorities. David Herrera, Housing Authority Executive Director, read a statement supporting the Housing Authority's position that all fees, except rates and charges attendant to actual utility consumption, are within the meaning of the statute and that the Housing Authority is exempt. He responded to questions from Council. Bill West, Chairman of the Housing Authority, stated the Housing Authority does not want to be in an adversarial position with the City and encouraged adoption of Option B. Councilmember Estrada stated he favored the Housing Authority's request, adding the reason for allowing exemptions of this type is for community or public good. He stated he did not see how a developer could profit from this exemption. He stated he would support Option B of the Resolution. Councilmember Kirkpatrick stated she would support Option B although she was initially concerned about the precedent that this action might set. She stated she was assured that the community will not find that private developers would be able to use the statute to their benefit. Councilmember Mabry stated he would not support Option B as drafted because he did not believe it appropriate to separate government ,and allow it to ' -118- May 17, 1988 ' compete on a different level than the private sector. He stated adoption of the Resolution would prevent the private sector from effectively competing to provide low-income housing. He stated the Resolution did not provide for street oversizing fund reimbursement in the absence of the fees being exempted. Councilmember Estrada stated most governmental functions for the benefit of the community work to the detriment of the private sector. He stated discussion should focus on how to interpret the statute rather than on philosophy. Councilmember Maxey stated he would not support the Resolution and agreed with the comments made by Councilmember Mabry. He pointed out the Housing Authority originally agreed to the payment -in -lieu -of -taxes voluntarily and without coercion. He stated that although the statute allows the Housing Authority to be exempt, it does not require the City to grant the exemption. He stated he viewed the Resolution as a passing of the burden directly on to the taxpayers. Councilmember Mabry made a motion, seconded by Councilmember Maxey, to amend the NOW, THEREFORE clause of Resolution 88-81 (Option B) to read as follows: "NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF FORT COLLINS, that, hereafter, Housing Authorities and all others providing low-income housing and operating within the City shall be exempt pursuaAt-to-Seetien-29-4-227;-6:R:S:; from the payment of the following fees:" and by adding a paragraph providing the following (language used here provides the intent of the amendment; actual language would be drafted by the City Attorney): "BE IT FURTHER RESOLVED that the City staff will prepare for Council consideration an ordinance that will provide a transfer of funds from the General Fund to the appropriate funds where fees have been waived an amount equal to what would have been collected from the low-income housing providers had the fees been collected." Councilmember Mabry and staff members responded to questions from Council about the possible effect of the amendment. Councilmember Horak stated he would support the amendment because it is in line with the goal to provide low-income housing. Councilmember Kirkpatrick stated she would not support the amendment because she was uncomfortable with the timing of the amendment. She stated she would be willing to consider a Resolution at a later time that deals with the issue of low-income housing. She stated she was prepared to vote ' in favor of the interpretation of the state statute that refers specifically to Housing Authority fees. -119- May 17, 1988 Councilmember Estrada agreed with Councilmember Kirkpatrick, noting he would like more information before supporting an amendment similar to the one proposed by Councilmember Mabry. Councilmember Winokur concurred with Councilmembers Kirkpatrick and Estrada, stating Councilmember Mabry's amendment needs further study before adoption. He pointed out the original Resolution is a reasonable step toward increasing the Council's commitment to providing affordable housing for low-income residents. The vote on Councilmember Mabry's motion to amend Resolution 88-81 (Option B) was as follows: Yeas: Councilmembers Horak, Mabry, and Maxey. Nays: Councilmembers Estrada, Kirkpatrick, Stoner, and Winokur. THE MOTION FAILED. Councilmember Horak stated he would like to consider the issues raised by Councilmember Mabry at a later date. He stated he would support the original Resolution. Councilmember Mabry expressed a desire to have staff resurface this issue during the next budget process. Mayor Stoner stated he was opposed to Option B of the Resolution because of the exemption from parkland fees and street oversizing fees. The vote on Councilmember Winokur's motion to adopt Resolution 88-81 (Option B) was as follows: Yeas: Councilmembers Estrada, Horak, Kirkpatrick, and Winokur. Nays: Councilmembers Mabry, Maxey, and Stoner. THE MOTION CARRIED. Resolution 88-82 Setting Forth the Intention of the City of Fort Collins to Issue Industrial Development Revenue Bonds for the Vipont Pharmaceutical, Inc. Project in the Approximate Principal Amount of 12.600,000, Adopted Following is staff's memorandum on this item: "FINANCIAL IMPACT The debt service on the private activity bonds will be paid by the applicant. The bonds do not constitute a debt of the City of Fort Collins. EXECUTIVE SUMMARY The Resolution allows the City to use its own 1988 Private Activity Bond allocation and to apply for a Private Activity Bond allocation of $750,000 [l -120- May 17, 1988 from the State of Colorado on behalf of the applicant, Vipont Pharmaceutical Inc. If allocation is received, the applicant will move Forward with the issuance of Industrial Development Revenue Bonds in the approximate principal amount of $2,600,000. The project is located in the