HomeMy WebLinkAboutWORK SESSION SUMMARY-10/11/2011-Work SessionFinancial Services
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ATTACHMENT #1
M E M O R A N D U M
Date: October 14, 2011
To: Mayor and City Council
Through: Darin Atteberry, City Manager
From: Mike Beckstead, Chief Financial Officer
Re: Oct. 11, 2011 Work Session Summary Follow up – 2012 Budget Revisions
City Manager Darin Atteberry reviewed a high-level summary of the City Manager's
Recommended 2012 Budget Revisions.
Councilmembers raised various questions in preparation for 1st reading of the budget. It was
decided that it was appropriate to have an additional work session to continue the discussion.
That work session is scheduled for October 18 and 1st reading of the 2012 Annual
Appropriation Ordinance is postponed until November 1, 2011.
For questions that were not able to be answered during the meeting, the answers to the
majority of those are included in this memo. Some questions may require additional time to
adequately research and respond.
/sek
Attachment
Page 2 of 8
October 11
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Council Member Requests re: 2012 Budget Revisions
1) Question from Aislinn Kottwitz
Can trail connections in southeast Fort Collins be considered in 2012
Response from Craig Foreman, Director of Park Planning & Development
In 2012 the Fossil Creek Trail at east Trilby Road will be joined with the Power Trail and a
new underpass installed under the road from which the Fossil Creek Trail will extend south
along Stanton Creek. This section of trail will connect to the Fossil Creek Trail being
constructed this fall in the Greenstone Development that is located just north of Carpenter
Road along Stanton Creek.
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2) Question from Aislinn Kottwitz
What would be required, including cost, to do an ice rink or City funded holiday lights in south
Fort Collins?
Response from J.R. Schnelzer, Director of Parks and Bill Whirty, Manager of Parks
Ice rink in south Fort Collins:
• A location and electricity requirements would need to be determined.
• An ice rink would cost approximately $300,000 to $1,000,000 depending on the size.
• If a permanent site could not be found, annual set up and tear down costs would be
$40,000 to $50,000 depending on rink size. If a permanent sight was found, annual
maintenance costs might be $10,000 to $15,000, but the City has no experience with
permanent outdoor rinks, so this estimate is very preliminary. The Recreation
Department could operate the ice rink. The Old Town Square ice rink generates
sufficient revenue to cover Recreation’s expenses to operate the rink.
Holiday lights in south Fort Collins:
• The City would need to work with businesses to determine locations and electricity
availability.
• If the amount of lighting requested is similar to the lighting in downtown, the lights
would cost approximately $125,000, and the annual installation and removal would
cost approximately $70,000. A light replacement program would need to be
established and would cost an additional $20,000 per year after the first three years of
use.
In Old Town Square, the DDA purchased a used ice rink in 2005 and paid for annual
maintenance through the 2011 holiday season. Additionally, the DDA purchased the
downtown lights in 2007 and initially a portion, and then in 2010 all, of the annual installation
and removal of the lights through the 2011 holiday season.
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3) Question from Aislinn Kottwitz
Can transit service south of Harmony be considered in 2012
Response from Karen Cumbo, Director of PDT and Marlys Sittner, Transfort/DAR Gen. Mgr.
Transfort staff received feedback from City Council at the September 27
th
work session that
the addition of transit service along Lemay Avenue south of Harmony Road should be
considered in a more systematic, fully vetted manner as part of the 2013-2014 BFO process.
Staff recommends this as the preferred course of action in consideration of the Transfort
Strategic Operating Plan.
Should City Council choose to add this service in 2012, $320,000 is needed to fund the fixed
route service along with the ADA-mandated complementary paratransit (Dial a Ride) service.
Please note that although this is a one-time budget amendment request, if accepted this
would become an ongoing cost to be incorporated into Transfort’s 2013-2014 BFO service
provision offers.
