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HomeMy WebLinkAboutAgenda - Mail Packet - 10/01/2024 - Council Finance Committee Meeting Agenda – October 3, 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 October 3, 2024 4:00 - 6:00 pm CIC Room Zoom Meeting https://zoom.us/j/8140111859 NOTE: Minutes from the September 5, 2024 meeting will be included in the November meeting packet. 1.Audit Results R. Bailey Presentation: 20 mins. Discussion: 25 mins. 2. CCIP Project Options G.Sawyer Presentation: 20 mins. J. Wimmer Discussion: 25 mins. 3. Transfort Appropriation M. Martinez Presentation: 15 mins. K. Zeisel Discussion: 15 mins. Page 1 of 56 Council Finance Committee 2024 Agenda Planning Calendar Revised 9/20/24 ts October 3rd 2024 2023 Audit Results 45 min R Bailey CCIP Project Options 45 min Transfort Appropriation 30 min November 6th 2024 60 min K. Kleer Hold: Foothills Metro District 45 min J. Birks December 5th 2024 SE Community Center 30 min V. Garfield Financial Policy review, incl. 2050 Tax and General Fund 45 min R. Bailey Bloom TCEF Reimbursement 20 min M. Virata Future Topics: E. Mulberry Threshold Analysis CCIP: Affordable Housing Revolving Loan Fund Page 2 of 56 Page 3 of 56 COUNCIL FINANCE COMMITTEE AGENDA ITEM SUMMARY Staff: Randy Bailey, Accounting Director Trevor Nash, CPA, Controller Josh Yde, CPA, Plante & Moran, PLLC Timothy St. Andrew, CPA, Plante & Moran, PLLC Date: October 3, 2024 SUBJECT FOR DISCUSSION Independent Auditors’ Report on 2023 Financial Statements Independent Auditors’ Report on Compliance for Major Federal Programs EXECUTIVE SUMMARY Plante & Moran will be presenting an overview of the Results of the 2023 Financial Statement Audit. This report covers the audit of the basic financial statements and compliance of the City of Fort Collins for year-end December 31, 2023. NOTE: The Annual Comprehensive Financial Report is available in print on request, and accessible online here: https://www.fcgov.com/finance/files/fy23-acfr-final-web-version.pdf?1724173021 GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED Staff seeks input on areas of priority or concern, other than those established in this Report to the City Council, for matters of recordkeeping and/or the City’s internal control environment. Otherwise, there are no specific questions to be answered as this is a 2023 year-end report. BACKGROUND/DISCUSSION In compliance with Government Auditing Standards, the City undergoes an independent external audit on an annual basis. Plante & Moran finalized its financial statement audit and compliance report on June 29, 2024, and the firm is required to report the results of the audit to those charged with governance. Attachment 1 to this agenda item contains the full report, findings of note are summarized below: Identified Deficiencies (Attachment 1, pages 3-5): Other findings/deficiencies identified by the auditors but not rising to the level of a significant deficiency can be found in the Report to the City Council. Staff will provide a written response to the audit findings at a fourth quarter Council Finance Committee meeting. The final 2023 Single Audit report on Compliance for Major Federal Programs is expected to complete by the third week of October and will be provided to Council Finance Committee at that time. ATTACHMENTS 1. Results of the 2022 Financial Statement Audit Page 4 of 56 1 June 29, 2024 To the Honorable Mayor and Members of the City Council City of Fort Collins, Colorado We have audited the financial statements of the City of Fort Collins, Colorado (the “City”) as of and for the year ended December 31, 2023 and have issued our report thereon dated June 29, 2024. Professional standards require that we provide you with the following information related to our audit, which is divided into the following sections: Section I - Required Communications with Those Charged with Governance Section II - Legislative and Informational Items Section I communicates significant matters related to the audit that are, in our professional judgment, relevant to your responsibilities in overseeing the financial reporting process. Section II presents legislative and other general information. These comments are offered in the interest of helping the City in its efforts toward continuous improvement. We would like to take this opportunity to thank the City’s staff for the cooperation and courtesy extended to us during our audit. Their assistance and professionalism are invaluable. This report is intended solely for the use of the City Council and management of the City of Fort Collins, Colorado and is not intended to be and should not be used by anyone other than these specified parties. We welcome any questions you may have regarding the following communications, and we would be willing to discuss these or any other questions that you might have at your convenience. Very truly yours, Plante & Moran, PLLC Timothy St. Andrew, CPA Partner Joshua L. Yde, CPA Principal Page 5 of 56 2 Section I - Required Communications with Those Charged with Governance Our Responsibility Under U.S. Generally Accepted Auditing Standards As stated in our engagement letter dated March 22, 2024, our responsibility, as described by professional standards, is to express an opinion about whether the financial statements prepared by management with your oversight are fairly presented, in all material respects, in conformity with U.S. generally accepted accounting principles. Our audit of the financial statements does not relieve you or management of your responsibilities. Our responsibility is to plan and perform the audit to obtain reasonable, but not absolute, assurance that the financial statements are free of material misstatement. As part of our audit, we considered the internal control of the City. Such considerations were solely for the purpose of determining our audit procedures and not to provide any assurance concerning such internal control. We are responsible for communicating significant matters related to the audit that are, in our professional judgment, relevant to your responsibilities in overseeing the financial reporting process. However, we are not required to design procedures specifically to identify such matters. Our audit of the City’s financial statements has also been conducted in accordance with Government