HomeMy WebLinkAboutAgenda - Mail Packet - 12/03/2024 - Council Finance Committee Agenda – December 5, 2024
Agenda
Council Finance Committee
December 5, 2024 - 4:00 - 6:00 pm
City Hall - CIC Conf. Room
In person with Remote Participation Available
https://zoom.us/j/8140111859
Upon request, the City of Fort Collins will provide language access services for individuals who have limited English
proficiency, or auxiliary aids and services for individuals with disabilities, to access City services, programs and
activities. Contact 970.221.6515 (V/TDD: Dial 711 for Relay Colorado) for assistance. Please provide advance notice.
Requests for interpretation at a meeting should be made by noon the day before.
A solicitud, la Ciudad de Fort Collins proporcionará servicios de acceso a idiomas para personas que no dominan
el idioma inglés, o ayudas y servicios auxiliares para personas con discapacidad, para que puedan acceder a los
servicios, programas y actividades de la Ciudad. Para asistencia, llame al 970.221.6515 (V/TDD: Marque 711 para
Relay Colorado). Por favor proporcione aviso previo cuando sea posible. Las solicitudes de interpretación en una
reunión deben realizarse antes del mediodía del día anterior.
A) Call Meeting to Order
B) Roll Call
C) Approval of Minutes
D) SE Community Center LeeAnn Williams
Victoria Garfield Shaw
30 minutes (15 mins. presentation / 15 mins. discussion)
E) Financial Policy Review Randy Bailey
(including 2025 Tax & General Fund)
45 minutes (20 mins. presentation / 25 mins. discussion)
F) Other Business
G) Adjournment
Next Scheduled Committee Meeting: January 2, 2025
Council Finance Committee
2024 / 2025 Agenda Planning Calendar
Revised 11/22/24 ck
December 5th 2024
SE Community Center 30 min V. Garfield
Financial Policy Review, Including 2050 Tax & General Fund 45 min R. Bailey
2025 Agenda Planning Calendar
January 2nd 2025
Bloom TCEF Reimbursement 20 min M. Virata
Foothills Metro District 45 min J. Birks
West Elizabeth Matching Funds 15 min S. Smith
Future Topics:
E. Mulberry Threshold Analysis
CCIP: Affordable Housing Revolving Loan Fund (February)
CCIP Updates (February)
2023 Audit Report – Staff Correction Plan
Fleet Management Policies and Practices
CCIP Updates (April)
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
November 6, 2024
4:00 – 5:30 pm
Council Attendees: Mayor Arndt, Emily Francis, Kelly Ohlson
Staff: Kelly DiMartino, Tyler Marr, Travis Storin, Denzel Maxwell, Teresa Roche,
Jenny Lopez Filkins, Ginny Sawyer, Terri Runyan, Max Valadez, Joe Wimmer,
Nina Bodenhamer, Drew Brooks, Monica Martinez,
Kaley Zeisel, Brad Buckman, Dana Hornkohl, Dean Klingner, Victoria Shaw, Jill
Wuertz, Kai Kleer, Patti Millo
Randy Bailey, Adam Halvorson, Trevor Nash, Garrison Dam, Jordan Granath,
Logan Bailor,
Renee Reeves, Dave Lenz, Jen Poznanovic, Jo Cech, Zack Mozer Carolyn Koontz
Matt Robenalt, Kristy Klenk
Other: Kevin Jones, Chamber
Meeting called to order at 4:00 pm
Approval of minutes from the September 5, 2024, and October 3, 3024 Council Finance Committee meetings.
Motion made to approve by Kelly Ohlson and seconded by Emily Francis. Approved by roll call.
A. DDA Line of Credit Renewal
Matt Robenalt, Executive Director, Downtown Development Authority
Kristy Klenk, Finance & HR Manager, Downtown Development Authority
Adam Halvorson, Sr. Analyst, Treasury, City of Fort Collins
Downtown Development Authority (“DDA”) Line of Credit (“LOC”) Finance for 2025-2030
EXECUTIVE SUMMARY
The current LOC established in 2012 and renewed in 2018 by the City on behalf of the DDA is scheduled to
expire at the end of 2024. The City and DDA began taking steps earlier this year to renew this debt instrument
with First National Bank for another six-year term, as it will be needed by the DDA to execute its projects and
programs in budget year 2025.
GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED
Does Council Finance recommend bringing an IGA forward to accommodate the renewal of the bank authorized
Line of Credit to be used by the DDA and satisfy compliance with C.R.S. §31-25-807(3)(a)(II)?
BACKGROUND/DISCUSSION
Background
The DDA Act (C.R.S. 31-25-801, as amended) has inherent processes that require the City and the DDA to work
collaboratively to achieve the purpose of the legislation. Among these expected collaborations is the process for
financing DDA activities. In 2012, Council adopted Ordinance No. 089, 2012 and the City and DDA established a
line of credit (LOC) with First National Bank to satisfy the statutory requirement to generate proceeds from debt
to be used by the DDA to execute its projects and programs and implement the DDA’s Plan of Development.
The tax increment revenues created each year by the private investment that has occurred downtown is used to
pay off the debt.
In 2018, Council adopted Ordinance NO. 066, 2018 to renew the LOC for another six-year term from 2019 –
2024. The current LOC is scheduled to expire at the end of 2024. The DDA and City began taking steps earlier
this year to renew this debt instrument with First National Bank for another six-year term, as it will be needed
by the DDA to execute its projects and programs beginning in budget year 2025.
Additionally, in 2012, Council approved Resolution 2012-081 and the DDA and City created an
intergovernmental agreement (“IGA”) that established the process by which the two organizations would:
• initiate requests for a draw from the LOC
• verify tax increment revenue cash available to repay the debt
• account for the loan proceeds released from the LOC, and
• execute repayment with tax increment within 7 days of the initial LOC draw
The Second IGA Governing a Line of Credit for Financing Downtown Development Authority Projects and
Programs was approved by City Council by Resolution 2018-046 to reflect the terms of the renewed LOC in 2018.
What is New for 2024?
In 2023, SB23-175 was signed into law, and this amendment to the DDA Act provides a new hybridized option
for meeting the statutory requirements for financing debt of downtown development authorities. This
amendment makes it possible for development authorities to obtain their own debt, and have it paid off with
tax increment revenues provided there is an IGA between the municipality and development authority
authorizing this arrangement. Prior to the amendment, the statute required that all debt issued for the benefit
of the development authority be exclusively the debt of the municipality.
Many of the downtown development authorities in the State use the same line of credit financing approach as
the Fort Collins DDA and City of Fort Collins. Because the approach has some steps that amount to busy-work
for municipal finance staff, there was wide support to create an option to transfer much of the administrative
burden to development authorities by allowing them to obtain their own debt, which is what SB23-175 now
offers.
Since this was a new concept enacted into the DDA Act, the DDA and City Finance staff have conferred with
appropriate legal counsel, and based on that began working together to discuss a new line of credit that will be
obtained by the DDA from a bank, and also the process steps that would be embodied in an IGA to achieve
compliance with the DDA Act and clearly define procedural steps between the City, DDA and bank. A flow chart
defining these procedural steps is provided in the last slide of Attachment 1 Slide Presentation.
It is planned that the intergovernmental agreement, and the line of credit loan promissory note from First
National Bank of Omaha will be presented to the DDA Board in February 2025 for approval, and the
intergovernmental agreement then advanced to the City Council for approval shortly thereafter. This schedule
for adoption is several months ahead of when the 2025 tax increment revenues are released by the County
Treasurer that would be used to pay off draws on the DDA's new line of credit, and this timing is supportive of
the DDA's cashflow timing needs for projects it will be funding in 2025.
Benefits and Impacts of the LOC
When the DDA and City began using the LOC financing approach in 2012, it provided benefits and positive impacts
over the much more expensive forms of financing such as issuance of traditional revenue bonds or private-
placement financing with banks and other investors. Using the LOC approach to finance DDA projects and
programs results in a significantly shorter period of time in which the debt incurs interest. This means that more
funding is available to invest directly into projects and programs in the downtown, and less is spent on finance
fees and interest expenses.
DDA staff analyzed the savings from this approach used between 2012-2024 against that of the other forms of
traditional financing used by the City and DDA in the past. The financial savings is significant. Since 2012, the
LOC total interest and financing fees for $46,671,468 of principal debt was $17,098. In contrast, the total
interest and finance fees for the City/DDA financing approach that traditionally used certificates of participation
and private placement bonds for $15,279,063 of principal debt was $3,412,065.
Other benefits and positive impacts using the LOC include:
• Strong expression of fiduciary stewardship of public funds
• Recognition that investment of tax increment funds, derived from property tax assessments of overlapping
tax entities, creates positive growth in assessed value and thereby increased the value of the property tax
base for all overlapping entities. (82% of the DDA tax increment comes from tax entities other than the City
such as Larimer County and Poudre School District)
• Funding partnerships of the DDA undertaken with the City and private sector have no cost of capital charges
assessed to the projects
• Every draw made on the LOC is paid off within seven (7) days, which means no effect at the end of the
calendar year on the City’s fund balance or City Comprehensive Annual Financial Report
Next Steps & Key Dates
The DDA has met with First National Bank of Omaha and is coordinating with the bank to provide the promissory
note and final term sheet.
The following key dates outline the remaining steps in the schedule to implement the LOC renewal:
DDA Board – Approval of IGA & LOC Promissory Note 2/13/2025
City Council – Approval of IGA 3/4/2025
Discussion / Next Steps;
Mayor Arndt; yes - Makes complete sense – don’t know why there would be any objections.
Kelly Ohlson; would love to see a list of different projects for each year; Capital Asset Maintenance obligations,
multi- year – round dollars, not details
B. Licensing, Permitting & Code Enforcement (LPCE) Project Funding
Monica Martinez., FP&A Manager PDT
Kevin Wilkins, Chief Information Officer
Kai Kleer
EXECUTIVE SUMMARY
An appropriation ordinance is being brought for your consideration by Planning, Development, and
to implement and modernize a new licensing, permitting, and code enforcement system.
existing funding for this project was originally allocated as part of the 2023/2024 Budget Cycle's 'Digital
n almost two-year procurement process, the City has selected Tyler Technologies (Tyler) as the ‘Vendor of
and is currently in contract negotiation. This appropriation request will provide the anticipated
temporary staffing backfill and organizational change
approximately $3,7M. This includes:
• Software as a Service 19-month Implementation
• Software as a Service two-year Subscription Costs
• City Staff Backfill for two-year Implementation
• Sole-Source Third Party Professional Implementation Services
• Change Management
during the first quarter of 2025 and be fully
Fall 2026.
experience, and save staff and customer time.
critical infrastructure and risk
authorizing an exception to the competitive
STAFF RECOMMENDATION
Staff recommend that the Council Finance Committee provide a recommendation of support to City Council.
BACKGROUND / DISCUSSION
Summary of Original Budget Offer
In FY2023/2024, City Council approved a $2.1 million enhancement offer to initiate the transformation of
current permitting, licensing, and development review processes and software. The City's legacy platform,
Accela, will reach end-of-life service of the on-premises system December 2025 and requires either a significant
upgrade to a cloud-based version of their system or conversion to a new system.
The consequences of not modernizing include IT security risks, falling behind increasing demands from
businesses and residents, inability to integrate new business processes, and increased operational inefficiencies.
This initiative aims to modernize business processes and adopt a more sustainable software ecosystem through
simplification, standardization, and a customer self-service approach.
This is envisioned as a transformational project that will set the stage for the next 10-20 years on how the City
provides services to our business and development community. Key outcomes cited from the 2023/2024 Budget,
InfoTech Strategy Roadmap (Attachment A), and the Discovery Phase of Change Management (Attachment B)
include:
• Streamlined, Standardized Processes: Simplify, consolidate, and automate licenses and permits to
eliminate redundancies and improve staff efficiency.
• Self-Service for All: Empower residents and businesses with low-touch, self-service options, advancing
community digital equity.
• Smart Digital Workflows: Transition from paper to digital, ensuring accessible, sustainable, and
simplified services.
• Scalability & Speed: Accelerate processing times to meet rising demands consistently across all service
areas.
• Unified, Cohesive Platform: Implement a citywide, integrated system that enhances collaboration and
responsiveness.
• Modernized Legacy Systems: Shift to a future-ready solution that supports a more accessible, equitable,
and efficient digital government, adopting leading industry solutions.
Actions Since BFO Approval
Following the City Council's support of the FY2023/2024 enhancement offer, City staff initiated the procurement
process by conducting a three-day Development Review, Licensing, Permitting, and Inspections Digital Strategy
Workshop which was facilitated by Info-Tech Research Group. The workshop results were used to create a
business model, identify current challenges, document the rationale for issuing an RFP, and provide key
recommendations (Attachment A).
Based on this work, TMG Consulting and City staff developed and issued an RFP in January 2024. During the first
half of 2024, City staff evaluated eleven RFP respondents, narrowing respondents down to three finalists. These
finalists were invited to demonstrate their products over a three-week period.
After product demonstrations, staff scored each vendor and selected an initial Vendor of Choice (Accela).
However, after a subsequent week-long workshop, months of scope of work development, and clarifications
regarding staffing and implementation timelines, the costs of the original proposal escalated significantly while
the modernization objectives embodied by the vision and goals of the project were greatly reduced. These
changes virtually eliminated Accela’s competitive advantage around pricing and ease of implementation causing
the City to re-engage in conversation with the second place Vendor of Choice (Tyler Technologies).
Discussions with the second-place Vendor of Choice (Tyler Technologies) were conducted under an abbreviated
60-day methodology facilitated by TMG Consulting, where a core team of City staff worked with Tyler to clarify
costs for implementation, scope of work, subscriptions, optional products, and refine staffing needs for the
project. The result of these conversations resulted in a competitive package that provided full alignment with
the City’s requirements of a future system.
Today, staff have been able to reach a firm estimation of all costs associated with the full scope of the solution,
including data migration, software interfaces, business process mapping and modernization, organizational
change management, staff backfill, implementation professional services, as well as the direct implementation
of the selected product. The funds being requested for this appropriation are described in greater detail below
and are summarized in table format at the end of this section.
FY23/24 Enhancement Funding and Original Assumptions ($2.1M)
The original budget development of this offer was based on feedback from the industry solution providers who
examined the scope of the City’s vision for change and provided rough cost estimates as guidance for writing the
offer. Although the original $2.1 million could adequately cover implementation costs, the original budget offer
lacked considering other components that would need funding to mitigate project risks. These components can
be characterized as lessons learned from initial unsuccessful procurement and implementation of the CIS
Utilities project as well as risk and mitigation strategies that were also highlighted by the July 2023 Info-Tech
Research Group Report (Attachment A). These additional cost considerations are meant to ensure project
success by pairing the implementation with organizational change management, adequate internal staff backfill,
and Tyler specific third-party professional services.
Strategy Roadmap & Procurement Process ($475K)
The City of Fort Collins contracted with TMG who conducted six of seven phases of the procurement process.
The following diagram illustrates the three distinct parts (strategy, selection, and contracting) of the process and
describes TMG’s methodology within each phase of the procurement process:
Staff have worked with TMG to complete 6 of 7 phases of the project with the final phase being conducted
internally, utilizing Tyler-specific implementation specialists to review the final contract package. This approach is
project.
Today, Phase 7 is largely complete and hinges on the project's ability to secure additional funds as requested
from City Council.
Vendor of Choice Software as a Service Implementation ($2M)
Tyler’s implementation services include approximately 9,200 hours of professional services for a period of 19-
months. Primary resources allocated to the project include the following roles and responsibilities:
• Project Manager: Oversees the project, manages budget and schedule, coordinates resources, and is the
primary point of contact.
• Consultant: A team of 4-6 resources that will develop and configure the product. This team completes all
Tyler related tasks assigned by the project manager, provides support during go-live, and facilitates training.
• Change Management Lead: The Vendor’s change management expert will work to integrate with the City’s
organizational change management resources. The City is operating under the following assumptions:
o The City will continue contracting with Prosci who will lead and develop a multi-phased plan to
implement changes successfully.
o The City will need to resource an internal Change Management Lead (.50 FTE) who will execute the
plan and act as a liaison between Prosci, City, and Tyler’s team.
Software Licensing ($1.34M or $670K annually)
Tyler’s software offer includes the configuration and go-live of the following components:
• Enterprise Permitting & Licensing Core Software
o Enterprise Permitting & Licensing Foundation: Acts as a central hub to the different suites GIS, civic
access, dashboards, cashiering, all configuration tools, report toolkit, and standard reports.
o Business Management Suite: Provides functionality such as electronic license requests, automated
routing, and responses. The suite manages licensing types, including business contractors,
environmental, alcohol, and marijuana. It provides tools for revenue collection, business tax
management, and regulated services. The suite will be able to provide GIS capabilities to track
business locations and visualize business distribution within the city.
o Community Development Suite: Platform that manages all aspects of the City's planning, permitting,
and development processes. Integrates with the Business Management Suite for streamlined
operation i.e., centralized property information, centralized contacts, and centralized Dashboards
across the suites.
o Rental Management Module
• Enterprise Permitting & Licensing Extensions (extensions that add functionality to core software)
o eReviews: This is required to facilitate the City's electronic plan review process. This component of
the system manages the routing, distribution, versioning, and integration into either DigEplan or
Bluebeam.
o Decision Engine: A digital permit guide that seamlessly integrates with Tyler’s Enterprise Permitting
& Licensing software to navigate applicants through the development entitlement, permitting, and
licensing application and approval processes. Through a simple interface, applicants can navigate
through a series of questions or selections to arrive at the appropriate permitting or licensing task,
whether it’s applying, renewing, paying, requesting a meeting or inspection, or just providing more
information.
o Enterprise Permitting & Licensing Civic Access Payment Toolkit: This allows the City to take online
payments through Civic Access.
o Enterprise Permitting & Licensing Document Management API Connector: This allows the City to
plug our existing Laserfiche application into the overall solution so that documents can be passed
into our permanent records when completed.
o Enterprise API Connector w/ Selectron: Allows contractors to call in and schedule appointments
from an automated system.
o SSRS Reporting Access: This is access to the Vendor’s data dictionary + data redundancy for inhouse
reporting needs.
Selected Optional Components
• Enterprise Permitting & Licensing Extension
o Citizen Connect – Community Development: Allows the community to monitor development
locations and trends through an interactive map and set up notifications if a project is created within
a customizable search area. This tool is intended to enhance transparency into the development
review and permitting process for everyone in the community.