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4) Request from Gerry Horak
Please provide a written 2012 Budget Revision Request for Regional Planning Assistance
Response from Karen Cumbo, Director of PDT and Mark Jackson, PDT Budget, Policy &
Communications Manager
Please refer to Attachment #1A
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5) Request from Gerry Horak
Please provide a written 2012 Budget Revision Request for a Neighborhood Planning
Outreach Specialist (Ombudsman)
Response from Karen Cumbo, Director of PDT and Steve Dush, Community Development &
Neighborhood Services Director
Please refer to Attachment #1B
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6) Request from Gerry Horak
Please provide a written 2012 Budget Revision Request for Affordable Housing Relocation
Assistance
Response from Karen Cumbo, Director of PDT and Joe Frank, Advance Planning Director
Please refer to Attachment #1C
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7) Question from Gerry Horak
What happens to the $812k that won't be used for Below Market Pay Adjustments?
Response from Mike Beckstead, Chief Financial Officer
Excluding any additional requests from Council, that amount would go into fund balance of
multiple funds. In the General Fund that amount would be $140k.
Page 4 of 8
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8) Statement from Gerry Horak
Not pleased with the process, or lack thereof, used for the additions to the 2012 budget, no
public outreach, no options from which to choose.
Response from Mike Beckstead, Chief Financial Officer
Your concerns have been heard and changes will be made to the next budget revision
process in 2013. Those changes include:
• Starting the process earlier including time at the annual Council workshop after
Council elections
• Public outreach will be included in the process
• The revision requests will go to Council Finance earlier in the year
• One or two Council Work Sessions will be conducted depending on the volume of
revision requests.
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9) Question from Gerry Horak
How will the elimination of the Furlough day be funded?
Response from Mike Beckstead, Chief Financial Officer
The budgeted savings of $130k in 2011 will be covered by forecasted underspending with the
various funds. We do not need to appropriate an additional $130k due to existing
appropriations.
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10) Question from Gerry Horak and Aislinn Kottwitz
What is the forecasted General Fund balance at the end of 2011?
Response from Mike Beckstead, Chief Financial Officer
The forecasted General Fund balance at the end of 2010 was $39.9 million. The actual fund
balance at year-end was $40.9 million.
For 2011, there was a budgeted use of $4.1 million of reserves which contributed to a 2011
projected General Fund balance of $35.8 million. Based on revenue changes, supplemental
appropriations, and departmental underspending, we are now forecasting to end 2011 with a
General Fund balance of $38.6 million.
In 2012, we originally budgeted to use $400k of General Fund reserves. Based on net
changes to forecasted General Fund revenue and the 2012 Budget Revisions, the 2012 year-
end General Fund balance is forecasted to be $39.4 million, an increase of $800k over 2011.
Page 5 of 8
General Fund Fund Balance Reconciliation
amounts in millions
Fund Balance 2010 forecast $ 39.9
Fund Balance 2010 actual $ 40.9
2011 Budget Surplus (Deficit) Original (4.1)
PO carryforward appropriations (2.4)
Supplemental Approriations (5.0)
Grant Revenue (supplemental) 1.1
Revenue variance * 4.9
Department savings (underspending) 3.2
2011 forcasted deficit $ (2.3)
2011 Forecasted ending fund balance $ 38.6
2012 Budget Surplus (Deficit) orginal (0.4)
Net 2012 Budget Revision impact 1.2
2012 Forecasted ending fund balance $ 39.4
* Includes $2.2 million in Sales & Use Tax revenue greater than budget, as well as updated forecasts
for other General Fund revenue items based on October YTD actuals
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11) Question from Kelly Ohlson
Can Old Town Properties contribute to downtown holiday lighting?
Response from J.R. Schnelzer, Director of Parks and Bill Whirty, Manager of Parks
The City will contact the DDA, DBA and Old Town Properties to determine if other funding
options exist.
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12) Question from Kelly Ohlson
What is driving the $3.1M increase in Sales Tax in 2012; is it an increase in the base or a
change in the % increase; and what is the forecasted increase?
Response from John Voss, Interim Finance Director
The $3.1 million increase is due to a change in the base. The forecasted increase in Sales
Tax from 2011 to 2012 is 1.95%.
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13) Question from Kelly Ohlson
What rate was the assumed interest income in 2011-12 budget, what is current rate
forecasted, when was new forecast developed, why the change?