Auditing Standards, issued by the Comptroller General of the United States. Under Government Auditing Standards, we are obligated to communicate certain matters that come to our attention related to our audit to those responsible for the governance of the City, including compliance with certain provisions of laws, regulations, contracts, and grant agreements; certain instances of error or fraud; illegal acts applicable to government agencies; and significant deficiencies in internal control that we identify during our audit. Toward this end, we issued a separate letter dated June 29, 2024 regarding our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements. Planned Scope and Timing of the Audit We performed the audit according to the planned scope and timing previously communicated to you in our letter about planning matters dated May 21, 2024. Significant Audit Findings Qualitative Aspects of Accounting Practices Management is responsible for the selection and use of appropriate accounting policies. In accordance with the terms of our engagement letter, we will advise management about the appropriateness of accounting policies and their application. The significant accounting policies used by the City are described in Note I to the financial statements. As described in Note I, the City changed accounting policies related to the implementation of the following:  GASB Statement No. 96, Subscription-Based Information Technology Arrangements. This statement provides guidance on accounting and financial reporting for subscription-based information technology arrangements. Under this statement, the City is required to recognize a right-of-use subscription asset and corresponding subscription liability. Accordingly, the accounting change has been retrospectively applied to prior periods presented as if the policy had always been used. We noted no transactions entered into by the City during the year for which there is a lack of authoritative guidance or consensus. There are no significant transactions that have been recognized in the financial statements in a different period than when the transaction occurred. Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. Page 6 of 56 3 Section I - Required Communications with Those Charged with Governance (Continued) The most sensitive estimate affecting the financial statements was the net pension liability and associated balances. Management’s estimate is based on discount rates, rate of return, and other assumptions, which are used by an actuary to calculate the net pension liability. We evaluated the key factors and assumptions used to develop the estimate in determining that it is reasonable in relation to the financial statements taken as a whole. The disclosures in the financial statements are neutral, consistent, and clear. Difficulties Encountered in Performing the Audit We encountered no significant difficulties in performing and completing our audit. Disagreements with Management For the purpose of this letter, professional standards define a disagreement with management as a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor’s report. We are pleased to report that no such disagreements arose during the course of our audit. Corrected and Uncorrected Misstatements Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are trivial, and communicate them to the appropriate level of management. The following material misstatements detected as a result of audit procedures were corrected by management.  The City had recorded a right-of-use asset and liability for a software-based information technology arrangement for which the subscription period had not commenced, rather than recording a prepaid item until the subscription commences.  The City had recorded unavailable revenue and receivables related to grants for which expenditures had been incurred but for which the grants had not been formally executed. These unavailable revenue and receivable have been removed.  The Tourism Improvement District is being included in the City’s financial statements as a discretely presented component unit. The attached schedule summarizes uncorrected misstatements of the financial statements. Management has determined that their effects are immaterial, both individually and in the aggregate, to the financial statements taken as a whole. However, uncorrected misstatements or matters underlying those uncorrected misstatements could potentially cause future period financial statements to be materially misstated. Significant Findings or Issues We generally discuss a variety of matters, including the application of accounting principles and auditing standards, business conditions affecting the City, and business plans and strategies that may affect the risks of material misstatement, with management each year prior to our retention as the City’s auditors. However, these discussions occurred in the normal course of our professional relationship, and our responses were not a condition of our retention. Management Representations We have requested certain representations from management that are included in the management representation letter dated June 29, 2024. Page 7 of 56 4 Section I - Required Communications with Those Charged with Governance (Continued) Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a second opinion on certain situations. If a consultation involves application of an accounting principle to the City’s financial statements or a determination of the type of auditor’s opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants. Other Information Included in Annual Reports Our responsibility for other information included in annual reports does not extend beyond the financial statements, and we do not express an opinion or any form of assurance on the other information. However, we read the introductory section, statistical section, and other schedules of the Annual Comprehensive Financial Report, and nothing came to our attention that caused us to believe that such information, or its manner of presentation, is materially misstated or materially inconsistent with the information or manner of its presentation appearing in the financial statements. Page 8 of 56 5 Attachments Client:City of Fort Collins, Colorado Opinion Unit:Governmental Activities Y/E:12/31/2023 Ref. #Description of Misstatement