• Integrated Plan Review
o DigEplan Pro: Allows all reviewers to use a centralized toolset for the collaboration, review, and
markup of plans. This tool is seen as a ‘game changer’ by City Building Services staff due to the
system’s ability to allow slip-sheeting, overlay from previous rounds of review, and ability to select
multiple sheets from separate rounds of review to create one final ‘approval’ plan set that can be
stamped and signed by the plan review department.
o These tools will streamline communication between staff and applicants, enable customers to
independently update their project plans without having to reprocess entire plan sets, and
significantly reduce the review process and project backlogs for building permit plan review and
development review staff.
Organizational Change Management ($386K)
The City of Fort Collins has not made organizational change management (OCM) standard practice in project
implementation and therefore was not reflected in the original appropriation request for this project. Through
the challenges of the Utilities Customer Information System project and additional work during strategy
development for this project, the City recognizes the importance of this methodology in ensuring successful
outcomes
OCM is a structured approach to helping individuals, teams, and organizations adopt change successfully. It
involves planning, communicating, engaging stakeholders, providing training, and monitoring progress to
minimize disruption and maximize benefits. The goals of OCM are to understand the impacts and scope of
change, ensure adoption and usage, and increase employee understanding and engagement throughout the
project. OCM increases the likelihood of successful outcomes.
Enterprise OCM is being proposed as part of the baseline offering from the Vendor, however, it does not provide
the level of support and resourcing that is anticipated for this project. As part of this agenda item, staff are
recommending a .5 FTE Change Management Lead (internal City resource), and services provided by Prosci for a
Change Advisor and team.
Below is a diagram of how OCM will be resourced and anticipated responsibilities of each party.
Third Party Professional Services ($864K)
The City of Fort Collins issued an RFP for professional implementation services to migrate from Accela and
implement Tyler’s system. While three vendors responded to the RFP, upon thorough evaluation, it was
determined that none possessed the requisite expertise to successfully execute the complex migration and
implementation process. Through extensive research and vendor identification efforts, staff have identified a
single qualified vendor, Park Consulting Group, that possesses the necessary skills, experience, and resources to
deliver the project to the City’s satisfaction. Based on this assessment, staff recommend proceeding with a sole
source contract with Park Consulting Group to ensure the timely and effective implementation of the new
licensing, permitting, and code enforcement system.
Hiring a third party project implementer with specific expertise with migrations from Accela to Tyler
Technologies will backfill gaps in system knowledge that City staff does not currently possess, ensure that the
project stays on schedule and within scope, configuration, follow’s industry best practices, and hold the Tyler
Technologies accountable with the technical deliverables of the project, with the project’s configuration, hold
the Tyler Technologies responsible, mitigate risks, prevent scope creep, and ensure timely delivery of the
system.
Staff assume a 20% contingency on this item bringing the requested total to $864k and is noted in the table
below.
City Staff Backfill for 19-month Implementation Period ($721K)
A key finding of the Info-Tech Report highlights the importance of resourcing and staff bandwidth. Insufficiently
addressing this aspect of the project poses a significant risk to its success.
The proposed backfill strategy aims to provide departments with the necessary resources to support their
anticipated project involvement. A contractual entry-level position is suggested to help alleviate the day-to-day
workload of functional team members from Code Compliance, Permitting, Development Review, and other
departments as assigned. Several other leadership positions will be needed from internal City Staff which
include a part time project manager, communications lead and change management lead.
•Will train City of Fort Collins staff on change management.
•Develop toolsets for sponsor messaging, process change
tracking, resistance management, and after-action review.
Prosci Change
Management
Advisor
•Provide toolsets
•Provide project support for 3-days during project kick-off
•1-day a week check-in with project team
•Provide support for 3-days during project 'go-live'
Vendor Change
Management Lead
•Act as a liasion between the vendor change management
lead and City.
City of Fort Collins
Change
Management Lead
In addition, Human Resources has estimated "Supplement Pay" for departments that will have short-term
involvement in the project beyond their regular duties. As part of internal backfill, staff is also requesting
funding for 24-months as a contingency should timelines slip during implementation.
Summarized Estimated Costs
Item Implementation Cost
Strategy Roadmap & Procurement Process
Tyler Technologies SaaS Implementation Professional Services
Software Licensing through Implementation
City backfill for the two-year implementation period (4 FTE)
• Business Support I
• Business Support I
• Building Technician I
• Development Review Coordinator I
$539,532*
City, Change Management Lead .50 FTE $67,500 *
City, Communications Lead .25 FTE $47,000*
City, Project Manager .50 FTE $67,000*
Third Party Implementation Professional Services
• Project Manager
• Integration Developer
• Training Manager
• Test Manager
•
$864,000*
• Phase 1 - $110,200
• Phase 2 – $106,000
•
$386,640*
$5,836,624
$2,140,200
$3,696,424
*Items assume a 20% contingency. For FTE items, contingency is represented by assuming a 24-month
implementation period as compared to the 19- month planned implementation period.
CITY FINANCIAL IMPACTS
The financial impact of implementing a new software system involves both upfront costs over the 19-month
implementation period and subsequent ongoing expenses. Initial investments include the software license,
professional services, and internal staffing backfill/support. After the first two years, there will be fixed annual
subscription costs for a 3-year period which will then increase at an anticipated 3% rate annually starting year 6.
Implementation Period Suggested Funding
Previously Appropriated Funds Amount
(reserve generated by
prior system fee)
Total Previously Appropriated Funds $2,140,000
Suggested Funds to be Appropriated Amount
(CEF Administrative Allowance)
Total Funds to be Appropriated $3,696,424
Total Estimated Project Cost $5,836,624,000
*These sources are comprised of multiple funding streams that fall within the category. The exact breakdown
within categories is still to be decided.
Tyler Technologies also offers managed professional services for on-going system support that will require
additional consideration from City IT Leadership. This is an optional cost and could mitigate the need for hiring
additional personnel for ongoing maintenance and servicing of the software.
System Funding for Ongoing Subscription Costs
The system will require a yearly subscription cost which is estimated to be approximately $700k for the first five
years. At the conclusion of five years, a yearly inflationary rate of 3% will be applied. At this time, subscription
cost is estimated to $700K as there are Tyler support add-ons that could increase prices by approximately $200k.
The necessity of these add-ons continues to be evaluated. The ongoing subscription cost is anticipated to be
managed in one or two ways:
1. Reinstatement of a 1.5% fee on all eligible transactions for system payment. There is historical
precedence for this fee as it has been previously assessed to pay for the existing legacy system. The
exact percentage of the fee could be adjusted to meet and not exceed cost recovery. Certain items such
as capital expansion fees would not be subject to the fee due to concerns surrounding the legality of
capital expansion fee usage.
2. A model that assigns cost based on system usage. The two implementation years will allow for further
development of a suggested methodology.
In both scenarios, it is anticipated that at a minimum the General Fund, Utilities Funds, & the Transportation
Fund would contribute to ongoing subscription costs.
As part of the scope of the project, the system is anticipated to fold in departments who have had a limited use
case under the existing legacy system. The scope identified providing functionality to the following user groups:
• Environmental Services
• Community Development & Neighborhood Services
• Poudre Fire Authority
• Engineering
• Utilities
• City Clerk’s Office
• City Manager’s Office
• Natural Areas
• Parks
• Information Technology
• External Agencies
Tyler Technologies will bring expertise and experience to the project. The documented business processes will
serve as the basis for testing, training and future process impartments.
PUBLIC OUTREACH
Over the years, the City has conducted numerous surveys centered around external customer experience with
the development review process and most recently, the evaluation of our Current State of Customer Service that
is being led by the City Manager’s Office.
Development Review Public Outreach
The Development Review Group has conducted numerous surveys that have consistently identified pain points
in our development review process. These surveys revealed that staff struggled to keep pace with the
administrative demands of reviewing development projects, and inefficient tools further contributed to lower-
than-expected satisfaction within the development community.
Since the introduction of Development Review Coordinators in 2018, a significant administrative gap has been
filled. However, several key pain points exist, which include:
• Excessive Review Cycles and Subjective Reviews Respondents frequently cited too many rounds of review,
overly lengthy processes.
• Ineffective Meetings: Poorly organized and unproductive meetings wasted valuable time and resources.
• Need for a Simplified Process for Small Projects: Respondents suggested streamlining the review process for
smaller projects to reduce administrative burdens.
• Limited Electronic Options: A lack of robust online tools hindered efficiency and user experience.
This project is anticipated to help re-engineer processes, streamline tasks, and introduce more automated
workflows to significantly reduce the administrative burden on staff, and free up time to focus on critical
discussions with our community. We also anticipate greater emphasis on self-serve workflows and tools for
customers which will save time, walk customers through the process, and identify the status of their project
without exchanging emails or calls with staff. Below is a high-level summary of the most recent surveys and
studies completed.
Current State of Customer Service
The current state of customer service report gathered information from 43 participants from departments such
as finance, utilities, community services, police services, planning, development, and transportation. The
implementation of this project aims to align the City’s objectives by modernizing our technology, providing a
standardized level of service to customers, unifying the customer experience, and breaking down departmental
silos that impede collaboration.
Future Communications Plan
As part of this appropriation request, staff proposes to fund a communication lead who will develop a
communications plan that will include a public outreach component. A significant shift in how customers interact
with the City is anticipated, requiring a clear and concise communication strategy to inform residents and
businesses about these changes. This strategy will include a variety of channels, such as the City's website, social
media, email newsletters, and traditional media outlets. Additionally, public meetings and training workshops may
be held to provide opportunities for direct feedback and input from the community.
DISCUSSION / NEXT STEPS:
Kelly Ohlson; long overdue (slide 15 – see above)
I would have guessed it to be further over in the red - why isn’t is further over in the red?
Denzel Maxwell; that is for the degree of impact to impacted departments within the city. This project is very
high priority for the city. The is the impact of implementing the project mostly internally. Backfill needs, extra
capacity needed for training. Externally - how are we educating the public to use the new tool. That bar
signifies organizational impact.
Travis Storin; magnitude of change
Tyler Marr: we all know that we have a lot of debt on these huge systems - this is the next most important one
after the Utilities CIS – that is why we are here with this one.
Kelly Ohlson; are we using some of the HVAC funds for this?
Travis Storin; not so much - that money was really deployed. The change in minimum fund balance within the
General Fund that enabled this - the policy change on the emergency balance. There are a degree of other
funds that had available reserves and didn’t have an offer against them in BFO.
Kelly Ohlson; why didn’t we get this into the Budget Process we just completed?
Travis Storin; the recommended budget was coming together in July. At that point, we were still upstream on
the procurement process. The finer points on the appropriation in each of the services in the grid were far from
certain at that time. We had indications that the cost would be in this magnitude.
Kelly Ohlson; (slide 12 - see below)
Average of 4 FTEs per month for 18 months. Are those new hires or existing resources and what happens to
them at the end of 18 months? If they are contract, that is how that work but wanted to confirm.
Patti Milio; the 4 FTEs are SMEs specifically; most are tied into the IT Department and are currently working on
the Accela Project. One is very knowledgeable on the intricacies of the existing system and will help bridge that
gap to the new system - she would have to be back backfilled
Kelly Ohlson; to confirm, they are new FTEs but some of them may currently be there so we would backfill their
current jobs – with contractors – so, not permanent additional FTEs.
Kelly Ohlson; what does Natural Areas do that is so complicated? I don’t see the Golf Fund there
Travis Storin; the rationale for all of these funds is based on the user base and activity within this system.
Staff has been working alongside Natural Areas, they are a beneficiary of the system in the use tax that we
collect on permits, but not necessarily in the user base. I think what you will see at First Reading is that fund
being proposed from the Transportation Fund as that makes more sense. I don’t know that we have Natural
Areas folks actually logging into the system to perform their work.
Kelly Ohlson; this is cutting it close – these things come to us and have to be acted on asap.
Things change and appropriately and I know you want to get it right or we would have had it sooner.
The company we are hiring – is this their first time doing this?
Kevin Wilkins; in our specific scenario where we are going from a legacy version of Accela on premise to this -
Tyler Tech has completed 56 of this type of project. In our selection of an implementation partner, we need to
make sure they have had that level of experience as well.
Mayor Arndt; I know we need this and that it is very complicated and that the current scenario is not acceptable.
Emily Francis; a question on the funding stack – Do we still have ARPA funds?
Travis Storin; as we get closer to the end of this year, we will look at unspent funds in some of our programs.
These are programs that have essentially wrapped up and still have surplus budget within those programs.
In this case, it was a technical assistance program around building and development which, we felt maintained
the character of the deployment here.
Emily Francis; when do all ARPA funds have to be spent by?
Travis Storin; we have until the end of this year for what is called obligation. Then, once obligated, we have until
the end of 2026. We are going to be cognizant that the political landscape could potentially put some of that
money at risk.
Emily Francis; will Council receive an update on that?
Travis Storin; we publish a quarterly ARPA progress report. I don’t recall if that goes to Council, but we will
make sure you get the report.
Emily Francis; for the sole source – why didn’t they respond to the RFP?
Denzel Maxwell; when we didn’t receive any responses back that would meet the need – it was recommended
that we go sole source.
Emily Francis; I hope it goes more smoothly than last time
Kelly DiMartino; we are confident it will because of the incredible amount of thought and work that has gone
info getting us to this point. Applying lessons learned from the past. It won’t be perfect
Mayor Arndt; modernizing
Recreation Appropriation Request Memo
Emily Francis; Will we get more information on what it is going to from a program level? Would it be is possible
be fully fund the access fund?
Travis Storin; we will make sure there is more information in there as we get to a more granular level. I will also
ask staff to include whether there is an optionality around what will be addressed with the access fund within
the AIS.
HR Memo
Kelly Ohlson; Medical / Dental/ Life Insurance benefits
Voluntary life insurance as well as Police and Fire Pension Association insurance is over by $300K as a direct
result of additional subscribers that we didn’t anticipate. Don’t’ we anticipate additional subscribers?
What are the higher than anticipated administrative costs? I would like to get this information in a memo
for First Reading.
Travis Storin; part of the reason you are seeing this is the way that we balance funds as we get to year end.
Funds have a code risk if they go over budget, we violate municipal code. We will include the requested
information. In terms of the revenue availability, the budget assumes our headcount and that is the primary
driver of the premiums that fund collects, but it has to make assumptions around which coverage people enroll
in and the number of people enrolling (employee + spouse + children). There is a story of drivers we can include
in the AIS.
Meeting adjourned
COUNCIL FINANCE COMMITTEE
AGENDA ITEM SUMMARY
Staff: Dean Klingner, Community Services Director
LeAnn Williams, Recreation Director
Victoria Shaw, Finance Senior Manager, Community Services
Date: December 5th, 2024
SUBJECT FOR DISCUSSION Southeast Community Center Status, Update and Next Steps
EXECUTIVE SUMMARY
The Southeast Community Center, a City of Fort Collins and Poudre River Public Library
District (PRPLD) partnership, is in the early stages of design. The project has a scope and
funding history that dates back to the 2015 voter approval of the Community Capital
Improvement Tax which included a Community Center with an Outdoor Pool.
In the intervening years, additional developments have made expanded opportunities possible.
These include completion of multiple studies and plans, a partnership with PRPLD, and a
potential funding partnership with Poudre School District.
Over the next several months, the design team will be developing funding and scoping options to
inform City Council, the PSD School Board, and the Library District Board decisions.
This conversation is intended to summarize the background, update project status and
developments, and to propose a framework for future decision making by the full Council.
GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED
What questions do Committee members have about the background, status and upcoming steps
for this project?
What questions do Committee members have regarding partnerships with PRPLD and PSD?
What questions do Committee members have about potential project inclusions and funding
options?
BACKGROUND/DISCUSSION
This project includes over 11 years of project development from the completion of a 2013
Feasibility study through today. Due to the volume of background information, this Agenda Item
Summary presents the background in summary, not complete detail.
• In October of 2013 the City completed the “Fort Collins Southeast Community
Recreation & Arts Center – Summary of Needs and Development Plan.” This study
provides valuable information about the origination of the idea of a facility in SE Fort
Collins, but is now old enough that it does not reflect current community needs.
• In January of 2021 City Council adopted “ReCreate, Parks and Recreation Master Plan.”
This document is the “north star” for guiding parks and recreation policy and investment
and highlights the need and plan for a Southeast Community Center at a high level.
• In 2022, at Council request, the City completed a more detailed aquatics study to
understand the demand, options and opportunities for public aquatics facilities in Fort
Collins.
• In 2022, City Council held two Work Sessions and a Council Finance Committee
discussing this project. No decisions were made, and as a result of these meetings, City
staff continued to work with the Library and PSD as potential partners and began to
consider a larger facility than required in the ballot language that could be phased or
funded through a future funding source.
• In November of 2023, the 2050 1/2-cent sales tax passed with the following ballot
language: “50% for the replacement, upgrade, maintenance and accessibility of parks
facilities and for the replacement and construction of indoor and outdoor recreation
and pool facilities.” (Bolding added for clarity for this discussion)
• The 2023-24 City Budget included funds for project development and design. City staff
has been actively working on this phase of the project since the 1st quarter of 2024.
Progress to date has included hiring of an Owners Representative, a Design Firm /
Architect, and a General Contractor.
ATTACHMENTS (numbered Attachment 1, 2, 3,…)
Headline Copy Goes Here
Dean Klingner, Community Services
Director
LeAnn Williams, Director, Recreation
Council Finance
Committee --
Southeast
Community Center
Status and Process
Update
12-05-24
Headline Copy Goes HereSoutheast Community Center (SECC)–History, Status, Planning
4
Timeline: How We Got Here
CCIP
Ballot
passed
April 7,
2015
Aquatics
Council
Work
Session
March 23,
2022
Council
Work
Sessions
Aug,Nov
2022
Today
Dec 5,
2024
City
Council
requests
aquatics
study
during
BFO work
session
October 5,
2021
ReCreate:
Parks &
Recreation
Master
Plan
adopted
January
2021
March – November 2022
Conversations with PSD and
PRPLD
Owners
Rep
Selection
April
2024
Project
Charter
Development
April 2024
2023
IGA Development and Adoption
Aquatics
Study
Jan
2022
2050
P&R Tax
passes
Nov 7,
2023
Design &
Const.
