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Home My WebLink AboutAgenda - Mail Packet - 09/03/2024 - Council Finance Committee Meeting Agenda – September 5, 2024Finance Administration 215 N. Mason nd Floor Fort Collins, CO 80522 970.221.6788 970.221.6782 - fax fcgov.com AGENDA Council Finance Committee Hybrid Meeting September 5, 2024 4:00 - 6:00 pm CIC Room Zoom Meeting https://zoom.us/j/8140111859 Approval of Minutes from the July 3, 2024, and the August 1, 2024, Council Finance Committee meetings. 1. Fund Balances T. Storin Presentation: 10 mins. Discussion: 20 mins. 2. Adjustment Ordinance L.Pollack Presentation: 10 mins. Discussion: 20 mins. 3. Electric System Appropriations T. Walker Presentation: 15 mins. C. Snowdon Discussion: 20 mins. Page 1 of 127 Page 2 of 127 Council Finance Committee 2024 Agenda Planning Calendar Revised 8/28/24 ck Sept. 5th 2024 Fund Balances 30 min T. Storin Adjustment Ordinance 30 min L. Pollack Electric System Appropriations 35 min October 3rd 2024 Hold for Audit Results 45 min R Bailey CCIP Project Options 45 min November 5th 2024 60 min K, Kleer Page 3 of 127 Page 4 of 127 Finance Administration 215 N. Mason nd Floor Fort Collins, CO 80522 970.221.6788 970.221.6782 - fax fcgov.com Council Finance Committee Hybrid Meeting CIC Room / Zoom August 1, 2024 4:00 - 6:00 pm Council Attendees: Mayor Arndt, Tricia Canonico Staff: Kelly DiMartino, Tyler Marr, Travis Storin, Ginny Sawyer, Jacob Castillo, Beth Yonce, Adam Molzer, Wendy Bricher, Drew Brooks Dean Klingner, Victoria Shaw, LeeAnn Williams, Dana Hornkohl, Brad Buckman, Eric Keselburg, Nina Bodenhamer, Africa Garcia Farina, Randy Bailey, Dave Lenz, Jen Poznanovic, Joe Wimmer, Carolyn Koontz Other: Joe Rowan Meeting called to order at 4:00 pm Approval of minutes from July 3, 2024, Council Finance Committee Meeting was postponed to the September 5th meeting when the committee members who were present at the July 3rd meeting will be in attendance. A. Grocery Tax Rebate Program Adam Molzer, Manager, Social Sustainability EXECUTIVE SUMMARY The Grocery Tax Rebate program’s 2024 budget affords $165,000 for rebates to qualified residents. Due to increased participation in the program, the total rebate payouts in 2024 are anticipated to be near $583,000. An appropriation of general fund dollars of $418,460 would fulfill the budget necessary to meet this obligation. In addition, $24,000 needs to be allocated to cover an anticipated staffing shortfall due to the Council-supported personnel conversion to classified status of the Program Coordinator in 2024. GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED 1. Does Council Finance Committee support a general fund appropriation request of $442,460 that will make the Grocery Tax Rebate program budget whole in 2024? BACKGROUND/DISCUSSION (details of item – History, current policy, previous Council actions, alternatives or options, costs or benefits, considerations leading to staff conclusions, data and statistics, next steps, etc.) Page 5 of 127 Program Details: Established in 1972, the Grocery Tax Rebate is intended to provide financially insecure residents relief from City sales tax charged on purchased food. The rebate amount is currently $80 per person. Grocery Tax Rebate qualifications include: • Resident inside the Fort Collins Growth Management Area (GMA). • Household income between 0-60% of Area Median Income (AMI). • Must have a document that aligns the applicant’s identity with a Fort Collins address. Applications are submitted via the Get FoCo online platform, where staff manually review each application and the uploaded documentation (EBT card copy, Medicaid card, LEAP letter, Free/Reduced Lunch letter) to verify income and residency eligibility. This is the third year partnering with Get FoCo and 96% of applications are now received via the web platform. One 0.75-FTE staff member assists residents with the application process, manually uploads payment data, and supports a variety of other program functions to ensure a positive customer experience. This staff position was converted from hourly to classified status with benefits in January 2024, per Council guidance. Program Growth: Between 2020-2023, the number of applications received increased over 95%, and rebates issued grew by 186%. In 2023, the City processed 1,966 applications. The total amount issued in 2023 for the grocery rebate program was $354,121. The FY2023 budget afforded $150,000 for rebates. From January to June 2024, the City has processed 1,553 applications. The total amount issued year-to-date in 2024 is $292,460. The FY2024 budget affords $165,000 for rebates. If a monthly average of $48,500 is realized for Q3 + Q4 2024, the total rebate obligation for 2024 will reach $583,460. The monthly average during Q3 + Q4 2023 was $37,333. Additionally, Council Finance Committee expressed support for the conversion of the Grocery Tax Rebate Coordinator position from hourly to classified at their 12/14/2023 meeting. This conversion took effect in January 2024 and the resulting $24,000 personnel budget shortfall needs to be made whole. An appropriation to meet the 2024 rebate and personnel obligations will require Council approval. Actual & Anticipated Obligation & Budget Year Applications Household Members Grocery Rebate Repeat %65+%Single HH %GetFoco % 2020 1006 1890 $123,435 886 88%509 51%641 64%N/A N/A 2021 948 1758 $117,987 844 89%446 47%588 62%N/A N/A 2022 1281 2626 $181,186 857 67%486 38%686 54%614 48% 2023 1966 4654 $354,121 866 44%453 23%911 46%1572 80% 2024 YTD June 1553 3655 $292,460 643 41%277 18%713 46%1493 96% * Rebate amounts above are tabulated by application receipt date, resulting in slight variations from the City's fiscal year due to timing. Page 6 of 127 Estimated Funding Needed $442,460 Lastly, the 2020-2024 data set also reveals the following about program participation trends: • Increased enrollment of new participants to the rebate program (lower proportion of repeat participants). • Residents under age 65 are increasingly participating in the rebate program. • Households with sizes greater than one are increasingly participating in the rebate program. GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED 1. Does Council Finance Committee support a general fund appropriation request of $442,460 that will make the Grocery Tax Rebate program budget whole in 2024? DISCUSSION / NEXT STEPS Mayor Arndt; do we charge the same sales tax on food that we do on everything else? Travis Storin; we do not, the renewables do not apply at the grocery store. Jen Poznanovic; 2.25 % is the grocery sales tax rate and the full rate is 4.35% Mayor Arndt; I can’t think of a single thing that is fairer. 0-60% AMI seems fair as well. Tricia Canonico; what do we see as an uptick rate going forward? Will we see these increases YOY with Get FoCo? What are we anticipating that we will need to budget in the future? Travis Storin; one of our primary strategies is to recruit more users. We are up to just shy of 2K households registered in the app which represents approximately 4,500 residents. We are getting a pretty broad reach now. Once they are enrolled on the app, the majority tend to enroll in multiple programs. Africa, would you like to address the engagement strategies you are working with? Africa Garcia Farnia; we have multiple partners around town including PSD and the Library District. We recruit partners who can help us get more folks enrolled in Get FoCo. We currently have over 3,000 active accounts on Get FoCo. Not all have renewed the grocery store rebate for 2024. We are expecting another 1,500. Travis Storin; before having the Get FoCo tool – it was ads on buses and on radio. We had some limited efficacity. Tricia Canonico: moving forward, are we budgeting for an increase with the grocery tax rebate? Travis Storin; you will see an increase in the Recommended Budget when it is published later this month, it is not quite to these levels. We may be setting ourselves up to return to this committee for an additional appropriation this time next year. The grocery sales tax rebate program has a rolling 12-month enrollment. Tricia Canonico; I know you said most of the folks are receiving it for the first time. Why aren’t we seeing more folks from previous years? Why aren’t they reapplying? Page 7 of 127 Adam Molzer; in 2023, 44% were returning applicants, in 2022, it was 67% and 2021 it was 89%. With Get FoCo, we are still seeing the repeat applications, but they are lower proportionally due to all of the new applicants. Travis Storin; this program was almost exclusively characterized as being utilized by frequent fliers who were aware of the program and in a very specific age demographic. We are taking this as a good news story as the program reaches younger and more diverse residents including families. Mayor Arndt; what is the total revenue that the grocery sales tax brings in? Jen Poznanovic; groceries are approximately 20% of our total sales tax revenue. The grocery sales tax category is one of our larger categories of the 18 categories that we have. I will get the number and circle back. Nina Bodenhamer; some of the other communities that offer a rebate in this space adjust the rebate amount based on other levers. Possibly a conversation going forward might we, do we adjust our payout based on the volume of participation? Mayor Arndt; I can see that question coming up – do we go to 50% AMI. I would say increase the budget versus decreasing the amount refunded or reducing participation. Travis Storin; $3500 per household member (2.25% of that is the $80) to get the total dollar amount we are refunding. Tricia Canonico; do we have any date on how much the average family spends on groceries per year? Travis Storin; we could canvass our department to see if we have any data. I will take this as a follow up. Mayor Arndt; this is a great program – forgoing a tax. Travis Storin; we will bring this to the full Council as soon as practical. B. Recreation Rebate (Reduced Fee) Program Victoria Shaw, Senior FP&A Manager, Community Services LeAnn Williams, Recreation Director, Community Services EXECUTIVE SUMMARY The Recreation reduced fee program provides an opportunity for income qualified members of the community to take part in recreational activities at a discounted rate. The program has been funded at the level of $190,000 per year from the General Fund, however usage and needs have surpassed this allocation. In 2023, the allocation covered approximately 50% of the usage. GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED Does Council Finance Committee have any feedback for staff on reduced fee program offered by Recreation? BACKGROUND/DISCUSSION Page 8 of 127 The reduced fee scholarships offered by Recreation have an ongoing goal of filling the gap for the community by ensuring anybody that meets the program’s qualifications can access the valuable, engaging, educational and beneficial programs offered by the Recreation department. Program Details: The program offers drop-in passes which allow for unlimited drop-in visits to facilities, and automated discounts for activity enrollments. By minimizing financial barriers, the recreation department can serve and support the community with programs that promote health, wellness, and overall well-being. Eligibility for the program requires participants to reside in the Fort Collins Growth Management Area and meet income standards. The income standards can be met with proof of income up to 185% of the Federal Poverty Level or qualification through the Poudre School District free and reduced lunch program. The passes then allow community members to access additional recreation programs at a discounted rate without additional approvals. The discounted rates for these services are: • $50 Family Pass: includes 2 adults and no limit on children in the same household. • $30 Adult Pass: for those 18-59 years of age (not including those who are currently attending high school). • $10 Youth/Senior Pass: for those under 18 or 60 and over. • Beginner/Introductory classes receive 90% discount. • Intermediate level classes, fitness classes, youth sports leagues, CARA Track & Cross-Country, SuperTots & Skyhawks receive 70% discount. • Advanced/Competitive classes receive 10% discount. Program Participation: Participation in these offerings has been robust, with a steep decline in 2020 due to the pandemic. Activity enrollments rebounded to pre-pandemic levels in 2021 and have since increased to 72% above the pre- pandemic level in 2023, suggesting the need for this program is higher than ever and programs have been more effective at reaching the qualifying populations. Similarly, reduced fee pass scans also declined steeply in 2020. They have rebounded to pre-pandemic levels but have not seen the same degree of growth as the activity enrollments. 3,161 5,285 5,494 2,450 5,556 7,810 9,469 0 2,000 4,000 6,000 8,000 10,000 2017 2018 2019 2020 2021 2022 2023 Recreation Low-Income Activity Enrollments Page 9 of 127 Participation is tracked for youth and adult programming. The majority of costs (78.5%) are associated with youth requests. This is driven by the reduced fee childcare and youth programs. The below table breaks down the youth and adult participation by programs. Youth Activities Summary # Requests Value of Requests Swim lessons 784 $39,350 Skating 252 $19,455 Adaptive - $0 Pottery 155 $10,119 Northside Atzlan Youth 1,098 $124,433 Foothills Activity Center Youth 233 $14,822 Sports 926 $67,711 Farm 164 $12,012 Youth Tennis 114 $9,154 3,726 $297,057 Adult Activities # Requests Value of Requests Aqua fitness 176 $5,164 Adult Swim lessons 19 $599 Adaptive 890 $30,902 Skating 19 $499 Social 9 $174 Arts and Crafts 111 $6,206 Fitness/Wellness 4,131 $13,784 Pottery 103 $11,093 Educational 90 $3,611 Dance 87 $2,881 Adult Tennis 44 $4,559 3,161 5,285 5,494 2,450 5,556 7,810 9,469 0 2,000 4,000 6,000 8,000 10,000 2017 2018 2019 2020 2021 2022 2023 Recreation Low-Income Activity Enrollments Page 10 of 127 64 $1,852 5,743 $81,322 Program Funding: The program has not been turning away participants based on available funding. The current funding level of $190,000 per year is allocated across the actual usage for the program and allows for partial revenue reimbursement. The Recreation fund by default foregoes any of the revenue not backfilled by the General Fund funding level. In 2023, this funding level represented about 50% of the General Fund reimbursement, and 50% foregone revenue to the Recreation fund. DISCUSSION / NEXT STEPS; GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED Does Council Finance Committee have any feedback for staff on reduced fee program offered by Recreation? LeeAnn Williams; we used to be PSD as our boundary but now it is our GMA 30% AMI. They are automatically enrolled if they qualify for free / reduced rate lunch program. Rebounded after the pandemic and has increased Summer camp – daycare. Some communities just do youth. We have silver sneakers – through their insurance providers They don’t pay anything – we get reimbursed for up to 10 visits per month When we build the SE Comm Center – we will see an increase then We are proud of this program – we don’t limit how much money we spend Victoria Shaw; the General Fund contributes about a50% reimbursement Childcare – summer camp – 40% of participation - Nexxus in community for our families We don’t have a projected shortfall This is a high priority Aligns with our strategic objectives Mayor Arndt; makes me feel good. Do we do any City Give work around? I think this is one of those intangible things that people can’t put their finger on but that makes living in Fort Collins Adam Snow donors who very specific with what programs Access & recreation - He hosted a golf tournament at City Park 9 We usually exceed our revenue projections Tricia Canonico; great work –I was just talking with my sister-in-law who has 3 little ones about the importance of childcare which is supplemented for her by her employer. Travis Storin; those were our two income qualified programs we wanted to review with you today. C. Engineering Supplemental Appropriations Page 11 of 127 Brad Buckman, City Engineer Monica Martinez, Sr. Manager FP&A Dana Hornkohl, Director, Civil Engineering SUBJECT FOR DISCUSSION Engineering Capital Projects – Supplemental Appropriations (4 projects) EXECUTIVE SUMMARY Four current transportation capital improvement projects will require additional funding for work to continue prior to proposed Budgeting for Outcomes (BFO) offers being finalized later this year for appropriation in 2025. Two of these projects are under construction: Laporte Avenue Multimodal Improvements (Laporte) and College Avenue – Trilby Road Intersection Improvements (College/Trilby). Two more projects are currently under design: Zach Elementary School Crossings – Safe Routes to School (Zach SRTS) and College Avenue – Triangle Drive Intersection Improvements (College/Triangle). Zach Elementary SRTS is scheduled to begin construction later this year; College/Triangle is scheduled to begin construction early in 2025. The estimated cost to complete these projects will exceed the currently appropriated budgets. There is sufficient discretionary transportation funding available to complete these projects if appropriated. It is necessary to 1) appropriate additional funds to complete these projects, 2) reduce scope, and/or 3) delay final delivery. Reduction of scope will result in projects that do not fully meet the established project goals or adopted City standards and plans. Delaying final delivery until other funding becomes available will negatively impact other transportation capital projects in the delivery pipeline. Staff is recommending supplemental appropriations totaling $4,152,470 which would allow for completion of the four projects as intended when work began. This request is coming before Council Finance Committee now to avoid additional cost impacts due to potentially pausing and restarting active construction and design projects. GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED • Does Council Finance Committee support an off-cycle appropriation of Highway Safety Improvement Program (HSIP) Grant Funds, Transportation Capital Expansion Fee (TCEF) Funds, and Transportation Services Fund Reserves as well as a reappropriation of funds from the Laporte Bridges project to complete the Laporte Avenue Multimodal Improvements project? • Does Council Finance Committee support an off-cycle appropriation of TCEF Funds, Transportation Services Fund Reserves, and Community Capital Improvement Program (CCIP) Arterial Intersection Improvements Fund to complete the College Avenue – Trilby Road Intersection Improvements project? • Does Council