Current Assets Long-term Assets Deferred Outflows of Resources Current Liabilities Long-term Liabilities Deferred Inflows of Resources Equity Revenue Expenses Net Income Statement Impact FACTUAL MISSTATEMENTS: A1 New SBITAs and leases should be booked as other financing sources on fund statements and not as revenues on full accrual statements (5,447,261)$ (5,447,261)$ -$ A2 Entry to correct accumulated depreciation for mechanical equipment purchased but not entered into fixed asset system (1,127,489)$ 1,127,489 (1,127,489) - JUDGMENTAL ADJUSTMENTS:- B1 None - - PROJECTED ADJUSTMENTS: C1 None - -$ - -$ -$ -$ -$ -$ - - - Total -$ (1,127,489)$ -$ -$ -$ -$ -$ (5,447,261)$ (4,319,772)$ (1,127,489)$ D1 The effect of misstatements and classification errors identified would be to increase (decrease) the reported amounts in the financial statement categories identified below: SUMMARY OF UNRECORDED POSSIBLE ADJUSTMENTS PASSED DISCLOSURES AND FINANCIAL STATEMENT PRESENTATION ISSUES: The financial reporting presentation of the Sales and Use Tax Fund is not consistent with GAAP (GASB 54, para. 30). Client:City of Fort Collins, Colorado Opinion Unit:General Fund Y/E:12/31/2023 Ref. # Description of Misstatement Current Assets Long-term Assets Deferred Outflows of Resources Current Liabilities Long-term Liabilities Deferred Inflows of Resources Equity Revenue Expenses Net Income Statement Impact FACTUAL MISSTATEMENTS: A1 New SBITAs and leases should be booked as other financing sources and capital outlay on fund statements 584,781$ 584,781$ -$ - JUDGMENTAL ADJUSTMENTS:- B1 None - - PROJECTED ADJUSTMENTS: C1 None - -$ -$ -$ -$ -$ -$ -$ - - - Total -$ -$ -$ -$ -$ -$ -$ 584,781$ 584,781$ -$ D1 SUMMARY OF UNRECORDED POSSIBLE ADJUSTMENTS The effect of misstatements and classification errors identified would be to increase (decrease) the reported amounts in the financial statement categories identified below: PASSED DISCLOSURES AND FINANCIAL STATEMENT PRESENTATION ISSUES: The financial reporting presentation of the Sales and Use Tax Fund is not consistent with GAAP (GASB 54, para. 30). Client:City of Fort Collins, Colorado Opinion Unit:Aggregate Remaining Fund Info Y/E:12/31/2023 Ref. #Description of Misstatement Current Assets Long-term Assets Deferred Outflows of Resources Current Liabilities Long-term Liabilities Deferred Inflows of Resources Equity Revenue Expenses Net Income Statement Impact FACTUAL MISSTATEMENTS: A1 New SBITAs and leases should be booked as other financing sources on fund statements and not as revenues on full accrual statements (4,038,720)$ (4,038,720)$ -$ - JUDGMENTAL ADJUSTMENTS:- B1 None - - PROJECTED ADJUSTMENTS: C1 None - -$ -$ -$ -$ -$ -$ -$ - - - Total -$ -$ -$ -$ -$ -$ -$ (4,038,720)$ (4,038,720)$ -$ D1 SUMMARY OF UNRECORDED POSSIBLE ADJUSTMENTS The effect of misstatements and classification errors identified would be to increase (decrease) the reported amounts in the financial statement categories identified below: PASSED DISCLOSURES AND FINANCIAL STATEMENT PRESENTATION ISSUES: None Page 9 of 56 6 Section II - Legislative and Informational Items Monitoring Lease, SBITA, and PPP Activity GASB Statements No. 87, Leases; No. 96, Subscription-Based Information Technology Arrangements (SBITAs); and No. 94, Public-Private and Public-Public Partnerships (PPP) and Availability Payment Arrangements, were effective in fiscal years 2022 and 2023. Although significant analyses were performed to determine the applicability of the new standards and record any necessary adjustments, we want to stress the importance of implementing ongoing monitoring procedures over lease, SBITA, and PPP activity. When the City enters into new leases, SBITAs, or PPPs; existing agreements are modified; or other facts and circumstances change, consideration must be given to the impact those changes will have on lease, SBITA, and PPP accounting. In order to do so, the City must ensure there is a process in place to identify and appropriately account for new leases, SBITAs, or PPPs or changes to existing agreements on an ongoing basis or at least at the end of each year. Cybersecurity and Information Technology Controls Cyberattacks are on the rise across the globe, and the cost of these attacks is ever increasing. Because of these attacks, municipalities stand to lose their reputation, the ability to operate efficiently, and proprietary information or assets. Communities potentially can also be subject to financial and legal liabilities. Managing this issue is especially challenging because even a municipality with a highly mature cybersecurity risk management program still has a residual risk that a material cybersecurity breach could occur and not be detected in a timely manner. We understand that the technology department continues to monitor and evaluate this risk, which are critical best practices. Additionally, periodic assessment of the system in order to verify that the control environment is working as intended is a key part of measuring associated business risk. We encourage administration and those charged with governance to work with the technology team on this very important topic. If we can be of assistance in the process, we would be happy to do so. OMB Proposed Revisions to the Uniform Guidance In October 2023, the Office of Management and Budget (OMB) posted proposed revisions for the Uniform Guidance for federal grants and agreements. The proposed guidance clarifies the applicability of requirements and terminology and includes some relaxation and clarification of certain requirements that required prior approval from federal regulators. A few key proposed changes include the following:  Increase the audit threshold to $1 million from $750,000  Increase the de minimis indirect cost rate from 10 percent to 15 percent  Require the schedule of expenditures of federal awards (SEFA) to identify recipient of federal award for audits that cover multiple recipients The proposed changes are included in more detail within the federal register at https://www.federalregister .gov/documents/2023/10/05/2023-21078/guidance-for-grants-and-agreements. Plante & Moran, PLLC will continue to monitor any changes to the Uniform Guidance, and we encourage the City to monitor developments in this area. Other New Guidance Upcoming Accounting Standards Requiring Preparation