Team
Selection
Fall
2024
PSD
Bond
Nov
2024
Headline Copy Goes Here
3
Southeast Community Center (SECC) timeline
Community Planning, Project Initiation
Project Scope & Budget Development (Conceptual Design)
Project Design Construction Opening & Ongoing Operations
•2013
Feasibility
Study
•2015 ¼-cent
Ballot
•ReCreate
(2021)
•Aquatics
Study (2021)
•2050 tax
*We are here*
Upcoming:
Jan 28th WS
Feb 25th WS
•Council
finalizes
scope,
budget,
timeline.
•Q1/Q2 2025
Headline Copy Goes Here
4
Partnerships – Poudre School District
Poudre School District Status, Framework, Next Steps
•IGA creates framework for lap lane partnerships
•Outlines 4 key steps:
(1) City identifies eligible funding (CCIP and 2050 Tax)
(2) PSD identifies eligible funding (Nov 2024 Bond measure)
(3) City approves scope and funding – 2025
(4) PSD approves scope and funding – 2025
•Land purchase closes Nov 30th
•IGA establishes “fair share” process – capital, operating and long-term maintenance
•Land value counts toward PSD share; will be reconciled once final costs are known
Headline Copy Goes Here
5
Partnerships – Poudre River Public Library District
Library Status, Framework, Next Steps
Opportunities –
•“Better Together”
•Shared spaces
•Connected vision, outcomes, focus areas
•Integrated user experience
•Access to programs and spaces for vulnerable populations
Partnership Framework –
•Independent costs
•Shared costs
•Shared operation and replacement costs
Headline Copy Goes HereStrategic Alignment
Strategic Focus Areas:
•Welcoming spaces /Intentional partnerships /Dynamic
services
Master Facilities Planning:
•160,000 sq. ft. of library space for projected 2040 pop.
•Includes expanding CTL to at least 40,000 sq. ft.
Actions Identified in Plan:
•Provide recreational amenities according to level of service
standards
•Ensure facilities and programs continue to respond to
changing user needs
•Aquatic facility recommendation
•Identified Culture and Innovation Gap Programs and
potential spaces
Poudre Libraries Strategic Plan & Master Plan
Parks & Recreation Master Plan,
2013 Feasibility Study & 2023 Innovation,
Recreation & Aquatics Study
Headline Copy Goes Here
7
Project Delivery – Project Team
Headline Copy Goes Here
8
Determining Project Budget & Scope
Starting Points:
•2015 Ballot inclusions – Community Center and Outdoor Pool
•Library Partnership
Additional Opportunities:
•Indoor lap lanes with fair share (capital, operating, and major maintenance) agreement with PSD
•Scope and scale of Community Center
•Expansion of Outdoor Pool scope to extend season (separate pool or maybe design options to
have a single pool operate both indoors and outdoors)
Headline Copy Goes Here
9
Community Center Level of Service
Headline Copy Goes Here
10
Proposed Key Decision Criteria
Cost Considerations
•Total Capital Cost
•Annual On-going costs (earned revenue / City General Fund split)
•Major Maintenance
Community Needs - Facility Inclusions
•Pools / Aquatics
•Childcare
•Community Spaces
•Recreation Spaces
•Creative / Innovation Spaces and facility integration
•Shared spaces (City/Library)
•Alignment with Policy, Plans, Studies
Council and Community Priorities
•Environmental Sustainability (LEED, water conservation, etc.)
•Resourcing vulnerable populations
•15-minute City
•Making government accessible and fun
•Intergenerational spaces
•Building Community
Headline Copy Goes Here
11
Equity and Vulnerable Populations
Headline Copy Goes Here
12
Equity and Serving Vulnerable Populations
Key Equity Questions:
•Who are we serving? –
understanding SE Fort Collins
demographics
•How is facility designed to be
welcoming and accommodating
to all?
•How can our fee structure work
to ensure access for all and
operate the facility sustainably?
Rental
Mobile Home
Future Units
Ownership
Affordable Housing, Land Bank, and Mobile Home Units
Headline Copy Goes Here
13
BACK UP
SLIDES
Headline Copy Goes Here
14
2050 Tax Parks and Recreation
2050 Tax Overview:
•½-cent sales tax
•Passed in November 2023
•Expires in 2050
•Allocations: 25% Transit, 25% Climate, and
50% FOR THE REPLACEMENT, UPGRADE, MAINTENANCE, AND ACCESSIBILITY OF PARKS FACILITIES AND FOR THE REPLACEMENT AND CONSTRUCTION OF INDOOR AND OUTDOOR RECREATION AND POOL FACILITIES
Headline Copy Goes Here
15
How should 2050 P&R tax be split between eligible elements?
Illustration:
Life of 2050 tax =
27 years x $10.5M (2024 dollars) =
$283 M
~80% = ~227 M replacement/refresh
~=$8.4M/year
~20% = ~$57 M replacement and
construction of indoor and outdoor
recreation and pool facilities
80%
20%
Potential Split of 2050 Parks and Rec Funds
Replacement, Upgrade, Maintenance, etc. -- PARKS & RECREATION
Replacement & Construction of Indoor and Oudoor Recreation and Pool Facilities
Headline Copy Goes Here
16
Funding options for SECC
FUNDING SOURCE TOTAL
2015-25 CCIP (existing)$17M
DOLA Resilience Grant (existing)$2M
CCIP Reserves (Council option)$10M
2050 (Council option – combination of 2050
reserves + bonding)$31M - $36M
COMBINED $60M - $65M
Headline Copy Goes HereAnticipated Project Timeline
4
All
Together
– Setting
the Stage
Nov 5,
2024
City
Council
Finance
WS
Dec 5,
2024
Rec Team
Work
Session
Nov 12,
2024
Library
Team Work
Session
Nov 14,
2024
Library
Team Work
Session
Dec 12,
2024
City Council
Work
Session
Jan 28,
2025
Library
Board
Work
Session
Feb 11,
2025
City Council
Work
Session
Feb 25,
2025
Projected
Building
Opening
2028
Design Anticipated
Through 2026
Anticipated
Construction
2026-2028
City Council
Meeting
March 17,
2025
All
Together
– Shared
Spaces
Jan 7,
2025
Headline Copy Goes HereTeam Roles and Responsibilities 18
18
Core Team
Poudre Libraries
•Ken Draves
•Diane Lapierre
City of Fort Collins Recreation
•LeAnn Williams
•Dean Klingner
City of Fort Collins Ops Services
•Eric Cluver
•Tracy Ochsner
•Brian Hergott
Expanded Team
Poudre Libraries
•Branch Managers
•Programming & Events Manager
•Library Executive Leadership
City of Fort Collins Recreation
•Sr. Managers, Recreation
•Sr. Supervisors, Recreation
•Marketing Team
City of Fort Collins Op Services
•Maintenance Superintendent
•Energy Services Manager
•Facility Lead Technicians
Project Leads
Poudre Libraries
•Ken Draves
City of Fort Collins Recreation
•LeAnn Williams
City of Fort Collins Ops Services
•Eric Cluver
--------------
Poudre School District Liaison
•Brandon Carlucci
Headline Copy Goes HereShared Values
Mission Statement
To create opportunities and build connections to
strengthen our community
Vision
To be a vibrant and essential center for learning,
inspiration, and engagement
Values
Curiosity, Collaboration, Innovation, Inclusion,
Intellectual Freedom, Accountability
Mission Statement
Exceptional service for an exceptional community.
Vision
To provide world-class municipal services through
operational excellence and a culture of innovation.
Values
Partnership, Service, Safety & Wellbeing,
Sustainability, Integrity & Belonging
19
19
COUNCIL FINANCE COMMITTEE
AGENDA ITEM SUMMARY
STAFF: Randy Bailey, Accounting Director
DATE: December 5, 2024
SUBJECT FOR DISCUSSION: 2024 Financial Policy Review
EXECUTIVE SUMMARY: Once a year a portion of Financial Policies are reviewed and
updated as needed. Staff is committed to reviewing each policy no less than every 3 years.
Policies up for review this year are:
Financial Management Policy 1 – Budget
Financial Management Policy 2 – Revenue
Financial Management Policy 3 – General
Financial Management Policy 5 – Fund Balance
Financial Management Policy 7 – Debt
Financial Management Policy 8 – Investments
GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED
1. Does Council Finance Committee support the changes as recommended?
BACKGROUND/DISCUSSION
Financial Management Policy 1 – Budget: This policy has several recommended minor
terminology changes for clarity and simplification.
Financial Management Policy 2 – Revenue: This policy has five recommended changes:
• Section 2.B.5.C Maintain Health Reserves
o Update General Fund liquidity rule to reflect decisions made during 2025/2026
budget cycle reducing the 60 day liquidity rule to 45 days.
• Section 4 Sales and Use Tax Distribution
o Update Sales and Use Tax tables to reflect effective dates and changes since last
policy update.
Note sunset of Keep Fort Collins Great at end of 2020
Added 2020 General City Uses Tax of $0.60
Added 2020 General Fund Renewable Tax of $0.25
Added 2024 2050 Tax of $0.50
• Section 5 Philanthropic Contributions
o Removed from Policy 2 – Revenue. Revised and covered in two administrative
policies; City Give and Philanthropic Governance
Financial Management Policy 3 – General: This policy has three recommended changes
• Section 2.B 401(a) and 457 Money Purchas Plans
o Updated “Direct Reports of City Council” to “Council Appointed Positions”
o Updated “Service Area Directors” to “Executive and Senior Leaders”
o Updated Employer contribution percentage for Police & Dispatch from 10.5% to
11%.
• Section 3 Fund Organization
o Added fund 256 – 2050 Tax to the Governmental fund list.
• Section 4.D Cost Recovery and Fee Setting
o Removed reference to “Keep Fort Collins Great” tax and referenced “…voter
approved tax revenue”
Financial Management Policy 5 – Fund Balance Minimums: This policy has one recommended
change.
• Section 3.A Minimum Balances
o Update General Fund liquidity rule to reflect decisions made during 2025/2026
budget cycle reducing the 60-day liquidity rule to 45-days.
Financial Management Policy 7 – Debt: This policy was reviewed and no changes are
recommended at this time.
Financial Management Policy 8 – Investments: This policy has one recommended change.
• Section 2 Scope
o Updates term “Trust and Agency Funds” to “Fiduciary Funds” to be inclusive of
pension, trust and agency funds.
ATTACHMENTS
• Presentation Slides
• Policy 1 – Budget, clean version with changes highlighted
• Policy 2 – Revenue, clean version with changes highlighted
• Policy 3 – General, clean version with changes highlighted
• Policy 5 – Fund Balance Minimums, clean version with changes highlighted
• Policy 7 – Debt, clean version with no changes recommended
• Policy 8 – Investment, clean version with changes highlighted
Headline Copy Goes Here
Accounting Director
December 5, 2024
Randy Bailey
Financial
Management Policy
Review
Headline Copy Goes HereDirection Sought
•Does Council Finance Committee support the changes as recommended?
Headline Copy Goes Here
3
Scope of Review
Policy #Policy Name Last CFC Review Date Next CFC Review Date
1 Budget November 2020 December 2024
2 Revenue November 2020 December 2024
3 General November 2020 December 2024
5 Fund Balance December 2022 December 2024
7 Debt January 2022 December 2024
8 Investments January 2022 December 2024
Headline Copy Goes Here 4
•Policy 1 – Budget
Headline Copy Goes Here 5Summary of Changes
Section As published Revised
i.Objective …scarce resources …finite resources
1.Overview …through the budget, services are
implemented.
…goals
Utilization of the budget process enables current
levels of programs and services to continue and
new programs and services to be implemented.
…priorities
2.Principles for Budget Planning …residents
In addition, the 2005-2007 Policy Agenda sets
forth the implementation… with desired
outcomes.
…community
[Removed to simplify]
3.Scope 3.D) …commencing in 2010 and every other
year thereafter…
[Removed to simplify]
4.Roles and Responsibilities From April through June, City staff… budget.[Removed to simplify]
5.Budgeting Control System
6.Balanced Budget Definition
7.Contingency Planning for
Unanticipated Revenue Shortfalls
Policy 1 – Budget
Terminology updates for greater clarity and simplification
Headline Copy Goes Here 6
•Policy 2 – Revenue
Headline Copy Goes Here 7Summary of Changes
Section As published Revised
1.Limitations under TABOR
2.Revenue Review, Objectives and
Monitoring
2.B.5.C Maintain Healthy Reserves
…contingency of 60 days or 17% of next year’s
adopted budgeted expenditures
2.B.5.C Maintain Healthy Reserves
…contingency of 45 days or 12.5% of next year’s
adopted budgeted expenditures
3.Fee Policy
4.Sales and Use Tax Distribution Voter approved taxation trend 1968 – 2020
Effective taxation detail 2020
Voter approved taxation trend 1968 - 2024
Effective taxation detail 2024
5.Philanthropic Contributions Legacy policy Removed from Policy 2 – Revenue.
Revised and included in two administrative
policies; City Give and Philanthropic Governance
Policy 2 – Revenue
General Fund contingency limit update – see Policy 5
Tax structure updates
Headline Copy Goes Here 8ChangesPolicy 2.4 – Revenue
Headline Copy Goes Here 9
•Policy 3 – General
Headline Copy Goes Here 10Summary of Changes
Section As published Revised
1.Administrative Charges
2.Medical Insurance and Retirement Plan B.2) Minor updates to plan matrix
3.Fund Organization Add fund: 256 – 2050 Tax
4.Cost Recovery and Fee Setting D. Recreation Fund Rates and Charges Policy
…50% of the Keep Fort Collins Great portion…
D. Recreation Fund Rates and Charges Policy
…voter approved tax revenues…
5.Capital Improvement Program
6.Using State Allocation of Private Activity
Bonds
Policy 3 – General
Minor updates to reflect normal period changes
Headline Copy Goes Here 11ChangesPolicy 3 – General
Section 2.B 401(a) and 457 Money Purchase Plans
Section 3 Fund Organization
Headline Copy Goes Here 12
•Policy 5 – Fund Balance Minimums
Headline Copy Goes Here 13Summary of Changes
Section As published Revised
1.Governmental Funds and Fund
Balances
2.Proprietary Funds and Working
Capital
3.Minimum Balances 3.A General Fund 60-day liquidity goal; 60 day
or 17% of subsequent year’s budgeted
expenditures and transfers out.
3.A General Fund 45-day liquidity goal; 45 day or
12.5% of subsequent year’s budgeted
expenditures and transfers out.
4.Below Minimum
Policy 5 – Fund Balance Minimums
General Fund contingency limit update
Headline Copy Goes Here 14Changes•Policy 5.3.A – General Fund
* Estimates based on budget information
General Fund 2019 2020 2021 2022 2023 *2024
Budget 152,740,315 156,472,057 182,363,393 201,246,909 221,713,275 221,179,814
Less: ARPA (10,953,647) (14,900,000) (4,845,853)
Net Budget 152,740,315 156,472,057 182,363,393 190,293,262 206,813,275 216,333,961
Total Expenditures 132,815,412 150,753,191 147,515,788 169,831,624 202,293,424 221,179,814
Fund Balance 71,768,144 62,757,091 86,545,002 85,449,320 76,661,985 51,972,652
Contingency (17%)26,600,250 31,001,777 32,349,855 35,158,257 36,776,773 42,170,975
Contingency (12.5%)19,559,007 22,795,424 23,786,658 25,851,659 27,041,745 31,008,070
I(D)7,041,243 8,206,353 8,563,197 9,306,597 9,735,028 11,162,905
TABOR emergency reserve @ 3%
of governmental revenues 7,105,519 6,673,522 7,670,272 7,779,526 9,011,743
Equivalent percent of operating
expenditures 5%5%5%4%4%
Comparative contingency reserves:
City < 12.5%12.5%15%17%> 17%Note
Ann Arbor MI x x x Range of 15% - 20%
Bellingham, WA x Minimum is the greater of $5M or 6% of opex
David, CA x
Denton Tx x 20% of operating expenditures plus 5% resiliency reserve
Durham NC x x x Currently running closer to 12% with a plan to recover.
Flagstaff AZ x x x Range of 15% - 20%
Fort Collins, CO x x x 12.5% of operating expenditures plus 4-5% emergency reserve.
Raleigh NC x x x x Can run as low as 8%
Santa Barbara, CA x x x Disaster reserve of 15% and 10% contingency
Tacoma, WA x
Headline Copy Goes Here 15
•Policy 7 – Debt
Headline Copy Goes Here 16Summary of Changes
Section As published Revised
1.Authorization for Municipal
Borrowing
2.Purposes and Uses of Debt
3.Types of Debt and Financing
Agreements
4.Debt Structure and Terms
5.Refinancing Debt
6.Debt Limitations and Capacity
7.Debt Issuance Process
7.Inter-agency Loan Program
7.Other
Policy 7 – Debt
Reviewed and no changes recommended at this time
Headline Copy Goes Here 17
•Policy 8 – Investments
Headline Copy Goes Here 18Summary of Changes
Section As published Revised
1.Policy
2.Scope Trust and Agency Funds Fiduciary Funds
[inclusive of pension, trust and agency funds]
3.Investment Objectives
4.Standards of Care
5.Safekeeping and Custody
6.Suitable and Authorized
Investments
7.Diversification and Liquidity
8.Reporting
9.Policy Adoption
Policy 7 – Investments
Minor terminology change for clarity
Headline Copy Goes HereDirection Sought
•Does Council Finance Committee support the changes as recommended?
Financial Policy 1 – Budget 1
Financial Management Policy 1
Budget
Issue Date: 01/12/21
Reviewed: 12/5/24
Version: 5
Issued by: Budget Director
Objective:
Governments allocate finite resources to programs and services through the budget process. As a
result, it is one of the most important activities undertaken by governments. The purpose of this
policy is to establish parameters and provide guidance governing the budget for the City of Fort
Collins (City).
Applicability:
This budget policy applies to all funds and Service Areas of the City.
Authorized by:
City Council Resolution 2014-058, 2017-101, 2021-010
Financial Policy 1 – Budget 2
1.1 Overview
The Fort Collins City Charter establishes time limits and the essential content of the City
Manager’s proposed budget; however the budget preparation process is not prescribed, but
is developed by the City Manager with input from the City Council.