Response from Harold Hall, Investment Administrator
The interest rate assumption that was projected in year 2010 for the 2011-2012 budget was:
2011 = 2.25%
2012 = 2.50%
The current Interest rate forecast assumption was developed and revised in August 2011 as
part of the 2012 Budget Revision Process.
2012 = 1.25%
YTD actual interest rate earned in 2011 = 1.42%. Reasons for the downward change in
interest rate assumptions:
1) The expected recovery that was projected by economists for the US economy in year
2010 and beyond did not materialize
2) In an attempt to stimulate the economy, the Federal Reserve Bank lowered the
Overnight Funds rate to a range of 0% to.25% in December 2008
3) The Federal Reserve is not expected to increase the Overnight Funds rate until mid
2013 or later
4) Because of the financial crisis unfolding in Europe and the continued weakness in the
domestic economy investors have flocked to safe investment classes such as
Treasury and Agency securities
5) The increase in demand for safe investments has increased their prices and lowered
their interest rates to historic lows
6) The City investment policy restricts our investment options to the same fixed income
securities that currently have historically low interest rates
7) The City investment portfolio is structured so that maturities are laddered from
immediately to as long as 5 years
8) As older higher yielding investments mature they are reinvested at the new lower
yields
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14) Statement from Kelly Ohlson
Disagree with the proposed uses of KFCG funds – change all to General Fund where
appropriate
Response from Mike Beckstead, Chief Financial Officer
Those changes have been made and are reflected in the AIS for the October 18 Council
Work Session. There is now no requested use of additional KFCG revenue that was not in
the adopted 2011-12 budget.
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Page 7 of 8
15) Question from Lisa Poppaw
How will the new affordable housing/human services dollars be leveraged?
Response from Karen Cumbo, Director of PDT and Joe Frank, Advance Planning Director
This budget amendment request provides funding for necessary administration costs of the
City’s local Affordable Housing and Human Services programs and services. Federal funds
are restricted from paying for local program administrative costs. As a result of federal
funding reductions, there is only enough funding available for federal program administration.
No funds are currently allocated for local program administration.
Several factors have led to the need for this budget request.
• The City’s Human Services Program and Affordable Housing Fund programs have
seen recent marked growth, both in terms of actual dollars and in corresponding
administration /implementation resources required.
• To date, no local program funds have been allocated to cover the administration costs
of the two growing City programs. All funds have been directed to programs.
• Federal funds, which until now have always covered oversight of those two City
programs, have been cut—impacting the separate funding categories of administration
and project financing. There are now only enough federal resources to administer the
federal programs.
• Federal audits are bringing increased compliance scrutiny. It is inappropriate for
federal funds to be used to administer our local programs.
This proposal does not add FTEs; it only shifts work responsibilities where most needed. The
request also does not use City dollars to cover federal programs and tasks. Lastly, it does
not take away program funding for 2012. Those direct service dollars have already been
committed and allocated to needed programs and projects.
Managers of these local programs continue to seek opportunities to leverage funds with
grants and partnerships as they arise. The goal is to maximize service provision to the
Community while tracking, reporting and managing cases in a responsible and transparent
manner.
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16) Question from Lisa Poppaw and Aislinn Kottwitz
Why are there no 2012 Budget Revision Requests that benefit south Fort Collins?
Response from Mike Beckstead, Chief Financial Officer
The biennial revision process is focused on the City's business needs, as well as the latest
forecasts for revenue and expense changes since the original budget was adopted a year
ago. It allows for mid course corrections to reflect those changes and a more accurate
financial understanding of the second year of the biennial budget.
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Page 8 of 8
17) Question from Wade Troxell
Is it feasible to fund the Digester Gas Treatment System offer from 2011 in 2012?
Response from Link Mueller, Utilities Project Manager and Kevin Gertig, Water Resources
and Treatment Operations Manager
Since the last BFO process, staff has been working on alternative methods of methane gas
usage other than the gas treatment system offered in the 2011/2012 budget.
• A CSU graduate team is investigating DWRF’s existing gas production capacity and
the potential for utilizing CSU’s waste food as a feed stock for additional gas
production.