We actively monitor new Governmental Accounting Standards Board (GASB) standards and due process documents and provide periodic updates to help you understand how the latest financial reporting developments will impact the City. In addition to the summaries below and to stay up to date, Plante & Moran, PLLC issues a biannual GASB accounting standard update. The most recent update and a link to previous fall and spring updates are available here. Page 10 of 56 7 Section II - Legislative and Informational Items (Continued) GASB Statement No. 99 - Omnibus 2022 This new accounting pronouncement has various effective dates. This statement addresses accounting and financial reporting requirements for specific issues related to financial guarantees, derivative instruments, leases, public-public and public-private partnerships (PPPs), subscription-based information technology arrangements (SBITAs), the transition from the London Interbank Offered Rate (LIBOR), the Supplemental Nutrition Assistance Program (SNAP), nonmonetary transactions, pledges of future revenue, the focus of government-wide financial statements, and terminology. GASB Statement No. 100 - Accounting Changes and Error Corrections This new accounting pronouncement will be effective for fiscal years ending June 30, 2024 and after. This statement enhances the accounting and financial reporting requirements for accounting changes and error corrections. GASB Statement No. 101 - Compensated Absences This new accounting pronouncement will be effective for fiscal years ending December 31, 2024 and after. The statement requires all compensated absences be reported under a new unified model that provides recognition and measurement guidance for all compensated absences that meet certain criteria. This is a major shift from the prior standards that provided different recognition and measurement guidance for vacation leave versus sick leave. Under the new standard, all compensated absences (with some exceptions like parental leave and military leave) that meet three criteria are to be recognized (accrued). The three criteria are (1) the absence accumulates, (2) the absence is attributed to services already performed, and (3) the absence is more likely than not to be either paid or settled through other means. A few of the more significant changes from prior guidance include the elimination of specific recognition criteria for sick leave (GASB 16’s termination payment method and vesting method) in lieu of standard recognition criteria for all types of compensated absences that meet the criteria. In addition, the prior standards used the “probable criteria” as a measurement stick for recognition; GASB 101 lowers that threshold to more likely than not. More likely than not means a likelihood of more than 50 percent. Because GASB 101 does not prescribe the manner in which these leave liabilities are estimated once the criteria are met, organizations will have significant latitude in how these estimates are determined. Because of this, there may be additional reporting and additional disaggregation of historical employee leave usage information that may be required in order to come up with an accurate estimate of these liabilities. We strongly suggest organizations start thinking about these changes now, brainstorm estimation methodologies, and begin gathering the necessary information in order to successfully adopt this new standard. GASB Statement No. 102 - Certain Risk Disclosures This new accounting pronouncement will be effective for fiscal years ending June 30, 2025 and after. This statement requires a government to assess whether a concentration or constraint makes the primary government or other reporting units that report a liability for revenue debt vulnerable to the risk of a substantial impact. It also requires a government to assess whether an event or events associated with a concentration or constraint that could cause the substantial impact have occurred, have begun to occur, or are more likely than not to begin to occur within 12 months of the date of the financial statements are issued. If certain criteria are met for a concentration or constraint, disclosures are required in the notes to the financial statements. GASB Statement No. 103 - Financial Reporting Model Improvements This new accounting pronouncement will be effective for fiscal years ending June 30, 2026 and after. This statement establishes new accounting and financial reporting requirements, or modifies existing requirements, related to the following: management’s discussion and analysis; unusual or infrequent items; presentation of the proprietary fund statement of revenue, expenses, and changes in fund net position; information about major component units in basic financial statements; budgetary comparison information; and financial trends information in the statistical section. Page 11 of 56 8 Section II - Legislative and Informational Items (Continued) Significant GASB Proposals Worth Watching The Revenue and Expense Recognition project aims to develop a comprehensive accounting and financial reporting model for transactions that result in revenue and expenses. The GASB has issued a preliminary views document that proposes a new categorization framework that replaces the exchange/nonexchange transaction notion with a four-step categorization process for classifying a transaction. In addition to this new framework, the proposal also addresses recognition and measurement of revenue and expense transactions. The exposure draft for this project is expected sometime in 2025. Plante & Moran, PLLC has spent significant time digesting this new proposed standard and recently testified to the GASB about our feedback. We strongly encourage the City to monitor developments with this standard, as the potential impact is quite broad. 