The fiscal year of the City is the calendar year. The City may adopt budgets for a budget
term of one fiscal year or more. After the Charter amendment in 1997 allowing the City
Council to set by ordinance a budget term to be more than one fiscal year, the Council has
adopted two-year budgets that correspond with the election cycle, with the recent
exception of having a one-year budget for fiscal years 2021 and 2022 due to the COVID
pandemic.
The budget is a 2-year plan by which the City Council sets the financial and operational
priorities for the City. Utilization of the budget process enables current levels of programs
and services to continue and new programs and services to be implemented. The budget
along with the annual appropriation ordinance provides the basis for the control of
expenditures. The State Constitution and the City Charter provide the basic legal
requirements and timelines for the process. Council priorities, ordinances and resolutions
provide additional direction and respond to the needs of the community.
1.2 Principles for Budget Planning
The City provides a wide variety of services to the community. It is in the power of the City
Council to adopt a budget and manage the available resources to best meet the service
needs for the overall good of the community (Charter Article II, Section 5 (c))
In 2005 the City Council, on recommendation from the City Manager, endorsed the
Budgeting for Outcomes (BFO) budget process. At a high level, the budgeting for outcomes
methodology can be summarized as:
1. Determine how much money is available. The budget should be built on expected revenues.
This would include base revenues, any new revenue sources, and the potential use of fund
balance.
2. Prioritize results. The results or outcomes that matter most to the community should be
defined. Elected leaders should determine what programs are most important to their
constituents.
3. Allocate resources among high priority results. The allocations should be made in a fair and
objective manner.
4. Conduct analysis to determine what strategies, programs, and activities will best achieve desired
results.
5. Budget available dollars to the most significant programs and activities. The objective
is to maximize the benefit of the available resources.
6. Set measures of monthly progress, monitor, and close the feedback loop. These measures
should assign monthly budget, spell out the expected results and outcomes and how they will
be measured.
Financial Policy 1 – Budget 3
7. Check what actually happened. This involves using performance measures to compare
actual versus budgeted results, and financial measures for budget versus actual results on a
monthly basis.
8. Communicate performance results. Internal and external stakeholders should be informed
of the results in an understandable format.
At that time, the City Council also identified the key outcomes it believed should be used in
the new budget process.
In 2012, the City Council passed resolution 2012-076 promoting improved results through
performance measures and data-driven decision making. In reference to the budget, an
outcome-based performance measurement system helps ensure that available resources
are used to achieve excellent results at low cost to the taxpayers and will enhance the
community’s understanding of the City and the services it provides.
1.3 Scope
A. Comprehensiveness
The proposed budget shall provide a complete financial plan for each fund of the City and
shall include appropriate financial statements for each type of fund showing comparative
figures for the last completed fiscal year, comparative figures for the current year, and the
City Manager's recommendations for the ensuing budget term (City Charter Article V, Part 1,
Section 2). In addition, the City of Fort Collins Budget Document may include items such as:
1) Statement of organization-wide strategic goals.
2) A description of the budget process, including a timeline.
3) A Glossary of Budget Terms.
4) A City of Fort Collins organizational chart.
5) Letter from the City Manager.
6) Budget Overview which may include:
a) The economic outlook;
b) Revenue assumptions;
c) Summary of use of reserves;
d) Budget priorities and highlights.
7) Copy of signed appropriation ordinance and a schedule of 2nd year proposed
appropriations.
8) Revenue, expense and changes in fund balance summaries.
9) Summary of employee full-time equivalent staffing by service area and department.
10) A section for each of the key strategic Outcomes, which may include:
a) Information indicating how the Offers in the Outcome are funded, by fund;
b) Major key purchases;
c) Major enhancements purchased;
d) Detailed listing of all offers funded and unfunded;
e) Strategic objectives of the Outcome.
11) Fund Statements.
Financial Policy 1 – Budget 4
12) Overview of debt position.
13) Current Capital Improvement Plan.
14) Summary of changes to user fees.
15) Summary of property tax mill levy and assessments.
The annual appropriation ordinance shall also include the levy in mills, as fixed by the
Council, upon each dollar of the assessed valuation of all taxable property within the city, such
levy representing the amount of taxes for City purposes necessary to provide, during the
ensuing fiscal year, for all properly authorized expenditures to be incurred by the City,
including interest and principal of general obligation bonds. If the Council fails in any year to
make said tax levy as above provided, then the rate last fixed shall be the levy fixed for the
ensuing fiscal year and the Financial Officer shall so certify (Charter Article V, Section 5).
B. Budget Form
The City of Fort Collins uses the Budgeting For Outcomes model to create the City budget. A
new budget is designed from the ground up based on the results desired in each of the
Outcomes defined by the City. The BFO budget-building process includes four steps:
1) Determine how much revenue will be available (the price people pay);
2) Determine the priorities of the City and the Community members and the results to be
achieved;
3) Allocate the revenue needed to achieve the desired results;
4) Determine which budget items will best produce the desired results at the price allocated.
C. Basis of Budgeting
All budgetary procedures conform to the City Charter and Code, state regulations and to
generally accepted accounting principles. The basis or principle used for budgeting is the
same as that used for accounting, with a few exceptions, and varies according to the fund type.
Governmental Funds use the modified-accrual basis of accounting. This means that revenues
are recognized when they are earned, measurable and available. Expenditures are recognized
in the period that liabilities are due and payable. The budgetary basis is the same and is used
in the General Fund, Special Revenue and Debt Service Funds, and Capital Project Funds.
Proprietary and Fiduciary Funds use the full accrual basis of accounting. Revenues are
recognized when they are earned and expenses are recognized when liabilities are incurred.
However, the budgetary basis in these funds is primarily based on the modified-accrual
approach. Instead of authorizing budget for depreciation of capital assets, the budget
measures and appropriates cash outflows for capital acquisition and construction, which is a
modified-accrual approach. In full accrual based accounting debt proceeds are recorded as
liabilities rather than a revenue (funding source). For these reasons, a reconciliation and
adjustment is made on these fund statements to show the difference between the budgetary
Financial Policy 1 – Budget 5
basis and the accounting basis.
D. Budget Calendar
The fiscal and accounting year shall be the same as the calendar year. "Budget term" shall
mean the fiscal year(s) for which any budget is adopted and in which it is to be administered.
Council shall set by ordinance the term for which it shall adopt budgets (Charter Article V,
Section 1).
On or before the first Monday in September the City Manager shall file with the City Clerk a
proposed budget for the City for the ensuing two-year term (Charter Article V, Section 2).
The Council shall, within ten (10) days after the filing of said proposed budget with the City
Clerk, set a time certain for public hearing and cause notice of such public hearing to be
given by publication. At the hearing, all persons may appear and comment on any or all
items and estimates in the proposed budget. Upon completion of the public hearing the
Council may revise the budget estimates (Charter Article V, Section 3).
After said public hearing and before the last day of November preceding the budget term, the
Council shall adopt the budget for the ensuing term. The adoption of the budget shall be by
ordinance. Before the last day of November of each fiscal year, the Council shall appropriate
such sums of money as it deems necessary to defray all expenditures of the City during the
ensuing fiscal year. The appropriation of funds shall be accomplished by passage of the
annual appropriation ordinance. Such appropriation of funds shall be based upon the budget
as approved by the Council but need not be itemized further than by fund with the exception
of capital projects and federal or state grants which shall be summarized by individual project
or grant (Charter Article V, Section 4).
Appropriations for each year of the two-year budget will be approved by the City Council
annually. Appropriations for the 2nd year of the biannual budget are adopted during the
budget revision process. That process allows for adjustments to the originally adopted
biennial budget that address new Council priorities or support changing needs based on
economic conditions. The City Manager may present any budget adjustment
recommendations to the City Council in Work Sessions and then Council may amend the
budget and, as required by the City Charter, appropriate or authorize expenditures for the
coming fiscal year.
1.4 Roles and Responsibilities
All powers of the City and the determination of all matters of policy are vested in the Council
except as otherwise provided by the Charter. Without limitation of the foregoing, the Council
has the power to adopt the City’s budget.
The City Manager is responsible to the Council for the proper administration of all affairs of
the City and to that end has the power and is required to prepare the budget and submit it to
Financial Policy 1 – Budget 6
the Council and be responsible for its administration after adoption.
The City Manager and Chief Financial Officer, along with the other executive directors, known
as the Budget Lead Team (BLT), develop the guidelines, consistent with the policies, to be
used for budget preparation. During the development of the budget, various department and
division representatives may be called upon to provide their expertise.
1.5 Budgeting Control System
No appropriation may be made by the Council which exceeds the revenues, reserves or other
funds anticipated or available at the time of the appropriation, except for emergency
expenses incurred by reason of a casualty, accident or unforeseen contingency arising after
the passage of the annual appropriation ordinance (Charter Article V, Section 8 (a)).
Control of expenditures is exercised at the fund level. Fund managers are responsible for all
expenditures made against appropriations within their fund and can allocate available
resources within the fund.
All appropriations unexpended or unencumbered at the end of the fiscal year shall lapse to
the applicable general or special fund, except for:
• appropriations for capital projects do not lapse until the completion of the capital project;
and
• federal or state grants do not lapse until the expiration of the federal or state grant
(Charter Article V, Section 11).
A. Budget Transfers
Between Funds or Capital Projects
During the fiscal year, the Council may, by ordinance, upon the recommendation of the City
Manager, transfer any unexpended and unencumbered appropriated amount or portion
thereof from one fund or capital project account to another fund or capital project account
provided that:
1) the purpose for which the transferred funds are to be expended remains unchanged;
2) the purpose for which the funds were initially appropriated no longer exists; or
3) 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 (Charter Article V, Section 10 (b)).
Within a Fund
Budget control is maintained at the departmental level. The City Manager may, during the
fiscal year, transfer any unexpended and unencumbered appropriated amount within the
same fund (Charter Article V, Section 10(a)). The Chief Financial Officer also has the authority
to approve departmental expenses greater than the budget for that department so long as the
Financial Policy 1 – Budget 7
overall expenses in the fund serving that department are less than the budgeted amount for
the fund. In no case may the total expenditures of a particular fund exceed that which is
appropriated by the City Council (Charter Article V, Section 8(b)).
B. Applicable Amendments to the Budget
Budget Increases
There generally are four opportunities during the fiscal year for supplemental additions to
the current year annual appropriation approved by Council:
1) The first is through the encumbrance carry-forward process whereby approved purchase
orders that cannot be executed prior to the end of the fiscal year will have available
budget carried forward into the new year.
2) The second is usually adopted in March/April to re-appropriate funds from the previous
year’s ending balance for projects or obligations that were approved but not completed
during that year.
3) The third opportunity in the 2nd half of the year is used to fine-tune (clean-up) the
current fiscal year for previously unforeseen events. In addition, if revenue is received
during the fiscal year from a source that was not anticipated at the time of budget
adoption or appropriation for the fiscal year, such as grants or implementation of a new
fee, Council may appropriate that unanticipated revenue for expenditure when received
anytime during the year.
4) Lastly, the Council, upon recommendation of the City Manager, may make supplemental
appropriations by ordinance at any time during the fiscal year; provided, however, that
the total amount of such supplemental appropriations, in combination with all previous
appropriations for that fiscal year, shall not exceed the then current estimate of actual
and anticipated revenues to be received by the city during the fiscal year. This provision
shall not prevent the Council from appropriating by ordinance at any time during the
fiscal year such funds for expenditure as may be available from reserves accumulated in
prior years, notwithstanding that such reserves were not previously appropriated
(Charter Article V, Section 9).
Budget Decreases/Frozen Appropriations
The budget may be decreased below adopted appropriations during the fiscal year due to
changes in service demand, changes in economic conditions, and/or changes in Council goals.
Each service area is responsible for developing a plan to reduce appropriations, which will
be ready for implementation should the need arise. If the City Manager directs budget
reductions, Council will be informed and the appropriations will be “set aside” through
administrative action. While the appropriation amount is not changed, expenditures shall
not exceed the reduced amount recommended by the City Manager.
Financial Policy 1 – Budget 8
C. Order of Funding when Multiple Funding Sources Available
Sometimes a given project or program has multiple sources of funding available. Examples
of such projects include but are not limited to grant funded projects, jointly funded
projects/programs between governmental and proprietary funds, or projects/programs
where both dedicated tax and/or fee revenues and General Fund tax revenues are available.
Unless stated otherwise within the authorizing ordinance, budget offer, or a contractual
agreement, funding sources will be applied in the order of most-constrained to least-
constrained in the judgment of City staff. For example, a project jointly funded by the
General Fund and the Natural Areas Fund would first fund project spending using all
available and appropriated Natural Areas revenues prior to spending appropriated General
Fund revenues. This is in an effort to maximize the benefit of available sources in
accordance with the principles described in section 1.2 above.
1.6 Balanced Budget Definition
All funds are required to balance. As such, total anticipated revenues must equal the sum of
budgeted expenditures for each fund. Revenues are derived from two sources: current
revenue charges and unallocated reserves carried forward from prior years.
1.7 Contingency Planning for Unanticipated Revenue Shortfalls
During times when the City experiences significant unanticipated revenue shortfalls, a
contingency plan will be developed that outlines the necessary steps to align expenditures to
meet the actual revenue received. The contingency plan will target the funds being impacted
by the revenue shortfall. In general, the priority order of the steps in our contingency
methodology are:
• Align ongoing expenditures with anticipated ongoing revenue
• Sweep vacancy savings and non-service related savings such as fuel or utilities if under
budget
• If a Contingency Reserve has been established, utilize a portion of that reserve
• Develop a stop doing list utilizing the drilling platform prioritization.
• At a Service Area level, reduce expenditures related to
o discretionary expenditures
o new hires/vacancies (postponement of posting positions)
o travel and training
o reduced levels of support to programs
Financial Policy 2 – Revenue 1
Financial Management Policy 2
Revenue
Issue Date: 01/12/21
Reviewed: 12/5/24
Version: 5
Issued by: Revenue and Project
Manager
2.1 Limitations under TABOR (Taxpayer Bill of Rights)
A. Background
The City of Fort Collins’ revenue and expenditures are limited by Colorado’s Taxpayer’s Bill
of Rights in Article X, Section 20 of the Colorado Constitution (TABOR). While TABOR limits
both revenue and expenditures, its primary application is in limiting revenue collections.
Growth in revenue is limited to the increase in the Denver-Boulder-Greeley Consumer Price
Index plus local growth (new construction and annexation). This percentage is added to the
preceding year’s revenue base, giving the dollar limit allowed for revenue collection in the
ensuing year. Any revenue collected over the limit must be refunded to the residents unless
the voters approve the retention of the excess revenue. Federal grants or gifts to the City
are not included in the revenue limit. City enterprises (electric, water, wastewater and
stormwater utilities) are also exempt from the imposed limits. In 2003, the Golf Fund
revenue sources was considered for enterprise status for purposes of TABOR.
Objective:
Monitoring and controlling revenues is important to the City of Fort Collins. Through its revenue policy, the
City primarily aims to maintain a diversified revenue system which will protect it from possible short -term
fluctuations in any of its various revenue sources. To accomplish this, revenues are monitored on a
continuous basis. An understanding of the economic and legal factors which directly and indirectly affect
the level of revenue collections is an important part of the City’s revenue policy.
Applicability:
This policy applies to all City Revenues. This policy does/does not apply to or govern revenues generated by
City-owned general improvement districts, DDA, URA, PFA or Library District.
Authorized by:
City Council, Resolutions 1994-174, 2013-093, 2016-096, 2021-010
Financial Policy 2 – Revenue 2
B. ‘De-Brucing’
In November 1997, Fort Collins’ voters approved a ballot measure that allows the City to
retain revenues that exceed the growth limit imposed by TABOR. The measure specified
that any retained revenues over the growth limit must be used for certain designated
purposes.
• Public Health and Safety (including, but not limited to, environmental monitoring
and mitigation)
• Transportation
• Growth Management
• Maintenance and Repair of Public Facilities
C. TABOR Notice for New Tax or Tax Increase
• Develop revenue forecasts that are reasonable and factor in the implications of over
collection.
• Review these forecasts with the appropriate leadership staff.
D. Monitor New Tax Revenue
• Staff will monitor actual revenue against the forecast revenue disclosed in the TABOR
notice.
• In the second year, confirm first years’ actual revenue to forecast and determine if any
action is needed. Provide a report to the City Council with results and any
recommended action.
E. TABOR Legislation and Judicial Decisions
Staff shall monitor new TABOR legislation, judicial decisions and actions taken by other
governments to see if they affect the City. This will include working with the City’s outside
consultants, such as special bond counsel and CML. When such matters are discovered
affecting the City, staff will confer to determine what actions, if any, the City should take in
response.
F. Documentation of ‘Fiscal Year Spending’ under TABOR
Although the City has de-Bruced, current interpretations of TABOR section 20(3)(c) merit
the need for the ongoing calculation of “fiscal year spending”. Staff will maintain and
update records annually to calculate the City’s fiscal year spending under TABOR. These
records shall be kept for at least six years. Also, documentation shall be kept current that
defines which related agencies, funds and types of revenues are required under TABOR to
be included in fiscal year spending and those that can be excluded.
Financial Policy 2 – Revenue 3
2.2 Revenue Review, Objectives and Monitoring
A. Review and Projections
The City reviews estimated revenue and fee schedules as part of the budget process.
The major revenue sources in the General Fund are sales and use tax, property tax,
lodging tax, intergovernmental revenues, fines and forfeitures, user fees and charges,
and transfers from other funds. Conservative revenue projections are made for the
budget term. The projections are monitored and updated as necessary.
B. Principles
The City has established six (6) general principles that will be used to guide decisions on
revenue:
1. Develop and maintain stable revenue sources.
The City will strive to maintain stable revenue sources by:
a. Targeting revenue sources with minimal volatility
b. Monitoring current revenue sources for variability
c. Adjusting forecasts as necessary to accommodate unanticipated
increases and declines
d. Monitoring and adjusting expenditures for unanticipated revenue
gains/losses
2. Develop and maintain a diverse revenue base.
For all general government operations, the City will strive to maintain
diverse revenue sources. The City recognizes that becoming too dependent
upon one revenue source would make revenue yields more vulnerable to
economic cycles. Therefore, the City will strive to maintain diverse revenue
sources by:
a. Targeting revenue from multiple sources
b. Working to expand fee-based revenue where possible
c. Working to minimize overdependence on any single revenue source
d. Staff will monitor dependency on sales and use tax to ensure an over
reliance does not occur
3. Cultivate revenue sources that are equitable among residents of different
economic levels.