Finance Committee support an off-cycle appropriation of TCEF Funds and Transportation Services Fund Reserves to complete the Zach Elementary School Crossings – Safe Routes to School project? Page 12 of 127 • Does Council Finance Committee support an off-cycle appropriation of Funding Advancements for Surface Transportation and Economic Recovery (FASTER) Act Grant Funds, Colorado Department of Transportation (CDOT) Americans with Disabilities Act (ADA) Funds, TCEF Funds, and Transportation Services Fund Reserves to complete the College Avenue – Triangle Drive Intersection Improvements project? BACKGROUND/DISCUSSION Since the Summer of 2021, the nation, Colorado, and the Denver region have experienced significant inflation in construction costs (Attachments 1, 2, and 3). The CDOT Colorado Construction Cost Index (CCI) reports an annual percentage increase in construction costs of 8.03%. These inflationary pressures continue to impact the City’s transportation capital improvement projects that are in active design and construction. Costs to acquire real property for right-of-way, permanent easements, temporary easements, and the professional services associated with acquiring real property have also escalated significantly over the same period. Laporte Avenue Multimodal Improvements The Laporte project will provide pedestrian and bicycle side paths in three phases 1) between Taft Hill Rd and Frey Ave (Bridges), 2) between Frey Ave and Fishback Ave (East), and 3) between Sunset St and Taft Hill Rd (West). The initial phase of this work (Bridges) was completed in 2023 and replaced two aging bridges in the corridor. The second phase of this work (East) began earlier this year and is scheduled to be completed later this summer. The third phase (West) is scheduled to begin in October once property acquisition is complete. The project delivery method for the East and West phases of the project is Construction Manager/General Contractor (CM/GC). The chosen contractor held pricing for the East phase despite a delay in beginning construction due to property acquisition and CDOT approval. The contractor has demonstrated by providing open book pricing, confirmed by an independent cost estimate, that price escalation has impacted many of the materials and costs for the West phase. The cost to acquire real property for the West phase has been significantly higher than was estimated. Construction was broken into an East and West phase to accommodate the property acquisition schedule introducing additional design cost. During this design effort, the City applied for and was awarded Fiscal Year 2027 HSIP grant funds to install a Rectangular Rapid Flashing Beacon (RRFB) in the West phase of the project. CDOT has agreed to provide the funding early so that the RRFB may be included in the construction. Savings from the Bridges phase ($517,000) can be reappropriated to the West phase. Including the local match for the HSIP award, it is estimated that an additional $560,055 (including $49,500 in CDOT HSIP funds) is needed to complete construction on the West phase. College Avenue – Trilby Road Intersection Improvements The College/Trilby project will improve safety for current and future traffic levels as growth continues in the region and will create a safer intersection for all users. Dual use side paths for pedestrians and bicycles are included throughout the intersection. The intersection will feature dual left turn lanes from S College Ave to Trilby Rd, right turn lanes for each direction of travel, and a widened Trilby Rd approach to S College Ave. Right-of-way acquisition costs for the College/Trilby project have been significantly more than was initially estimated (~$3.0M), with total acquisition costs likely to be ~$4.5M. The primary factor in this increase is land value escalation over the period of acquisition. As with the Laporte project, the delivery method for the College/Trilby project is CM/GC. Construction was broken into three phases to take advantage of property that had been acquired and to lock in lower pricing for early work. Phase 1 work (walls) began earlier this year. Phase 2 construction (utility relocation and storm drainage) will begin in several weeks, with Phase 3 work (sidewalks, paving, signals, landscaping) following later this Fall. Work is scheduled to be complete next Spring. As with Laporte, the contractor has provided open book pricing for Phase 2 and 3 that has been confirmed by an Page 13 of 127 independent cost estimate. The pricing shows escalation for several items including storm drainage infrastructure. It is estimated that the project will need $1,509,000 to address the construction and acquisition escalation. As property around the College/Trilby project redevelops, the redevelopment will trigger repayments to the City for the eligible costs of the intersection improvements, including right-of-way acquisition. Currently, that total is estimated to be approximately $1.25M. Reimbursement payments will be due to the City upon execution of any development agreement. Zach Elementary School Crossings – Safe Routes to School The Zach Elementary SRTS project will provide signal and crossing improvements across Kechter Rd at Jupiter Dr and Cinquefoil Ln. SRTS grant funding was awarded in 2023. After the award, during the design phase, additional concrete work was identified and included in the project. It was also determined that there was temporary easement acquisition needed to complete the project that was not originally included in the project budget. With the additional work, easement acquisition, and construction cost escalation, it is estimated that the project will need $454,500 to begin construction later this Fall and ending early in 2025. College Avenue – Triangle Drive Intersection Improvements The College/Triangle project will install a new traffic signal as well as bicycle and pedestrian improvements connecting Triangle Dr to the northeast towards the Lakeview on the Rise development and onto Water’s Way Park. There is severe crash history at this intersection and in 2023 CDOT committed FASTER funding to the City for signal improvements. CDOT has also committed funding for pedestrian improvements to bring the intersection into compliance with ADA requirements. Working with a consultant, the City has developed 30% design documentation and a total cost estimate of $1,628,915 (including $832,211 in CDOT FASTER and ADA funds). Staff has identified three alternatives to reach final completion on the four projects. • Option 1: Secure off-cycle appropriations for the projects to complete design, acquisition, and construction and avoid additional costs with delaying the work. There is currently sufficient discretionary funding to cover these proposed appropriations. • Option 2: Reduce the scope of work for the projects. All four projects have been value engineered to minimize costs. Additional reduction of scope would potentially compromise project goals or limit the ability to meet City standards. • Option 3: Delay final delivery until additional funding can be secured. This option would result in the project not meeting the identified project goals within the promised timeframe, expose the remaining work to further inflation, and would impact the schedule and budget for other transportation capital projects in the design, acquisition, and construction pipeline. Summary of requested supplemental appropriations for all four projects. • Grant Funds: $881,711 • TCEF Reserves: $2,220,230 • Transportation Fund Reserves: $450,529 • CCIP – Arterial Intersection Improvements: $600,000 • Total: $4,152,470 Summary of Existing Funding and Proposed Supplemental Appropriations Page 14 of 127 DISCUSSION / NEXT STEPS; GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED • Does Council Finance Committee support an off-cycle appropriation of Highway Safety Improvement Program (HSIP) Grant Funds, Transportation Capital Expansion Fee (TCEF) Funds, and Transportation Services Fund Reserves as well as a reappropriation of funds from the Laporte Bridges project to complete the Laporte Avenue Multimodal Improvements project? • Does Council Finance Committee support an off-cycle appropriation of TCEF Funds, Transportation Services Fund Reserves, and Community Capital Improvement Program (CCIP) Arterial Intersection Improvements Fund to complete the College Avenue – Trilby Road Intersection Improvements project? • Does Council Finance Committee support an off-cycle appropriation of TCEF Funds and Transportation Services Fund Reserves to complete the Zach Elementary School Crossings – Safe Routes to School project? • Does Council Finance Committee support an off-cycle appropriation of Funding Advancements for Surface Transportation and Economic Recovery (FASTER) Act Grant Funds, Colorado Department of Transportation (CDOT) Americans with Disabilities Act (ADA) Funds, TCEF Funds, and Transportation Services Fund Reserves to complete the College Avenue – Triangle Drive Intersection Improvements project? Staff has identified three alternatives to reach final completion on the four projects. • Option 1: Secure off-cycle appropriations for the projects to complete design, acquisition, and construction and avoid additional costs with delaying the work. There is currently sufficient discretionary funding to cover these proposed appropriations. • Option 2: Reduce the scope of work for the projects. All four projects have been value engineered to minimize costs. Additional reduction of scope would potentially compromise project goals or limit the ability to meet City standards. • Option 3: Delay final delivery until additional funding can be secured. This option would result in the project not meeting the identified project goals within the promised timeframe, expose the remaining work to further inflation, and would impact the schedule and budget for other transportation capital projects in the design, acquisition, and construction pipeline. Mayor Arndt; do we pay interest rates on these acquisitions – curious about funding Kelly DiMartino; we fund it with cash from a variety of sources – always cash on hand. Off cycle appropriation to complete the first two due to inflation impacts Grant Funds Local Funds Re- Appropriation Total Grant Funds TCEF Reserves Trans. Fund Reserves CCIP Arterial Intersection Fund Total Increase Laporte 4,937,500$ 1,365,495$ 517,000$ 6,819,995$ 49,500$ 335,454$ 175,101$ -$ 560,055$ 8% College/Trilby 13,640,992$ 2,873,513$ -$ 16,514,505$ -$ 908,820$ 180$ 600,000$ 1,509,000$ 9% Zach Elementary SRTS 745,587$ 187,397$ -$ 932,984$ -$ 179,410$ 275,090$ -$ 454,500$ 49% College/Triangle -$ -$ -$ -$ 832,211$ 796,546$ 158$ -$ 1,628,915$ N/A TOTAL 19,324,079$ 4,426,405$ 517,000$ 24,267,484$ 881,711$ 2,220,230$ 450,529$ 600,000$ 4,152,470$ N/A Previously Appropriated Proposed Supplemental Appropriations Page 15 of 127 Travis Storin; the dollars are there - reserves in the upcoming 2025 -26 Budget. I commend the team for a creative approach with the funding stack. Since we are in the middle delay the cross walk on Impala Mayor Arndt; that is a drop in the bucket - if we are in the middle of something - we should finish it –it feels like a higher priority to finish the ones that are in process. Tyler Marr; funding these inflation impacts are delaying the start of other things which carry an opportunity cost. Some new things may be delayed. Tricia Canonico; no upside to delaying or downsizing the project - a lot of grant funding opportunities It is too bad that we keep seeing the constructions costs increasing. I would support moving forward. Do we anticipate any stabilization in the coming year for the construction costs increases? Dana Hornkohl; there has been no indication of that yet. A lot of volatility in concrete and asphalt costs. Mayor Arndt; I am sure they will talk about tradeoffs in the budget. D. Parking Supplemental Appropriations Eric Keselburg, Sr Manager, Parking Services EXECUTIVE SUMMARY Parking Services is requesting appropriation of available Parking Reserves to fund the following items. The Civic Center Parking Structure (CCPS) item will be funded using dedicated CCPS Reserves. 1. The southeast corner public stairwell in CCPS needs to be replaced, as identified during the recent condition assessment. This stairwell is located on the most heavily trafficked exit from CCPS and has been closed since June 2020, as design and funding are finalized. 2. Parking Services began sealant work in the Firehouse Alley Garage in 2023. Funds allocated for this project in 2023 were not used due to timing delays and subsequently became part of the Parking Reserves. These funds are now needed to complete the project. 3. Parking Services presented to City Council in October 2023, to request support to research a sustainable funding model for the downtown parking system. The scope for the Request for Proposal (RFP) has been drafted and reviewed by the Downtown Development Authority (DDA); which has agreed to contribute financially to assist with the Downtown Parking System Strategy Study, and subsequent implementation plan. 4. The third-party security company, Precision Security, provides security services in the three (3) City- managed parking structures. The current staffing and hours of coverage are not changing; however, the cost of service has increased yearly including a 4.5% for 2024 service. Parking Services is requesting appropriations versus aligning with the standard Budgeting for Outcomes (BFO) process due to project timing and the need to adjust the current year budget. Page 16 of 127 GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED Parking Services is requesting the appropriation of available Parking Services reserve funding to allow for movement on the customer experience items, and to allow the RFP to be submitted to begin the downtown parking study; to gather both partner and community feedback, ahead of Council direction. BACKGROUND/DISCUSSION There are a few asks being compiled together. The first being the CCPS stairwell, which following the 2019 condition assessment was found to have repair needs. Due to the pandemic and financial constraints imposed on Parking Services, the maintenance schedule was paused (approved by the contracted structural engineering firm). Once the American Rescue Plan Act (ARPA) funding was provided (BFO cycle 2022/2023), Parking Services resumed maintenance repairs. However, the subsequent and necessary condition assessment performed found that the southeast stairwell had degraded to an unsafe level; which required it to be closed (June 2022) for public use. Several design options were discussed and presented; that said, a viable design was submitted, and a path forward was determined. To complete this project a supplemental appropriation of $1,200,000 is being requested. These funds will be appropriated from the CCPS Reserves. The second request is to utilize prior funding which was set-aside in 2023 for necessary parking structure deck sealant maintenance work in FAPS. This project was planned to bridge funding availability from both 2023 and 2024; due to timing delays, the available 2023 funding was not used and subsequently rolled into the Parking Reserves. To complete this project a supplemental appropriation of $110,000 is requested. These funds will be appropriated from Parking Reserves. The third ask revolves around the following. Parking Services presented to City Council at a work session in October 2023, specifically pertaining to the current state of the Parking Services operation and the request to support continuing efforts to develop a new financial and strategic model and related implementation plan for downtown parking. The identified problem statement showcased that the current parking system model does not provide the parking choices needed for those who visit the downtown area. As well, it is incapable of addressing the demand distribution challenges, which frustrates our users, because of the reliance on an enforcement methodology and the use of low dollar paid parking in undesirable facilities. Also, Parking Services is unable to fulfill its required goals to fund its maintenance needs because it cannot achieve cost neutrality in its current model. The scope of the RFP has been drafted and reviewed by the DDA, who agreed to contribute financially to the downtown parking study. At this time, a supplemental appropriation of $185,000 is requested to fund this work. The DDA has agreed to reimburse the City for the cost in the amount of $65,000 or up to 50% of total cost. The final piece of the request is due to the increased cost of third-party security services provided in the three (3) City-managed parking structures. Parking Services contracts armed security to ensure the evening and late- night users of the parking facilities have adequate protection, with armed security at each facility, with added security staffing during the weekend. The cost of the contract for armed security has increased yearly including an increase of 4.5% in 2024. Parking has managed past yearly increases within its budget, but cost increases have now accumulated resulting in this request for $50,000 in supplemental appropriation from Parking Reserves. The available reserve balance is sufficient to cover the presented requests and will help to minimize execution, and advance efforts made to date. As well, the contract increase will provide uninterrupted security coverage for our downtown customers. DISCUSSION / NEXT STEPS; Page 17 of 127 GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED Parking Services is requesting the appropriation of available Parking Services reserve funding to allow for movement on the customer experience items, and to allow the RFP to be submitted to begin the downtown parking study; to gather both partner and community feedback, ahead of Council direction. Paused due to pandemic - SE stairwell in the Civic Center Parking structure was closed in 2022 We have identified a path forward – 12-18 months – our goal is summer/ fall for 2025 to reopen the SE stairway. Monica Martinez; basically, we had a situation where it should have been put in a Purchase Order per the standard process, but that did not occur - funding did not get picked up there – Mayor Arndt; what is the additional $185K for? Eric Keselburg; we worked with a parking consultant for the downtown parking study leading up to the presentation to the Council. This would be for the second half of the study where we reach out to some of the stakeholders which will lead to a recommendation to Council for next steps. The DDA has agreed to come forward with some funding as well. Mayor Arndt; I am fine with all of this. The Council is anxious to be helpful in the parking structure repairs. Tricia Canonica; we would like to see this moving forward – good to have that stairwell back in service and to maintain our other parking structures. I am good with this. Meeting adjourned at 5:05 pm Page 18 of 127 Page 19 of 127 Finance Administration 215 N. Mason nd Floor Fort Collins, CO 80522 970.221.6788 970.221.6782 - fax fcgov.com Council Finance Committee Hybrid Meeting CIC Room / Zoom July 3, 2024 4:00 - 6:00 pm Council Attendees: Mayor Arndt, Emily Francis, Kelly Ohlson Staff: Kelly DiMartino, Tyler Marr, Travis Storin, Jenny Lopez Filkins, Teresa Roche, Ginny Sawyer, Nina Bodenhamer, Lawrence Pollack, Meaghan Overton, Dean Klingner, Victoria Shaw, Drew Brooks, Cortney Geary, Monica Martinez, LeeAnn Williams, Chief Bergsten, Kirsten Howard, Teresa Roche, Nina Bodenhamer, Randy Bailey, Adam Halvorson, Jo Cech, Trevor Nash, Renee Reeves, Kevin Wilkins, Dave Lenz, Joe Wimmer, Carolyn Koontz Meeting called to order at 4:02 pm Approval of minutes from June 6, 2024, Council Finance Committee Meeting. Emily Francis moved for approval of the minutes as presented. Kelly Ohlson seconded the motion. The minutes were approved unanimously via roll call by; Mayor Arndt, Emily Francis, Kelly Ohlson. A. CCIP Project List Update Ginny Sawyer, Lead Policy & Project Manager Joe Wimmer, Senior Financial Analyst SUBJECT FOR DISCUSSION Community Capital Improvement Tax Renewal EXECUTIVE SUMMARY The purpose of this item is to begin consideration of a community capital tax program for voter consideration in November 2025. GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED 1. What questions does Council Finance Committee have on the initial projects listed? 