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Page 12 of 56 City of Fort CollinsDecember 31, 2023Audit Presentation to City Council Finance Committee 1Page 13 of 56 Agenda Financial Statement Audit Required Post-Audit Communications Federal Single Audit 2Page 14 of 56 Financial Statement Audit •Unmodified opinion •New accounting standard implemented – GASB 96: Subscription-Based Information Technology Arrangements •Audit results 3Page 15 of 56 Required Post-Audit Communications •Significant Audit Findings •No transactions entered into by the City lacking authoritative guidance •No significant transactions that have been recognized in a different period than when the transaction occurred •No difficulties encountered in performing the audit •No disagreements with management •Summary of Unrecorded Possible Adjustments includes adjustments related to subscription-based IT arrangements, accumulated depreciation, and year-end activity related to the Tourism Improvement District 4Page 16 of 56 Required Post-Audit Communications •Significant Audit Findings •Material Weaknesses The City reported deferred inflows of resources and a receivable for several Federal Transit Authority (FTA) grants under which pre-award spending had begun prior to the end of the reporting period but grant agreements had not been executed The Tourism Improvement District had been improperly excluded from the financial statements 5Page 17 of 56 Federal Single Audit 6 •Federal expenditures of $29.4 million •Three major programs tested in 2023 o ALN 14.218 – Community Development Block Grants o ALN 20.205 – Highway Planning and Construction o ALN 21.027 – Coronavirus State and Local Fiscal Recovery Funds •Unmodified opinions expected •Federal award findings – material weakness related to reporting of expenditures on the SEFA prior to executed grant agreements Page 18 of 56 Thank you Timothy.StAndrew@plantemoran.com - 313.496.8542 Josh.Yde@plantemoran.com - 734.302.6921 7Page 19 of 56 Page 20 of 56 COUNCIL FINANCE COMMITTEE AGENDA ITEM SUMMARY Staff: Travis Storin, Chief Financial Officer Ginny Sawyer, Project Manager Joe Wimmer, Financial Analyst Date: October 3, 2024 SUBJECT FOR DISCUSSION Capital Improvement Quarter-Cent Tax Renewal EXECUTIVE SUMMARY The purpose of this item is to update the Council Finance Committee (CFC) on continued development into building a package of projects for the capital tax renewal. This renewal is targeting the November 2025 election. GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED 1. What questions do committee members have regarding the current projects and/or timeline? 2. Are there projects the committee would recommend to remove or add? BACKGROUND/DISCUSSION The current Community Capital Improvement Program (CCIP) tax will expire on December 31, 2025. Staff is currently working to create a package to offer voters as a renewal in November 2025 for a tax that would run from January 1, 2026, to December 31, 2035. To date staff has: • Demonstrated the traditional use of this tax being implemented at approximately 50% transportation-related projects and 50% identified capital projects. • Shared lessons learned from previous tax measures. • Confirmed the desire that package projects serve a diversity of needs throughout the community and focus on projects identified and vetted by the public through planning processes. • Compiled and vetted potential projects submitted by departments. Timeline to date has included Council touch points at a February 2024 work session, March 2024 CFC, April 2024 work session, and July 2024 CFC. Page 21 of 56 Proposed Council timeline going forward includes: - October 3, 2024 CFC (scheduled) - November 12, 2024 Council work session (scheduled) - January/February 2025 CFC (to be scheduled) - May work session (to be scheduled) - July work session (to be scheduled) - July/August 2025 ballot referral (to be scheduled) This schedule also anticipates public outreach and engagement starting in early 2025. Potential Projects The proposed project list to date is attached. The list represents project costs far over what the quarter-cent tax would collect. Continued refinement on the list will include prioritization of projects through Council direction and public input, identifying scalable projects, and cost refinement. This list includes transportation-related projects and newly identified projects. A few specific projects and details of note:  Following the last CFC meeting, staff took feedback to look at which funding sources and which projects truly align in the parks and recreation area. Council also recently had a work session specifically focused on the use of 2050 tax. Based on these discussions, the Mulberry pool project remains in the 2026-35 capital sales tax list ($10M) with an understanding that multiple funding sources will ultimately be needed.  Staff has continued to vet the potential use of a $10M Affordable Housing Fund as the seed money for an on-going revolving loan fund. The overarching goal would be to create sustainable affordable housing funding and provide an ability to go “narrow and deep” with funding as opposed to “wide and shallow.” There are still many details to be determined and based on work and conversations to date it seems feasible to: - Issue a sales tax revenue bond against the $10M affordable housing fund dedication. - Bond proceeds of approximately $7.5M would be available in year one to loan to an affordable housing developer(s) at a favorable below-the-market interest rate. - Developer would pay back loan creating money for future loans and projects.  Further discussions with Operation Services, Culture Services, and the Museum of Discovery have potentially narrowed the scope of the downtown trolley building improvements into two specific activities: 1. Identify and complete necessary improvements to make the downtown trolley building “ready” and feasible for a yet to be determined use; and 2. Find temporary storage for the Museum artifacts to allow for downtown trolley barn improvements and the inventory and auditing of the objects. There is still work and refinement to be done on this project. Page 22 of 56  Additional project list changes since July CFC: o The following projects are no longer listed: - Lincoln Center Kitchen Renovation - Community Shared Commercial Kitchen - LaPorte Avenue Re-design o The following projects have been added - Timberline Recycling Center Improvements Naming Having common nomenclature on tax measures can be beneficial during public outreach and throughout the term of the tax when describing funding sources. Previous programs have included: Designing Tomorrow Today Project RECAP Choices 95 Building Community Choice Building on Basics And the current program: Community Capital Improvement Program (CCIP) Considerations for the renewal are listed below. Capital by Design Capital Improvement Tax Quarter Cent Capital ATTACHMENTS 1. Draft 2026-2035 Capital Tax Project List 2. 