Prospect Park East P.U.D., Lots 1, 2 and 8. The proceeds of the bonds will be used to acquire and construct a 36,000 square -foot manufacturing facility. The facility will be constructed for lease to and occupancy by Vipont Pharmaceutical Inc., a local business. BACKGROUND In 1988, the City of Fort Collins has a private activity bond allocation of $1,853,500. The City may also apply for unlimited allocations for Private Activity Bonds from the Statewide balance. Projects may be induced and forwarded to the State, where they will be considered on a first -come - first -served basis. The application for the inducement of City of Fort Collins, Colorado Industrial Development Revenue Bonds (Series 1988) for Vipont Pharmaceutical Inc., a Colorado General Partnership, in the approximate principal amount of $2,600,000 is being sent under separate cover for review. The project consists of the acquisition and construction of a 36,000 square -foot office, distribution and light manufacturing building to be located on Lots 1, 2, and 8 of the Prospect Park East P.U.D. in ' Southeast Fort Collins. The facility will be constructed for lease to and occupancy by Vipont Pharmaceutical Inc. Vipont Pharmaceutical manufactures and markets a plaque -fighting toothpaste and mouthwash, and a periodontal irrigation system - all products for the treatment of oral health. The project is located in an approved P.U.D. Staff has reviewed the application using criteria established by Resolution 84-92, adopting Industrial Development Bond Policies and Criteria. The IDRB Criteria Evaluation Sheet is attached." Councilmember Winokur made a motion, seconded by Councilmember Kirkpatrick, to adopt Resolution 88-82. Finance Director Alan Krcmarik reviewed the proposal before Council and responded to questions from Council. He introduced Vipont representatives Bill Reynolds, Gerald Lee, and Jerry. Blake. Bill Reynolds, representing Vipont Ventures, spoke of the proposed development of this project. Jerry Blake, Vipont manufacturing division, spoke of the manufacturing functions of Vipont. Bruce Lockhart, 2500 East Harmony Road, questioned if the $2,600,000 includes the building and interior equipment. He also questioned the ' points awarded the project for energy conservation and target industries. -121- May 17, 1988 Gerald Lee, Vipont representative, responded that approximately $500,000 is for manufacturing equipment as well as additional land for future expansion. Councilmember Horak stated he thought this was a good example of how to use this type of funding. Councilmember Estrada stated Vipont was an excellent company and stated he looks forward to future growth of the company. Councilmember Winokur also spoke highly of the Vipont company and endorsed this use of IDRB's. Councilmember Kirkpatrick commended Vipont for its hiring practices, highlighting the opportunities afforded women in the company. She thanked Vipont for its contributions to the community. The vote on Councilmember Winokur's motion to adopt Resolution 88-82 was as follows: Yeas: Councilmembers Estrada, Horak, Kirkpatrick, Mabry, Maxey, Stoner, and Winokur. Nays: None. THE MOTION CARRIED. Items Relating to the Proposed Expansion of the Foothills Fashion Mall Following is staff's memorandum on this item: "FINANCIAL IMPACT Vacation of the public rights -of -way, portions of East Monroe Drive and Foothills Parkway, will cause no direct or indirect City expense. The developers of the Mall will bear the entire cost of closing the streets. The indirect benefit to the City will be a reduction in cost to maintain the portions of street. EXECUTIVE SUMMARY A. Second Reading of Ordinance No. 115, 1987, Vacating the Portion of East Monroe Drive between JFK Parkway and Stanford Road. B. Second Reading of Ordinance No. 116, 1987, Vacating the Portion of Foothills Parkway between Mathews Street and Stanford Road. C. Second Reading of Ordinance No. 117, 1987, Vacating a Utility Easement on the site of the Foothills Fashion Mall located in the vicinity of the proposed Mervyns Department Store. Everwest, as owner of the Foothills Fashion Mall and developer of the proposed Mall expansion, has requested that the City vacate portions of -122- May 17, 1988 ' East Monroe Drive, Foothills Parkway, and a utility easement for the proposed expansion of the Mall. On August 4, 1987, the Council adopted these Ordinances on First Reading by a vote of 5-0, with the understanding that second reading of the ordinance would be postponed until the developer obtained the necessary signatures of the adjoining property owners. On May 11, 1988, the developer indicated that he would obtain the signatures by May 17, 1988. The developer and staff have reached agreement on a traffic access and control plan for regulating traffic and detours during each construction phase. City staff supports the vacation and the Planning and Zoning Board has endorsed the concept by giving its final approval to the expansion plans. The vacations of Monroe Drive and Foothills Parkway provide for an improved overall plan for the Mall. The shopping areas in Foothills East, Foothills Fashion Mall and the Marriott are all tied together with improved pedestrian and automobile circulation systems and with improved landscaping. All utilities have been contacted and have no objections as long as easements are retained for their facilities. Those easements have been provided in the new plat. The only objection to the vacations has come from a few residents along Swallow Road and Mathews. The objections have been to the potential for increasing traffic in front of their homes. The residents believe that vacating Foothills Parkway would block the street and cause more mall traffic on Swallow and Mathews. To mitigate that possibility, the developer will do several things. The most important help is from the driveways in the Mall being designed to follow the same general pattern as the streets being vacated. Therefore, through traffic can still follow the route of the vacated street if they choose to do so