The City will strive to preserve a revenue stream that does not overburden
low-income residents by:
a. Providing low-income residents with opportunities to participate in
programs through reduced fee structures and scholarships
b. Providing a Sales Tax on Food and Utility rebate to lessen the burden of
taxes and fees on low-income residents
Financial Policy 2 – Revenue 4
c. Ensuring fees do not exceed cost to provide service
4. Generate adequate revenue to maintain service levels in line with resident
expectations.
The City will generate adequate revenue to maintain core service levels by:
a. Ensuring fees for service do not exceed cost to provide service
b. Maintaining a cost recovery model
c. Monitoring service level performance annually through the Community
Scorecard
d. Regularly reviewing services to assess core vs. desired
5. Maintain healthy reserves.
The City will maintain healthy reserves by:
a. Adhering to State mandated reserve and internal reserve policies
b. Maintaining a Tabor (State) reserve for the General Fund of 3% or more
of the City’s fiscal year spending
c. Meeting City policy for the General Fund of an additional contingency of
45 days or 12.5% of next year’s adopted budgeted expenditures
6. Fees for Services are fairly born by those who use those services.
C. Monitoring
In an annual summary financial report, the major sources revenue and the associated
percentages will be reviewed by the Council Finance Committee.
2.3 Fee Policy
As a home rule municipality, the City of Fort Collins has the ability to determine the extent
to which fees should be used to fund City facilities, infrastructure and services. There are
two kinds of fees that the City may establish: Impact Fees and Special Service Fees. Impact
fees are typically one-time charges levied by the City against new development. Impact
fees are based on current levels of service and act as a buy-in method for new development.
The revenue can only be used for capital infrastructure needs created by the impact of the
new development. However, the City may and does employ other methodologies legally
available to calculate its impact fees. Special service fees are charges imposed on persons or
property that are designed to defray the overall cost of the particular municipal service for
which the fee is imposed. This Policy sets forth principles for identifying: (1) the kinds of
services for which the City could appropriately impose fees; (2) methods for calculating the
percentage of costs to be recovered by such fees; and (3) the manner in which the fees
should be allocated among individual fee payers.
A. Fees should be cost related
The amount of a fee should not exceed the overall cost of providing the facility,
Financial Policy 2 – Revenue 5
infrastructure or service for which the fee is imposed. Cost may include direct and
indirect costs. That is:
1. Costs which are directly related to the provision of the service; and,
2. Support costs which are more general in nature but provide support for the
provision of the service.
B. Percentage of cost recovery
The extent to which the total cost of service should be recovered through fees
depends upon the following factors:
1. The nature of the facilities, infrastructure or services. In the case of fees for
facilities, infrastructure as well as governmental and proprietary services, total
cost recovery may be warranted. In the case of governmental services, it may be
appropriate for a substantial portion of the cost of such services to be borne by the
City’s taxpayers, rather than the individual users of such services.
2. The nature and extent of the benefit to the fee payers. When a particular facility
or service results in substantial, immediate and direct benefit to fee payers, a
higher percentage of the cost of providing the facility or service should be
recovered by the fee. When a particular facility or service benefits not only the fee
payer but also a substantial segment of the community, lower cost recovery is
warranted.
3. The level of demand for a particular service. Because the pricing of services can
significantly affect demand, full cost recovery for services is more appropriate
when the market for the services is strong and will support a high level of cost
recovery.
4. Ease of collection. In the case of impact fees, ease of collection is generally not a
factor. In the case of fees for services, however, such fees may prove to be
impractical for the City to utilize if they are too costly to administer.
C. Establishment and Modification of Fees and Charges
The following Impact Fees imposed by the City are established by the City Council by
ordinance and may be modified only by ordinance of the City Council.
1. Six Capital Expansion Fees: Transportation, Neighborhood Park, Community Park,
Fire, Police and General Government
2. Five Utility Fees: Water Supply Requirement, Electric Capacity, Sewer Plant
Investment, Stormwater Plant Investment, Water Plant Investment
Fee updates occur on a regular two and four-year cadence and fee updates occur
together to provide a more holistic view of the impact of any fee increases. Detailed
Financial Policy 2 – Revenue 6
fee study analysis for all six Capital Expansion Fees occurs every four years. This
requires an outside consultant through a request for proposal (RFP) process where
data is provided by City staff. Findings by the consultant are also verified by City staff.
For Utility Fees, a detailed fee study is planned every two years. These are internal
updates by City staff with periodic consultant verification. Fee study analysis will be
targeted in the odd year before Budgeting for Outcomes (BFO). In years without an
update, an inflation adjustment occurs.
The amounts of all other service and administrative fees may be determined by the
City Manager as provided in City Code Chapter 7.5, Article I, absent any provision of
the City Charter the contrary. Development Review/Building Fees follow the same
four-year cadence as the Capital Expansion Fees.
All fee revenues will be estimated by the City Manager and submitted to the City
Council as part of the City Manager’s recommended budget.
D. Rebate Programs
If the amount of a particular fee is considered to be too high to accommodate the
needs of particular segments of the community and the public interest would be
served by adjusting the amount or manner of payment of such fees in particular
instances, the amount of the fee may be waived, rebated, or deferred as appropriate.
In the case of fees established by ordinance, the criteria for waiving, rebating, or
deferring payment of such fees shall be established by the City Council by ordinance.
2.4 Sales and Use Tax Distribution
Sales and Use Tax shall be used and accounted for as intended by the voters. Details of how
the different segments of sales and use tax are used are outlined in the City Code Chapter
25. The following is a summary for informational purposes only.
The City's Sales and Use Tax currently totals 4.35 cents on a $1.00 purchase, as follows:
Effective January 1, 2024
1968 - General City uses 1.00 cent
1980 - General City uses 1.00 cent
1982 - General City uses 0.25 cent
2006 - Natural Areas & Open Space 0.25 cent*
2011 - Keeping Fort Collins Great 0.85 cent***
2015 - Street Maintenance 0.25 cent*
2015 - Community Capital Improvement Program 0.25 cent*
2020 – General City Uses 0.60 cent**
2020 – General Fund Renewable 0.25 cent**
2024 – 2050 Tax 0.50 cent**
4.35 cent
* Excludes sales and use tax on grocery food for home consumption
** Excludes sales and use tax on grocery food for home consumption and use tax for
manufacturing equipment
*** Keep Fort Collins Great tax sunset end of 2020
Financial Policy 2 – Revenue 7
2.4.A Management and reporting of 2050 Tax Proceeds
Voters approved the November 2023 City-Initiated Ballot Issue No. 1 for a 0.50% sales and use
tax beginning January 1, 2024 and ending December 31, 2050. Colloquially this renewable tax
is referred to as the “2050 Tax”. The ballot measure read as follows:
SHALL CITY OF FORT COLLINS TAXES BE INCREASED BY $23,800,000 IN THE FIRST FULL
FISCAL YEAR (2024), AND BY SUCH AMOUNTS COLLECTED ANNUALLY THEREAFTER, FROM
A .50% SALES AND USE TAX BEGINNING JANUARY 1, 2024, AND ENDING AT MIDNIGHT ON
DECEMBER 31, 2050, WITH THE TAX REVENUES SPENT ONLY FOR THE FOLLOWING:
• 50% FOR THE REPLACEMENT, UPGRADE, MAINTENANCE, AND ACCESSIBILITY OF
PARKS FACILITIES AND FOR THE REPLACEMENT AND CONSTRUCTION OF INDOOR
AND OUTDOOR RECREATION AND POOL FACILITIES,
• 25% FOR PROGRAMS AND PROJECTS ADVANCING GREENHOUSE GAS AND AIR
POLLUTION REDUCTION, THE CITY’S 2030 GOAL OF 100% RENEWABLE
ELECTRICITY, AND THE CITY’S 2050 GOAL OF COMMUNITY-WIDE CARBON
NEUTRALITY, AND
• 25% FOR THE CITY’S TRANSIT SYSTEM, INCLUDING, WITHOUT LIMITATION,
INFRASTRUCTURE IMPROVEMENTS, PURCHASE OF EQUIPMENT, AND UPGRADED
AND EXPANDED SERVICES;
• AND WHILE CITY COUNCIL MAY EXERCISE ITS DISCRETION IN DECIDING THE
TIMING OF SPENDING FOR EACH CATEGORY, THAT SPENDING SHALL SUPPLEMENT
AND NOT REPLACE THE CURRENT CITY FUNDING FOR THE SPECIFIED PURPOSES
AND SHALL BE RECONCILED TO THE STATED PERCENTAGES BY THE END OF 2030,
2040, AND WHEN THE LAST REVENUES COLLECTED FROM THE TAX ARE SPENT, BUT
THIS TAX SHALL NOT APPLY TO:
• ITEMS EXEMPT UNDER THE CITY CODE FROM CITY SALES AND USE TAX;
• FOOD FOR HOME CONSUMPTION; AND
• MANUFACTURING EQUIPMENT, BUT FOR THE USE TAX ONLY;
• AND WITH ALL THE TAX REVENUES, AND INVESTMENT EARNINGS THEREON, TO BE
COLLECTED, RETAINED, AND SPENT AS A VOTER APPROVED REVENUE CHANGE
NOTWITHSTANDING THE SPENDING AND REVENUE LIMITATIONS OF ARTICLE X,
SECTION 20 OF THE COLORADO CONSTITUTION?
The following policy language is intended to:
1. Further prescribe the City Council’s intended split of the 50% Parks/Recreation share.
The categories of Replacements, Upgrades, Maintenance, and Accessibility are intended
for the majority of funding, and thus the amounts for construction of “indoor and
outdoor recreation and pool facilities” is limited to 20% of the overall proceeds within
the 50% share, reconciled by gross appropriations at the same 2030, 2040, and 2050
frequencies as prescribed by the ballot
2. Further direct staff to report to Finance Committee annually the life-to-date spending
percentages for each of the three ballot categories (Parks/Rec, Transit, Climate) to
ensure well-planned proportionality between the categories for management of the
2030, 2040, and 2050 legal reconciliation milestones.
Financial Policy 2 – Revenue 8
2.5 Philanthropic Contributions (removed)
The City of Fort Collins (City) will pursue philanthropic support consistent with the City’s goals and
objectives, and in the best interests of Fort Collins residents. The City will always consider the public trust
and comply with all applicable laws when soliciting and accepting philanthropic donations.
Strong oversight of philanthropic gifts is a priority, and the City has created multiple layers of
accountability and transparency for donated funds and the projects receiving donated funds. Charitable
gifts to the City can only be used for the intended purpose designated by donors. Charitable gifts to the
City delivered directly into the budgets of benefiting projects, and can’t be redirected by elected officials
or City staff.
The City reserves the right to decline any charitable gift if, upon review, acceptance of the donation offer is
determined in the sole discretion of the City not to be in the best interests of the City.
In 2019, the City of Fort Collins adopted Administrative Policy 52-City Give to create standards and
protocols for the acceptance and governance of charitable gifts, and for the orchestration of
philanthropic practices. Additionally, the City adopted Finance Governance Policy to establish protocols
for City Give, staff and officials regarding the acceptance and documentation of philanthropic gifts, and
procedures to responsibly and efficiently manage charitable gifts
Financial Policy 2 – Revenue 9
Getting Help
Please contact the Revenue and Project Manager with any questions at 970.221.6626.
Related Policies/References
City Code Chapter 25 Taxation, Article III Sales & Use Tax
City Code Chapter 26 Utilities
Administrative Fee
Definitions
Governmental Services: services provided by the City for the public good such as regulating land use,
maintaining streets, and providing police and fire protection.
Impact Fees: usually one-time charges, levied by the City against new development to offset the impacts of
the new developments
Proprietary Services: services provided for the benefit and enjoyment of the residents of the City, at their
discretion, such as parks and recreation services
Rebate: a return of a portion of a fee within a specified time. Unlike a waiver or discount, the rebate is given
after the fee has been paid in full
Special Service Fee: charges imposed on persons or property that are designed to defray the overall cost of
the particular municipal service for which the fee is imposed
Waiver: when a portion of a fee is reduced before being paid by a buyer
1 Financial Policy 3 – General Financial Policies
Financial Management Policy 3
General Financial Policies
Issue Date: 01/12/21
Reviewed: 12/05/24
Version: 6
Issued by: City Council
3.1 Administrative Charges
Certain General Fund departments render services to departments in other funds and shall
be equitably apportioned to those other funds. General Fund departments that do not have a
direct billing mechanism shall have their costs allocated using the formula outlined in this
section to other funds and provide offsetting revenue in the General Fund.
A. General Fund Departmental Costs to be Allocated
Certain General Fund departmental costs to be allocated include City Council, City
Manager, City Clerk, City Attorney, Human Resources, and Finance. Any services in
these departments which are funded by user fees or dedicated revenues are excluded
from the allocation.
The amount of costs to be allocated is the current adopted budget for each of the
departments listed above less user fees and dedicated revenue. With a multi-year
budget, the charge to each fund is increased by a determined percentage for the second
future year and then adjusted to the actual calculation with the next multi-year budget.
B. How Costs Are Allocated
The Human Resources costs are allocated on a prorated basis to funds based on the total
number of budgeted full-time-equivalent positions in each fund.
Objective:
To outline the method and principles for allocation Administrative Charges; establishing the parameters for
the Medical and Retirement Program; Fund Organization; Cost Recovery and Fee Setting; and Capital
Improvement Program.
Applicability:
This policy applies to all City funds. It does not apply to URA, DDA, PFA and Library.
Authorized by:
City Council Resolution 2006-006, 2015-055, 2017-101, 2021-010
2 Financial Policy 3 – General Financial Policies
All other General Fund administrative costs are allocated on a prorated basis to the
funds based upon adjusted expenditure budgets for the current year. Adjustments are
made to recognize the lower number of administrative services required for Capital,
Debt Service, and Purchased Power payments. Capital project budgets are reduced by
two-thirds and averaged over three years. Debt Service budgets are reduced by three-
fourths and the entire Purchased Power budget is deducted from the Light & Power
budget.
C. All Funds Receive Allocations but Not All Funds Are Charged
While Administrative Charges are allocated among all City funds, only specified funds
are charged. Charges are not made to a fund if it is not self-supporting, it is a
Governmental Internal Service fund, or if the funds role is merely to facilitate proper
accounting procedures. For example, the Sales and Use Tax fund and Debt Service fund
receive amounts which are then transferred to other funds. Charging these funds would
lead to double charging many transactions and would not correspond to the level of
service provided by the departments in the General Fund.
D. Review
During each budget process, the Administrative Charge calculation will be reviewed by
the Budget Office. Minor refinements in the allocation formulas are made as needed.
Significant changes will be brought to the City Council for approval to assure that the
equitable apportionment meets requirements of the Code/Charter.
3.2 Medical Insurance and Retirement Plan
A. Medical Insurance
In 1981, the City of Fort Collins set up a partially self-funded medical insurance program.
The objective of a self-funding program is to reduce the cost of medical insurance by
assuming the risk for certain plan expenses. Assuming a portion of the risk lowers the
amount of charges compared to a conventional full insurance plan Historically, the City has
found this funding method to be a cost-effective means of providing a very desirable
employee benefit.
To administer the self-funded and insured portions of the medical insurance plans, the City
conducts a competitive proposal process every five years or more often if required. The
insurance contracts are reviewed annually for both performance and cost. The types of
services contracted for include plan administrative services, stop-loss protection against
larger claims, life and accidental death and dismemberment insurance, and long-term
disability coverage.
3 Financial Policy 3 – General Financial Policies
B. Retirement Programs
The City of Fort Collins contributes to two types of retirement plans: a Defined Benefit Plan
and Defined Contribution Plans.
1. Defined Benefit Plan - the General Employees Retirement Plan (Plan). The pension
plan is closed to new participants as of 1/1/1999.
The Plan document approved by the City Council outlines the details of the program. A
Board meets monthly to oversee the program. Board members, in consultation with annual
actuary report and other information, make recommendations to City Council for any plan
changes that may be needed from time to time. The Plan currently calls for the employer
(City) to contribute 10.5%. Because the plan is underfunded, a Supplemental Contribution
is made at a fixed dollar amount each year. The Supplemental amount is reevaluated every
2 years in conjunction with the budget cycle and based on the latest actuarial valuation
report.
2. 401(a) and 457 Money Purchase Plans. Also known as Defined Contribution Plans,
the contribution rates are as follows:
Employee Group
401 a 457
Employer Employee Waiting Employer Employee Waiting
Classified Employees 6.5% 3.0% 6 months 0.0% optional no wait
Classified Employees hired
on or before 3/31/07
7.5% 3.0% 6 months 0.0% optional no wait
Unclassified Management 6.5% 6.0% no wait 0.0% optional no wait
Unclassified Management
hired on or before 3/31/07
7.5% 6.0% no wait 0.0% optional no wait
Council Appointed Positions 10.0% 0.0% no wait match up to
3%
optional no wait
Executive and Senior Leaders 10.0% 0.0% no wait match up to
3%
optional no wait
Police & Dispatch (per union
agreement) *
11% 8.5% no wait match up to
3%
optional 6
months
for
match
Community Service Officer 8.0% 3.0% 6 months 0.0% optional no wait
* All employee groups vest immediately, except Police and Dispatch who follow schedule in
union agreement.
Employee contributions to the 457 plan are limited to the amounts published by the IRS.
4 Financial Policy 3 – General Financial Policies
The City will contract with a third-party administrator to provide the Defined Contribution Plans.
City Staff comprised of both Finance and HR will oversee the program and performance of the third-
party administrator.
3.3 Fund Organization
Funds for accounting and financial reporting purposes have their own balance sheet and income
statement.
The organization of the City’s Funds is designed to enhance accountability and transparency,
comply with Generally Accepted Accounting Principles, meet grant requirements, comply with City
Code/Charter and comply with Colorado statutes. In City Article V, Section 25 the Financial Officer
is empowered to create funds as appropriate. However, City Code Chapter 8, Article III also
establishes additional parameters for City funds.
The number of funds established should be the minimum needed for legal and operating
requirements. Unnecessary funds can result in inflexibility, undue complexity and inefficient
financial administration.
The City’s funds are organized at two levels of groupings: Fund Groups and Fund Types.
Fund Groups
Governmental Funds Used to account for activities primarily supported by taxes, grants and similar
revenue sources.
