HomeMy WebLinkAboutMINUTES-10/14/2014-AdjournedOctober 14, 2014
COUNCIL OF THE CITY OF FORT COLLINS, COLORADO
Council -Manager Form of Government
Adjourned Meeting — 9:00 PM
• ROLL CALL
PRESENT: Weitkunat, Overbeck, Poppaw, Campana, Troxell, Cunniff, Horak
Staff present: Atteberry, Daggett, Nelson
Items Relating to the Construction of a New Utilities Administration Building and Renovation
of 700 Wood Street. (Adopted)
A. First Reading of Ordinance No. 137, 2014, Appropriating Capital Project Funding in the Light and
Power, Water, Wastewater, and Stormwater Drainage Enterprise Funds and Authorizing the
Transfer of Appropriations to the Cultural Services and Facilities Fund for the Art in Public Places
Program, for the Construction of a New Utilities Administration Building in Block 32 on LaPorte
Avenue and Renovation of 700 Wood Street.
B. Resolution 2014-095 Directing the City Manager to Review Funding for Utilities Capital
Improvements, Including Utilities Plant Investment Fees and Other Related Matters, and Report
the Results of that Review for Further Council Consideration.
The purpose of this item is to provide funding for the construction of a new Utility Administration
Building within Block 32, on LaPorte Avenue, as well as renovation of the existing Utility Service
Center at 700 Wood Street. The total combined project costs are $23,411,000 with $4,500,000
already appropriated from Light and Power reserves, leaving $18,911,000 to be appropriated with
this ordinance.
A Utility Building Team comprised of internal staff and external subject matter experts has worked
with the architectural firm RNL and Adoltson and Peterson Construction to assess the best way to
address the current building performance and space issues facing Fort Collins Utilities' ongoing and
future business operations. Balancing the city-wide goal to have high -performing office buildings
with the need to be fiscally prudent has led the Building Team to recommend the two -pronged
funding process proposed in this appropriation ordinance.
The four Utility Enterprise Funds (Light and Power, Water, Wastewater and Stormwater) will share
the costs of the projects. All appropriations will come from the existing reserves in these four funds.
A Resolution is also being presented directing staff to investigate the use of development fees for
additional types of capital needs such as facilities, modifying the information provided on customer
utility bills to increase transparency and to evaluate the long term rate impacts of capital
improvements.
Kevin Gertig, Utilities Executive Director, discussed the project and stated the total project cost
is $23.4 million.
Mike Beckstead, Chief Financial Officer, discussed the community benefits of the proposed new
building and noted existing office space does not meet customer service needs. Staff is in the
process of completing ten year capital improvement plans for all utilities.
Eric Sutherland, 3520 Golden Currant, opposed utilizing an adjourned meeting for First Reading
of an ordinance and opposed the use of reserve funds for capital construction.
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Councilmember Cunniff asked about the funding sources being rates from utilities. Beckstead
replied that is essentially correct; however, unanticipated revenue and underspent budget funds
also end up in the reserve fund balance.
Councilmember Cunniff requested an explanation of the plant investment fee (PIF). Beckstead,
replied the PIF is calculated based on the infrastructure costs plus the five year historical capital
spend for the wet utilities. For light and power, the calculation is different.
Councilmember Conniff asked how often the increase in cost of capital expansion is included in
rate increases. Beckstead replied construction inflation was not considered in the most recent
light and power increase, as it was primarily due to PRPA increases. Previous rate increases
have dealt with renewable energy. He stated upcoming wastewater rate increases are justified by
capital needs. Councilmember Cunniff requested additional details prior to Second Reading.
Councilmember Cunniff asked about the rationale behind dates in the Resolution. Beckstead
replied current workload and needed public outreach were considered.
Councilmember Cunniff requested the City Manager be directed to return with a staff report on
or before March 10.
Mayor Pro Tem Horak asked if standards exist for funds that should be available for
contingencies. Beckstead replied each utility has a minimum fund standard; the available
working capital is net of all of the requirements being taken out. The water reserve fund is
expected to grow significantly in 2014 due to a combination of factors.
Mayor Pro Tem Horak asked how the statement can be made that rates will not increase if this
building is funded. Beckstead replied it has not been stated that rates will not go up. Mayor Pro
Tem Horak stated previous presentations have indicated future rates will not increase because of
this building. Beckstead disagreed with Mayor Pro Tem Horak's memory of the presentation
stating there will be needs based on increased cost of service and increased potential capital
needs that will be vetted out in 2015.
Councilmember Campana asked how the rates are calculated in terms of the inclusion of capital
expansion. Beckstead replied a better explanation of detailed utility rate -making could better be
discussed by Lance Smith, Utilities Strategic Financial Planning Manager. Smith stated the rate -
making process does involve a certain amount of capital investments being identified as part of
the revenue requirements each year. He noted those funds are not necessarily specifically
targeted for a building replacement or piece of infrastructure, but there is an average amount of
capital investment needed year after year, which is assumed when making rate adjustments.
Councilmember Campana requested additional detail on the issue prior to Second Reading.
Councilmember Cunniff made a motion, seconded by Councilmember Poppaw, to adopt
Resolution 2014-095, directing the City Manager to present a staff report on findings on or
before March 10, 2015, and correcting the date to October 14, 2014.
City of Fort Collins _ Page 423
RESULT:
RESOLUTION 2014-095 ADOPTED AS AMENDED [UNANIMOUS]
MOVER:
Ross, Cunniff, District 5
SECONDER:
Lisa Poppaw, District 2
AYES:
Weitkunat, Overbeck, Poppaw, Campana, Troxell, Cunniff, Horak
Councilmember Campana made a motion, seconded by Councilmember Troxell, to adopt
Ordinance No. 137, 2014, on First Reading.
Mayor Pro Tern Horak requested an explanation as to the assumptions being made regarding cost
of service for new buildings prior to Second Reading. He expressed concern that Council may
not have done,its due diligence to make this decision based on solid information.
RESULT: ORDINANCE NO. 137, 2014, ADOPTED ON FIRST READING [UNANIMOUS]
MOVER: Gino Campana, District 3
SECONDER: Wade Troxell, District 4
AYES: Weitkunat, Overbeck, Poppaw, Campana, Troxell, Cunniff; Horak
• OTHER BUSINESS
• ADJOURNMENT
The meeting adjourned at 9:41 PM.
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