• Staff is participating in Natural Resources’ solid waste analysis to identify other
possible waste food sources for gas production
• A GEO phase 1 technology grant has been applied for to investigate the installation of
micro-turbines at DWRF in the event a stable feedstock supply can be secured
Staff recommends that any available enhancement funds for the reclamation plants be
applied to the elimination of chlorine gas disinfection
• As directed by Council, staff is preparing a ultra-violet (UV) enhancement offer for
submission in the 2013-2014 BFO process
• A CSU senior design group is working with staff to investigate various ultra-violet
disinfection alternatives for DWRF
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Attachment #1A - From the October 11 Work Session Summary Memo
Revision Title:
Fund: Contact: Cumbo/Jackson
Result Area: Package/Offer #: N/A
Total Amount: $50,000
Funding Source #1: Funding Amount #1: $50,000
FTE Requested:
Description:
2012 BUDGET REVISION REQUEST
Regional Planning Assistance
None
This offer creates a funding source for participation in regional planning opportunities that arise from time to
time. Some of these opportunities are regional partnerships that require financial participation. An example of
a current funding partnership need is the currently ongoing "Embrace Northern Colorado" effort. Note: These
funds are separate and in addition to annual dues allocated for membership in the North Front Range
Metropolitan Planning Organization (regional transportation and air quality planning).
The cost for this proposal is suggested to be in the $25,000 to $50,000 range, and is requested to come from
General Funds. Note: This is a one time (2012) budget amendment request. If accepted, this fund pool would
have to be considered as part of the 2013-2014 BFO process as an ongoing expense.
100 - GENERAL FUND
Economic Health
General Fund
Attachment #1B - From the October 11 Work Session Summary Memo
Revision Title:
Fund: Contact: Cumbo/Dush
Result Area: Package/Offer #: N/A
Total Amount: $75,000
Funding Source #1: Funding Amount #1: $75,000
FTE Requested:
Description:
2012 BUDGET REVISION REQUEST
Neighborhood Planning Outreach Specialist (Ombudsman)
1.0 FTE
This request funds a new position to act in a liaison role between the City's Current Planning Department
and citizens and neighborhood organizations potentially affected by proposed development. This
Neighborhood Outreach Specialist would assist citizens throughout the development review planning
process.
This position is to be housed in the Neighborhood Services Division of CDNS. Specific personnel costs have
not been determined yet by CDNS and Human Resources, but it is anticipated that this position is likely to fall
in or near the Administrative Professional (AP) level 03. Fully loaded personnel costs may be in the range of
$75,000. There may also be additional resources needed for materials, office expenses, etc.
Please note that this is a one time budget amendment request. If approved, these costs would be added as
ongoing expenses as part of the 2013-2014 CDNS/Neighborhood Services BFO offers.
100 - GENERAL FUND
Neighborhood Livability
General Fund
Attachment #1C - From the October 11 Work Session Summary Memo
Revision Title:
Fund: Contact: Cumbo/Frank
Result Area: Package/Offer #: N/A
Total Amount: $50,000
Funding Source #1: Funding Amount #1: $50,000
FTE Requested:
Description:
2012 BUDGET REVISION REQUEST
Affordable Housing Relocation Assistance
None
This request creates a pool of funds to provide affordable housing relocation assistance. If deemed
appropriate and legal, these funds are intended to serve as matching money to other services and resources
provided by the developer and other public agencies (e.g. Larimer County). These funds would be managed
by the City's local Affordable Housing/ Human Services programs.
Funds would be eligible only for documentable expenses such as, but not limited to, moving expenses,
security deposits, first month rent, temporary hotel costs, and food vouchers.
General funds are requested for this fund pool. Other funding options could include use of 2012 local
Affordable Housing and Human Services program funds. Note: If local AH/HS funds are used for this pool, this
would mean fewer resources available to go to other program needs.
The City will not receive FY 2012 Federal funds (e.g. Community Development Block Grant) until October 1
and may not be available in time to address immediate relocation needs. Another consideration when
contemplating use of federal funds, is the associated regulations and rules that come with federal funding. If
these regulations and requirements are not followed, federal funds such as CDBG would not be eligible.
Note : This is a one time budget amendment request. If approved, these costs would be added
to Advance Planning's ongoing services 2013-2014 BFO offer.
100 - GENERAL FUND
Neighborhood Livability
General Fund