rather than using Mathews and Swallow. Secondly, improvements will be made to other entrances that should prevent more traffic from rerouting to use Swallow. These improvements are: to remove the cross pan in Monroe on the east side of College which removes the bump that slows traffic; to add a double left turn lane on westbound Horsetooth to southbound College to improve the flow through the intersection; and to add a right turn lane on westbound Horsetooth to northbound College to also help the flow. To help mitigate the effects of turn phase will be added to the ' install a new signal at Swallow the increasing traffic on Swallow, a left Swallow at College signal and the City will and Stover. -123- May 17, 1988 The final benefit from the vacations is that the added space provides room ' for the Mall expansion and, thereby, room to upgrade the Mall to regional status. This will benefit both the Mall and the City in keeping the regional Mall within the City." Councilmember Mabry withdrew from the discussion and vote on this item due to a perceived conflict of interest. Councilmember Horak made a motion, seconded by Councilmember Winokur, to bring Items A and B off the table (tabled on Second Reading on August 18, 1987). Yeas: Councilmembers Estrada, Horak, Kirkpatrick, Maxey, Stoner, and Winokur. Nays: None. (Councilmember Mabry withdrawn) THE MOTION CARRIED. Councilmember Maxey made a motion, seconded by Councilmember Winokur, to adopt Ordinance No. 115, 1987 as amended prior to Second Reading. Planning Director Tom Peterson gave background information on this item. He, and Traffic Engineer Rick Ensdorff, responded to questions from Council. Larry Scott, 2821 Eagle Drive, expressed concern about the traffic light at Stanford and Stover. Councilmember Maxey expressed concern that the collector and arterial ' standards are not being adhered to with this project and about the impact on traffic flow in the area. Mayor Stoner spoke of the economic benefits this project will generate. The vote on Councilmember Maxey's motion to adopt Ordinance No. 115, 1987 as amended prior to Second Reading was as follows: Yeas: Councilmembers Estrada, Horak, Kirkpatrick, Maxey, Stoner, and Winokur. Nays: None. (Councilmember Mabry withdrawn) THE MOTION CARRIED. Councilmember Winokur made a motion, seconded by Councilmember Maxey, to adopt Ordinance No. 116, 1987 as amended prior to Second Reading. Yeas: Councilmembers Estrada, Horak, Kirkpatrick, Maxey, Stoner, and Winokur. Nays: None. (Councilmember Mabry withdrawn) THE MOTION CARRIED. -124- May 17, 1988 ' Ordinance No. 80, 1988, Appropriating $30,186 of Downtown Development Authority Prior Year Reserves for the Operation of a Motorized Trolley from Major Hotels and the CSU Campus to the Downtown Area. Adopted on First Reading Following is staff's memorandum on this item: "FINANCIAL IMPACT This action appropriates $30,186 of DDA prior year reserves into the Operation and Maintenance budget for expenditure on the trolley service, which has been determined to be an appropriate use of the DDA funds (see attached legal opinion). These funds are available in DDA prior year reserves. EXECUTIVE SUMMARY At its May 5, 1988 meeting, the Board of Directors of the Downtown Development Authority unanimously approved Resolution 88-4 (attached) recommending that the Fort Collins City Council appropriate Thirty Thousand One Hundred Eighty-six Dollars ($30,186) from unappropriated funds in the DDA 0 & M budget to fund the operation of a motorized trolley in conjunction with a larger system connecting shopping and business areas ' with downtown parking lots. It was the Board's decision that the shuttle would provide an exciting, attractive, and unique method of attracting shoppers, out-of-town visitors, students, and conventioneers to the central business district. With approval of Council, the monies will be placed into the Authority's marketing line item in the 0 & M Budget. The DDA has been working with various representatives of downtown interest groups, Transfort, and Development Services staff on the implementation of a rubber -wheel circulator trolley shuttle service in the downtown during the summer months. The "trolley" project will operate on two separate routes, free of charge, Monday through Saturday, from Memorial Day to Labor Day. One route will circulate the downtown area, connecting key parking locations to various downtown destinations, and will be funded by the City's Parking Fund. The other route will connect major hotels and the CSU campus to the downtown and will be funded by the DDA. This service will be contracted through the Denver Trolley Company which provides similar service to the City of Boulder. The total cost of the "trolley" project is $77,400 for 86 days of service. These costs will be shared between the City's Parking Fund ($16,254), the DDA ($30,186) and •the Downtown Business Association ($30,960 in ' advertisements). -125- May 17, 1988 This Ordinance appropriates the necessary funds for the DDA to participate in the pilot project. BACKGROUND The "trolley" project was conceived by a varied group of interested individuals/organizations concerned with the economic vitality of the central business district. Members of this group included representatives of the DDA, Downtown Business Association (DBA), Chamber of Commerce, Convention and Visitors Bureau, Transfort, Development Services and other interested parties. The purpose of this group was to examine opportunities and implement programs which would stimulate activity in the downtown area. The "trolley" will complement the variety of downtown promotional activities (street fairs, swap meets, outdoor concerts, farmer's market, food fair, Hawaiian Luau, etc.) planned for the summer months. The "trolley" pilot project, modeled after a similar shuttle in Boulder, is designed to promote and stimulate activity in the central business district. It is believed that introduction of an old-fashioned "trolley" in the downtown area will create an element of excitement and