2. What additional considerations does Council Finance Committee want included in the process? Page 20 of 127 BACKGROUND/DISCUSSION The City of Fort Collins has a 40+ year history of utilizing voter approved sales tax initiatives to fund major capital projects. While many communities rely on bonding for capital projects, Fort Collins has committed to a “pay as we go” model that has benefited the community through project engagement and utilizing tax collection from both residents and non-residents. Past tax packages have demonstrated that core elements of success include: - Benefiting the community as a whole both geographically and by interest; and - Including projects that can leverage other funding and partnerships. The current Community Capital Improvement Program (CCIP) tax will expire December 31, 2025. A renewal package will be offered to voters in November 2025. Staff has begun the initial work of identifying projects either identified in masterplans or flagged as needed capital. This is not a staff recommended list but a first collection of potential projects. The project list will continue to be refined over the next 12 months through Council interaction and public engagement. Some details of note: • Staff is researching other communities that use a revolving loan fund for affordable housing and looking at the possibility of bonding against CCIP housing fund money to create a similar program. • The Laporte Avenue redesign is not in any masterplan. This project came from a resident a few years ago and staff offered adding it to potential projects for consideration. • Projects will be further vetted to ensure they are more capital implementation than feasibility/planning outcomes. Projects will also be vetted for scalability. • While geographic disbursement of projects is a priority, the bulk of City-owned property and Poudre River reaches with associated plans are located in the downtown area. NEXT STEPS Staff will continue to vet and refine offers as mentioned above. An outreach plan will be developed and this item will come to a full council work session on August 27, 2024. The timeline anticipates Council referring a ballot measure in July/August 2025 for the November 2025 ballot. Proposed Projects: Vision Zero Plan – Arterial Intersection Improvements: $10M This project provides an annual fund for improvements to arterial intersections with safety improvements for all travel modes. This funding has allowed City staff to provide needed design, local match for grants, and construction funding, for previous major arterial intersection improvements. From the 10-year Transportation Capital Improvement Program (TCIP), notable planned projects include: - Shields and Prospect Intersection Improvements - Shields and Horsetooth Intersection Improvements - Drake and Lemay Intersection Improvements - College and Drake Intersection Improvements Active Modes Plan – Bike and Grade Separated Crossings: $20M This project provides an annual fund to construct bicycle infrastructure as recommended in the Active Modes Plan (AMP). This includes linear facility improvements such as buffered and separated bike lanes as well as spot Page 21 of 127 treatments or crossing improvements such as bike/ped signals and protected intersections. Projects have been prioritized using the outcomes-based evaluation measures of network connectivity, access to transit, safety and comfort, and health and equity, with an emphasis on Safe Routes to Schools. This fund will combine the previous CCIP Bicycle Infrastructure Improvements and CCIP Bike/Ped Grade Separated Crossing Funds so will also fund pedestrian underpass projects that align with the AMP and the Strategic Trails Master Plan, as well as aligns with our Vision Zero action plan. Active Modes – Pedestrian Plan: $16M This project provides an annual fund for construction of missing and ADA deficient sidewalks to complete the build out of the City network as well as pedestrian crossing improvements recommended in the Active Modes Plan. This funding provides approximately 1.5 to 2 miles of new sidewalk per year. Priority is given to areas near schools to advance the Safe Routes to School Program, as well as along arterial roads. Fund can also provide for local grant match. Willow Street Streetscape: $5.3M This project would create a better urban design corridor along Willow Street from Linden to Lincoln extending the previous work done on Willow Street west of Linden. The project assumes two travel lanes, two parking lanes, two bike lanes with 3-foot buffers and two 8-foot wide sidewalks. Jefferson Street (College to Linden): $6.8M Creating a corridor similar to the recently completed Linden Street project on Jefferson from College Ave to Linden Street. Two drive lanes with a two-way center left turn lane through the corridor. The sidewalks would be improved to be 22' wide similar to Linden Street. Jefferson Street (Linden to Mountain): $7.4M Creating a corridor similar to the recently completed Linden Street project on Jefferson from College Ave to Linden Street. Two drive lanes with a two-way center left turn lane through the corridor. The sidewalks would be improved to be 22' wide similar to Linden Street. Laporte and College Plaza: $7.6M The purpose of this project is to create an improved urban design and bike/ped space on Laporte from College to Mason. The project would include 3 travel lanes and 2 8-foot buffered bike lanes west of College and 2 travel lanes with 2-8 foot buffered bike lanes East of College. The project would create a pedestrian plaza in the area surrounding College and Laporte. Transfort Bus Stop Enhancements: $1M Transfort was allotted $1M in the current CCIP. The first three years of CCIP funding (2016 through 2018) funded ADA improvements at 86 stops. The next 4 years of CCIP funding ($400,000) was leveraged as the local match for $1.5M in federal funds to complete ADA improvements at 134 stops, and purchase needed amenities throughout the service area, including 25 shelters, approximately 90 other amenities such as benches and trash cans. To date, 220 stops have seen ADA upgrades as a result of CCIP funding. There are approximately 40 bus stops remaining that require ADA upgrades and additional funding will be needed for additional amenities, and to maintain existing bus stops in a state of good repair for future riders. Transfort Bus Replacement: $5M Transfort leveraged $1M as local match to receive an additional $10.5M in other funding sources, mainly federal, to purchase 14 buses. In the next 10 years, 30 buses reach the end of their useful life including eight (8) 60FT articulated MAX buses. Replacing buses at the end of their useful life is pivotal to maintaining the fleet in a Page 22 of 127 state of good repair, minimizing mechanical breakdowns and maximizing on time route performance, while also leading to lower lifetime maintenance costs. Transfort Maintenance Facility: $16M The vision for an expanded or new facility includes sufficient office space, training facilities, maintenance bays, and bus parking facilities to house the additional buses needed for expanded service. A new facility includes the potential for mixed use commercial space, and a new publicly accessible transit station. Current estimate for a new facility is approximately $77M, not including design costs. This CCIP funding request would be leveraged with federal grant dollars at a match rate of 80% federal funds and 20% local match and would be used toward the design and expansion of the existing facility, and/or design and construction of a new facility. Nature in the City (NIC): $1.5M NIC projects provide opportunities for people to interact with and become stewards of their surrounding environment. These projects increase wildlife values by creating stronger connectivity between larger patches of urban habitat, such as natural areas and City parks. By funding both internal City efforts and public/private partnerships, the community integrates diverse, native landscapes from the center of Fort Collins to the edges of the Growth Management Area. Housing Fund: $10M Staff is researching potential new use of housing fund dollars including bonding against the amount to create a revolving loan fund. We have also confirmed with local housing providers that any amount of gap funding is a value. Lee Martinez Farm Plan and Refresh: $2.6M Preserving and expanding inclusive outdoor recreation opportunities reflects the values that make Fort Collins a truly special place to live, work, and play. This project funds a plan and vision for the future of the Farm at Lee Martinez Park along with capital funding to make enhancements and expansion to the Farm. Mulberry Pool Replacement and Expansion: $26.8M Mulberry Pool is the only pool in Fort Collins that provides a small year-round leisure pool that serves families. Mulberry also provides lap lanes for both the community, Poudre School District swim teams and club teams along with swim lessons for swimmers of all abilities. A new modern facility would better serve the growing needs of Fort Collins. The facility could include a full warm water leisure pool with zero entry, slide(s) and other play features. The facility will also include at least 6 lap lanes to maintain the current level of service for the Fort Collins swim community. Pickleball Complex: $4M A pickleball complex feasibility study is underway to determine if a community park site can close the gap in the short-term while waiting for future community parks to be built. Building a 12-court complex would cost approximately $4M. Strategic Trails Implementation: $10M The Strategic Trail Plan will be completed in 2024 and early 2025. Additional annual funding will support the current Conservation Trust funding and expedite project delivery as developed by the plan. Dog Parks: $2.5M Funding would implement two new dog parks and bring existing dog parks up to the same standard. Page 23 of 127 Bike Park: $5M Implement first phase of a bike park based on feedback gathered in a future bike park feasibility study. Children’s Garden and Infrastructure Upgrades: $4.9M The Children's Garden was the first to open to the public 20 years ago. The field of informal learning in nature has matured greatly and the garden is showing its age. A comprehensive renovation will rejuvenate the space, better align with current learning theory, and address drainage and maintenance issues. The full scope of the Children's Garden construction project includes the garden itself, along with reconsiderations of the entry and access sequence for families as well as school groups, along with including art elements and interpretive signage. Historic Trolley Building Restoration: $15.4M The historic Car Barn/Trolley Building at 330 N Howes St, which has been stabilized for use as interim storage for the Museum of Discovery, provides an opportunity for an iconic structure to be rehabilitated and adapted for a community-centered use. The 2017 Downtown Master Plan identifies the building for restoration and repurposing into a local attraction. Police Detention Remodel: $400K This project is a remodel of the detention area at the Police Station to make the total area in the building more useable. Since the original construction of the Police Station, the detention area has not been used because of regulatory restrictions and currently acts as a storage facility. Catering Kitchen at the Lincoln Center: $2.6M The Lincoln Center’s event catering kitchen is in need of a full remodel. The kitchen has not been updated since its time serving as the kitchen for Lincoln Junior High prior to that property becoming The Lincoln Center in 1977. The kitchen is crucial to reputation and operations as an event center. Numerous operational aspects need to be updated. Museum of Discovery Artifact Storage and Care: $2.9M This project creates clean, safe, climate controlled, publicly accessibility, housing for historic Museum artifacts. New storage will replace the current off-site storage located in the historic Trolley/Car Barn building. Relocating the Museum's storage will allow for public use for the historic Car Barn building. Downtown River Projects: $2-$32M The Downtown reaches of The Cache la Poudre River – the sections from Shields Street to Mulberry -were planned in the Downtown River Plan. Whitewater Park, considered Reach 3, was completed in the last CCIP. Both Reach 2 (including Lee Martinez and Legacy Parks) and Reach 4 (including Old Fort Collins Heritage Park) are potential next phase projects. Options for implementation would be full funding at $32M for Reach 2 or $22M for Reach 4 or looking to progress public outreach and conceptual design in both areas for $2M. Construction Waste Diversion Equipment Replacement: $2.2M Five pieces of heavy machinery are included in this offer. The Crushing and Recycling Facility is a significant contributor to waste diversion and provides recycled materials to the public. In 2023, this facility processed approximately 138,000 tons of concrete and asphalt for reuse and diverting this material from the landfill. Shared Commercial Kitchen: $1M This project will create a (feasibility study) shared commercial kitchen and co-working space to help fill a gap in the food business and entrepreneurial eco-system. With the increase in entrepreneurial food businesses, Page 24 of 127 particularly in our underserved and underrepresented communities, Fort Collins has some infrastructure challenges to best support these endeavors. Downtown Parks Shop: $11.2M The Parks Department has been built on a district model for maintenance activities. The current downtown site is located in a refurbished commercial warehouse which is near the end of its useful life and will be displaced as part of the Civic Center Master Plan. A new facility in the downtown area will house not only the local support staff but also the crews which support the horticultural areas around our facilities and throughout the public areas and trail systems. Two districts will work out of this facility providing efficient operations in a timely manner to the public. GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED 1. What questions does Council Finance Committee have on the initial projects listed? 2. What additional considerations does Council Finance Committee want included in the process? DISCUSSION / NEXT STEPS Back to full Council on the 27th – In December we would like to come back with recommended package Engage the public – August 2025 deadline for ballot in November Mayor Arndt; for the estimated $110M, what period of time does that cover? That is hard to estimate given that prices keep going up. Travis Storin; our approach is to use today’s dollars. It is not layering inflation on the funding or the costs. Kelly Ohlson; this is one of my top 5 priorities. We need more time. I am not sure that using today’s dollars is still the best method – construction costs went up way more than inflation. I would like to avoid $14M for a Community Center - better finesse there I don’t want to be flexible with the language – if we decide that the train is a bad idea – If that costs 10x more That is some of the high value stuff - Why do we give such credence to one person’s idea? I remember when a certain group of people got the attention and everyone else was left in the dust. Why did one person’s idea get the attention that it did? Ginny Sawyer; it wasn’t solicited. They came to us, and this is their area of expertise. They said this kind of fits in with some of your plans. Always open to ideas Kelly Ohlson; I am open to more on affordable housing. I want to be ready to do the Mulberry Pool, but I thought we were using dollars from the new tax for that. Travis Storin; during the referral process that ultimately led up to Council referral. The intent is that it would be for the indoor aquatic facility Southeast Community Center. The door is open, if Council wishes to do that for the Mulberry Pool. There is built in flexibility for either / or a ballot measure. I will continue to hold until we see the September materials. Page 25 of 127 Kelly Ohlson; at some point within the next year, we need to make a decision on whether Mulberry is on this or not. Tyler Marr; fully funding both the indoor components of the Southeast Community Center and Mulberry Pool would probably present some pretty substantial opportunity costs out of the 2050 tax compared to some of the maintenance goals the Council was trying to set. I don’t think we have looked at it being all one or the other. If we were going to take the whole cap to build two pools from now until 2050. Emily Francis; I have the same kind of question about Mulberry Pool and Lee Martinez Park. They are both what I would consider refresh or maintenance which should be part of the tax we just passed. It seems to me that the added components at the Southeast Community Center lap lanes should be under this CCIP. The lap lanes as the original was just the outdoor pool. If the community wants lap lanes, they should be under CCIP, but the refresh should fall under the tax we