2016-2025 CCIP Tax Project Map Page 23 of 56 Headline Copy Goes Here Travis Storin -Chief Financial Officer Ginny Sawyer -Lead Policy and Project Manager Joe Wimmer –Senior Financial Analyst Capital Sales Tax ¼-cent Renewal Council Finance Committee Oct 3, 2024 Page 24 of 56 Headline Copy Goes Here EPIC, Natural Areas, & Choices 95Project RECAPDesigning Tomorrow Today Capital Quarter-Cent History 2 1973-1980 •Lincoln Center •Mulberry Pool •Fire Station #4 •City Hall Building •Main Library •Parks Acquisition •Sewer to Andersonville/Alta Vista •Street Improvements 1985-1997 •Choices 95 •Senior Center •Eastside Neighborhood Park •Southwest Community Park Land Acquisition •Indoor Pool Renovations •Fire Station #10 Land Acquisition 1984-1989 •Major Street Improvements •Sidewalk Pedestrian Access Ramps •Indoor Pool Renovations •Open Space and Trails Acquisitions & Construction •Bikeways on College, Timberline, and Horsetooth •PFA Equipment Replacement & Land Acquisition Page 25 of 56 Headline Copy Goes Here Building on BasicsBuilding Community Choice Capital Quarter-Cent History 3 1997-2005 •Police Building Land •EPIC Second Ice Sheet •Northside Aztlan Community Center •Pavement Management Program •Gardens on Spring Creek •Fossil Creek Community Park 2016-2025 •Poudre River Whitewater Park •Willow Street Improvements •Carnegie Building Renovation •Nature in the City Projects •Lincoln Avenue Bridge •Gardens on Spring Creek Visitor's Center Expansion •Affordable Housing Fund 2006-2015 •Fort Collins Museum of Discovery •Senior Center Expansion •Bicycle Program Plan Implementation •North College Avenue Improvements •Pedestrian Plan and ADA Improvements CCIP Page 26 of 56 Headline Copy Goes Here 4 Renewal Timeline 2024 Q1 2025 Q2-Q3 2025 Q4 2025 ›On November ballot›Begin Public Outreach and Engagement ›Refinement of all projects and Programs ›To-be-scheduled: ›February CFC ›April Work Session ›Start to finalize total package ›Continue outreach ›Ballot Referral in late July/early August ›To-be-scheduled: ›June Work Session ›July regular meeting ›Begin package Development ›February Work Session ›March CFC ›April Work Session ›July CFC ›October CFC ›November Work Session Page 27 of 56 Headline Copy Goes Here 5 Capital Tax – Lessons Learned Helpful to… -Advance projects from Master Plans that have been informed by community input. -Ensure items put forth represent community desires and priorities across broad geography, types of services, and personal passions. -Utilize community engagement to help prioritize projects and programming. Have learned to… -Adjust for inflation and add on years of operation and maintenance. -Balance flexibility and specificity to ensure voters get what the ballot promised while allowing flexibility to take advantage of unforeseen opportunities (grants, development, etc.) -Avoid singular projects that would absorb a majority of the funding. -Solidify a plan far enough in advance of referral to ensure adequate budgeting analysis and community awareness. The last two measures passed with 80% voter approval Page 28 of 56 Headline Copy Goes Here 6 Capital Tax – Successful Project Package Asset Management & Master Plans Council Priorities Community Appeal Page 29 of 56 Headline Copy Goes Here 8 Totals & Summary ¼ Cent Tax Revenue •$11M annual revenue (2024) •$110M total revenue 2026-2035 Proposed Projects •$166M total project proposals to-date (2024) Culture 7% Parks & Recreation 30% Public Safety 1% Transportation/ Active Modes 52% Environment 4% Housing 6% Chart includes all proposed projects ($166M) Page 31 of 56 Headline Copy Goes Here 9 Projects of Note Mulberry Pool o Remaining in package at $10M for capital tax share o Recognize pool replacement will require multiple funding sources Housing o Continuing to explore revolving loan fund (RLF) specifics o Stakeholders support $10M as RLF or as standard program Downtown Trolley Building & Museum o Building has been identified in the Downtown Masterplan as asset for community centered use o Currently houses object artifact collection and other storage o Need both storage and renovation funding Page 32 of 56 Headline Copy Goes Here 10 Projects In Progress Dog Parks o Highly rated in Recreation Masterplan o Need to determine best funding/timing/and locations Bike Park (Early Phase) o Bike Park feasibility study to be completed in April/May 2025 timeframe o $5M not likely to cover full cost River Projects o Looking at Lee Martinez and Legacy Park area to College o Focus on bank stabilization and access for neighborhoods north of the river Page 33 of 56 Headline Copy Goes Here 11 Additions and Removals Additions: Timberline Recycling Center Improvements Removed: Lincoln Center Kitchen Shared Community Kitchen LaPorte Avenue Redesign Page 34 of 56 Headline Copy Goes Here 12 Capital Tax 2025-2026 Naming - Brainstorm Capital By Design Capital Improvement Tax Quarter Cent Capital Current: Community Capital Improvement Program Page 35 of 56 Headline Copy Goes HereNext Steps 13 •November 12 Work Session •Continue to refine projects and programs including: •Identifying scalability and impacts •Determine final recommended streetscape projects Page 36 of 56 Headline Copy Goes HereDirection Sought 14 What questions do committee members have regarding current proposed projects and/or timeline? 01 Are there projects the committee recommends to remove or add?02 Page 37 of 56 1 Draft 2026-2035 ¼-cent Capital Tax Project List Council Finance Committee October 3rd, 2024 Arterial Intersection Improvement Program: $10M Vision Zero Plan This program 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 Bicycle Infrastructure and Overpass/Underpass Program: $20M Active Modes Plan This program 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 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. Pedestrian Sidewalk Program: $16M Active Modes Plan This program 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 (Linden to Lincoln): $5.2M 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 and could be well timed to leverage with redevelopment in the area. 