Proprietary Funds Used to account for activities that receive significant support from fees and
charges.
Fiduciary Funds Used to account for resources that a City holds as a trustee or agent on behalf of an
outside party that cannot be used to support the City’s own programs.
Within each Fund Group are Fund Types.
Governmental Fund Types
General Fund Main operating fund used to account for and report all financial resources not
accounted for and reported in another fund.
Special Revenue
Funds
Used to account for and report the proceeds of specific revenue sources that are
restricted, committed or assigned to expenditure for specific purposes, other than
debt service or capital projects.
Debt Service Funds Used to account for and report resources that are restricted, committed or
assigned to expenditure for principal and interest.
Capital Project Funds Used to account for and report resources that are restricted, committed or
assigned to expenditure for capital outlays, including the acquisition or
construction of capital facilities or other capital assets.
5 Financial Policy 3 – General Financial Policies
Proprietary Fund Types
Enterprise Funds Used to account and report any activity for which a fee is charged to external users
of goods and services
Internal Service
Funds
Used to account and report any activity for which a fee is charged to other funds,
departments, or agencies of the City and its component units on a cost
reimbursement basis.
Fiduciary Fund Types
Pension (and Other
Employee Benefit)
Trust Funds
Used to account and report resources that are required to be held in trust for the
members and beneficiaries of defined benefit plans.
Custodial Funds Used to report resources held by the City in a purely custodial capacity.
The following is a list of all funds of the City, including legally separate entities but from a financial
reporting perspective are treated as a component unit of the City.
Group and Type Legal Ref. Name
Governmental
General Fund City 100 General Fund
Special Revenue Fund City 250 Capital Expansion Fund
Special Revenue Fund City 251 Sales & Use Tax Fund
Special Revenue Fund Separate 252 General Improvement District #1
Special Revenue Fund City 254 Keep Fort Collins Great Fund
Special Revenue Fund City 255 Community Capital Improvement
Program
Special Revenue Fund City 256 2050 Tax
Special Revenue Fund City 272 Natural Areas Fund
Special Revenue Fund City 273 Cultural Services & Facilities
Special Revenue Fund City 274 Recreation Fund
Special Revenue Fund City 275 Cemeteries Fund
Special Revenue Fund City 276 Perpetual Care Fund
Special Revenue Fund City 277 Museum Fund
Special Revenue Fund City 280 Community Development Block
Special Revenue Fund City 281 Home Investment Partnership
Special Revenue Fund City 290 Transit Services Fund
Special Revenue Fund City 291 Transportation Capital Expansion Fee
Special Revenue Fund City 292 Transportation Services Fund
Special Revenue Fund Separate 293 GID #15 - Skyview
Special Revenue Fund City 294 Parking Fund
Debt Service City 304 Capital Leasing Corporation
Capital Projects Fund City 400 Capital Projects Fund
Capital Projects Fund City 270 Neighborhood Parkland Fund
Capital Projects Fund City 271 Conservation Trust Fund
6 Financial Policy 3 – General Financial Policies
Proprietary
Enterprise Fund City 500 Golf Fund
Enterprise Fund City 501 Electric and Telecommunications
Fund
Enterprise Fund City 502 Water Fund
Enterprise Fund City 503 Wastewater Fund
Enterprise Fund City 504 Storm Drainage Fund
Enterprise Fund City 505 Broadband Fund
Internal Service Fund City 601 Equipment Fund
Internal Service Fund City 602 Self-Insurance Fund
Internal Service Fund City 603 Data and Communications Fund
Internal Service Fund City 604 Benefits Fund
Internal Service Fund City 605 Utility Customer Service & Admin
Fiduciary
Pension Trust Fund City 700 Employees' Retirement Fund
Governmental
Special Revenue Fund Separate 800 URA - N. College District
Special Revenue Fund Separate 801 URA - Prospect South TIF District
Special Revenue Fund Separate 803 URA - Mall Fund
Special Revenue Fund Separate 820 DDA Operating Fund
Special Revenue Fund Separate 821 DDA Fixed Asset and Long-Term Debt
Special Revenue Fund Separate 822 DDA Debt Service Fund
3.4 Cost Recovery and Fee Setting
A. Enterprise Funds shall rely on charges and user fees to recover their costs, rather than
taxes. Utility rates will be based upon the cost-of-service approach to reflect full distribution
of costs to appropriate rate classes in order to effect equitable sharing of costs. Rates shall
be established and maintained at a level sufficient to maintain positive net income in each of
the utility funds after paying the full cost of operating and maintaining the utilities and
keeping them in good repair and working order. Such rates shall also be sufficient to enable
each utility, where applicable, to meet rate requirements of City or utility enterprise bond
ordinances.
B. The Internal Service Funds shall operate under the following guidelines.
1. Internal service fund charges are limited to the recovery of the cost of the service, including
depreciation, rather than making a profit. Each fund's prior year financial statements and
estimates of future costs form the basis for the calculation of charges.
7 Financial Policy 3 – General Financial Policies
2. Charges should be set at a level to avoid significant adverse financial impacts on their
customers. Fund customers and independent experts should be allowed to review and make
recommendations about the level of charges. The Finance Department should approve the
analysis and conclusions used to set rates.
3. Internal service funds should compete with similar services offered by the private sector.
The City staff will compare rates every five years. If not competitive with the private sector, the
Finance Department will analyze whether the private sector should provide the service.
4. Internal service funds may build up reserves. Customer-approved master plans and
independent third-party actuarial reviews (for the Benefit and Self-Insurance funds) guide the
level of reserves. Fund managers may spend reserves only for their approved purpose.
5. The City may buy equipment and facilities for the internal service funds through lease-
purchase financing. Management's decision to recommend lease-purchase financing depends
on: (1) cash flow needs; (2) budget constraints; (3) benefit to cost analysis; and (4) level of
reserves.
6. Except for the Utilities Customer Service and Administration Fund, Internal service funds
operate under the same guidelines and constraints as the General Fund and other governmental
funds of the City. The Utilities Customer Service and Administration Fund shall operate under
the guidelines of the Utilities Services Funds.
C. Cultural Services & Facilities Fund Fee Policy
1. Total revenue from fees and charges shall cover a minimum of 55% of Lincoln
Center Operation and Maintenance and Performing and Visual Arts Programming Budgets.
This includes revenues generated at the Lincoln Center from rentals, equipment,
concessions and other miscellaneous sources and all total direct revenues from the
Performing and Visual Arts Programming. A transfer from the General Fund will make up
the difference between total revenue and expenditures.
2. The Cultural Services and Facilities Administration and Museum budgets provide
minimal financial support. These programs are funded primarily by a transfer from the
General Fund.
3. Major capital improvements and renovations will be financed through sources other
than Cultural Services and Facilities Fund.
4. Charitable gifts and donations—raised from the philanthropic sector of
foundations, corporations, and individuals to support public initiatives of the City of
Fort Collins—will be
8 Financial Policy 3 – General Financial Policies
made directly to the City of Fort Collins. Acceptance, stewardship, tracking, and
expenditures of all charitable gifts are governed by Philanthropic Administrative and City
Give Finance Governance Policy with great attention to transparency and accountability.
D. Recreation Fund Rates and Charges Policy
Recreation Rates and Charges shall cover between 68% to 75% of all operating costs, with the
difference to be covered by the City’s General Fund and/or voter approved tax revenues
dedicated to Parks & Recreation. Equipment and rolling stock shall be considered operating
costs in the application of this policy. Recreation Rates and Charges shall not be expected to
cover major capital items such as facility and land acquisitions, major renovations to facilities
or other costs such as utilities, custodial or grounds maintenance.
3.5 Capital Improvement Program
1. Each Service Area or Department shall develop multi-year Master Plans for capital
improvements. On a city-wide basis, staff shall compile a 10-year Capital Improvement
Plan and update it every two years. Estimates of operating and maintenance costs
should be included.
2. Appropriation requests must include not only the cost of construction or acquisition
and the funding sources, but an estimate of operating and maintenance costs.
3. Capital improvements projects will be administered in accordance with the Capital
Projects Procedures Manual.
4. Appropriations for capital improvements will be constructed and expenditures incurred
only for the purpose as approved by City Council.
5. Staff should seek out grants and partnerships whenever appropriate.
3.6 Using State Allocation of Private Activity Bonds
A. Background: Conduit debt is issued in a local government’s name, but the resources for
repayment come from individuals or entities that are not part of government. Entities seek
9 Financial Policy 3 – General Financial Policies
conduit debt because of the government’s ability to issue debt at favorable tax-exempt
rates. Private Activity Bonds (PAB) are a form of conduit debt.
Colorado’s Private Activity Bond allocation program is established by the Colorado Private
Activity Bond Ceiling Allocation Act, Section 24-32-1701, et seq., C.R.S. Pursuant to Section
24-32-1706, annually the City of Fort Collins is offered a portion of the State ceiling as a
local government. If the City does not issue bonds or assign bond capacity to an entity for a
local project by September 15th annually, the cap automatically reverts back to the state’s
pool.
Historically, the City has provided this capacity on a first come first serve basis. It has not
been uncommon for the City to receive no requests. Because more partners are using
programs that can benefit from the lower interest rate that PAB’s offer, the City is
establishing this process.
B. Purpose: PAB’s allow certain private sector activities to receive lower interest rates. PAB’s
may be used for affordable housing development and rehabilitation, specific economic
development programs and for industrial development purposes, among other permitted
uses. The City will attempt to find local uses for this development tool.
C. Communication: Information about the program should be placed on the City’s website
(fcgov.com). Consideration for other advertising and communication methods may be
appropriate.
D. Awarding and Assigning: Awarding PAB and Assigning PAB allocations are different
processes. Assigning PAB to another qualified issuer is strongly preferred. This is to reduce
the administrative investments and leverage the efficiency of qualified issuers who award
PAB’s regularly. If an entity applies for a direct award under the City’s name, staff will
attempt to find a qualified issuer that agrees to accept an assignment from the City and
issue the PAB under their own authority.
E. Application due date: Written applications to use of Fort Collin’s annual PAB allocation are
due to the City’s Chief Sustainability Officer by March 15th.
F. Application Elements:
a. The following items are required when applying for both assignments and direct
awards.
i. A request letter signed by applicant describing the project the PAB would be
used for and including: the applicant’s name, address, phone, email address,
and principal contact.
ii. Amount of allocation being requested.
10 Financial Policy 3 – General Financial Policies
iii. Bond counsel firm name, address, phone, email address and principal
contact.
iv. Description of Applicant’s local projects and years of operation
v. Number of years’ entity has been doing business in State of Colorado
vi. Provide a Certificate of Good Standing from the Secretary of State’s office.
vii. Description of assets to be purchased or constructed and expenses
incidental to the project, including the sale of bonds.
viii. Explanation of how the project aligns with City objectives.
ix. Number of housing units and target demographics
x. Statement from competent bond counsel that the project is eligible for
qualified private activity bonds.
b. The following additional items are required in applications for direct awards of PAB:
Debt Information
xi. Name, address, phone of principal contact of the proposed underwriter or
lender.
xii. Anticipated timetable for bond transaction.
xiii. Estimated bond redemption and interest payment schedule
xiv. Indicate the type of letter of credit or similar instrument, which will back the
debt
xv. Disclose if the applicant is involved in any litigation which may affect the
validity or repayment of the bonds.
Financial Information
xvi. Audited financial statements for the applicant for the last three years and
interim statements for the current year. If not available, please explain why.
xvii. Projection of future revenues, expenditures and debt service coverage for
the next five years supported by a feasibility study.
Other
xviii. Describe the arrangements that will ensure compliance with arbitrage
reporting and payment requirements.
xix. Name, address and principal contact person for applicant’s local bank.
xx. Briefly describe any potential conflicts of interest of personal/ professional/
political relationships between the applicant’s officers and/or directors or
applicant’s operations and the City of Fort Collins.
xxi. Any other information which provides evidence of the applicant’s ability to
repay the bonds and complete the project.
Debt Security
xxii. All arbitrage calculations and payments must be performed by the trustee
under the terms of the trust agreement or by any such other arrangement
that will ensure compliance. The City must be provided with copies of 8088-
T’s filed with the IRS.
xxiii. The private entity must provide the City with information on the status of
the debt annually and upon any material event.
11 Financial Policy 3 – General Financial Policies
xxiv. The bond documents must indemnify the City against IRS assessments and
legal fees arising from the financing.
xxv. The issuer’s agent will be responsible for all continuing disclosure
requirements.
c. Items missing from application may result in disqualification from consideration.
G. Fees: There are no fees for applications that request assignments to another qualifying
issuer. However, the following fees apply to applications requesting a direct award of PAB
from the City of Fort Collins.
a. Issuance fee equal to the greater of: A. 0.25% of the par amount of the debt, or B.
$5,000. The fee is capped at $25,000.
b. The cost of a review of the financing by an independent fiscal agent (to be selected
by the City)
c. Any other direct cost incurred by the City related to the financing.
d. There will not be additional issuance fees for any amendment or modification of the
original transaction even if it requires official action by City Council, except for
actual direct costs of the City.
H. Review Process
a. PAB Committee: Applications will be reviewed by a committee of at least 3 people.
Members will include at least one representative each from Social Sustainability,
Economic Health and Finance. Representatives from other departments, such as the
City Manager’s Office will be added as needed. Service Area Directors will make the
necessary appointments to the PAB Committee.
b. At a minimum, the following factors should be considered by the PAB Committee
when making a recommendation:
i. How well the project applied for meets the land use, economic development
and/or affordable housing goals of the City of Fort Collins.
ii. Project feasibility and timing.
iii. Leverage of other investment into the project.
iv. Maintenance of or increase in local tax base.
v. Competing uses for the City’s allocation.
vi. Whether the City’s allocation should be used in multiple projects.
vii. Whether the application should be considered by any City Board or
commission.
c. The PAB Committee will decide on a recommendation no later than July 1.
d. City Council shall approve all PAB assignments or direct awards. The PAB
Committee shall submit their recommendations to the City Council no later than
August 15.
12 Financial Policy 3 – General Financial Policies
Getting Help
Please contact the Controller with any questions at 970.416.2436.
1 Financial Policy 5 – Fund Balance Minimums
Financial Management Policy 5
Fund Balance Minimums
Issue Date: 01/12/21
Version: 6
Reviewed: 12/5/24
Issued by: City Council
2 Financial Policy 5 – Fund Balance Minimums
5.1 Governmental Funds and Fund Balances
To set minimum fund balances so as to mitigate risks, maintain good standing with
rating agencies, and ensure cash is available when revenue is unavailable. The policy
sets minimum fund balances, not targets or maximum balances. Each fund should be
evaluated by staff to determine the appropriateness of maintaining fund balances above
the minimums set in this policy. Contingencies for severe weather, prolonged drought,
and anticipated capital spending should be considered independently from this policy.
The Equity on balance sheet of a governmental fund is called Fund Balance. The current
classifications of Fund Balance in governmental funds are primarily based on the origin
of the constraints. The following categories are in decreasing order of constraints.
Non-Spendable Permanent endowments or assets in a non-liquid form
Restricted Involve a third party: State Legislation or contractual agreements
Committed Set by formal action of the City Council
Assigned By staff, and/or residual balances in a Special Revenue Fund
Unassigned Remaining balances in governmental funds
Minimums outlined in section 5.3 relate only to Assigned and Unassigned balances.
Objective:
To set minimum fund balances as to mitigate risk, maintain good standing with rating agencies, and ensure
cash is available when revenue is unavailable. The policy sets minimum fund balances, not targets or
maximum balances. Each fund should be evaluated by staff to determine the appropriateness of
maintaining fund balances above the minimums set in this policy. Contingencies for severe weather,
prolonged drought, and anticipated capital spending should be considered independently from this policy.
Applicability:
Funds—This policy applies to all City funds. It does not apply to URA, DDA, PFA and Library.
Authorized by:
City Council Resolutions 1994-174, 2008-038, 2014-058,2017-101, 2021-010
3 Financial Policy 5 – Fund Balance Minimums
5.2 Proprietary Funds and Working Capital
Internal Service Funds and Enterprise Funds are accounted for nearly identical to the
private sector. The balance sheets include long term assets and long-term liabilities.
The resulting Equity section on their balance sheet, called Net Position, is not always a
good measure of spendable financial resources. To get to spendable financial resources,
a common calculation is to take Current Assets and subtract Current Liabilities, with the
net result called Working Capital.
To further refine, for purposes of this policy, certain required restrictions are further
subtracted and result in Available Working Capital. Some examples of required
restrictions are unspent monies for Art in Public Places, Water Rights, and existing
appropriations for capital projects. The minimums outlined in section 5.3 relate to
Available Working Capital.
5.3 Minimum Balances
The following Minimum Balances refers to Assigned and Unassigned Fund Balances in
governmental funds and Available Working Capital in the Internal Service Funds and
Enterprise Funds.
A. General Fund
45 Day Liquidity Goal - The Commitment for Contingency should be at least 45 days
(12.5%) of the subsequent year’s originally adopted budgeted expenditures and
transfers out. The calculation for the minimum level shall exclude expenditures and
transfers out for large and unusual one-time items.
Important note – the 45 Day Liquidity Goal is in addition to the Emergency Reserves
required by Article X, Section 20(5) of the State Constitution. This reserve must equal
3% of non-exempt revenue and can only be used for declared emergencies. Fiscal
emergencies are specifically excluded by the State Constitution as qualifying use of this
reserve.
B. Special Revenue Funds
No minimum balance is required.
4 Financial Policy 5 – Fund Balance Minimums
C. Debt Service Funds
No minimum balance is required.
D. Capital Project Funds
No minimum balance is required.
E. Enterprise Funds
Enterprise funds focus on working capital rather than fund balance.
Enterprise Funds shall maintain a minimum Available Working Capital equal to 25% of
Operating Expenses, less Depreciation. Exception1: In the case of L&P, operating
expenses will include purchased renewable energy for resale but will not include
regular purchased power for resale (i.e. Platte River Power Authority). Exception 2: In
the case of Golf, the minimum fund balance will be 12.5%.
Important note – The Water Fund holds a balance for Restricted Water Rights. The
balance equals the amount of cash in-lieu-of water rights payments and raw water
surcharges less any expenses for acquiring water rights and water storage.
The enterprises funds should also be accumulating available working capital above
these minimums for the purposes of funding future capital projects.