encourage pedestrian/shopper activity while providing a valuable shuttle service from the hotels, CSU, and the parking lots. The "trolley" is intended to serve as pilot project and, if successful over a period of time, will evolve into a shuttle service offered by the private sector. The funds allocated to the project this year will serve as seed monies to determine the viability of the continuance of the program in future years. The Boulder trolley, which began operations last summer, provides a similar shuttle service connecting four major shopping centers with a 10-minute headway. The service runs, from Memorial Day to Labor Day, is free to riders and is financed by the Urban Renewal League and City funds, as well as a contribution of $1,000 from each of the shopping centers. The average rider was female, age 20 to 40, with children. The trolley ran an average of 300 to 400 trips per day. The City of Boulder was pleased with last year's service and has contracted with the Denver Trolley Company to continue service this summer. The Fort Collins "trolley" pilot project will consist of two routes and could be augmented with charter service for special events, conventions and conferences on an as -needed basis. Route one will circulate in the downtown area on 10-minute headways, connecting key parking locations to various destinations in the downtown area. Service will begin at 11 a.m. and continue until 6 p.m. A total of 602 hours of service will be provided on route one. This route will be funded by the City's Parking Fund and the DBA (through interior and exterior advertising on the "trolley", which reduces the hourly lease rate). Route two will connect the major hotels and the CSU campus to the downtown area. Service will begin at 11 a.m. and continue until midnight, for a 126- May 17, 1988 total of 1,118 service hours. This route will be funded by the DDA and the DBA (through interior and exterior advertising). The City's objective of the pilot project is to increase parking lot utilization. The DBA's objective is to increase downtown patronage, while the DDA's objective is to increase the attractiveness of the downtown to investors and developers. The downtown "trolley" service meets the goals and objectives of the DDA's Plan of Development, adopted by City Council in September 1981. Specifically, this plan recommends the DDA work to provide sufficient public parking including construction of garages and to introduce programs such as shuttle systems, van pools, park and ride lots, and bikeways. In order to provide the "trolley", a contract will be entered into with the Denver Trolley Company. The "trolleys" have a seating capacity of 35 with standing room for approximately 10 to 15 people. Under the terms of the lease agreement, all operating and maintenance expenses, including the vehicle, driver, and insurance, will be provided at a rate of $45 per hour. These costs will be reduced to $27 per hour by selling both interior and exterior advertising. The City and the DDA will lease the vehicles at $27 per hour and the Denver Trolley Company, with the support from the DBA, will be responsible for ensuring that the advertising is sold. If the advertising is not sold, the "trolley" lease rate to the ' City and the DDA remains at $27 per hour. The total project costs would be shared between the City's Parking Fund, the DDA and the DBA as follows: BUSINESS CITY DDA ADVERTISING TOTAL SHARE SHARE SHARE COSTS $16,254 $30,186 $30,960 $77,400 21% 39% 40% 100% The DBA will assume the lead agency role and work closely with the City and the DDA." Development Services Director Mike Davis described the proposed project and responded to questions from Council. Bruce Lockhart, 2500 East Harmony Road, stated he thought performance guidelines should be established at the onset of the project. Maggie Kunze, Executive Director of the Downtown Business Association, expressed the Association's support for the downtown trolley. She stated the Association would participate in encouraging business owners to advertise on the trolley. Earl Wilkinson, 926 Valley View Road, stated he initiated this project and ' spoke in support of the project and the downtown area. He answered questions from Council. 127- May 17, 1988 Councilmember Estrada stated this is a creative idea which he fully supports. He stated he believes the trolley will add a cultural dimension to the city. Councilmember Mabry expressed excitement for this unique, cooperative effort between the public and private sectors. Councilmember Kirkpatrick stated although she has been very critical of parking fund usage, she believed the trolley will be well -utilized and an appropriate use of those funds. Councilmember Horak stated he would be interested receiving information at a later date regarding the impact the downtown trolley has on Transfort ridership. He stated he believed Convention and Visitors Bureau funds should be used to fund this type of project. He stated the project makes sense, but he did not believe the funding was appropriate. Councilmember Maxey expressed concern about the source of funding and that the trolley be used to bring people from all over the city to the downtown area. Mayor Stoner stated he would support the Ordinance, although he shared some of the concerns about the funding from the City. Councilmember Mabry made a motion, seconded by Councilmember Estrada, to adopt Ordinance No. 80, 1988 on First Reading. Yeas: Councilmembers Estrada, Horak, Kirkpatrick, Mabry, Maxey, Stoner, and Winokur. Nays: None. THE MOTION CARRIED. Ordinance No. 95, 1987, Authorizing the Issuance of City of Fort Collins Downtown Development Authority Tax Increment Revenue Refunding and Improvement Bonds, Adopted as Amended on Second Reading Following is staff's memorandum on this item: "FINANCIAL IMPACT The DDA Tax Increment Bonds Series 1985A are proposed for refunding to take advantage of the current market rates. This savings would reduce the debt service on the bonds which are backed by the Sales and Use Tax Fund. The refunding