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. Page 39 of 56 2 Jefferson Street (Linden to Mountain): $7.3M 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. Transfort Bus Stop Upgrades and Bus Replacement: $6M Transfort has utilized dedicated funding from this program to improve over 80 bus stops and to leverage grant funding that will allow improvements at more than 100 additional stops and shelters. Improvements include ensuring ADA accessibility and amenities such as benches and trash cans. To date, 220 stops have seen ADA upgrades as a result of CCIP funding. Transfort also leverages program dollars for bus replacement. 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. Transfort Maintenance Facility: $16M This 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. 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 $80M. 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 Renovation and Facility Expansion: $2.6M This project funds enhancements at the Farm at Lee Martinez Park by expanding inclusive outdoor recreation opportunities including a shelter space and additional education features. Mulberry Pool Replacement and Expansion: $10M Mulberry Pool will reach end of life in the next 10-years. This funding will help with a future replacement. Currently, Mulberry 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. Page 40 of 56 3 Pickleball Complex: $4M This funding will be utilized and leveraged to provide additional pickleball courts. A pickleball complex feasibility study is underway to determine if an existing community park site can offer additional courts to close the gap in the short-term while waiting for future community parks to be built. Building a new 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 improve existing dog parks. There is a current deficit in the central west and central east sections of town. The 2021 Parks & Recreation Master Plan calls for four additional dog parks by 2040. Bike Park (Early Phase): $5M This funding would be used to implement first phase of a bike park based on feedback gathered in a future bike park feasibility study. Children’s Garden and Infrastructure Upgrades: $5.5M This funding would allow for a major update of the Children's Garden which was the first garden to open to the public 20 years ago. The full scope of the Children's Garden construction project includes the garden itself, entry and access modifications for families and school groups, event support infrastructure, drainage issues, art elements, and interpretive signage. Police Renovation for Mental Health Response Team: $450K The current detention area is underutilized due to regulatory restrictions and with renovation could provide much needed office and meeting space for the Mental Health Response Team. Downtown Trolley Building Renovation $6.8M This funding would be utilized to stabilize the historic downtown trolley building. This building currently houses the Museum object artifacts and other miscellaneous storage. Stabilizing the building for future use is a first step towards maintaining and opening the space for greater public use. Funding in this offer includes temporary storage of the artifacts. In 2017, the Downtown Master Plan identified the historic Downtown Trolley Building as high potential for a community-centered use. Downtown River Projects – Legacy Park to River’s Edge Natural Area: $8M Improvements to the downtown reaches of The Cache la Poudre River – the sections from Shields Street to Mulberry ‐were planned in the 2014 Downtown River Plan. This funding is proposed to improve access to the Poudre River for neighborhoods north of the river. Improved connectivity could include Salyer Natural Area, Legacy Park, and River’s Edge Natural Area. 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. Page 41 of 56 4 Timberline Recycle Center (TRC): $2.2M CCIP funding is also requested to implement identified site improvements to make the TRC more accessible to all, to improve safety for visitors and staff, and to meet the increased demand for recycling services in our community. Elements included in this project: • ADA accessibility through ramps and walkways as well as decreased distance from bins to vehicles. • Expanded access to recycling bins to meet the increasing number of customers and amount of material recycled at the site. Downtown Parks Shop: $7.9M This funding allows for early work towards implementing the Civic Center Master plan. The current downtown Parks Shop 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. Page 42 of 56 CCIP-FUNDED CAPITAL PROJECTS ACROSS FORT COLLINS 2016-2025 S L e m a y A v e S C o l l e g e A v e S T a f t H i l l R d In t e r s t a t e 2 5 S C o l l e g e A v e W Harmony Rd E Trilby Rd E County Rd 32 Carpenter Rd W Trilby Rd E Harmony Rd W Horsetooth Rd E Horsetooth Rd W Drake Rd E Drake Rd W Prospect Rd E Prospect Rd W Mulberry St W Elizabeth St W Vine Dr E Vine Dr E Mulberry St Mountain Vista Dr Richards Lake Rd E Douglas Rd U.S. 287 B Hwy 2 8 7 Laporte Ave W Mountain Ave Rive r s i d e A v e S O v e r l a n d T r a i l N O v e r l a n d T r a i l N T a f t H i l l R d S T a f t H i l l R d N S h i e l d s S t S L e m a y A v e N L e m a y A v e S T i m b e r l i n e R d S T i m b e r l i n e R d Tu r n b e r r y R d S C o l l e g e A v e St r a u s s C a b i n R d Zi e g l e r R d S S h i e l d s S t S S h i e l d s S t Timberline and Mail Creek Ditch underpass Vine and Lemay underpass Siphon overpass (construction in 2024) Harmony and Power Trail underpass (construction in 2025) BIKE/PED GRADE-SEPARATED CROSSINGS: CAPITAL PROJECTS: Carnegie Building Renovation Club Tico Renovation Downtown Poudre River Enhancements Whitewater Park Gardens on Spring Creek Visitors Center Lincoln Avenue Bridge Lincoln Center Upgrades Linden Street Renovation Lee Martinez Park Improvements Southeast Community Center Willow Street Improvements Growth Management Area Columbia & Lemay bike/ped crossing (half signal) Elizabeth & Ponderosa bike/ped crossing (rectangular rapid flashing beacons) Magnolia & Shields bike/ped crossing (half signal) City Park & Mulberry intersection (full signal and two-way raised separated bike lanes) Laporte Ave. raised separated bike lanes (Fishback to Sunset) BICYCLE INFRASTRUCTURE IMPROVEMENTS: PEDESTRIAN PROGRAM IMPROVEMENTS: Drake Road – Harvard to Stover (north and south sides) Prospect Road – Remington to Stover (north and south sides) Prospect