F. Internal Service Funds
Each fund is a unique operation and will maintain a minimum Available Working Capital
as follows:
601 Equipment Fund 8.3% Of annual operating expenses, excluding
depreciation
602 Self-Insurance Fund * 25.0% Of annual operating expenses
603 Data & Communications
Fund
0.0% N/A
604 Benefits Fund 25.0% Of annual medical and dental expenses
605 Utility Customer Service
Fund
0.0% N/A
* Self Insurance Fund will be measured against Available Unrestricted Net Position
instead of Available Working Capital.
5 Financial Policy 5 – Fund Balance Minimums
5.4 Below Minimum
When circumstances result in balances below the minimum, staff should develop a plan
to restore minimums fund balances and present it to Council Finance Committee.
6 Financial Policy 5 – Fund Balance Minimums
Definitions
Non-Spendable Fund Balances: Applicable to governmental funds. Permanent endowments or assets in a
non-liquid form such as long-term inter-agency loans.
Restricted Fund Balances: Applicable to governmental funds. Involve a third party such as State
Legislative requirements, voter ballot language, or the Contractual Agreements with parties
external to the City.
Committed Fund Balances: Applicable to governmental funds. Involve a of formal action by the City
Council. An example is traffic calming revenues are required to be spent on traffic calming
activities. Any unspent monies at end of year are classified as Committed to traffic calming in the
General Fund.
Assigned Fund Balances: Are applicable to governmental funds. Assignments can be made by senior
management. They represent the intent to use the monies for a specific purpose. An example of this
it this the one-time Harmony Road monies transferred by the State to the City. Although required to
be used on Harmony Road, staff intends to use the monies only on Harmony Road improvements.
These monies are considered when measuring compliance with minimum fund balances.
Unassigned Fund Balances: Are applicable only to the governmental funds. These monies are considered
when measuring compliance with minimum fund balances.
Working Capital: Is a term applicable to Internal Service and Enterprise Funds. It is the difference
between Current Assets and Current Liabilities. Not all Working Capital is available. Available
Working Capital does not include Restrictions for debt, Art in Public Places, approved capital
appropriations, and other restrictions.
Unrestricted Net Position: Is a term applicable to Internal Service and Enterprise Funds. Not all
Unrestricted Net Position is available. Available Unrestricted Net Position does not include unused
Art in Public Places monies, approved capital appropriations, and other commitments.
Liquidity: Assets range from cash to land. The more easily and quickly an asset can be converted to cash
determines its relative liquidity.
Reserves: A legacy term that previously referred to fund balances, or fund balances set aside for a specific
purpose. It is no longer used on financial statements.
Fund Balance: Is a term applicable to governmental funds. Fund balance or Equity is the difference
between assets, liabilities, deferred outflows of resources and deferred inflows of resources. Since
governmental funds do not have long term assets and long-term debt on their balance sheet, fund
balance is similar and approximates working capital in the private sector and enterprise funds.
7 Financial Policy 5 – Fund Balance Minimums
Getting Help
Please contact the Controller with any questions at 970.416.2436.
1 Financial Policy 7 – Debt
Financial Management Policy 7
Debt
Issue Date: 02-07-2023
Reviewed: 12-05-2024
Version: 3
Issued by: City Council
7.1 Authorization for Municipal Borrowing
The City Charter (Article V. Part II) authorizes the borrowing of money and the issuance of long-term
debt. The Charter and State Constitution determine which securities may be issued and when a vote
of the electors of the City and approved by a majority of those voting on the issue.
7.2 Purpose and Uses of Debt
Long term obligations should only be used to finance larger capital acquisitions and/or construction
costs that are for high priority projects. Debt will not be used for operating purposes. Debt financing
of capital improvements and equipment will be done only when the following conditions exist:
a) When non-continuous projects (those not requiring continuous annual appropriations)
are desired;
b) When it can be determined that future users will receive a significant benefit from the
improvement;
c) When it is necessary to provide critical basic services to residents and taxpayers (for
example, purchase of water rights);
d) When total debt, including that issued by overlapping governmental entities, does not
constitute an unreasonable burden to the residents and taxpayers.
Objective:
The purpose of this policy is to establish parameters and provide guidance governing the issuance
of all debt obligations issued by the City of Fort Collins (City).
Applicability:
This debt policy applies to all funds and Service Areas of the City and closely related agencies such
as the Downtown Development Authority (DDA), Fort Collins Leasing Corporation and the Fort
Collins Urban Renewal Authority (URA).
Authorized by:
City Council Resolutions, 1994-174, 2013-093, 2023-017
2 Financial Policy 7 – Debt
7.3 Types of Debt and Financing Agreements
The types of debt permitted are outlined in State statute. The City will avoid derivative type
instruments. In general the following debt types are used by the City:
a) General obligation bonds—backed by the credit and taxing power of the City and not
from revenues of any specific project. Colorado law limits general obligation debt to
10% of the City’s assessed valuation. Under TABOR this type of debt must be approved
by voters.
b) Revenue Bonds—issued and backed by the revenues of a specific project, tax
increment district (TIF), enterprise fund, etc. The holders of these bonds can only
consider this revenue source for repayment. TABOR does not require that voters
approve these types of debt.
c) Lease Purchase – issued whereby the asset acquired is used as collateral. Examples
include Certificates of Participation (COP), Assignment of Lease Payments (ALP) and
equipment leases. Equipment leases shall be limited to financing within Internal
Service Funds. TABOR does not require that voters approve these types of
agreements.
d) Moral Obligation Pledge—a pledge to consider replenishing a debt reserve fund of
another government agency if the reserve was used to make debt payments. This type
of commitment will only be used to support the highest priority projects, or when the
financial risk to the City does not increase significantly, or when the City’s overall
credit rating is not expected to be negatively impacted. Because it is a pledge to
consider replenishing, it is not a pledge of the City’s credit, and as such is not a
violation of State statutes and City Charter. However, decision makers should keep in
mind that not honoring a Moral Obligation Pledge will almost certainly negatively
impact the City’s overall credit rating. TABOR does not require that voters approve
these types of agreements.
e) Interagency Borrowing—issued when the credit of an agency (DDA, URA) of the City
does not permit financing at affordable terms. Usually used to facilitate a project until
the revenue stream is established and investors can offer better terms to the agency.
Program parameters are outlined in section 7.8 of this policy. TABOR does not
require that voters approve these types of agreements.
f) Conduit Debt—Typically limited to Qualified Private Activity Bonds (PAB) defined by
the IRS and limited to the annual allocation received from the State. Low income
housing is one example of a qualified use of PAB. Program parameters are outlined
the General Financial Policy 3.6. There is no pledge or guarantee to pay by the City.
g) Any other securities not in contravention with City Charter or State statute.
7.4 Debt Structure and Terms
The following are guidelines, and may be modified by the City to meet the particulars of the
financial markets at the time of the issuance of a debt obligation:
3 Financial Policy 7 – Debt
a) Term of the Debt: The length of the financing will not exceed the useful life of the asset
or average life of a group of assets, or 30 years, whichever is less. Terms longer than
20 years should be limited to the highest priority projects.
b) Structure of Debt: Level debt service will be used unless otherwise dictated by the
useful life of the asset(s) and/or upon the advice of the City's financial advisor.
c) Credit Enhancements: The City will not use credit enhancements unless the cost of the
enhancement is less than the differential between the net present value of the debt
service without enhancement and the net present value of the debt service with the
enhancement.
d) Variable Rate Debt: The City will normally not issue variable rate debt, meaning debt
at rates that may adjust depending upon changed market conditions. However, it is
recognized that certain circumstances may warrant the issuance of variable rate debt,
but the City will attempt to stabilize the debt service payments through the use of an
appropriate stabilization arrangement.
e) Derivative type instruments and terms will be avoided.
7.5 Refinancing Debt
Refunding of outstanding debt will only be done if there is a resultant economic gain regardless of
whether there is an accounting gain or loss, or a subsequent reduction or increase in cash flows.
The net present value savings shall be at least 3%, preferably 5% or more. In an advanced
refunding (before the call date), the ratio of present value savings to the negative arbitrage costs
should be at least 2.
7.6 Debt Limitations and Capacity
Debt capacity will be evaluated by the annual dollar amount paid and the total amount outstanding
with the goal to maintain the City’s overall issuer rating at the very highest rating, AAA. Parameters
are different for Governmental Funds, Enterprise Funds, and Related Agencies.
a. Governmental Funds—Annual debt service (principal and interest) will not exceed
5% of annual revenues. For calculation, revenues will not include internal charges,
transfers and large one-time grants. Outstanding debt in relation to population and
assessed value will be monitored.
b. Enterprise Funds—Each fund is unique and will be evaluated independently. Each
fund’s debt will be managed to maintain a credit score of at least an A rating. These
funds typically issue revenue bonds and investors closely watch revenue coverage
ratio. Coverage ratios are usually published in the Statistical Section of the City’s
Comprehensive Annual Financial Statement.
c. Related Agencies—Each agency will be evaluated independently, taking into account
City Charter, State statutes, market conditions and financial feasibility.
4 Financial Policy 7 – Debt
7.7 Debt Issuance Process
When the City utilizes debt financing, it will ensure that the debt is soundly financed by:
a) Selecting an independent financial advisor to assist with determining the method of
sale and the selection of other financing team members
b) Conservatively projecting the revenue sources that will be used to pay the debt;
c) Maintaining a debt service coverage ratio which ensures that combined debt service
requirements will not exceed revenues pledged for the payment of debt.
d) Evaluating proposed debt against the target debt indicators.
7.8 Inter-agency Loan Program
1. Purpose: The purpose of the Inter-agency loan program is to support City
services, missions, and values by making loans to outside entities such as the
Urban Renewal Authority and the Downtown Development Authority while
maintaining an adequate rate of return for the City.
2. Eligible Applicants: The following are examples of situations in which City
loans to outside agencies may be appropriate:
A. An entity that was created wholly or in part by the City and is in a fledgling
stage and does not yet have an established credit history to access the
capital markets. Examples include the Urban Renewal Authority, etc.
B. An entity related to the City desires to issue debt that will be repaid over a
timeframe that would be unrealistic for a private lender. Examples include
bonds issued by the Downtown Development Authority for less than 10
years.
C. Any other situation in which the Council deems it appropriate to meet the
financing needs of an entity that is engaged in services that support the
mission and values of the City.
3. Program Guidelines:
A. The borrowing entity must have approval from its governing body.
B. The loan must be evidenced by a promissory note.
C. There must be a reasonable probability of repayment of the loan from an
identifiable source such as TIF revenues.
5 Financial Policy 7 – Debt
D. The interest rate assigned to the loan must be the higher of the Treasury
Note or Municipal Bond of similar duration (3 year, 5 year, etc.), plus 0.5%,
subject to the following minimum (floor).
FLOOR - Minimum Loan Rates
Term Rate
0 – 5 years 2.75%
6 – 10 years 3.25%
11 – 15 years 3.75%
16 – 25 years 4.00%
E. The loans must be limited to 25 years.
F. City Council must review the request and approve the amount and terms
and conditions of the loan.
G. Loans of Utility reserves must be reviewed by either the Energy Board or
Water Board, as applicable, in advance of City Council or Council
committee consideration, and must meet the following additional criteria:
a. the City Council must make a formal finding that the funds will not
be needed for utility purposes during the term of the loan, and that
the terms and conditions of the loan represent a reasonable rate of
return to the Utility; and
b. utility rates must not be increased for the purposes of funding the
loan.
4. Limit on Funds available for Loan Program
A. Governmental Funds: Total loans shall not exceed 25% of the aggregate
cash and investments balance of the governmental funds (i.e., General
Fund and Special Revenue Funds).
B. Enterprise Funds: Total loans shall not exceed 5% of the aggregate cash
and investments balance in the enterprise funds (i.e. Utility Funds and
Golf Fund).
C. Operating and capital needs of the loaning funds shall not be significantly
impaired by these loans.
6 Financial Policy 7 – Debt
Getting Help
Please contact the Director of Accounting with any questions at 970.221.6784.
Related Policies/References
- The City of Fort Collins Charter (Article V., Part II)
- Investment Policy
- Debt Administration Policy and Procedures 53
D. Loans should not impact the loaning funds compliance with minimum fund
balance policies, timing of intended uses, etc
7.9 Other
Debt Management - The City will also have an administratively approved Debt
Administration Policy and Procedure 53 that includes guidance on:
a) Investment of bond proceeds
b) Market disclosure practices to primary and secondary markets, including annual
certifications, continuing disclosures agreements and material event disclosures
c) Arbitrage rebate monitoring and filing
d) Federal and State law compliance practices
e) Ongoing Market and investor relations efforts
f) Identify a Chief Compliance Officer
g) System of actions and deadlines
h) Records to be maintained
7 Financial Policy 7 – Debt
Definitions
Conduit Debt: 1- An organization, usually a government agency, that issues municipal securities to raise
capital for revenue-generating projects where the funds generated are used by a third party
(known as the "conduit borrower") to make payments to investors. The conduit financing is
typically backed by either the conduit borrower's credit or funds pledged toward the project by
outside investors. If a project fails and the security goes into default, it falls to the conduit
borrower's financial obligation, not the conduit issuer (City). 2- Common types of conduit financing
include industrial development revenue bonds (IDRBs), private activity bonds and housing revenue
bonds (both for single-family and multifamily projects). Most conduit-issued securities are for
projects to benefit the public at large (i.e. airports, docks, sewage facilities) or specific population
segments (i.e. students, low-income home buyers, veterans). 3- In some cases, a governmental entity
issues municipal bonds for the purpose of making proceeds available to a private entity in
furtherance of a public purpose, such as in connection with not-for-profit hospitals, affordable
housing, and many other cases. These types of municipal bonds are sometimes referred to as
"conduit bonds." One common structure is for the governmental issuer to enter into an
arrangement with the private conduit borrower in which the bond proceeds are loaned to the
conduit borrower and the conduit borrower repays the loan to the issuer. For most conduit bonds,
although the governmental issuer of the bonds is legally obligated for repayment, that obligation
usually is limited to the amounts of the loan repayments from the conduit borrower. If the conduit
borrower fails to make loan repayments, the governmental issuer typically is not required to make
up such shortfalls. Thus, unless the bond documents explicitly state otherwise, investors in conduit
bonds should not view the governmental issuer as a guarantor on conduit bonds.
Credit Enhancements: the requirement that a certain percentage or amount of non-federal dollars or in-
kind services be provided in addition to the grant funds.
Interagency: the individual responsible for fiscally managing the grant award and the person who
maintains the records in the City’s financial system.
Debt Service Coverage Ratio: is a common measure of the ability to make debt service payments. The
formula is net operating income (operating revenue – operating expense) divided by debt service
(annual principal and interest)
1 Financial Policy 8 – Investments
Financial Management Policy 8
Investment Policy
Issue Date: 02-07-2023
Reviewed: 12-05-2024
Version: 5
Issued by: City Council
8.1 Policy
The City of Fort Collins, Colorado (the “City”) is a home rule municipality operating under
the City Charter. Article V, Part III of the City Charter assigns to the Financial Officer the
responsibility of investing City funds. Funds must be placed in investments authorized by
the City Council (“Council”). The Financial Officer will administer the investment program
to ensure effective and sound fiscal management.
It is the policy of the City to invest public funds in a manner which will protect capital and
meet liquidity needs while providing the highest investment return.
8.2 Scope
This policy is to establish guidelines for the efficient management of City funds and for the
purchase and sale of investments. This investment policy applies to the investment of all
general and special funds over which the City exercises financial control, including
operating funds, Poudre Fire Authority, the Downtown Development Authority, Poudre
Objective:
This policy is to establish guidelines for the efficient management of City funds and for the purchase and sale
of investments. The City’s principal investment objectives, in priority order are: legal conformance, safety,
liquidity and return on investment. All investments shall be undertaken in a manner that seeks to ensure the
preservation of capital in the overall portfolio.
Applicability:
This investment policy applies to the investment of all general and specific funds over which the City
exercises financial control, including operating funds, Poudre Fire Authority, the Downtown Development
Authority, Poudre River Public Library District, Fort Collins Leasing Corporation and the Fort Collins Urban
Renewal Authority.
Authorized by:
City Council, Resolutions 90-44, 2008-121, 2009-109, 2010-065, 2012-119. 2023-017.
2 Financial Policy 8 – Investments
River Public Library District, Fort Collins Leasing Corporation and the Fort Collins Urban
Renewal Authority. For purposes of this policy, operating funds include:
General Fund;
Special Revenue Funds;
Debt Services Funds (unless prohibited by bond ordinance);
Capital Projects Funds;
Enterprise Funds;
Internal Service Funds;
Fiduciary Funds; and
Any newly created Fund, unless exempted by Council.
Unless specifically provided for in the bond ordinance, all bond proceeds, bond reserve
funds and pledged revenues must be invested in accordance with the operating funds
guidelines set forth in this Investment Policy. Guidelines for investing the funds of the City’s
defined benefit plan shall be included in the Investment Policy for the General Employees’
Retirement Plan, which is monitored and approved by the General Employees’ Retirement
Committee.
8.3 Investment Objectives
The City’s principal investment objectives, in priority order, are: legal conformance, safety,
liquidity, and return on investment. All investments shall be undertaken in a manner that
seeks to ensure the preservation of capital in the overall portfolio.
1. Legal conformance: The investment portfolio will conform to all legal and
contractual requirements.
2. Safety: Safety of investment principal and the preservation of capital are
primary objectives of the investment program. When making investment
decisions, the Financial Officer will seek to ensure the preservation of capital
in the overall portfolio by mitigating credit risk and interest rate risk.
A. Credit Risk: The Financial Officer will minimize the risk of loss of principal
and/or interest due to the failure of the security issuer or backer by:
a. Limiting investments to the safest types of securities.
b. Pre-qualifying financial institutions, securities brokers and dealers,
and advisors.
c. Diversifying the investment portfolio to reduce exposure to any
one security type or issuer.
Interest Rate Risk: The Financial Officer will minimize the risk that the market value of
securities in the portfolio will fall due to changes in market interest rates by:
3 Financial Policy 8 – Investments
a. Whenever possible, holding investments to their stated maturity
dates.
b. Investing a portion of the operating funds in shorter-term
securities, money market mutual funds, or local government
investment pools.