also includes an additional $3.3 million which the DDA would have to provide as low-cost funding for the Robinson-Piersal and Opera House projects and for other projects approved by the Council at a later date. 1 -128- May 17, 1988 EXECUTIVE SUMMARY This Ordinance implements the refunding of originally issued in 1984 and refunded in additional bonds in the amount of $3.3 million promote future projects. BACKGROUND DDA Tax Increment Bonds 1985. It also includes to be used by the DDA to On June 2, 1987, City Council adopted on First Reading Ordinance No. 95, 1987, authorizing $13,975,00O of refunding and improvement bonds. The issuance was justified on the following criteria: The bonds would only be issued when $250,000 of net present value savings as compared to the 1985 refunding were achieved. The existing bond covenants could be improved in terms of the additional bonds test and the discharge of the lien on the Sales and Use Tax Fund. The provisions of the present DDA refunding bonds do not conform to requirements imposed in the City's Sales and Use Tax bond ordinance. This situation will be corrected in the new bond ordinance. In addition to the refunding, additional bonds would be issued at a parity with the current bonds in escrow. Qualifying projects within the District could then be supported. If no projects use the bonds, the bond proceeds would be subject to early call. On May 3, 1988, Council authorized a new financial structure because market conditions would not provide the $250,000 in savings. Boettcher and Company, underwriter for the financing, proposed the new structure. The new structure modifies the maturities of the bonds so they better match the projected growth of the tax increment. The new structure also extends the life of the bond by about one and one half years. This adds two years of tax increment to help retire the debt. The City's Sales and Use Tax pledge will remain in place; the new structure reduces the probability that it will be used. the new structure increases the total amount of debt service to be paid by about $1.6 million when compared to the 1985 refunding financial structure." Councilmember Mabry withdrew from the discussion and vote on this item due to a perceived conflict of interest. Councilmember Maxey made a motion, seconded by Councilmember Kirkpatrick, to remove Ordinance No. 95, 1987 from the table (tabled indefinitely on July 21, 1987). Yeas: Councilmembers Estrada, Horak, Kirkpatrick, Maxey Stoner, and Winokur. Nays: None. (Councilmember Mabry withdrawn) -129- May 17, 1988 THE MOTION CARRIED. Finance Director Alan Krcmarik gave a brief presentation on this item. Loring Harkness, bond counsel, read amendments to Ordinance No. 95, 1987 into the record. He responded to questions from Council. Councilmember Horak made a motion, seconded by Councilmember Maxey, to adopt Ordinance No. 95, 1987 as amended on Second Reading. Larry Scott, 2821 Eagle Drive, objected to the refunding of these bonds and the additional $3.3 million. Bruce Lockhart, 2500 East Harmony Road, expressed concerns about providing an additional $3.3 million. Mayor Stoner stated he would support the motion, noting he believed the risk to the City is minimal. The vote on Councilmember Horak's motion to adopt Ordinance No. 95, 1987 as amended on Second Reading was as follows: Yeas: Councilmembers Estrada, Horak, Kirkpatrick, Maxey, and Stoner. Nays: Councilmember Winokur. (Councilmember Mabry withdrawn) THE MOTION CARRIED. Resolution 88-83 Authorizing the City Manager to Amend the Agreement Relating to the Opera House Galleria Project Adopted Following is staff's memorandum on this item: "EXECUTIVE SUMMARY On May 10, 1988 the Downtown Development Authority Board of Directors approved the terms of the amended agreement between the DDA and the developer of the Opera House Galleria project. The amended agreement stipulates that the Authority will reimburse the developer for the cost of certain public improvements in an amount not to exceed the debt which can be financed by using 75 percent of the tax increment generated by the project. BACKGROUND Chronoloav 5115186 - City Council approves by resolution DDA participation in the I Opera House Block. -130- May 17, 1988 12116186 City Council approves on first reading an ordinance authorizing the City Manager to enter into a contract with the Downtown Development Authority and Historic Opera House Properties to reimburse the developer $403,945 for the cost of alley and sidewalk improvements. 1106187 City Council approved on Second Reading, ordinance authorizing the City Manager to enter into a contract with DDA and Historic Opera House Properties to reimburse the developer $403,945 for the cost of alley and sidewalk improvements. 5127187 Agreement between City, DDA, and Historic Opera House Properties is signed. 12103187 DDA Board of Directors approves a six-month extension of the agreement with Historic Opera House Properties. 12114187 - City Council approves a six-month extension to the agreement Historic Opera House Properties. 2122188 - DDA Board of Directors considers a revised proposal from the Opera House developer requesting $2 million in public expenditures to be used for alley and sidewalk improvements and the improvement and acquisition of an atrium passing through the center of the proposed project. The Board agreed to hear a 3103188 revised proposal at its March meeting. - DDA Board of Directors considers a revised request from the developer for public expenditures of $1.245 million. No decision was made. 4107188 - DDA Board of Directors reconsidered the Opera House Project. A motion to approve public participation in the project at a level which would have used 100 percent of the property tax increment for financing failed. 