just passed. Travis Storin; I believe those decisions will rest with the Council. The IGA with the school district (land swap) was contingent on passage of 2050 but not necessarily funding from 2025. That was the dependency that was built in. Kelly Ohlson; I saw in the paper that you were talking about the Pickleball complex. Spring Creek Park was designed to be a new kind of park and because of sensitivity around veterans’ issues, that was allowed to be an addition later. It was extremely controversial but ended up being extremely loved. Located next to Natural Areas, it wasn’t a park that was going to be filled with other things. That was promised. You may want to find a different place for the Pickleball complex. The Downtown River projects – I would like everyone to take a look at the Natural Areas map for the city of Fort Collins. You will see tiny green spots. I would prefer that those areas are focused on habitat and restoration. That is my drop dead one. If habitat restoration is done well and folks have better access to the river – I am all for it. If it’s Disneyland on the Poudre – count me out because we have just little slivers of wildlife habitat. Ginny Sawyer; there are a lot of different opportunities which is they the dollar amounts are so different. There are divergent structures which we know you want taken out. There is an opportunity at Lee Martinez Park that includes Parks, Utilities and Natural Areas. Restoring some of that area and would benefit all three entities. Kelly Ohlson; Can you include in the next document – maybe two pages and include the history from 1997 which included Fossil Creek Park and Gardens on Spring Creek Page 26 of 127 I also like the circle chart (see slide #8 below). Not necessarily the outcomes but the concept of showing that. It says - Natural Areas but should say Nature in the City. important for ballot Of all of the things you cut- Nature in the City was cut in half while -very few other things were cut in half. What am I missing? Page 27 of 127 Ginny Sawyer; I called them to ask why they are asking for less money. Their answer was that they are working toward going deeper as opposed to wider. It was a conscious decision on their part based on their direction and what they are trying to achieve. Kelly Ohlson; I would like to have more context. For that amount of money, the goodwill that builds throughout the city with neighborhood projects, etc. is very significant. Working with schools, neighborhoods and HOAs is a win for the entire organization. Emily Francis; what do we count as capital improvement? It seems like a catch all. Ginny Sawyer; it is a catch all for what we want funded – previously it was called Building on Basics, Community Choices and Designing Tomorrow Today. We worked on a new name, and we ended up with Community Capital Improvement Program. Looking for something that we can point to – we said we would build this or do this and here is what we created. Emily Francis; maybe we can do some thinking around changing the name. The conversation with the Museum of Discovery artifacts (see below) – if the non-profit side talking about sharing that expense with us? Artifacts are city owned so we looked at it as a city expense. Museum of Discovery Artifact Storage and Care: $2.9M This project creates clean, safe, climate controlled, publicly accessibility, housing for historic Museum artifacts. New storage will replace the current off-site storage located in the historic Trolley/Car Barn building. Relocating the Museum's storage will allow for public use for the historic Car Barn building. Kelly DiMartino; that was based on the agreement between the city and the nonprofit in terms of what the city and the non-profit will contribute. It would probably be good to have an update on this. The nonprofit contributions have outpaced the city contributions. It is raising questions on the non-profit side as well on the path going forward. Kelly Ohlson; I suggested the partnership be put on the ballot but there was no money. To be fair, the city paid significantly more in the beginning, which included the land, buildings, etc. Pursuant to a discussion about things being out of sync, people said it would be an equal partnership. I was there from day 1 and you look the other way on things. We did more than our share in the beginning. Kelly DiMartino; from the agreement perspective, the city’s role around capital and facilities and the nonprofit around operations. It would be a good thing to get us all regrounded. Partners want to look at how it looks moving forward. Travis Storin; around the artifacts in the trolley barn. Within this process, this is a good time to identify strategies around fund raising outside of the tax. Whether that is philanthropic fund raising or P3 or working with other governmental agencies. It is helpful to receive some direction and guidance around which you think are good candidates for that, in both directions (staff and Council). Because what is a bad look is when we get late in the process and say we want to haircut this – can you go raise this amount of money? It becomes filling a hole rather than something that is co-created. Page 28 of 127 Nina Bodenhamer; when we go back to the IGA with the Museum of Discovery, it also included the land for the facility. That is the ideal way to structure a philanthropic partnership. 5 years later, it is time to revamp who is contributing what. When we look at this menu that staff is suggesting you will bill, there are opportunities for philanthropic contributions and how do we do that not as a budget strategy but as a community investment strategy. When we are talking about ballot language, we will also want to be very careful about the language around what the philanthropic role is and what the partnership role is and what is our strategy if it is not met. Emily Francis; I think that is fair and this would be a good one for that partnership. Ginny Sawyer; the artifacts are also prime for grants. Nina Bodenhamer; the artifacts are owned and insured by the city. PFA has artifacts that could be added to that. Thinking about what that looks like as a partnership for community curation. Emily Francis; I do like the affordable housing strategy. The Lee Martinez and Mulberry Pool, some of the Transfort bus stop enhancements are a blurry line between the tax we just passed and then asking again. I know there is discussion around the ballot language intent and what it says but voters read maintain and enhance and it feels like these 4 items …the voters feel like they just gave you money to do this. It feels like a very blurry area. Tyler Marr; staff is coming at this as trying to preserve maximum flexibility in some of these areas. Lee Martinez may be a perfect example, what we are talking about is an expansion of the usable space in one form or another. When we talk about refresh – it is right on that cusp. Emily Francis; I am concerned about the appetite to pass more taxes. Ginny Sawyer; always say renewal - this is not a tax increase. Emily Francis; a question – I know the URA is working on the Albertsons location. They have been talking about a community hub going in somewhere to provide support services. I wondered if that had been considered. Ginny Sawyer; we have had discussions on that. I think it is a readiness conversation. In the next six months, depending on what happens, it may come back onto the mix. Emily Francis; is that because it is based on the assumption that it would only work at Albertsons or? Ginny Sawyer; I had a conversation with Josh around not wanting to predetermine anything with some of the things with these other projects - if it is an actual feasibility study that needs to happen then that might not be appropriate. We can keep it in the mix though. Emily Francis; I would like to keep it in the mix. It is in the URA plan. I feel that the Community Hub, especially with our equity office, try to meet some of these things that we have been talking about for a very long time. Mayor Arndt; Regarding the Arterial Intersection Improvements (see below). This also seems to be borderline between is that a capital improvement or is that something that is in our plans that is a priority for Council the streets tax, right? How do you decide? Page 29 of 127 Vision Zero Plan – Arterial Intersection Improvements: $10M This project provides an annual fund for improvements to arterial intersections with safety improvements for all travel modes. This funding has allowed City staff to provide needed design, local match for grants, and construction funding, for previous major arterial intersection improvements. From the 10-year Transportation Capital Improvement Program (TCIP), notable planned projects include: - Shields and Prospect Intersection Improvements - Shields and Horsetooth Intersection Improvements - Drake and Lemay Intersection Improvements - College and Drake Intersection Improvements Travis Storin; The Streets Maintenance Program (SMP) is around maintenance of existing signals, pavement quality and bridges. The arterial intersections, some of the expansions that you see, additions of medians and safety features. Mayor Arndt; The Mulberry Pool would be a perfect one for partner maybe with CSU. Kelly DiMartino; we have a study underway, but I haven’t seen the results. Tyler Marr; I don’t think it is finished. There is active work with CSU as they should think about replacing the Moby pool, which is older. Mayor Arndt; Transfort Bus Replacement $5M (see below). When we replace buses do we buy another style? We keep buying these enormous buses that are not very full. When other cities buy smaller buses which run fuller and are more nimble, might not need a CDL. Transfort Bus Replacement: $5M Transfort leveraged $1M as local match to receive an additional $10.5M in other funding sources, mainly federal, to purchase 14 buses. In the next 10 years, 30 buses reach the end of their useful life including eight (8) 60FT articulated MAX buses. Replacing buses at the end of their useful life is pivotal to maintaining the fleet in a state of good repair, minimizing mechanical breakdowns and maximizing on time route performance, while also leading to lower lifetime maintenance costs. Tyler Marr; when you hear us talking about optimizing the Transit Master Plan – those are exactly the kind of questions that are being asked in that work. Where do fixed routes make sense? In some cases, the standard buses will still be what we are after. In a number of these other areas, it is micro transit, a smaller way to achieve the same goals Emily Francis; Taft & Elizabeth- why do we focus this on downtown, when we are talking about 15-minute communities, streetscapes and walkability. Why do we focus it just on downtown? Travis Storin; Jefferson to start, I think you are observing the sequential adherence to a Transportation Master Plan. The combination of the Vine/Lemay overpass, the Linden work we have done, and the River District improvements are all part of a way to give the trucks a route around downtown rather than through it. That is not to suggest that it is somehow better than streetscapes in other parts of town. That is where we Page 30 of 127 would look to Council for guidance – we see your plan that was adopted x years ago and here are this Council’s priorities. Tyler Marr; when you look at the Jefferson and Willow block, it is one of the last remaining pieces of that right sizing. To put it candidly, DDA has often times brought magic funding to some of these projects through their increment. The first half of Willow (from College to Linden), the DDA funded a significant portion of that project. Emily Francis; it is important to think about 15-minute cities and building that out. We focus so much on downtown, rightfully so but if we are trying to build out community hubs. We need to start looking at how we make those improvements in other parts of the city. Kelly Ohlson; blurred lines between the two taxes. I think we can get close to not ordering those too much – you may run into some blowback from Council on things – we don’t control what else is on the ballot – there could be 3 other things on the ballot that we don’t control, so we want to make this attractive and not redundant. Kelly Ohlson; Regarding the $26.8M for Mulberry Pool (see below) - is that our share or would the city be splitting that? Mulberry Pool Replacement and Expansion: $26.8M Mulberry Pool is the only pool in Fort Collins that provides a small year-round leisure pool that serves families. Mulberry also provides lap lanes for both the community, Poudre School District swim teams and club teams along with swim lessons for swimmers of all abilities. A new modern facility would better serve the growing needs of Fort Collins. The facility could include a full warm water leisure pool with zero entry, slide(s) and other play features. The facility will also include at least 6 lap lanes to maintain the current level of service for the Fort Collins swim community. Joe Wimmer: that is our share - $51M would be the total. We will make sure that is clear, Kelly Ohlson; is there room available at the museum artifact storage site or does it require another building? Ginny Sawyer; this is why we want to have a more holistic conversation. The city owns that entire half block from the Trolley Barn to Eco-Thrift which is part of the Civic Center Master Plan. We do need to have conversations around if it is part of the Trolley Barn, how does that work? How do we repurpose the Trolley Barn to be accessible and nice storage? If it is not the right place, can it be on that property or is there a nearby property where that could occur. The current section storing artifacts is 5400 square feet and it is packed. Kelly Ohlson; the Trolley Barn is not the right building for museum storage. Wouldn’t this be the time to ask for more solid waste diversion capital? Construction Waste Diversion Equipment Replacement: $2.2M Five pieces of heavy machinery are included in this offer. The Crushing and Recycling Facility is a significant contributor to waste diversion and provides recycled materials to the public. In 2023, this facility processed approximately 138,000 tons of concrete and asphalt for reuse and diverting this material from the landfill. Ginny Sawyer; it has come up and similar to community hub – we aren’t sure where this is going yet, so let’s keep this in the mix. Page 31 of 127 Tyler Marr; as we are working through these grants that look specifically at construction demolition and the organics, that will give us a better sense for what those options are and if this might be a logical place to ask. Kelly Ohlson; is this going to be more refined when it comes to the work session? Ginny Sawyer; we will get the materials out earlier for your review. Kelly Ohlson; the timetable isn’t long enough. Voting is mid-October and that is not enough time for people to organize for or against. Historically we did it later, so that staff could interact, but actually they can anyway as long as they don’t advocate for it. Staff can answer questions and give presentations, they just can’t promote. It used to be backed up close to the election so staff could be out in a semi advocacy role, educating the public – cutoff date earlier so folks know what is on the ballot. Ginny Sawyer; The August date is the latest possible date that it can be referred to the ballot. Mayor Arndt; Bike Parks; could we be more creative? Many other cities do different things. Dog Parks; some cities have small dog pocket parks in neighborhoods which are gathering places. Some have lease free times. Maybe a few dog parks could offer lease free times. Central Park does it in New York City. There are huge fines if you pass the time for lease free. I feel like we could be more creative than a chain link fence around gravel. Looking around at what other cities do - an example is Cherry Creek Park in Denver Dog Parks: $2.5M Funding would implement two new dog parks and bring existing dog parks up to the same standard. Bike Park: $5M Implement first phase of a bike park based on feedback gathered in a future bike park feasibility study. Page 32 of 127 B. General Fund Admin Charge to Other Funds Lawrence Pollack, Budget Director SUBJECT FOR DISCUSSION Overview of the General Fund Administrative Charge to Other Funds EXECUTIVE SUMMARY The General Fund Administrative Charge is intended for partial cost recovery for Citywide support services. This includes the services provided by the City Attorney’s Office, City Manager’s Office, Human Resources and Finance, as well as a few others. These various shared services are necessary for day-to-day running of the City organization and to support the breadth of programs and services City departments provide externally to the community. The goal of the model is to have a methodology that is fair to all contributing funds. GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED What questions does the Council Finance Committee have about the General Fund Administrative Charge Model and how it is deployed within the City’s budgeting process? BACKGROUND/DISCUSSION There are a wide variety of services necessary to run the City organization and support the wide breadth of programs and service to the community provided by City departments and their staff. These shared administrative services are generally centralized so that each department need not replicate those activities with their own staff. Centralization also allows for standardization, efficiency and economies of scale that would not occur if each of those activities was decentralized. The many services provided by Human Resources are an example. The employee life cycle begins with recruitment and continues through the phases of hiring, onboarding, training and development, etc. All of these services require talented staff to ensure process standardization and consistency across the organization. It is much more cost effective to have those staff working together as a team to help facilitate the employee experience, rather than if each department had to hire their own resources to complete those functions. Lastly, many of these services have state and federal compliance requirements, requiring specialized knowledge of those. These types of services are typically housed within the General Fund because they are not owned by any individual department. Similar to a PILOT, a payment in lieu of tax, the intent of the General Fund Administrative Charge is to provide a methodology for the departments focused on external service delivery to the community to pay for the use of those shared administrative services. The value proposition is that it is overall less expensive to utilize administrative staff rather than incremental