Road – Taft Hill to Overland (north side; with final gap to be completed in 2024) Harmony Road – various north and south gaps between College and Strauss Cabin College and Prospect College and Horsetooth College and Trilby ARTERIAL INTERSECTION IMPROVEMENTS: Page 43 of 56 COUNCIL FINANCE COMMITTEE AGENDA ITEM SUMMARY Staff: Monica Martinez Date: October 3rd, 2024 SUBJECT FOR DISCUSSION Transfort Supplemental Appropriation EXECUTIVE SUMMARY This supplemental appropriation request addresses a clean-up of grant budget projections to align with confirmed award amounts as well as an anticipated need for additional budget in order to continue current Transfort service levels through year end. GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED • Does Council Finance Committee support an off-cycle appropriation of federal grant revenue? BACKGROUND/DISCUSSION Yearly Transfort Reconciliation Process The BFO cycle requires that revenue be projected up to three years in advance of actual receipt of revenue. For Transfort, this means that yearly FTA grants such as the main 5307 operational grant and the paratransit 5310 grant, are projected using estimates based on prior year amounts, anticipated trends, or anticipated changes to the federal funding bill. Confirmed award amounts for each grant then typically become available in the spring of the award year. Due to this timing, Transfort will require a yearly reconciliation process that appropriates confirmed award amounts for grants used to reimburse that City fiscal year’s expenses. This supplemental appropriation will update award amounts for 5307 and 5310 grant amounts. Notably, the amount to be appropriated for the FTA’s FY23 5307 represents the entirety of the grant. This grant had previously been anticipated for use during the 2025/2026 BFO cycle but will now be used for the 2024 City fiscal year. This places Transfort on a healthy reimbursement track wherein one 5307 operational grant is used per year and that FTA grant year is lagged one year behind the City fiscal year requesting reimbursement. Transfort Budget Update Transfort’s 2024 operational budget is currently appropriated to $22.3M. This includes the $1.2M in 2050 Tax that was approved during the 2024 Mini-BFO process. At this time, it is anticipated that to end the year at current service levels Transfort will need an additional appropriation of $1.3M. This additional appropriation will be funded by approximately $900k in grant revenue that is available due to award amounts increasing significantly since initial budget estimates. The remaining $400k will be funded by unanticipated grant revenue from prior year reimbursements. The main drivers in expense increases are listed below: Page 44 of 56 1) $250k: 2023 hourly bus operator conversions and the addition of a transit supervisor position. These increases were made once staff identified the availability of grant funding in both 2023 and 2024 due to low budget projections. 2) $350k: increases to vehicle repair services costs including and $85k repair on a bus damaged three years ago 3) $200k: snow removal costs due to the loss of the advertising contract 4) $400k: bus-stop-to-bus-stop due to continued discontinued service on routes 11 and 12 5) $100k: contingency It is anticipated that the 2050 tax portion of Transfort’s budget will see savings of approximately $.6M. This is because the appropriated budgets represented a full year of expense while the necessary updates to salaries were not effective until July of 2024. As the mini-BFO offers outlined specific costs intended for the 2050 tax, staff intends for unused funds to drop back into 2050 reserves instead of allowing them to fund other Transfort operational expenses. ATTACHMENTS Page 45 of 56 Headline Copy Goes Here PDT FP&A Manager Monica Martinez Transfort Supplemental Appropriation 09/15/2024 Page 46 of 56 Headline Copy Goes Here 2 Direction Sought Does Council Finance Committee support the off-cycle supplemental appropriation of Transfort grant revenue? Page 47 of 56 Headline Copy Goes Here 3 Transfort’s 2024 Budget This supplemental appropriation will Appropriate FTA FY23 5307 grant revenue Increase Transfort’s 2024 operational budget by ~$1.3M Appropriate updated award amounts for discretionary FTA grants Page 48 of 56 Headline Copy Goes Here 4 Yearly FTA Grant Alignment – Updated Process •BFO: projects grant revenue amounts out by two years City •Spring of the award year releases final award amounts FTA •Appropriates final award amount the year the grant is used City Page 49 of 56 Headline Copy Goes Here 5 Transfort’s 2024 Budget Revised Forecast FY22 5307 Operational •Used for 2023 expenses FY21 ARPA 5307 •Used for 2022 Expenses FY24 5307 Paratransit Capital •2025 Expenses FY23 5307 Operational •2025 Operational Expenses FY22 5307 Operational •$3.1M FY21 ARPA 5307 •$9k FY24 5307 Paratransit Capital •$400k Original Budget Page 50 of 56 Headline Copy Goes Here 6 Transfort 2024 Operational Expenses Expense Type Projected Overage 2023 Hourly Operator Conversions & TS Addition*$250k Vehicle Repair Svcs $350k Snow Removal $200k Bus stop to bus stop $400k Contingency $100k *In 2023 staff identified that grant revenue had been under-projected for 2023 & 2024. A portion of the resulting available funds was then used to support critical changes to Transfort’s operational staffing.Page 51 of 56 Headline Copy Goes Here 7 Transfort Finance System FTA Operational Grants – City Fiscal Year 2024 Updated Available Grant Amount: $4,432,091 Current Appropriated Grant Budget Amount: $3,513,723 Additional Available Grant Amount:$909,368 Page 52 of 56 Headline Copy Goes Here 8 Supplemental Appropriation Funding Total Supplemental Appropriation Request: $1.3M •$909k from under-projected grant fund amounts •$400k from unanticipated grant revenue (reserves, prior year grant revenue) Page 53 of 56 Headline Copy Goes Here 9 Transfort’s 2024 Budget This supplemental appropriation will Appropriate all FTA FY23 5307 Increase Transfort’s 2024 operational budget by ~$1.3M Appropriate updated award amounts for discretionary FTA grants Page 54 of 56 Headline Copy Goes Here 10 Direction Sought Does Council Finance Committee support the off-cycle supplemental appropriation of Transfort grant revenue? 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