4114188 - At a special meeting, DDA Board of Directors reconsidered the proposal for public participation in the Opera House project. A motion to finance at 100 percent of property tax increment to pay for alley and sidewalk improvements, acquisition and improvement of the atrium passing through the center of the project, and additionally, that the developer deed a 5,000 square foot parcel at the rear of the site to the DDA failed. A revised motion to spend no more than 75 percent of the generated property tax increment for the same improvements and with the inclusion of the 5,000 square feet passed, 6-0. 5110188 - At a special meeting, the DDA Board of Directors approved the terms of the amended agreement which requires the expenditure of no more than 75 percent of the property tax increment for alley ' and sidewalk improvements, for acquisition and improvement of -131- May 17, 1988 the atrium, and including the deeding of the 5,000 square foot I parcel at the rear of site to the DDA. Calculation of Tax Increment Financing Pledged to Pro.iect Estimated cost of improvements: $6,087,694 Commercial assessment factor: x.29 Net taxable value: $1,765,430 Projected mill levy: .0635 Gross Property Taxes Owed: $112,105 Less existing property taxes: (21,858) Total Tax Increment: $90,247 75 75 percent requirement x .75 Net Annual Public Investment $67,685 Calculation of Estimated Debt Annual Payment: $67,685 Term: 15 years Interest: 7 112% Total Supportable Debt: $597,500* *Total supportable debt will vary depending on the final interest rate (which will be determined through the refunding), the final assessable value of the project as determined by the Larimer County Assessors office at the time the project is built. Terms of the Agreement In return for the DDA investment, the developer improves the utility infrastructure in the alley at the rear of the project, the developer improves the sidewalk and landscaping along the front of the project, the developer constructs an atrium and hallway connecting College Avenue to the LaPorte/America lot and deeds the improvements and the property underlying, them to the Downtown Development Authority. In addition, the developer will deed a parcel of approximately 5,000 square feet at the rear of the project to the DDA. 2. Regarding the parcel of )and at the rear of the site, the DDA has agreed that no future development will exceed two stories in height, that the design will be compatible with the Opera House improvements, and that any new structure will be built lot -line to lot -line. The DOA has also expressed its desire to see a performing arts theatre built on , the site but it has made no commitment nor is it bound to such a future development. The owner of the Opera House has the right of first -132- May 17, 1988 ' refusal should a legitimate offer be made to acquire this property from the DDA. 3. Covenants will be placed on the atrium governing maintenance, management, and operations. These covenants are similar to those on the pedestrian plaza in Old Town Square. 4. The developer will retain an easement beginning ten feet above the atrium floor. This is intended to control access by the general public to the offices on the upper floors of the project. 5. If the Downtown Development Authority develops the 5,000 square foot parcel at the rear of the site, it agrees to pay one-half the cost of the common walls between the parcel and the Opera House. 6. A figure not to exceed $10,000 will be deducted from the bond proceeds to cover DDA legal and administrative expenses. 7. The developer is required to reimburse the Downtown Development Authority $5,000 for the relocation expenses of Bennett Hotel residents. This payment must be made prior to January, 1989 (projected start of construction) or the entire agreement is void. The City and the DDA have demonstrated strong leadership and fiscal responsibility toward this project. City Council's original approval of the reimbursement ordinance came just after the public vote on the Robinson Piersal project. Both the City and the ODA permitted extending the deadline for the original agreement. Since then, the DDA Board of Directors has worked extremely hard to achieve an equitable level of Financial participation. The Opera House Galleria project meets with the DDA's Plan of Development, and the City's Comprehensive Plan and Goals and Objectives. Located within 100 feet of the busiest downtown intersection, this project should help to generate renewed interest in the central business district. Its focus on specialty retail and class -A office space coincides with the recommendations made in the Ross Downtown Market Analysis. The Opera House project involves the historic restoration of one of Fort Collins' most noted buildings. Public participation in the project reaffirms this City's commitment to historic values and tradition and is a recognition that a healthy, vigorous downtown neighborhood is important to the welfare of the community as a whole." Councilmember Kirkpatrick made a motion, seconded by Councilmember Maxey, to adopt Resolution 88-83. DDA Executive Director Chip Steiner thanked City staff members for their work on this project over the last few months, and the City Council and Downtown Development Authority Board of Directors for their perseverance ' during the course of this project. -133- May 17, 1988 Jim Reidhead, representing the developer (Walt Brown), described the I project, its benefits to downtown, and responded to questions from Council. Walt Brown, project developer, spoke of the project's role in the revitalization of the downtown area. Director of Administrative Services Pete Dallow gave a brief presentation and stated staff and bond counsel Loring Harkness were available to answer questions. Mark Thieman, president of the Downtown Business Association, encouraged Council's support for the project. John Pitner, owner of J. Pitner Ltd., stressed the need for higher quality retailers and professionals in the downtown area and expressed support for the project. Eldon Ward, Downtown Development Authority Board of Directors, stated the DDA put an extreme amount of consideration and debate into the recommended level of support for the project. Bruce Lockhart, 2500 East Harmony Road, spoke against the proposal, stating he did not believe