departmental hiring or paying a third party. The use of the General Fund Administration Charge model has been in place for well over 20 years. It is used during the budget process for departments to include their ratio of the charges within their ongoing budget requests. The General Fund departments included in the model are as follows: - City Attorney’s Office - City Manager’s Office - City Clerk’s Office - City Council Page 33 of 127 - City Hall Facility Charges - Emergency Preparedness and Security - Finance - Human Resources Step #1: The model for the 2025-26 Budget starts with the originally adopted operating budgets from 2024 for each City fund. A number of modifications are then made so as to not double count expenses. For example, transfers between funds are backed out as those don’t reflect budgeted activity that would utilize administrative services. Other budgeted expenses, like PILOTs and Purchased Power, are also backed out for similar reasons. This then determines the modified budget for each fund, applicable for use in the model. From there, each fund’s % of the total City modified budget is calculated. This % is what the total cost of the shared services in the General Fund will be multiplied by to determine the ratioed share of those expenses, by fund. Step #2: The budgets for each of the 8 departments listed above are then entered into the model with additional adjustments to again avoid any double counting, like in Step #1. Here is an example, City Charter requires certain funds to pay a specified portion of the City Manager’s compensation. In this case, the Light & Power fund pays 40% and the Water fund pays 20%. Those amounts are backed out of the model so as to not double count them. A similar thing happens within the City Attorney’s Office based on agreements with departments like Natural Areas. In that case, the 0.50 FTE of dedicated attorneys to supporting the Natural Areas is backed out so those costs are also not double counted. Step #3: The ratioed modified costs of those 8 departments are then summed up by fund for the total GF Admin Charge to be budgeted in Year 1 of the biennial budget. Year 2 is calculated by taking the Year 1 cost for each fund and increasing it by the inflationary assumption included in the budget; which is 2.5% for 2026. Step #4: The City Funds are split into what is referred to as ‘charged funds’ and ‘non-charged funds’ where the only difference is the ‘non-charged funds’ are not charged the amount calculated in the model. The reason for this is the ‘non-charged funds’ all receive a subsidy from the General Fund to cover a portion of that fund’s budgeted expenses. If there was an additional General Fund Admin Charge given to those funds, the only way they would be able to pay for it would be to then increase the subsidy from the General Fund. Such transactions would not add any value, so those funds are not charged. Step #5: These amounts for the ‘charged funds’ are then discussed with the various fund managers to go through the calculations and answer their questions so we can align on the amount specified in the model, which is to be included in that department’s Ongoing Offers. For the 2025-26 Budget, there was a conversation about the applicability of debt service (principal and interest payments) in the model. It was determined that, similar to PILOTS, debt service obligations don’t have ongoing operational impacts and so those costs have been backed out of the modified budgets. The result of this change benefited funds with greater debt than funds without much debt. GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED What questions does the Council Finance Committee have about the General Fund Administrative Charge Model and how it is deployed within the City’s budgeting process? Page 34 of 127 DISCUSSION / NEXT STEPS CSA = Customer Service & Admin Mayor Arndt; do you give them a budget? Lawrence Pollack; the calculated amount is based off of their budget - the last two columns (purple) on slide 7 (see below) are the totals that would be included in on-going offers in the departments associated with those funds. Kelly DiMartino; think about us charging them a percentage of the big picture allocations – it is how we allocate across the organization. Mayor Arndt: one fund hit legal really hard one year - Lawrence Pollack; we say that comes out in the wash over time Mayor Arndt; I was wondering if it changes behavior over the year Travis Storin; it is usually not a time and effort kind of thing – most of these expenses with personnel being the largest line item – your headcount is usually what is driving consumption of HR resources - - it is a dollar magnitude Page 35 of 127 Lawrence Pollack; one of the things we test with each department who is receiving this administrative charge is conceptually the cost of these would be less than if they have hired their own staff or paid for third party expertise. The other side benefit is consistency especially in HR and Legal. Consistency on our hiring practices as opposed to everyone having their own mini-HR department. This is another conceptual reason for a shared services model. Kelly DiMartino; I would say the bigger challenge that we experience is people wanting a greater amount of access to their central shared services. There is never enough capacity to meet all of our needs. Kelly Ohlson; not what I asked for - Step #4 (see below) I wanted to get this fixed as I think it has been wrong for 30 years – Natural Areas Fund - $460K. Parkland Fund and the Conservation Trust Fund and Capital Projects Fund are all zero. All enterprise funds but Natural Areas is not an enterprise fund. It is the only place of any significance in the city that gets charged for these services and is not an Enterprise Fund. People go to the ballot and bring that in, and the city penalized them. Step #4: The City Funds are split into what is referred to as ‘charged funds’ and ‘non-charged funds’ where the only difference is the ‘non-charged funds’ are not charged the amount calculated in the model. The reason for this is the ‘non-charged funds’ all receive a subsidy from the General Fund to cover a portion of that fund’s budgeted expenses. If there was an additional General Fund Admin Charge given to those funds, the only way they would be able to pay for it would be to then increase the subsidy from the General Fund. Such transactions would not add any value, so those funds are not charged. Lawrence Pollack; slide 7 (see above) Natural Areas is the only governmental fund that does not receive a General Fund subsidy. The cost to Natural Areas to provide these services to them is $460K for 2025. Page 36 of 127 Kelly Ohlson; use Parks - it is just built into their budget Lawrence Pollack; that is because Parks is in the General Fund so there is no money moving. Kelly Ohlson; I don’t think that is fair – citizens bring the money to the table and the city runs the show. I don’t get it. Lawrence Pollack; it is very common across other cities Emily Francis; it is funded differently. They are paying it but then we reimburse it from the General Fund. If the tax went away and we wanted to fund Natural Areas it would move down. Mayor Arndt; because it is ballot initiated Kelly Ohlson; I just don’t get it – Natural Areas is being punished – some of these things aren’t bringing in the money Mayor Arndt; but if the voters are voting on the tax – it should be self-sustaining – it goes back to the General Fund. Voters are saying, we want to pay this much money and it goes to Natural Areas. Then Natural Areas wants to hire someone – they are going to hire city of Fort Collins HR because it is cheaper, and it is better for us to do it that way. So, they have to pay for it since it wasn’t in the General Fund. That is a substantial difference – then you are double funding it through the General Fund and the tax the voters approved. It goes back to the voters. Kelly Ohlson; How do we determine that $472K is the correct amount? Is the formula the same for everyone? Lawrence Pollack; every fund is treated the same - the only exception is that you are not charged if you received a General Fund contribution. It is meant to be a consistent methodology and we go through extensive rigor to ensure we are not double counting. Page 37 of 127 C. Intergovernmental Agreement with Poudre Fire Authority Dave Lenz, Director, Financial Planning & Analysis SUBJECT FOR DISCUSSION Update to the Amended and Restated Intergovernmental Agreement between the City of Fort Collins and the Poudre Valley Fire Protection District (dated July 15, 2014) that established the Poudre Fire Authority. EXECUTIVE SUMMARY The City of Fort Collins (“City”) and the Poudre Valley Fire Protection District (“District”) established the Poudre Fire Authority (“PFA”) with an Intergovernmental Agreement (“IGA”) in 1981. This agreement was further adjusted in 1983 and 1987 to include a revenue allocation formula (“RAF”). This agreement was further amended and restated in 2014 to include an update to the RAF and Support Services provided to PFA by the City. The full 2014 amended and restated IGA including the RAF (Exhibit A) and Support Services provided (Exhibit B) is included as Attachment 1. During 2024, City and PFA staff continued discussions to update the IGA, completing an analysis of the support services (and associated costs) provided by each party and beginning the evaluation of the RAF. These preliminary findings have previously been shared with the Council Finance Committee in March, City Council/District Board in a joint Work Session in April, and ongoing PFA and District Board meetings. This update focuses on the proposed adjustments to the RAF, including the changes to administrative oversight of the joint agreement, as well as a recap of the shared services analysis and updated timeline to finalize adoption of the amended agreement. GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED What questions does the committee have related to the update of the Intergovernmental Agreement, the proposed Revenue Allocation Formula Adjustments or the Support Services and costs provided? Does the committee support the proposed changes to the Intergovernmental Agreement and supporting Exhibits A and B? BACKGROUND/DISCUSSION Support Services Provided: During the second half of 2023, City and PFA staff reviewed the Support Services provided in the existing Exhibit B. This effort involved over 30 collaborative meetings with both City and PFA personnel. The interviews and analysis involved investigation on the scope of services being provided by City personnel, including support areas that were not specifically outlined in Exhibit B as services to be provided. Additionally, certain services had transitioned to PFA over the ensuing time since the agreement update in 2014. In all instances, efforts were made to identify the time and costs involved in each City department or PFA program providing the support. During 2024, City and PFA staff jointly reviewed all findings of the 2023 costing of the services provided which indicated the City provides PFA with approximately $728,000 annually of in-kind costs and an additional $3.5 million in direct charges ($3.0 million is for Benefits and Wellness). PFA’s cost of services provided is estimated at approximately $292,000 annually ($248,400 is for two added positions – 50% for an IT Analyst III role and 85% of the Battalion Chief - Emergency Management role). Page 38 of 127 The net amount of the in-kind costs results in a total of approximately $436,000 provided by the City to PFA. This amount captures the new estimated baseline of service provided that will be incorporated into the updated IGA and RAF discussed in the sections below. It is intended that these services will be regularly reviewed by City and PFA staff for any material annual additions or subtractions to provided services. Additionally, the new agreement will incorporate an annual inflation adjustment to this net calculated amount based upon an agreed CPI Index. Revenue Allocation Formula - Current: The RAF specifies how both the City and the District make contributions to the PFA. The District’s contribution is annually through the adopted mill levy (minimum of 10.595 mills) and the City’s contribution is through a combination of a portion of the City’s base sales and use tax revenue (undedicated for specific other projects or legally restricted or committed for other uses) and 67.5% of the operating mill levy of the City’s property tax revenue. The City’s contributions are based on the biennial budgeted amounts for sales/use and property taxes. These amounts are not adjusted for actual collections (please refer to Exhibit A of the IGA for the RAF calculation details). In the 2023 Budget, the City’s contributed approximately $35.9 million in revenue sharing to PFA ($19.2 million in property tax and $16.9 million in sales/use tax, less $0.2 million for PFA contribution agreements). For the 2024 budget, the revenue contribution increases to approximately $38.7 million ($21.7 million in property tax and $17.3 million in sales/use tax, less $0.3 million in PFA contribution adjustments). The District contributed $8.8 million in 2023 and $12.4 million in 2024. The City’s 2024 contribution amounts are detailed below: Service Area Annual In-Kind Costs Annual Charged Total Cost of Services Provided Total $727,626 $3,456,986 $4,184,611 Cost of City Services provided to PFA Service Annual In-Kind Costs Total $291,738 Cost of Services provided - Absorbed by PFA Page 39 of 127 The total sales and use tax amount subject to the RAF calculations above is $128,243,683 ($101,245,013 of Existing Base plus $26,998,670 of New Base), with the total sales and use tax contribution amount totaling $17,261,150. Revenue Allocation Formula - Proposed: City and PFA staff have been evaluating the current RAF over the past few months. Goals of this evaluation have been to: • Simplify the sales and use tax calculations to incorporate the Keep Fort Collins Great (KFCG) 0.6% base rate increase • Adjust the calculations to incorporate the new baseline of cost of services provided. • Adjust the amount in the use tax calculation to include currently “excluded” one-time amounts. • Change contributions to PFA to be based on actual results versus the current budgeted amounts. This will also incorporate a “risk corridor” band to share a portion of revenue upside and limit the revenue downside related to actual results vs. budgeted estimates. • Provide an annual true-up for the risk corridor above. • Add further definition around adjustments for future growth and annexations. • Move to an annual budget amount for sales, use, and property taxes aligned with the annual appropriated budget for these amounts. Calculation Adjustments Actual 2024 Contribution (As of 4/22/22) Existing Base Sales Tax 92,770,987$ Existing Base Use Tax 8,474,026$ Total Existing Base Sales & Use Tax 101,245,013$ First 1% of Existing Base Sales & Use Tax 44,997,784$ Existing Base Sales & Use Tax RAF - 29%29.0% Existing Base Sales & Use Tax Contribution 13,049,357$ Property Tax 32,174,388$ Property Tax RAF - 67.5%67.5% Property Tax Contribution 21,717,712$ New Base Sales Tax 24,738,930$ New Base Use Tax 2,259,740$ Total New Base Sales & Use Tax 26,998,670$ New Base Sales & Use Tax RAF - 15.6%15.6% New Base Sales & Use Tax Contribution 4,211,793$ Total City Contribution 38,978,862$ Emergency Dispatch ($231,849) Homelessness Support ($20,000) Net City Contribution 38,727,013$ Adjustments for PFA Funded Position Support Page 40 of 127 The first adjustment step is to simplify the sales and use tax calculated contribution amount. If we take the 2024 tax amounts and contribution amounts from the current RAF calculation shown above, we are able to determine a single new calculation percentage as shown below (B divided by A equals C): The next step in our adjustment is to account for the new baseline cost of services provided under Exhibit B. To accomplish this, we take the calculation from the above section and add the net cost of services provided to get the new contribution amount (A plus B equals C). The final step of the RAF calculation adjustment is to include the full available use tax amounts (currently “excluded” one-time amounts) in the use tax base (D) to calculate the total sales and use tax base (E). To calculate the new updated percentage amount, we the use previously calculated contribution by the total base sales and use tax (F divided by E equals G). For simplification and some slight rounding difference, we will use a blended rate of the 2025 and 2026 years (H) as the calculation rate to determine the final Sales and Use Tax Contribution (I). 