the project was solid enough to warrant City support. Larry Scott, 2821 Eagle Drive, agreed with the comments made by Mr. ' Lockhart and urged Council to deny the project. Carey Hewitt, downtown business owner (The Cupboard), welcomed the project to the downtown area, stating he believed it would be an improvement to the neighborhood. Councilmember Maxey stated he was involved in the DDA process of evaluating this project. He stated the DDA recognizes this changes the amount of participation from a previous general policy of Council, noting the level of participation was at the insistence of the DDA, not the developer. He stated he felt comfortable with the project and would vote to support the Resolution. Councilmember Mabry stated this is a way to bolster the downtown area at no risk to the City and he would support the Resolution. Councilmember Winokur thanked Councilmember Maxey for his attention to this issue through his Council representation on the DDA Board. He spoke of the commitment and perseverance shown by Mr. Brown in bring this project to realization. Councilmember Kirkpatrick stated she was assured the financial risk to the City and the community was minimal. She stated the project has been reviewed very critically by all parties involved and that she would support the project. I -134- May 17, 1988 1 Councilmember Estrada stated support for the project indicates the community's support for the future of the downtown. He thanked Mr. Brown for his tenacity in this project. Councilmember Horak stated he believed the city as a whole will benefit from this project in the long term. The vote on Councilmember Kirkpatrick's motion to adopt Resolution 88-83 was as follows: Yeas: Councilmembers Estrada, Horak, Kirkpatrick, Mabry, Maxey, Stoner, and Winokur. Nays: None. THE MOTION CARRIED. Ordinance No. 81, 1988, Appropriating $300,000 from General Fund Reserves to the Surplus and Deficiency Fund. Adopted on First Reading Following is staff's memorandum on this item: "FINANCIAL IMPACT ' Transfer of these funds will lower the reserve for the General Fund will enable the City to prevent default in the payment of principal interest on iocal and special improvement district bonds issued by City. It is anticipated that money will be returned to the General Reserves at some future time. EXECUTIVE SUMMARY but and the Fund Money is needed in the Surplus and Deficiency Fund to prevent the default by the City in the payment of principal and interest due to bondholders of local and special improvement district bonds issued by the City. BACKGROUND The Charter of the City of Fort Collins authorizes the City to create a surplus and deficiency fund to be used to pay principal and interest due to the holders of special and local improvement district bonds issued by the City. The Surplus and Deficiency Fund (the "Fund") has been funded by the transfer of money remaining in any improvement district fund after the fund was closed and from interest earnings on the fund balance. The Fund began in 1974 with a year-end transfer of $3,354. The Fund reached its maximum of $284,119 in 1984. Each subsequent year has shown more expenditures from the Fund than revenues into the Fund. It is anticipated that, in 1988, expenditures will exceed revenues by $300,000. Expenditures from the Fund occur for several reasons: -135- May 17, 1988 1. A property owner fails to pay the assessment and the City ' obtains a tax certificate for the property. Currently, the City is holding tax certificates on property whose outstanding principal totals $104,068. Until the property is redeemed or sold, the City uses money from the Fund to correct the cash flow problem in the fund of the district where the property is located. State statutes require the City to hold the tax certificate for three years before the property can be sold and the City reimbursed for the money it has paid into the district fund. 2. Assessments are not paid on time. This creates a temporary cash flow problem for a district because interest due to bondholders is taken from the assessments paid. If the assessment money is delayed, the City will obtain the money needed from the Fund rather than default on an interest payment. In addition, when assessments are not paid on time, bonds cannot be called as originally estimated and the interest payments on the bonds are greater than anticipated. If there are prepayments of assessments, this problem can often be corrected. If not, the district will have a negative fund balance at maturity. 3. Cash flow problems. Special Improvement District #77 has a ' cash flow problem because the district was created without the inclusion of capitalized interest in the bond issue. Because there was not capitalized interest, the City has been paying the interest to the bondholders out of its own funds since the district was created. Although the district has been assessed, there has not yet been enough money paid on assessments to reimburse the City and to pay the interest on the bonds. The district is currently showing a deficit of $227,736. It is anticipated that this problem will be corrected when the assessments are paid, but until that time the City must fund the deficit. There are also several districts that have cash flow problems because the interest accrual date was miscalculated. It had been the City's practice to begin charging interest to the property owner as of the date of expiration of capita lized.interest. Recent computer analysis has proven that this will leave the districts with a negative cash balance at maturity unless a significant number of prepayments are made. It is not possible to calculate the exact amount that will be transferred from the Surplus and Deficiency Fund each year because the default rate in any district for any year cannot be determined. This transfer of $300,000 is expected to be sufficient for 1988, based on our best projections of default and known deficiencies in each district. When cash flow problems are corrected, money will be returned to the Fund and transferred back to I General Fund Reserves." -136- May 17, 1988 Councilmember Mabry withdrew from the discussion and vote on this item due to a perceived conflict of interest. Councilmember Maxey made a motion, seconded by Councilmember Horak, to adopt Ordinance No. 81, 1988 on First Reading. Finance Director Alan Krcmarik gave a brief presentation on this item and responded to Council questions. Bruce Lockhart, 2500 East Harmony Road, posed several questions about this item and expressed concerns. Councilmember Horak stated this item deals with cash flow problems and the intent is not to "sweep the problem under the rug". Councilmember Winokur stated the choices available at this time are to default on the bonds or levy additional ad valorem property taxes, neither of which is desirable. He stated this is a temporary measure to deal with the problem. Councilmember Estrada stated Council and staff were not happy with the cash flow problem, but stated it would not help the situation to default on the bonds. The vote on Councilmember Maxey's motion to adopt Ordinance No. 81, 1988 on First Reading was as follows: Yeas: Councilmembers Estrada, Horak, Kirkpatrick, Maxey, Stoner, and Winokur. Nays: None. (Councilmember Mabry withdrawn) THE MOTION CARRIED. Resolution 88-84 Assigning Councilmembers as Liaison Representatives to Various Boards and Commissions and Appointing Councilmembers to Various Committee Assignments, Adopted Following is staff's memorandum on this item: "At the May 10 worksession, Council informally discussed the assignment of Councilmembers as liaison representatives to the City's various boards and commissions and the appointment of Councilmembers to various committee assignments. This Resolution would formally make these assignments until such time as the Council makes new assignments. Several assignments remain unresolved and will be decided on May 17." ' Mayor Stoner stated Council had reached agreement on all but a few assignments at the last worksession. He stated those still needing to be filled would be handled one -by -one. -137- May 17, 1988 I Councilmember Estrada made a correction to the Resolution by inserting Councilmember Kirkpatrick's name in place of his name for the Commission on the Status of Women. Mayor Stoner noted Councilmember Horak's name should be inserted in place of Councilmember Estrada's name for the Poudre Fire Authority. Councilmember Maxey made a motion to adopt Resolution 88-84 with the following names inserted: Ad -Hoc Transportation Committee Loren Maxey Planning and Zoning Board Ed Stoner Overall Economic Development Plan Ed Stoner Poudre Fire Authority Bob Winokur Loren Maxey THE MOTION DIED DUE TO LACK OF A SECOND. Councilmember Maxey expressed a desire to have a balance of committee assignments among Councilmembers. Mayor Stoner noted Councilmembers Horak, Mabry, and Maxey expressed interest in the Ad -Hoc Transportation Committee. Councilmembers Horak and Mabry withdrew from consideration for the Ad -Hoc Transportation Committee. Councilmember Maxey's name was inserted in the Resolution. Mayor Stoner stated Councilmembers Estrada, Horak, Kirkpatrick, Stoner, and Winokur were interested in the Planning and Zoning Board liaison position. Councilmembers Estrada, Kirkpatrick, and Winokur withdrew from consideration. After a straw vote of the Council, Councilmember Horak's name was inserted in the Resolution. Councilmember Horak withdrew his interest in the Overall Economic Development Plan, and Councilmember Mabry's name was inserted in the Resolution. L IM1:le May 17, 1988 ' Councilmember Horak withdrew from consideration for the Poudre Fire Authority, leaving Councilmembers Maxey and Winokur for appointment to that assignment. Councilmember Horak made a motion, seconded by Councilmember Kirkpatrick, to adopt Resolution 88-84 with the names inserted. Yeas: Councilmembers Estrada, Horak, Kirkpatrick, Mabry, Maxey, Stoner, and Winokur. Nays: None. THE MOTION CARRIED. Other Business Resolution 88-85 Appointing Acting City Attorney. Adopted Following is staff's memorandum on this item: "The City Attorney has resigned effective June 1, 1998. This resolution will provide for the transition period from June 1, 1988 until a new City Attorney is hired and on the job." ' Councilmember Horak made a motion, seconded by Councilmember Maxey, to adopt Resolution 88-85 inserting the name of W. Paul Eckman. Yeas:. Councilmembers Estrada, Horak, Kirkpatrick, Mabry, Maxey, Stoner, and Winokur. Nays: None. THE MOTION CARRIED. Mayor Stoner spoke of City Attorney John Huisjen's service to the City and the community as City Attorney and expressed his appreciation for his dedication and loyalty to the City. Councilmember Estrada thanked City Attorney Huisjen for a job well done and wished him luck in future ventures. Councilmember Kirkpatrick thanked City Attorney Huisjen for his service and interest in municipal government. City Attorney Huisjen thanked Councilmembers for their kind words and stated he had enjoyed his tenure as City Attorney. Councilmember Mabry made a motion, seconded by Councilmember Maxey, calling for the Finance Committee to review the process and begin the selection of an independent auditor and to establish a similar process for the selection of a bond counsel at the earliest possible date. Yeas: Councilmembers ' Estrada, Horak, Kirkpatrick, Mabry, Maxey, Stoner, and Winokur. Nays: None. -139- May 17, 1988 THE MOTION CARRIED. L Councilmember Kirkpatrick made a motion, seconded by Councilmember Horak, to direct DDA and City staff to investigate the success sharing option for Council consideration. Yeas: Councilmembers Estrada, Horak, Kirkpatrick, Mabry, Maxey, Stoner, and Winokur. Nays: None. THE MOTION CARRIED. AdJournment Councilmember Winokur made a motion, seconded by Councilmember Horak, to adjourn the meeting to 9:00 a.m. on June 2 to conduct City Attorney candidate interviews. Yeas: Councilmembers Estrada, Horak, Kirkpatrick, Mabry, Maxey, Stoner, and Winokur. Nays: None. The meeting adjourned at 12:10 a.m. 0 -140-