2024 Combined Sales and Use Tax Total Sales Tax Base 117,509,917$ Total Use Tax Base 10,733,766$ Total Sales and Use Tax Base 128,243,683$ (A) Total Sales and Use Tax Contribution 17,261,150$ (B) Calculated Contribution Rate 13.460%(C) 2024 2025 2026 Total Tax Contribution 17,261,150$ 18,383,050$ 18,891,202$ (A) Additional Contribution to Cover Cost Allocation -$ (B) Total Contribution after Cost Allocation 17,261,150$ 18,818,938$ 19,327,089$ (C) 2024 2025 2026 Combined Sales and Use Tax - New Calculated % Total Sales Tax Base 117,509,917$ 125,845,203$ 129,620,574$ Total Use Tax Base 10,733,766$ (D) Total Sales and Use Tax Base 128,243,683$ 142,224,514$ 145,999,885$ (E) Total Sales and Use Tax Contribution 17,261,150$ 18,818,938$ 19,327,089$ (F) Calculated Contribution Rate 13.460% 13.232% 13.238%(G) Average of 2025 and 2026 N/A 13.235% 13.235%(H) Total Sales and Use Tax Contribution with Avg Rate 18,823,414$ 19,323,085$ (I) Page 41 of 127 The Property Tax RAF calculation amount remains unchanged at 67.5% of the eligible City Property tax mill levy amount. Additionally, the amount of net shared services costs will be deducted from (or added to) the contribution amount to PFA from the City. This will allow for expansion or contraction of the net contribution amount based on material additions to (or reduction in) services provided by either the City or PFA under Exhibit B. (Note that the adjustments previously made to the PFA contribution amount for Dispatch and Homelessness position support are excluded above and will be handled as an annual charged service.) Actuals versus Budgeted Contribution Amounts and Risk Sharing Currently, the contribution amounts that are provided by the City to PFA are set every two years based on City’s biennial budgeting process. There is no adjustment in the contribution to PFA for the amounts that actually are collected for sales, use, and property tax. The proposed adjustment will be to contribute actual tax receipts to PFA on a monthly basis, with a true-up at year-end based upon the agreed upon cap and floor bands. The City’s budgeting process has a conservative bias, as it should, based on the need to “protect for the downside”. If we look at the average variance of budget vs. actual for the three tax categories since 2003, we see the following variation patterns: To allow for sharing upside potential revenue with PFA and to share some downside risk of potential revenue shortfall (without putting at risk the need to provide PFA’s core fire and emergency services), this proposed RAF adjustment puts in place a cap and floor on the percentage variation from budget that PFA receives from the City. The following are the proposed risk sharing bands for each tax. 2024 2025 2026 Total - Proposed RAF Sales Tax Contribution 15,816,423$ 16,655,613$ 17,155,283$ Use Tax Contribution 1,444,727$ 2,167,802$ 2,167,802$ Property Tax Contribution 21,717,712$ 22,571,998$ 23,023,438$ Total Contribution 38,978,862$ 41,395,412$ 42,346,523$ Less: Net Shared Services Costs -$ (435,888)$ (435,888)$ Net Contribution 38,978,862$ 40,959,525$ 41,910,635$ Total - Current RAF Sales Tax Contribution 15,816,423$ 16,938,323$ 17,446,474$ Use Tax Contribution 1,444,727$ 1,444,727$ 1,444,727$ Property Tax Contribution 21,717,712$ 22,571,998$ 23,023,438$ Total Contribution 38,978,862$ 40,955,048$ 41,914,640$ Actual vs. Budget Annual Average Variance (%) Number of years Average Variance Number of years Average Variance Sales Tax 2.4%11 5.4% 10 -2.0% Use Tax 14.1%16 18.5%5 -5.4% Property Tax 0.4%11 2.3% 10 -1.7% Actual Exceeds Budget Budget Exceeds Actual 2003 - 2023 Page 42 of 127 If any of the individual actual tax amounts collected are within the band range, no adjustment is necessary. If a tax amount is above or below the annual cap or floor, an adjustment will be made at year end to adjust for the excess (or shortage) to bring the annual contribution back to the band percentage amount. Annexation and Growth Provisions The current RAF allows for adjustments to the contribution amounts paid to PFA in the event the City annexes property currently within District boundaries. These provisions will be maintained in the proposed RAF through adjustments to the sales and use tax and/or property tax contribution percentages. Mechanics of this process are still under evaluation. Annual Setting of the Budgeted tax amounts The proposed RAF changes include the budgeted sales, use, and property tax amounts to be set at time of annual appropriation of the individual year budgets (as opposed to the biennial cadence currently in the RAF). This will allow for a timelier update to these key budget assumptions, especially in the aftermath of severe shocks to the economy (positive or negative). The two-year estimate will still be provided in the biennial budget approval. Other items still under consideration/finalization • District, PFA and City ongoing legal reviews • Movement of dispatch services to a charge for service as opposed to a deduction from the RAF • Full detail of City and PFA roles and responsibilities including joint calendarization of timelines NEXT STEPS/PATH FORWARD The goal is to complete the update of the IGA for inclusion in the 2025/26 City BFO Cycle. City and PFA staff are working jointly to reach agreement on terms and conditions to include in an update to bring to both the City Council and District Board for approval. Tentative schedule for moving forward: Work Streams: July: Finalize Combined Agreement Terms and City/District/PFA Legal Evaluations Communications/Actions: July: Council Finance Committee - proposal July: District Board - proposal August: City Council Adoption consideration - 1st August: District Board Adoption consideration Sept: City Council Adoption consideration - 2nd Upper Band (% above Budget) Lower Band (% below Budget) Sales Tax 3.0% -2.0% Use Tax 6.0% -2.0% Property Tax 2.0% -2.0% Page 43 of 127 GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED What questions does the committee have related to the update of the Intergovernmental Agreement, the proposed Revenue Allocation Formula Adjustments or the Support Services and costs provided? Does the committee support the proposed changes to the Intergovernmental Agreement and supporting Exhibits A and B? DISCUSSION / NEXT STEPS A brief introduction was given to the Council Finance Committee in March. Shared Services – slide #6 (see below) Page 44 of 127 Kelly Ohlson; is the basic purpose of this to get as close to fairness as possible? Dave Lenz; the goal is to get an updated understanding of what is going on now and what has changed over the last 10 years and the fairness of this. There is one area where we still need to do more work and that is dispatch’s share – in terms of how much the district funds and how much the city shares, and it also involves UC Health and the City of Wellington. We can move closer and closer over time, and it can be done in the context of the agreement. The sense of fairness – we want to formalize the agreement and be able to track and have an agreement that can react Kelly Ohlson; what isn’t Emergency Management a core assignment? Dave Lenz; initially, we had been providing that service to them. They have taken on some additional responsibilities over the last 10 years. They have funded a position to handle some of the things we have been doing. Travis Storin; in 2019, PFA ran all local emergency preparedness and management. In 2019, the city took that over upon the retirement of a longstanding Battalion Chief who handled that function. This function is now called Emergency Preparedness Services (EPS) and is within the city organization. PFA retained the fire protection side of emergency management. Chief Bergsten; Emergency Management did not cover any of the district side, so all of the wildland urban interface outside the city of Fort Collins. That is a big risk area for us to address and that is why we are doing the emergency management on our side is to address the entire district side. Some of the flooding / water issues we have outside the city of Fort Collins. Page 45 of 127 Kelly Ohlson; would this pass the test for fairness? Mayor Arndt; this is great. We have to build systems for the future. The system is changing to be more resilient in the future and to anticipate changes. Chief Bergsten; it also allows us to be more nimble. The current agreement does not allow us to make any changes or edits. Having the true up in year 2. If there were dramatic changes, they could be identified and addressed in a true-up. We budget conservatively but if it is a good year, we would be able to share in the same benefits on both sides. Kelly Ohlson; I would like to request a meeting to understand for comparable suburban type cities that we are not the richest funded fire authority. I would like to understand comparable geography /population – especially with the property tax increase. Mayor Arndt; I went down to Conifer which is a high fire district. They have five fire districts and chiefs, and the administrative costs are crazy. I hope they get what they need, and their service is excellent. PFA was founded in 1981. It was absolutely brilliant to come together and reduce redundancies and increase efficiency for the public. Will you do the sit down with Council member Olson? Kelly Ohlson; have there been discussions about becoming one entity a municipal department within the city? Chief Bergsten; it was considered during these discussions and that is what we are building into - We are currently at an 80/20 split – 80% of calls from the city and 20% from the district and that continues to shift more toward the city side. It could be a city department and then you contract with the district. Travis Storin; I would say an auxiliary goal with this update is to prepare for a landing. There will be a future Council in District 4 that will be confronted with that very question. As we get deeper into the East Mulberry annexation plan, that call volume that the Chief was mentioning will start to become overwhelming. You look at a model, maybe a municipal department that contracted services for the rural areas. This could happen in 10 or 25 years. This being the structural update to prepare for that dialog. Chief Bergsten; I am happy to meet with Councilmember Ohlson. The goal is to provide the best level of service for the best price equally across the district and the city. Meeting Adjourned at 5:53 PM Page 46 of 127 Page 47 of 127 COUNCIL FINANCE COMMITTEE AGENDA ITEM SUMMARY Staff: Travis Storin, Chief Financial Officer Date: September 5, 2024 SUBJECT FOR DISCUSSION: Status of Fund Balances and Working Capital EXECUTIVE SUMMARY: The attached presentation gives a status of fund balances and working capital. Fund balances are primarily considered for funding one-time offers during the Budgeting for Outcomes process. To a lesser extent, available monies are also used to fund supplemental appropriations between BFO cycles. GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED General update to Council Finance Committee BACKGROUND/DISCUSSION To aid in answering the question of what funding is available to support emerging issues and initiatives in the next budget cycle. In each fund the balances are shown vertically by the accounting classifications. The amounts are then additionally categorized into Appropriated, Available with Constraints, and Available for Nearly Any Purpose. Appropriated, Minimum Policy or Scheduled is comprised of minimum fund balances established by policy, funds from the 2023 balance that have been appropriated in 2024, and amounts for projects specifically identified by voters. An example of the latter is Community Capital Improvements Plan. Available with Constraints are those balances available for appropriation but within defined constraints. An example are donations received through City Give. They are restricted for the purpose of the donation, but still available for appropriation. Available for Nearly Any Purpose are balances that are available for appropriation at the discretion of the City Council. ATTACHMENTS 1. PowerPoint presentation Page 48 of 127 Headline Copy Goes Here Chief Financial Officer Travis Storin Status of Fund Balances 09-05-2024 Page 49 of 127 Headline Copy Goes Here 2 Objectives •Inform Committee on Types of Constraints •Review fund balances as of 12/31/2023 •Summarize how Fund Balances are used in the budget process Page 50 of 127 Headline Copy Goes Here 3 Fund Balance Definitions Least Constrained Non-spendable •Non-liquid in form (e.g. inventory, long-term receivables, land) •Legally or contractually required to be maintained intact (e.g. permanent endowments) Restricted •Externally / 3rd Party enforceable legal restrictions (e.g. TABOR emergency reserve, debt covenants, re-development agreements, IGA’s) Committed •Constraint formally imposed at the Council or Board Level through Ordinance (e.g. Capital Expansion fees, Neighborhood Parkland fees) Assigned •Intended to be used for specific purposes (e.g. Affordable Housing, Camera Radar, Encumbrances), not authoritative Unassigned •Available for any City purpose Most Constrained Page 51 of 127 Headline Copy Goes Here 4 Use of Restricted Balances Available but with some constraints •Street Maintenance Program within Transportation fund are restricted but available as defined in the ballot language •Donations made within a fund are available, but for the donations purpose Available for nearly any purpose •Funds available at the discretion of the City Council for any municipal purpose Page 52 of 127 Headline Copy Goes Here 85.5$ 76.7$ 62.4$ 5.1$ 9.2$ Capital Expansion Fund 27.7 31.2 - 31.2 - Sales & Use Tax Fund 2.4 1.3 0.3 1.0 - GID #1 Fund 0.6 0.7 0.1 0.6 - Keep Fort Collins Great Fund 1.3 0.2 - 0.2 - Community Capital Imprvmt Plan 23.0 31.6 12.3 19.3 - Neighborhood Parkland Fund 5.2 5.4 2.4 3.0 - Conservation Trust Fund 3.6 4.7 2.0 2.7 - Natural Areas Fund 20.9 22.7 8.7 14.1 - Cultural Services Fund 3.1 3.4 1.4 2.0 - Recreation Fund 2.9 3.3 1.0 2.4 - Cemeteries Fund 1.0 1.2 0.1 1.1 - Perpetual Care Fund 2.1 2.2 - 2.2 - Museum Fund 0.7 0.7 0.1 0.6 - Transit (4.9) (1.8) 0.7 (2.5) - Transportation Capital Expansion 18.0 22.8 2.1 20.7 - Transportation 12.8 13.7 6.0 7.7 - Parking Fund 2.7 3.7 0.3 3.4 - Capital Projects Fund 7.9 (0.5) (5.0) 4.4 - Golf Fund 5.3 3.1 0.9 2.2 - Light & Power Fund (excl. Broadband)60.5 61.7 55.4 6.3 - Water Fund 80.3 76.9 59.2 17.7 - Wastewater Fund 46.7 46.5 33.0 13.5 - Storm Drainage Fund 32.3 35.5 27.2 8.3 - Equipment Fund 5.9 2.7 1.5 1.1 - Self Insurance Fund 1.7 2.6 2.8 (0.2) - Data & Communications Fund 1.8 2.1 1.5 - 0.6 Benefits Fund 15.0 18.2 10.6 7.6 - Utility Customer Service Fund 2.4 17.5 13.2 4.3 - TOTAL 468.5$ 489.9$ 300.2$ 179.9$ 9.8$ Page 53 of 127 Headline Copy Goes Here Page 54 of 127 Headline Copy Goes Here Landbank inventory 2.5 2.5 2.5 - Udall Endowment 0.1 0.1 0.1 - Restricted TABOR Emergency 7.8 9.0 9.0 - Police Radio Network 0.4 0.4 0.1 0.3 Donations & Misc 0.9 0.1 0.1 - Convention & Visitor Center 0.6 0.4 0.4 PEG distribution 0.2 0.2 0.2 BOB Park Maint 0.2 0.1 0.1 PRPA Economic Dev Prgm 0.1 - - Committed Culture & Recreation (Fort Fund)0.3 0.5 0.5 Tourism Maintenance/Mitigation 0.2 0.2 0.2 Affordable Housing Land Bank 0.2 0.2 0.2 Police Regional Training Facility 0.1 - - Trash Contracting - - - Rental Housing Program - (0.1) (0.1) Disposable Bag Fees (0.2) - - Assigned Prior Year Purchase Orders 5.3 3.6 3.6 - Muni Court Renovation 0.4 0.2 0.2 - Manufacturing Use Tax Rebate 0.1 0.2 0.2 - Digital Equity 0.5 0.8 - 0.8 Opioid Settlement 0.1 0.2 - 0.2 Camera Radar 1.4 1.1 0.1 1.0 Waste Innovation 0.2 0.2 - 0.2 Reappropriation 0.6 2.5 0.2 2.3 Budgeted use of reserves 5.5 7.7 7.7 - Child Care Needs 0.3 0.3 - 0.3 Police Programming 0.6 1.0 - 1.0 Hughes Land Purchase 2.0 - - ERP Replacement 2.5 2.2 - 2.2 County Coordinated Elections - 0.4 0.2 - 0.2 Unassigned 15.1 7.6 3.3 - 4.3 Year End Total 85.5$ 76.7$ 62.4$ 5.1$ 9.2$ Page 55 of 127 Headline Copy Goes Here Page 56 of 127 Headline Copy Goes Here 9 General Fund Balances •$2.5M Land-bank program inventory, held at lower of cost or market •$9M is an emergency reserve required by TABOR, equal to 3% of qualified governmental revenue; City also has policy setting an additional $35.1M aside •Traditionally fund balances are assigned for camera radar and photo red-light, public safety dispatch system, affordable housing and waste innovation •$13.8M is set aside for prior year purchase orders, reappropriation, and budgeted use of reserves Page 57 of 127 Headline Copy Goes Here 10 Community Capital Improvement Plan Available for ballot projects 12.5 5.8 - 5.8 - 2026-2030 O&M per ballot - 1.4 1.4 - - City Park Train 0.1 - - - Club Tico Renovation - - - - - Poudre River Proj (CCIP only) - - - - - Gardens Visitor Center Expansion 0.1 0.1 0.1 - - Nature in the City 0.4 0.6 0.6 - - Affordable Housing Fund 0.6 1.0 1.0 - - Arterial Intersection Imprvmnt 1.8 2.0 2.0 - - Bicycle Infrastructure Imprvmt 0.8 0.6 0.6 - - Bike/Ped Grade Separated Cross 1.5 2.6 2.1 0.5 - Lincoln Avenue Bridge 0.3 - - - - Pedestrian Sidewalk - ADA 0.1 0.5 0.5 - - Transfort Bus Replacements - - - - - Willow Street Improvements 0.1 - - - - Linden Street Renovation - (0.3) (0.3) - - Carnegie Bldg Renovation 2.2 (0.5) 1.7 (2.2) - SE Community Center 2.4 17.6 2.4 15.2 - Bus Stop Improvements 0.1 0.2 0.2 - - Year End Total 23.0$ 31.6$ 12.3$ 19.3$ -$ Page 58 of 127 Headline Copy Goes Here 11 Transportation Street Maintenance - 1/4 Cent 4.9 2.6 0.7 1.9 Committed Capital Projects 1.4 1.5 1.3 0.2 Assigned Prior Year Purchase Orders 1.9 1.7 0.9 0.8 - Harmony Road 4.6 4.2 2.7 1.5 - Transportation Surplus - 3.7 0.4 3.3 - Year End Total 12.8$ 13.7$ 6.0$ 7.7$ -$ Page 59 of 127 Headline Copy Goes Here 12 Natural Areas Natural Areas 20.1 21.9 7.9 14.0 - Donations 0.1 0.1 - 0.1 Assigned Prior Year Purchase Orders 0.7 0.7 0.7 - - Year End Total 20.9$ 22.7$ 8.7$ 14.1$ -$ Page 60 of 127 Headline Copy Goes Here 13 Transit Capital Project Transfers 0.6 0.9 - 0.9 Assigned Prior Year Purchase Orders 0.3 0.7 0.7 - Transit Surplus(Deficit)(5.8) (3.4) (3.4) - Year End Total (4.9)$ (1.8)$ 0.7$ (2.5)$ -$ Page 61 of 127 Headline Copy Goes Here 14 Cultural Services & Facilities Opera Donation 0.1 0.1 - 0.1 - Committed Art in Public Places 0.7 0.8 0.2 0.6 - Assigned Prior Year Purchase Orders 0.1 0.2 0.2 - - Gardens on Spring Creek 0.2 0.9 0.2 0.7 Cultural Services Surplus 2.0 1.4 0.8 0.6 Year End Total 3.1$ 3.4$ 1.4$ 2.0$ -$ Page 62 of 127 Headline Copy Goes Here 15 Recreation Prior Year Purchase Orders 0.2 0.2 0.2 - - Recreation Programs 0.3 0.3 0.2 0.0 - Recreation Surplus 2.4 2.9 0.6 2.3 - Year End Total 2.9$ 3.3$ 1.0$ 2.4$ -$ Page 63 of 127 Headline Copy Goes Here 16 Benefits Prior Year Purchase Orders 0.2 0.1 0.1 - Budgeted Use of Reserves 1.8 2.4 2.4 - - ERP replacement reserves - 1.8 1.8 - Benefit Surplus 7.2 7.6 - 7.6 Year End Total 15.0$ 18.2$ 10.6$ 7.6$ -$ Page 64 of 127 Headline Copy Goes Here 17 Self Insurance Prepaids 0.6 0.6 0.6 - - Assigned - Prior Year Purchase Orders - 0.1 0.1 - Committed Self Insurance surplus / (deficit)(0.3) (0.2) (0.2) - Year End Total 1.7$ 2.6$ 2.8$ (0.2)$ -$ Page 65 of 127 Headline Copy Goes Here 18 Light & Power Prior Year Purchase Orders 1.5 2.0 2.0 - - Approved Capital Projects 20.7 40.1 40.1 - - Budgeted Use of Reserves 4.7 2.8 2.8 - - Available for Capital and Operations 24.3 6.5 0.2 6.3 - Year End Total 60.5$ 61.7$ 55.4$ 6.3$ -$ Page 66 of 127 Headline Copy Goes Here 19 Water Fund Prior Year Purchase Orders 2.2 0.5 0.5 - - Approved Capital Projects 28.5 51.8 51.8 - - Budgeted Use of Reserves 19.1 0.2 0.2 - - Available for Capital and Operations 24.0 17.7 - 17.7 - Year End Total 80.3$ 76.9$ 59.2$ 17.7$ -$ Page 67 of 127 Headline Copy Goes Here 20 Wastewater Prior Year Purchase Orders 0.7 0.5 0.5 - - Approved Capital Projects 22.7 26.1 26.1 - - Budgeted Use of Reserves 7.2 2.4 2.4 - - Available for Capital and Operations 12.3 13.5 - 13.5 - Year End Total 46.7$ 46.5$ 33.0$ 13.5$ -$ Page 68 of 127 Headline Copy Goes Here 21 Storm Drainage Prior Year Purchase Orders 0.7 0.9 0.9 - - Approved Capital Projects 14.4 19.7 19.7 - - Budgeted Use of Reserves 1.6 4.1 4.1 - - Available for Capital and Operations 13.4 8.3 - 8.3 - Year End Total 32.3$ 35.5$ 27.2$ 8.3$ -$ Page 69 of 127 Headline Copy Goes Here Page 70 of 127 Headline Copy Goes Here 23 Capital Expansion General Government 17.5 19.8 - 19.8 - Police 0.5 0.6 - 0.6 - Fire 3.5 1.0 - 1.0 - Community Parkland 6.2 9.8 - 9.8 - Assigned - Year End Total 27.7$ 31.2$ -$ 31.2$ -$ Page 71 of 127 Headline Copy Goes Here 24 Sales & Use Tax Natural Areas 2.4 1.3 0.3 1.0 - Year End Total 2.4$ 1.3$ 0.3$ 1.0$ -$ Page 72 of 127 Headline Copy Goes Here 25 GID #1 GID#1 0.6 0.7 0.1 0.6 Year End Total 0.6$ 0.7$ 0.1$ 0.6$ -$ Page 73 of 127 Headline Copy Goes Here 26 KFCG Street Maintenance 0.1 0.1 - 0.1 - Other Transportation 0.8 0.7 - 0.7 - Police Services - - - - - Fire & Emergency Services - (0.1) - (0.1) - Parks & Recreation 0.1 - - - - Other 0.3 (0.5) - (0.5) - Year End Total 1.3$ 0.2$ -$ 0.2$ -$ Page 74 of 127 Headline Copy Goes Here 27 Neighborhood Parkland Neighborhood Parks 5.2 5.4 2.4 3.0 - Year End Total 5.2$ 5.4$ 2.4$ 3.0$ -$ Page 75 of 127 Headline Copy Goes Here 28 Conservation Trust Parks, Rec & Open Space Capital Improvements 3.6 4.7 2.0 2.7 Year End Total 3.6$ 4.7$ 2.0$ 2.7$ -$ Page 76 of 127 Headline Copy Goes Here 29 Cemeteries Prior Year Purchase Orders 0.1 0.1 0.1 (0.0) - Cemeteries Surplus 0.9 1.1 - 1.1 Year End Total 1.0$ 1.2$ 0.1$ 1.1$ -$ Page 77 of 127 Headline Copy Goes Here 30 Perpetual Care Perpetual Care 2.1 2.2 - 2.2 - Year End Total 2.1$ 2.2$ -$ 2.2$ -$ Page 78 of 127 Headline Copy Goes Here 31 Museum Cultural Services Surplus 0.7 0.7 0.1 0.6 - Year End Total 0.7$ 0.7$ 0.1$ 0.6$ -$ Page 79 of 127 Headline Copy Goes Here 32 Transportation Capital Expansion - - Transportation CEF Surplus 11.5 18.8 2.0 16.8 Capital Projects 6.4 3.9 - 3.9 Assigned Prior Year Purchase Orders 0.1 0.1 0.1 - - Year End Total 18.0$ 22.8$ 2.1$ 20.7$ -$ Page 80 of 127 Headline Copy Goes Here 33 Parking CC Parking Garage IGA 2.4 2.2 - 2.2 - Assigned Prior Year Purchase Orders 0.2 0.5 0.3 0.2 - DT Parking 0.1 1.0 - 1.0 - Year End Total 2.7$ 3.7$ 0.3$ 3.4$ -$ Page 81 of 127 Headline Copy Goes Here 34 Capital Projects Other Fund Supported Projects 0.1 (5.0) (5.0) - - Donations and Grants 0.0 0.2 0.2 - Committed General Fund Supported Projects 7.8 4.2 4.2 - Year End Total 7.9$ (0.5)$ (5.0)$ 4.4$ -$ Page 82 of 127 Headline Copy Goes Here 35 Golf - Net investment in capital - - - - - Committed Art in Public Places - - - - - - - - Assigned Prior Year Purchase Orders - 0.1 0.1 - Available for Capital and Operations 4.9 2.5 0.4 2.1 - Year End Total 5.3$ 3.1$ 0.9$ 2.2$ -$ Page 83 of 127 Headline Copy Goes Here 36 Equipment Prior Year Purchase Orders 0.5 0.1 0.1 - - Approved Capital Projects 4.5 0.6 0.6 - - Equipment surplus 0.3 1.1 - 1.1 - Year End Total 5.9$ 2.7$ 1.5$ 1.1$ -$ Page 84 of 127 Headline Copy Goes Here 37 Data and Communications Prior Year Purchase Orders 0.4 0.3 0.3 - - Reappropriation 0.1 0.4 0.4 - - Budgeted Use of Reserves - 0.8 0.8 - - Data & Communication Surplus 1.3 0.6 - 0.6 Year End Total 1.8$ 2.1$ 1.5$ -$ 0.6$ Page 85 of 127 Page 86 of 127 COUNCIL FINANCE COMMITTEE AGENDA ITEM SUMMARY Staff: Lawrence Pollack, Budget Director Travis Storin, Chief Financial Officer Date: September 5, 2024 SUBJECT FOR DISCUSSION First Reading of Ordinance No., 2024, Making Supplemental Appropriations in Various City Funds. First Reading of Ordinance No., 2024, Appropriating Prior Year Reserves and Authorizing Transfers in Various City Funds. EXECUTIVE SUMMARY The purpose of these Annual Adjustment Ordinances is to combine dedicated and unanticipated revenues or reserves that need to be appropriated before the end of the year to cover the related expenses that were not anticipated and therefore, not included in the 2024 annual budget appropriation. The unanticipated revenue is primarily from fees, charges, rents, contributions and grants that have been paid to City departments to offset specific expenses. GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED • What questions or feedback does the Council Finance Committee have on the 2024 Annual Adjustment Ordinances? • Does the Council Finance Committee support moving forward with bringing the 2024 Annual Adjustment Ordinances to the full City Council on the Consent Agenda? BACKGROUND/DISCUSSION These Ordinances appropriates unanticipated revenue and prior year reserves in various City funds and authorizes the transfer of appropriated amounts between funds and/or projects. The City Charter permits the City Council to appropriate unanticipated revenue received as a result of rate or fee increases or new revenue sources, such as grants and reimbursements. The City Charter also permits the City Council to provide, by ordinance, for payment of any expense from prior year reserves. Additionally, it authorizes the City Council to transfer any unexpended appropriated amounts from one fund to another upon recommendation of the City Manager, provided that the purpose for which the transferred funds are to be expended remains unchanged; the purpose for which they were initially appropriated no longer exists; or the proposed transfer is from a fund or capital project account in which the amount appropriated exceeds the amount needed to accomplish the purpose specified in the appropriation ordinance. Page 87 of 127 If these appropriations are not approved, the City will have to reduce expenditures even though revenue and reimbursements have been received to cover those expenditures. The table below is a summary of the expenses in each fund that make up the increase in requested appropriations. Also included are transfers between funds and/or projects which do not increase net appropriations, but per the City Charter, require City Council approval to make the transfer. A table with the specific use of prior year reserves appears at the end of the AIS. Funding Additional Revenue Prior Year Reserves Transfers TOTAL General Fund $801,293 $292,582 $0 $1,093,875 Cultural Services Fund 7,400 291,064 5,630 304,094 Capital Projects Fund 243,300 0 21,300 264,600 Transportation Services Fund 1,429,500 1,200 0 1,430,700 Self-Insurance Fund 970,239 0 0 970,239 Golf Fund 1,500 25,130 0 26,630 Cemeteries Fund 0 207,870 0 207,870 801-URA - Prospect South TIF District Fund 0 1,873,927 0 1,873,927 803-URA - Mall Fund 0 17,804 0 17,804 Transportation CEF Fund 0 21,300 0 21,300 GRAND TOTAL $3,453,232 $2,730,877 $26,930 $6,211,039 A. GENERAL FUND 1. EPS - Weld County Reimbursement for CERT Purchase City's EPS applied to a FEMA funded program ran through the State's Northeast All Hazard Region. Weld County serves as the fiscal agency for the State's Northeast All Hazard Region, reporting all FEMA funds used for selected projects on its financials (Weld County = grant recipient). The workings of the program provide Weld reimbursing the City in upwards of $4,998 for emergency related equipment/supplies. Based on the City not deemed as a grant recipient of FEMA funds, the $4,998 in funds to be reimbursed by Weld are not grant funds. City's EPS will spend the $4,998 in 2024. 2. Municipal Court - Constitutional Requirements This request is to add additional funding for Court Appointed Defense Counsel attorneys and interpreters to the Municipal Court's 2024 budget. The Municipal Court's enforcement caseload has increased 21% in 2024 over 2023 case filings, and 33% over case filings in 2022. The number of scheduled interpreter hearings has doubled in 2024 as compared to 2023 (90 in 2023, 201 in 2024 through July 31st of each year). Because of these caseload and hearing increases, the Court needs additional funds to continue to provide these constitutionally required services to Court defendants. Page 88 of 127 FROM: Prior Year Reserves (General Fund) $47,288 FOR: Municipal Court constitutionally required services $47,288 3. Municipal Court - Contractual Obligations This request is to add funding to the Municipal Court's 2024 budget to pay for Jail Services. Larimer County and the City of Fort Collins annually review the intergovernmental agreement (IGA) relating to the City's use of the Larimer County Jail for municipal defendants and bonding services. The agreement includes the costs for bed spaces, bonding services, and in-custody video hearings held three (3) a week to meet new State Law requirements. All of the costs associated with these services and this contract have increased. The Court and the City Attorney's Office work closely with the Larimer County Jail to review and update procedures and apply efficiencies where possible. 4. Fort Collins Police Services (FCPS) has received revenue from various sources. A listing of these items follows: a. $140,691 – Police Miscellaneous Revenue: Police Services receives revenue from the sale of Police reports along with other miscellaneous revenue, like restitution payments, evidence revenue and SWAT training. b. $34,800 – 2023/2024 BATTLE Grant Supplemental (Beat Auto Theft Through Law Enforcement): 'The Property Crimes division of Police Services has been awarded an additional $34,000 on top of the original $18,000 grant to fund additional overtime to help investigate auto theft in Northern Colorado. c. $29,387 - 2024 CRISP Server Storage Upgrade: Police Services needed more server space to allow the CRISP system to function properly. This clean up appropriation is equal to Larimer County's contribution to the server upgrade. d. $29,517 - 2020 JAG Grant Supplemental Award: Larimer County is the Recipient of the JAG grant and at the end of the 3-year grant period in 2023, the county had excess grant funds to award and instead of sending them back to DOJ, the city accepted the funds to offset overtime expenses in 2023 for the Drug Task Force for drug investigations. e. $43,750 - 2024 Police Radio Used Radio Sale: Police Services sold off old radios that are no longer being used and the revenue will be used to purchase new radios. f. $265,534 - Police Reimbursable Overtime: Police Services help schedule security and traffic control for large events. Since these events are staffed by officers outside of their normal duties, officers are paid overtime. The Page 89 of 127 organizational who requested officer presence and then billed for the costs of the officers' overtime. FCPS partners with Larimer County to staff events at The Ranch. Police receives reimbursement from Larimer County for officers’ hours worked at Ranch events. g. $69,684 – 2024 Police School Resource Officers Overtime: Police Services have a contract with Poudre School District to provide Officers on location at a majority of the schools for safety and support. The school district pays Police Services based on a predetermined contract amount and also partially reimbursing for overtime incurred. This request is for the previously billed overtime and anticipated overtime for the remaining year. h. $8,912 - 2024 DUI Enforcement: Proceeds that have been received for DUI enforcement. i. $1,847 - ICAC SFY 2023-24 Grant: Cyber Crimes received a supplemental award of 1,847 to help fund additional travel for training purposes. j. $19,000 - 2024-2025 HVE Grant: The Pollice Traffic Unit was awarded $19,000 to help fund Police overtime expenses in order to monitor DUI compliance on targeted enforcement days. TOTAL APPROPRIATION FROM:$34,800 FROM:$29,387 Page 90 of 127 FOR: Monitor DUI compliance $19,000 Total: $643,122 5. Digital Inclusion - Connexion Discount Program Dedicated revenue from Fort Collins Connexion's PILOT (Payment in Lieu of Taxes) are paid to the General Fund to support the City's Digital Inclusion Program. The Digital Inclusion Program reimburses Connexion for customers enrolled in the income-qualified digital inclusion discount program. Increased enrollment in the program will result in the discount reimbursement to exceed budget at year-end. PILOT revenues to the General Fund are projected to cover the increase in discounted customers and is requested to be appropriated in 2024. 6. Radon Kits Environmental Services sells radon test kits at cost as part of its program to reduce lung-cancer risk from in-home radon exposure. This appropriation recovers kit sales revenue for the purpose of restocking radon test kits annually. 7. Work for Others and Program Fees for Conflict Transformation Works The Conflict Transformation Works (CTW) program earns revenue from 2 main sources: providing workplace mediation for other City Departments and charging fees to the youth who are involved in the conflict programming and resolution. These revenue dollars primarily support the programming costs. We are requesting appropriation of Mediation revenue of $3,000 ($1,462.50 has been received in 2024 and the remaining $1,527.50 is projected to be earned in 2024) and fee revenue of $2,600 ($1,620 has been received in 2024 and the remaining $980 is projected to be earned in 2024). 8. Restorative Justice Grant Award A grant in the amount of $40,428 was awarded from the Colorado Division of Criminal Justice Juvenile Diversion fund for the continued operations of Restorative Justice Services programs that provide a community alternative to the justice system for youth who commit crimes in Fort Collins. No match is required, and it is a reimbursable grant. Grant period is July 1, 2024 - June 30, 2024. This grant helps fund youth referred from the 8th Judicial District Attorney's Office or referred in lieu of a summons to that office. Since 2004, the City has received grant funding for Restorative Justice Services from this grant funding agency. Page 91 of 127 FROM: Unanticipated Revenue (Colorado Division of Criminal Justice Diversion Grant) $40,428 FOR: Restorative Justice Services programs $40,428 9. Land Bank Operational Expenses This request is intended to cover expenses related to the land bank property maintenance needs for 2023. Since expenses vary from year to year, funding is requested annually mid-year to cover these costs. Expenses in 2023 include general maintenance of properties, raw water and sewer expenses, electricity, repairs, and other as applicable. 10. Manufacturing Equipment Use Tax Rebate Finance requests the appropriation of $97,918 to cover the amount due for the 2023 Manufacturing Equipment Use Tax Rebate program as established in Chapter 25, Article II, Division 5, of the Municipal Code. B. CULTURAL SERVICES & FACILITIES FUND 1. Pianos About Town Grants The purpose of this item is to appropriate prior year grant funds from the Bohemian Foundation to Art in Public Places for the Pianos About Town program. Cultural Services received grants in 2017, 2018 and 2020 totaling $128,414 and those funds were never appropriated. This item seeks to ensure that the funding is correctly and legally budgeted and accounted for. 2. Creative District Grant Funding The purpose of this item is to appropriate current and prior year grant and miscellaneous funds for the activities of the Downtown Fort Collins Creative District in the amount of $170,050. Of $185,905 in total funding awarded to the Creative District since it started in 2014, $15,855 has been appropriated. This activity will have a net neutral impact on the City's bottom line and is required by City Charter and will ensure that the funding is correctly and legally budgeted and accounted for. Page 92 of 127 various grants) FROM: Unanticipated Revenue (contributions & donations) $400 FROM: Unanticipated Revenue (State of Colorado CCI Grant $7,000 FOR: Downtown Fort Collins Creative District $170,050 3. Southridge Golf Irrigation Project APP contribution (refer to item G3) Ordinance numbers 100 & 101, to be reviewed and passed by Council on August 20, 2024 should have included a contribution to Art in Public Places in the amount of $5,630. This is based on the amount of $563,000 for the irrigation system replacement at Southridge Golf Course. C. CAPITAL PROJECTS FUND 1. King Soopers 146 -- Midtown Gardens Marketplace Payment-In-Lieu (Drake and College Intersection) As part of the development agreement for King Soopers 146 -- Midtown Gardens Marketplace at the northwest corner of Drake and College, the developer's traffic study shows an impact to the College Avenue and Drake Road intersection that would have required the construction of an eastbound to southbound right turn lane from Drake Road to College Avenue. In-lieu of the developer constructing this right turn lane, the development agreement required the payment of $243,300 to the City as part of the College and Drake Capital Project. The Engineering Department is currently designing the Drake and College intersection improvement. 2. Union on Elizabeth Payment-In-Lieu (W. Elizabeth St.; refer to item K1) The City received a payment in lieu of construction from the Developer of the Union on Elizabeth project. The payment was for required roadway frontage improvements of W. Elizabeth St., per their development agreement. This payment was collected in 2018 and deposited into the Transportation Capital Expansion Fee Fund. D. TRANSPORTATION SERVICES FUND 1. Open Streets Vendor Fees Open Streets is an annual FC Moves event that promotes active modes of transportation and invites folks to experience a street without cars. At Open Streets, Page 93 of 127 participants can expect 1-2 miles of car-free, family-friendly streets. Participants are encouraged to Ride the Route and explore areas called “Activity Hubs”- temporary clusters of activity provided by local businesses and organizations. Vendors for Open Streets are charged $50 if they are a non-profit, $100 if they are a private business. For our Fall 2024 event, we have 38 private businesses and 10 non-profits already signed up as vendors, in addition to 10 food trucks. Our request includes $1,200 in vendor fees from 2023 that were not appropriated (so this would be coming from Transportation Reserves), $4,000 in fees that have been collected to date in 2024, and a projection of another $500 we expect to collect for the remainder of 2024. It is important that we are able to offset our costs with these fees, since our operating budget is not large enough to support this event without incoming revenue. 2. Spin Annual Payment Per the contract between the City and Spin, Spin pays an annual fee of $10,000. These funds can be used at the City's discretion, and typically are used for projects related to the Spin program. In 2024, funds were used to install bike/scooter boxes for better parking options, and to support the Which Wheels Go Where project to update City code regulating what types of micromobility can be used on what facilities. 3. Streets Department Work for Other Program The Planning, Development and Transportation Work for Others program is a self- supported program for all “Work for Others” activities within Streets. Expenses are tracked and billed out to other City departments, Poudre School District, CSU, CDOT, Larimer County, developers and other public agencies. The original budget of $3.2M was an estimate based on prior years budget with allowed growth rate. Due to unanticipated projects and equipment/parts needs, and higher cost of materials, additional funding of $715K is requested to cover projects through the end of 2024. Revenue for performing the work will offset the expense (expense will not be incurred if revenue is not received). 4. Traffic Department Work for Other Program The Planning, Development and Transportation Work for Others program is a self- supported program for all “Work for Others” activities within Traffic. Expenses are tracked and billed out to other City departments, developers and other public agencies. Page 94 of 127 The original budget of $752K was an estimate based on prior years budget with allowed growth rate. Due to unanticipated projects and equipment/parts needs, and higher cost of materials, additional funding of $700K is requested to cover projects through the end of 2024. Revenue for performing the work will offset the expense (expense will not be incurred if revenue is not received). E. SELF INSURANCE FUND 1. Self Insurance Fund Insurance expenditures City insurance premiums and claim settlements are projecting to exceed the 2024 budget within the Self Insurance Fund. 2024 Fund revenues in the amount of $970,239 are available for appropriation to cover excess insurance expenditures. Self Insurance Fund reserves exceed the City's target reserve level and surplus revenues are not needed to contribute to fund balance at year end. F. CONSERVATION TRUST FUND 1. Correct lapsing to non-lapsing ORD 33 Fossil Creek Trail Spur Project Ordinance #33, adopted by Council on March 19, 2024, should have been non-lapsing. This was not clearly indicated in the AIS, so the amount needs to be moved from a lapsing to a non-lapsing business unit since this is for the Fossil Creek Trail Spur Project. Project G. GOLF FUND 1. Golf Course Superintendent Association of America (GCSAA) Grants First Green GCSAA Grants (Golf Course Superintendent Association of America) were awarded in early 2024 to all three golf courses for Poudre School District community outreach. With these grants, we engaged with STEM (Science, Technology, Engineering and Mathematics) students and taught them about how it applies to a golf course. We've received $1,500 for these grants. Page 95 of 127 2. City Park 9 Pump station repairs The City Park 9 Pump Station is showing signs of imminent failure and will need to be replaced prior to the 2025 season in order to maintain the current level of service provided to its patrons. Without this station, irrigation of the course is not possible. In 2024, repairs were made in order to get the station through the end of the season, but if the pump were to fail in 2025, it would lead to subpar course conditions and reductions in rounds revenue. These repairs take around 8-12 weeks and need to be completed prior to the start of the 2025 irrigation season in early March. Total cost of these repairs are estimated at $25,130. 3. Southridge Golf Irrigation Project APP contribution (refer to item B3) Ordinance numbers 100 & 101, to be reviewed and passed by Council on August 20, 2024, should have included a contribution to Art in Public Places in the amount of $5,630. This is based on the amount of $563,000 for the irrigation system replacement at Southridge Golf Course. H. CEMETERIES FUND 1. 149 Grandview repairs The Parks Cemeteries division manages a rental house at 149 Grandview that is in desperate need of repairs due to missed inspections. These repairs include gutter cleaning/repairs, deck repairs/painting, roof repairs, window sealing, and more are estimated at $50,000. 2. Grandview pump station electrical repairs/upgrades In April Cemeteries made necessary electrical repairs/upgrades to the Grandview pump station due to an outdated source that was not up to code and unsafe. The total cost of these repairs is $34,720. 3. Purchase of Backhoe in 2023 invoiced in 2024 Cemeteries was approved for the purchase of a Backhoe during the 23-24 budget cycle (Offer 57.2). PO 9240355 was issued for this purchase 2/23/2023; however, it was not delivered until February 2024. This PO was missed during the PO Carryforward exercise. We are asking for $123,150 to cover these expenses that should have hit in 2023. Page 96 of 127 I. URA PROSPECT SOUTH FUND #801 1. Transfer of Urban Renewal Authority (URA) Fund Equity 801 to Fund 800 The URA districts were consolidated into one fund in 2024, Fund 800. This transfers the residual assigned fund balance in Fund 801 (Prospect South) & Fund 803 (Foothills Mall) to Fund 800. Subsidiaries have been assigned in the new fund structure and funds will be transferred accordingly. J. URA MALL FUND #803 1. Transfer of Urban Renewal Authority (URA) Fund Equity 803 to Fund 800 The URA districts were consolidated into one fund in 2024, Fund 800. This transfers the residual assigned fund balance in 801 (Prospect South) & 803 (Foothills Mall) to fund 800. Subsidiaries have been assigned in the new fund structure and funds will be transferred accordingly. K. TRANSPORTATION CEF FUND 1. Transfer to the Capital Projects Fund for the Union on Elizabeth Payment-In- Lieu (W. Elizabeth St.; refer to item C2) The City received a payment in lieu of construction from the Developer of the Union on Elizabeth project. The payment was for required roadway frontage improvements of W. Elizabeth St., per their development agreement. This payment was collected in 2018 and deposited into the Transportation Capital Expansion Fee Fund. FINANCIAL / ECONOMIC IMPACTS This Ordinance increases total City 2024 appropriations by $6,211,039. Of that amount, this Ordinance increases General Fund 2024 appropriations by $1,093,875, including use of $292,582 in prior year reserves. Funding for the total increase to City appropriations is $3,453,232 from unanticipated revenue, $2,730,877 from prior year reserves and $26,930 from transfers from reserves or previously appropriated funds. Page 97 of 127 The following is a summary of the items requesting prior year reserves: ATTACHMENTS Attachment #1 – Presentation to Council Finance Committee A2 General Fund Muni Ct - Constitutional Requirements $47,288 A3 General Fund Muni Ct - Contractual Obligations 46,059 A4d General Fund Police - 2020 JAG Grant Supplemental Award 29,517 A9 General Fund Land Bank Operational Expenses 71,800 A10 General Fund Manufacturing Equipment Use Tax Rebate 97,918 B1 Cultural Services Fund Pianos About Town Grants 128,414 B2 Cultural Services Fund Creative District Grant Funding 162,650 D1 Transportation Services Fund Open Streets Vendor Fees 1,200 G2 Golf Fund Golf - City Park 9 Pump station repairs 25,130 H1 Cemeteries Fund Cemeteries- 149 Grandview repairs 50,000 H2 Cemeteries Fund Cemeteries - Grandview pump station electrical repairs/upgrades 34,720 H3 Cemeteries Fund Cemeteries - Purchase of Backhoe in 2023 invoiced in 2024 123,150 I1 801-URA - Prospect South TIF District Fund Transfer of URA Fund Equity 801 to Fund 800 1,873,927 J1 803-URA - Mall Fund Transfer of URA Fund Equity 803 to Fund 800 17,804 K1 Transportation CEF Fund Engineering - Union on Elizabeth Payment-In-Lieu (W. Elizabeth St.)21,300 Page 98 of 127 2024 Annual Adjustment Ordinances Council Finance Committee –September 5, 2024 Attachment #1 Page 99 of 127 22024 Annual Adjustment Ordinances The recommended 2024 Annual Adjustment Ordinances are intended to address: •2024 unanticipated revenues (e.g., grants & reimbursements) •Appropriation of unassigned reserves to fund unanticipated expenditures associated with approved 2024 appropriations •Should be routine and non-controversial •Items approved by the ordinance need to be spent within fiscal / calendar year 2024, unless non-lapsing in nature Page 100 of 127 32024 Annual Adjustment Ordinances City-wide Ordinances No. , 2024 increase total City 2024 appropriations by $6,211k •These Ordinances increase General Fund 2024 appropriations by $1,094k, including the use of $293k in prior year reserves. Those reserves are primarily for: o $72K for Land Bank Operational Expenses o $98k for Manufacturing Equipment Use Tax Rebate •Funding for the total City appropriation of $6,211k is: o $3,453k from Unanticipated Revenue o $2,731k from Prior Year Reserves o $27k from Transfers from Reserves or previously appropriated funds Page 101 of 127 4Summary of 2024 Adjustments by Fund Funding (all values in $k)Additional Revenue Prior Year Reserves Transfers TOTAL GRAND TOTAL $3,453 $2,731 $27 $6,211 Page 102 of 127 5Larger Adjustments Item (in $k)General Fund Capital Projects Fund Cultural Services Fund Transportation Services Fund Self- Insurance Fund Other TOTAL Sub-Total $265.5 $243.3 $170.1 $1,415.0 $970.2 $1,891.7 $4,955.9 All Other Recommended Items $828.3 $21.3 $134.0 $15.7 $0.0 $255.8 $1,255.2 TOTAL $1,094 $265 $304 $1,431 $970 $2,148 $6,211 Page 103 of 127 62024 Annual Adjustment Ordinances Guidance Requested: •What questions or feedback does the Council Finance Committee have on the 2024 Annual Adjustment Ordinances? •Does the Council Finance Committee support moving forward with bringing the 2024 Annual Adjustment Ordinances to the full City Council on the Consent Agenda? Page 104 of 127 Page 105 of 127 COUNCIL FINANCE COMMITTEE AGENDA ITEM SUMMARY Staff: Travis Walker, Interim Light & Power Director Cody Snowdon, Electric Engineering Director Date: 9/5/24 SUBJECT FOR DISCUSSION: Light & Power Bond Issuance and Capital Planning EXECUTIVE SUMMARY L&P Management wishes to inform the Council Finance Committee on the use of funding to date and future use of the issuance. GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED (Work session questions should be designed to gather direction from Council without requiring Councilmembers to make a decision.) - Inform Council Finance on use of funds and future capital plans. BACKGROUND/DISCUSSION (details of item – History, current policy, previous Council actions, alternatives or options, costs or benefits, considerations leading to staff conclusions, data and statistics, next steps, etc.) Current and future use of bond issuance: - Transformer purchases for development and supply chain issues- catch up from pandemic - Cable and Transformer Replacements- replacing aging infrastructure to maintain reliability and facilitate electrification - Back-to-front yard conversions to facilitate Beneficial Electrification- enables larger service capacity for heat pumps, electric vehicles - Technology that supports the electric system and the Virtual Power Plant- Advanced Distribution Management System - Limited Equipment Purchases to facilitate cable replacement projects - Substation Planning/system studies to support electrification ATTACHMENTS (numbered Attachment 1, 2, 3,…) Slides attached. Page 106 of 127 Page 107 of 127 2Background $60 Million Total $20 Million to Connexion $40 Million to Light & Power 2023 Light & Power/Connexion Bond Issuance Page 108 of 127 3Bond Utilization Plans Through the continued capital improvement plan, the City team has identified several areas of the Electric System in need of investment. Light & Power •Build a new substation in the northeast part of the City. (System study to verify). •Cover increased costs associated with the purchase of transformers due to supply chain issues. •Additional annexation costs and additional capital replacement work that needs to be addressed throughout the Electric System. Connexion •Complete the Telecommunications Systems Page 109 of 127 4Future Needs System Concerns:Plan Moving Forward: •Being prepared for current and future development projects. •Having stock to replace existing transformers. •Hardening the system to allow for BE and EV deployment across the City. •Load distribution and optimization. •Safety. •Reliability. •Purchasing transformers to get back to Pre-Covid stock numbers. •Increasing Cable Replacement Projects. •Expediting a Rear Lot – Front Lot Conversion Program. •Off-loading circuits to establish a better balance between substations. •Selecting and implementing new software to help response, efficiency, and accuracy. Page 110 of 127 5Current & Future Funding $11 million used so far Transformer Purchases •Total Cost: $11.3M o $9.3M Bond, $2M from yearly budget •Three Phase: 131 QTY • Single Phase: 335 QTY Back Lot to Front Lot Conversion Project • Mulberry Conversion Project o Cost: $1,020,000 o # of Lots: 48 Circuit Replacements • Circuit 514 o Cost: $194,000 Equipment •Line Truck o Cost: $320,100 • Cable Puller o Cost: $383,370 Page 111 of 127 6Ongoing Cable Replacements Will increase to $2M+ per year in future budgets •Maintains system reliability and facilitates loading for Beneficial Electrification. •Replacements based on risk of failure (comprehensive statistical analysis) or based on age. Currently budgeted for $500,000 per year Page 112 of 127 Headline Copy Goes Here 7Transformer Replacements Will increase to $5M+ per year in future budgets •New construction •Replacements of overhead modified to newer submersible style transformers o This style allows for greater capacity, nighttime charging of EVs Currently budgeted for $2 million per year Page 113 of 127 8Back Lot to Front Conversions 1000+ services will need to be moved to front-lot design •Front lot installation is safer for crews and residents. •Allows for 200 amp+ service sizes to allow for beneficial electrification- EV's, heat pumps, etc. $23 million identified in associated costs Page 114 of 127 Substation Load Diversification •Substation Load Diversification distributes loads out of our substations more efficiently. o This results in increased flexibility for the utility. •It also helps us take advantage of current infrastructure in absorbing greater load needs from Beneficial Electrification. o This helps to ensure we are allocating loads properly on our infrastructure, so we aren’t overusing certain areas unnecessarily. 9 Page 115 of 127 10Technology Advanced Distribution Management System: •Allows for participation in Platte River Power Authority/L&P Virtual Power Plant •Provides the technology to control and communicate with distributed energy resources (batteries, EV's, thermostats) •Provides an Outage Management System and allows for better communications to customers during outages. Page 116 of 127 Headline Copy Goes HereCurrent Transformers Quantities 12 Single Phase Transformers •Left Side: Transformer Quantities on hand. o Limited number for transformer failure replacements •Middle: Transformers already reserved for new development that has started construction •Right Side: Quantities if all reserved transformers were placed in the field. o Currently there is a shortage on 50 kVA Submersibles (-38),100 kVA Padmounts (-17), and 167kVA Padmounts. Three-Phase Transformers •Left Side: Transformer Quantities on hand. o Limited number for transformer failure replacements •Middle: Transformers already reserved for new development that has started construction •Right Side: Quantities if all reserved transformers were placed in the field. o Currently we are in the positive, but this does not include any of the projects that are under Development Review and close to construction.Page 118 of 127 Headline Copy Goes HereHistoric & Forecasted Single-Phase Transformers Quantities 13 •Historically: Light and Power has seen a trend of under 10 issued 120/208v, 3- Phase transformers over the last 10 years, excluding 2022 •Forecasted: This includes larger project such as Montava Phase D, Cable Replacement Projects, and Sonders Village. This does not account for all the additional phases within Bloom and Montava or other future developable areas. Page 119 of 127 Headline Copy Goes HereHistoric & Forecasted 3-Phase Transformers Quantities 14 •Historically: Light and Power has seen a trend of under 10 issued 120/208v, 3- Phase transformers over the last 10 years, excluding 2022 •Forecasted: There has been a shifted in development focusing more on multi- family. This has caused for a large increase in 120/208v transformers. Above shows the quantities estimated for project either within Development Review or already approved through the process. Page 120 of 127 Headline Copy Goes HereTransformer Lead Time & Cost Increase 15 •Lead Time: •25 kVA increased from 23 to 104 weeks (2 years) •50 kVA increased from 32 to 104 weeks (2 years) •75 kVA increased from 51 to 104 weeks (2 years) •Increased Transformer Cost: •Actual quotes o 50 kVA increased from $3,283 in 2020 to $16,649 in 2023 (507% ↑) •Estimates based on 50 kVA increases o 25 kVA estimated increase from $2,675 in 2020 to $12,737 in 2023 (476% ↑) o 75 kVA estimated increase from $3,403 in 2020 to 24,340 in 2023 (715% ↑) Page 121 of 127 Headline Copy Goes HereRear Lot to Front Lot Conversions 16 Project Estimates: Benefits: •Crew Safety o Removes them from private property during emergency outages. •Allows customers ability to increase service size. o Currently max is 125-amps o Does not allow PV, EV, or BE Subdivision No. of Lots Estimate Mulberry Conversion 48 1,020,000.00$ Miller Brothers Foothills 9 191,250.00$ Avery Park Phase 2 131 2,783,750.00$ Avery Park Phase 3 119 2,528,750.00$ Sheely Subdivision 34 722,500.00$ South College Heights 224 4,760,000.00$ Indian Hills Subdivision 181 3,846,250.00$ ParkwoodSubdivision 149 3,166,250.00$ Meadow LarkSubdivision 245 5,206,250.00$ Totals:1140 24,225,000.00$ Page 122 of 127 Headline Copy Goes HereRear Lot to Front Lot Conversions 17 •Grain Bin •Modified Overhead within metal enclosure. •Secondary fuses on the side. •Corn Crib o Deep concrete vaults. o Hot fuses on the side o Custom lids in private yards. o Most in conduit that is impassable and will require a bore to install new conduit. •Residential Services o Combined Service Box o Widow Boxes o Only access through the top and all live wires. •Transformers •Extremely hard to find, repair, and replace. Page 123 of 127 Headline Copy Goes HereCable Replacement Project (Distribution Cable) 18Page 124 of 127 Headline Copy Goes HereSubstation Load Diversification 19 Issue: •A couple substations are at maximum capacity •Harmony Substation (500) •Dixon Substation (200) •Linden Substation (700) •A few substations have additional capacity •Portner Substation (900) •Richards Lake Substation (600) •Timberline Substation (300) •Currently there is not an updated study to understand the overall capacity of the system or future growth. Plan: •Install a few circuits from Portner Substation to off-load Harmony and Dixon. •Install a few circuits from Timberline Substation to off-load Harmony,. •Potentially install a few circuits from Timberline to off-load Dixon. •Need for better Technology and current system load study. •Drake Substation: •Circuits (Occupied): 9 •Positions Open: 0 •Double Stacked: 1 •Timberline Substation: •Circuits (Occupied): 9 •Harmony Substation: •Circuits: 27 •Positions Open: (1) •Richard Lake Substation •Circuits: 6 Page 125 of 127 Headline Copy Goes HereSubstation Load Shedding 20Page 126 of 127 Headline Copy Goes HereModified Overhead Transformer Replacement 21 Issue: •Total of 3,478 in the field currently •Total to be replaced •946 – 25 kVA •2,250 – 50 kVA •92 – 75 kVA •30 – 100 kVA •1 – 167 kVA Plan: •Start a replacement program •Help with electrification due to cooling •Help to update our system Page 127 of 127