3. Liquidity: The investment portfolio must be sufficiently liquid so as to meet all
reasonably anticipated operating cash flow needs. This is accomplished by
structuring the portfolio so that securities mature to meet cash requirements
for ongoing operations. Investments shall be managed to avoid, but not
prohibit, sale of securities before their maturities to meet foreseeable cash
flow requirements. Since all possible cash needs cannot be anticipated, the
portfolio must consist largely of securities with active secondary or resale
markets.
4. Return on Investment: The investment portfolio will be designed with the
objective of maximizing the rate of return on investment while maintaining
acceptable risk levels and ensuring adequate liquidity. Return on investment
is of secondary importance compared to the safety and liquidity objectives
described above. Investment pooling may be used to maximize the City’s
investment income. Interest income, from pooling, will be distributed to the
participating funds in proportion to each fund’s level of contribution.
The Financial Officer will determine whether a security will be sold prior to
maturity. The following are examples of when a security might be sold:
a. A security with a declining credit rating may be sold early to minimize loss
of principal;
b. A security swap would improve the quality, yield, return, or maturity
distribution of the portfolio;
c. Liquidity needs of the portfolio require that the security be sold; or
d. The Financial Officer will obtain the best rate of return on investments by
taking advantage of market volatility and recognizing gains on a portion of
the portfolio.
8.4 Standards of Care
1. Prudence: The City has a fiduciary responsibility to protect the assets of the
City and to invest funds appropriately. The standard of care to be used by City
officials is the “prudent person” rule as specified by CRS 15-1-304, which
reads:
“Standard for investments: In acquiring, investing, reinvesting,
exchanging, retaining, selling, and managing property for the benefit of
4 Financial Policy 8 – Investments
others, fiduciaries shall be required to have in mind the responsibilities
which are attached to such offices and the size, nature, and needs of the
estates entrusted to their care and shall exercise the judgment and care,
under the circumstances then prevailing, which men of prudence,
discretion, and intelligence exercise in the management of the property of
another, not in regard to speculation but in regard to the permanent
disposition of funds, considering the probable income as well as the
probable safety of capital. Within the limitations of the foregoing
standard, fiduciaries are authorized to acquire and retain every kind of
property, real, personal, and mixed, and every kind of investment,
specifically including, but not by way of limitation, bonds, debentures,
other corporate obligations, stocks, preferred or common, securities of any
open-end or closed-end management type investment company or
investment trust, and participations in common trust funds, which men of
prudence, discretion, and intelligence would acquire or retain for the
account of another.”
The Financial Officer and designees, acting within the guidelines of this
investment policy and written procedures, the City Charter and Code, all
applicable state and federal laws and after exercising due diligence, will not be
held personally liable and will be relieved or personal responsibility for an
individual security’s credit risk or market price changes, or for losses incurred
as a result of specific investment transactions or strategies. (CRS 24-75-601.4,
et seq.)
2. Ethics and Conflicts of Interest: City officers and employees involved in the
investment process will refrain from personal business activity that could
conflict with the proper execution and management of the investment
program, or that could impair their ability to make impartial decisions.
Employees and investment officials must disclose any material interests in
financial institutions with which they conduct business. They must further
disclose any personal financial and investment positions that could be related
to the performance of the City’s investment portfolio. In addition they must
adhere to the rules of conflicts of interest as stated in Art. IV, Section 9(b) of
the Charter of the City of Fort Collins, Colorado.
3. Delegation of Authority: The City Charter assigns the responsibility for the
collection and investment of all city funds to the Financial Officer, subject to
direction from Council by ordinance or resolution. The Financial Officer,
subject to City Manager approval, may appoint other members of the Finance
Department to assist in the investment function.
Administrative Procedures
5 Financial Policy 8 – Investments
a. The Financial Officer is responsible for all investment decisions
and activities, and must regulate the activities of subordinate
employees for the operation of the City’s investment program
consistent with this investment policy.
b. No person may engage in an investment transaction except as
provided under the terms of this Investment Policy and the
procedures established by the Financial Officer.
A. Authorized Designees
a. The Financial Officer will maintain a list of individuals and
institutions that are authorized to transfer, purchase, sell and wire
securities or funds on behalf of the City.
b. This list will be provided to the securities broker or dealer or
financial institution prior to the City conducting any investment
transactions with the institution.
B. Investment Advisors
a. The Financial Officer has the discretion to appoint one or more
investment advisors, registered with the Securities and Exchange
Commission under the Investment Advisors Act of 1940, to assist
in the management of all or a portion of the City’s investment
portfolio.
b. All investments made through such investment advisors shall be
within the guidelines of this Investment Policy.
4. Investment Committee: The Investment Committee consists of the Financial
Officer and at least 2 other employees of the City that are knowledgeable in
the area of governmental investments. The Investment Committee, at the
discretion of the Financial Officer, may also include up to 2 private sector
investment or banking professionals. The purpose of the Investment
Committee shall be to provide advice to the Financial Officer regarding the
operation of the investment program.
8.5 Safekeeping and Custody
1. Authorized Securities Brokers and Dealers and Financial institutions
A. The Financial Officer will maintain a list of financial institutions authorized
to provide investment services. The Financial Officer will also maintain a
list of approved securities brokers and dealers. This list may include
“primary” dealers or regional dealers that qualify under Securities and
Exchange Commission (SEC) Rule 15C3-1.
6 Financial Policy 8 – Investments
B. All financial institutions and securities brokers and dealers who wish to
provide investment services to the City must supply the following (as
appropriate):
a. Current audited financial statements;
b. Completed securities broker and dealer questionnaire;
c. Proof of National Association of Securities Dealers certification and
registration in the State of Colorado; and
d. Certification of their review, understanding and agreement to
comply with the City’s Investment Policy.
C. If a financial institution or securities broker or dealer wishes to enter into
a repurchase agreement with the city, the institution must sign a Master
Repurchase Agreement approved as to form and content by the City
Attorney’s Office.
D. The Financial Officer must conduct an annual review of the financial
condition of authorized financial institutions and securities brokers and
dealers.
E. Investment transactions must be executed with an authorized financial
institution or securities broker or dealer except in the following
circumstances:
a. Commercial paper, banker acceptances and guaranteed investment
contracts may be purchased and sold directly from the issuer;
b. Mutual funds and money market funds may be purchased, sold and
held directly with the funds;
c. Investments in local government investment pools may be
transacted directly with the pool; and
d. Bond refunding and lease escrow agreements will be executed as
provided in the bond and lease documents.
F. The Financial Officer will establish a safekeeping agreement with an
approved financial institution to act as a third party custodian. Investment
securities will be held for the City by the custodian. When applicable, the
Financial Officer shall establish a separate securities lending agreement
with the custodian bank. The selection of the City’s primary depository
and primary custodian will be made through the City’s competitive
Request for Proposals process.
2. Delivery versus Payment: All trades will be executed by delivery versus
payment to ensure that securities are deposited in an eligible financial
institution prior to the release of funds. Securities will be held by the City’s
third-party custodian as evidenced by safekeeping receipts.
7 Financial Policy 8 – Investments
3. Internal Controls: The Financial Officer is responsible for establishing and
maintaining an internal control structure designed to provide reasonable
assurance that the assets of the city are protected from loss, theft or misuse.
8.6 Suitable and Authorized Investments
As a home rule city, the City may adopt a list of acceptable investment instruments differing
from those outlined in CRS 24-75-601.1. Pursuant to Article V of the City’s Charter the
Council has adopted the following Ordinances and Resolutions establishing the framework
under which the Financial Officer must conduct his duties: Ordinance 90, 1993; Ordinance
108, 1988, Resolution 85-134; and Resolution 82-70. Council may adopt additional
Ordinances or Resolutions that require modification of these investment tools.
1. Eligible Investments: City funds may be invested in the following:
A. Any securities now or hereafter designed as legal investment for
municipalities in any applicable statute of the State of Colorado;
B. Interest-bearing accounts or time certificates of deposit, including
collateralized certificates of deposit and certificates of deposit through the
Account Registry Service, of financial institutions designated as
depositories for public moneys by the State of Colorado;
C. United States Treasury obligations for which the full faith and credit of the
United States are pledged for payment of principal and interest. Such
securities will include but not be limited to: Treasury bills, Treasury notes,
Treasury bond and Treasury strips with maturities not exceeding five
years from the date of purchase;
D. Obligations issued by any United States government-sponsored agency or
instrumentality. Maturities may not exceed five years from the date of
purchase;
E. Obligations issued by or on behalf of the City;
F. Obligations issued by or on behalf of any state of the United States,
political subdivision, agency, or instrumentality thereof. At the time of
purchase the obligation shall have an investment grade rating of not less
than AA- from Standard & Poor’s, Aa3 from Moody’s Investors Service or
AA- from Fitch Ratings Service. The ratings must be not less than above for
all agencies rating the debt, no split ratings are allowed;
G. Prime-rated bankers acceptances with a maturity not exceeding six
months from the date of purchase, issued by a state or national bank
which has a combined capital and surplus of at least 250 million dollars,
whose deposits are insured by the FDIC and whose senior long-term debt
8 Financial Policy 8 – Investments
is rated at the time of purchase at least AA- by Standard and Poor’s, Aa3 by
Moody’s Investors Service, or AA- by Fitch Ratings Service. The ratings
must be not less than above for all agencies rating the debt, no split ratings
are allowed;
H. U.S. dollar denominated corporate notes or bank debentures. Authorized
corporate bonds shall be U.S. dollar denominated, and limited to
corporations organized and operated within the United States with a net
worth in excess of 250 million dollars. At the time of purchase the
debenture or corporate note shall have an investment grade rating of not
less than AA- from Standard & Poor’s, Aa3 from Moody’s Investors Service
or AA- from Fitch Ratings Service. The ratings must be not less than above
for all agencies rating the debt, no split ratings are allowed;
I. Prime-rated commercial paper with a maturity not exceeding six months
issued by U.S. corporations. At the time of purchase the paper shall be
rated A1 by Standard and Poor’s and P1 by Moody’s Investors Service. If
the commercial paper issuer has senior debt outstanding, the senior debt
must be rated at the time of purchase at least AA- by Standard and Poor’s
or Aa3 by Moody’s Investors Service;
J. Guaranteed investment contracts of domestically-regulated insurance
companies having a claims-paying ability rating of AA- or better from
Standard & Poor’s at the time of purchase;
K. Repurchase and reverse repurchase agreements. The structure of the
agreements (including margin ratios and collateralization) shall be
contained in the Master Repurchase Agreements. Repurchase agreements
shall include but are not limited to delivery-versus-payment, tri-party and
flexible repurchase agreements;
L. Local government investment pools authorized under the laws of the State
of Colorado with a rating of AAAm; and
M. Money market mutual funds regulated by the Securities and Exchange
Commission and whose portfolios consist only of dollar denominated
securities.
2. Repurchase Agreements
A. Before any repurchase agreements shall be executed with an authorized
securities broker or dealer or financial institution, a Master Repurchase
Agreement approved as to form and content by the City Attorney’s Office
must be signed between the City and the securities broker or dealer or
financial institution.
B. The Financial Officer will maintain a file of all Master Repurchase
Agreements.
9 Financial Policy 8 – Investments
C. In addition to the straight forward repurchase agreement, wherein the
financial institution or securities broker or dealer delivers the collateral
versus payment to the City’s custodian for a fixed term at a fixed rate, the
City may enter into other types of repurchase agreements which may
include but not be limited to flexible repurchase agreements, tri-party
agreements and reverse repurchase agreements.
D. Repurchase agreements must be collateralized as provided in individually
executed Master Repurchase Agreements at a minimum of 102 percent.
E. Zero coupon instruments will not be accepted as collateral.
F. The collateralized securities of the repurchase agreement can include but
are not limited to: U.S Treasuries, Collateralized Mortgage Obligations or
Agency securities.
8.7 Diversification and Liquidity
1. Diversification and Asset Allocation: It is the intent of the City to diversify its
investment portfolio. Investments shall be diversified to eliminate the risk of
loss resulting from over-concentration of assets in a specific maturity, issuer
or class of securities. Diversification strategies and guidelines shall be
determined and revised periodically by the Financial Officer. The investments
may be diversified by:
A. Limiting investments to avoid over-concentration in securities from a
specific issuer or business sector (excluding U.S. Treasury securities);
B. Limiting investment in securities that have higher credit risks;
C. Investing in securities with varying maturities; and
D. Maintaining a portion of the portfolio in readily available funds such as
local government investment pools, money market funds or short term
repurchase agreements to ensure that City liquidity needs are met.
The maximum investment allowable for each investment category as a
percentage of the entire portfolio is as follows (excluding collateral for
repurchase agreements):
CASH AND CASH EQUIVALENTS ......................................................... 100%
TREASURY SECURITIES .......................................................................... 90%
GOVERNMENT-SPONSORED AGENCY SECURITIES ............................ 90%
REPURCHASE AGREEMENTS ................................................................. 70%
LOCAL GOVERNMENT INVESTMENT POOLS ....................................... 60%
10 Financial Policy 8 – Investments
CORPORATE NOTES OR BONDS* ......................................................... 40%
BANK DEBENTURES* .............................................................................. 25%
COMMERCIAL PAPER* ............................................................................ 25%
BANKER’S ACCEPTANCES* ..................................................................... 25%
MONEY MARKET FUNDS
AND MUTUAL FUNDS ....................................................................... 15%
CD ACCOUNT REGISTRY SERVICE
(MAXIMUM 50 MILLION). ............................................................... 15%
CERTIFICATES OF DEPOSIT ................................................................... 15%
GUARANTEED INVESTMENT CONTRACTS ............................................ 5%
* A maximum of 10 percent of the portfolio may be invested in any one
provider or issuer.
2. Investment Maturity and Liquidity
A. A portion of the portfolio should be continuously invested in readily
available funds such as local government investment pools, money market
funds, or short-term repurchase agreements to ensure that appropriate
liquidity is maintained to meet ongoing obligations. The City must at all
times maintain 5 percent of its operating investment portfolio in
instruments maturing in 120 days or less.
B. Reserved funds may be invested in securities exceeding 5 years if the
maturities of such investments are made to coincide as closely as possible
with the expected use of funds.
C. The weighted average final maturity limitation of the total portfolio,
excluding pension funds and long-term reserve funds, will not exceed 3
years.
D. The City may collateralize repurchase agreements with longer-dated
investments, final maturity not to exceed 30 years.
8.8 Reporting
1. Methods: The Financial Officer will prepare an investment report on a
quarterly basis. In addition, a comprehensive investment report may be
published on the City’s website on an annual basis. All investment reports will
be submitted in a timely manner to the City Manager.
2. Performance Standards: The investment portfolio will be managed in
accordance with the parameters specified within this Investment Policy. The
Financial Officer will establish a benchmark yield for the City’s investments
11 Financial Policy 8 – Investments
equal to the average yield on the U.S. Treasury security which most closely
corresponds to the portfolio’s actual weighted average maturity. In order to
determine the actual rate of return on any portion of the portfolio managed by
an investment advisor, the Financial Officer must include all of the advisor’s
expenses and fees in the computation of the rate of return.
3. Marking to Market: The market value of the portfolio will be calculated at
least quarterly and a statement of the market value will be included in the
quarterly investment report.
8.9 Policy Adoption
This Investment Policy will be reviewed at least every three years by the Investment
Committee, City Manager and the Financial Officer and may be amended by Council as
conditions warrant. The Investment Policy may be adopted by Resolution of the Council.
12 Financial Policy 8 – Investments
Definitions
Agency: A bond, issued by a U.S. government-sponsored agency. The offerings of these agencies are backed
by the U.S. government, but not guaranteed by the government since the agencies are private
entities. Such agencies have been set up in order to allow certain groups of people to access low cost
financing, especially students and first-time home buyers. Some prominent issuers of agency bonds
are Student Loan Marketing Association (Sallie Mae), Federal National Mortgage Association (Fannie
Mae) and Federal Home Loan Mortgage Corporation (Freddie Mac). Agency bonds are usually exempt
from state and local taxes, but not federal tax.
Average Life: The length of time that will pass before one-half of a debt obligation has been retired.
Bankers’ Acceptance: A short-term credit investment which is created by a non-financial firm and whose
payment is guaranteed by a bank. Often used in importing and exporting, and as a money market
fund investment.
Benchmark: A comparative base for measuring the performance or risk tolerance of the investment
portfolio. A benchmark should represent a close correlation to the level of risk and the average
duration of the portfolio’s investments.
Book Value: The value at which a security is carried on the inventory lists or other financial records of an
investor. The book value may differ significantly from the security’s current value in the market.
Broker: An individual who brings buyers and sellers together for a commission.
Cash Sale/Purchase: A transaction which calls for delivery and payment of securities on the same day that
the transaction is initiated.
Certificate of Deposit (CD): A time deposit with a specific maturity evidenced by a certificate.
Collateralization: Process by which a borrower pledges securities, property, or other deposits for the
purpose of securing the repayment of a loan and/or security.
Commercial Paper: An unsecured short-term promissory note issued by corporations, with maturities
ranging from 2 to 270 days.
Coupon Rate: The annual rate of interest received by an investor from the issuer of certain types of fixed-
income securities. Also known as the “interest rate”.
Credit Quality: The measurement of the financial strength of a bond issuer. This measurement helps an
investor to understand an issuer’s ability to make timely interest payments and repay the loan
principal upon maturity. Generally, the higher the credit quality of a bond issuer, the lower the
interest rate paid by the issuer because the risk of default is lower. Credit quality ratings are
provided by nationally recognized rating agencies.
13 Financial Policy 8 – Investments
Credit Risk: The risk to an investor that an issuer will default on the payment of interest and/or principal
on a security.
Current Yield (Current Return): A yield calculation determined by dividing the annual interest received
on a security by the current market price of that security.
Debenture: A bond secured only by the general credit of the issuer.
Delivery versus Payment (DVP): A type of securities transaction in which the purchaser pays for the
securities when they are delivered either to the purchaser or to their custodian.
Diversification: A process of investing assets among a range of security types by sector, maturity, and
quality rating.
Duration: A measure of the timing of the cash flows, such as the interest payments and the principal
repayment, to be received from a given fixed-income security. This calculation is based on three
variables: term to maturity, coupon rate and yield to maturity. The duration of a security is a useful
indicator of its price volatility for given changes in interest rates.
Federal Deposit Insurance Corporation (FDIC): A federal agency that insures deposits in member banks
and thrifts up to $100,000 ($250,000 through 12/31/2013).
Federal Funds: Funds placed in Federal Reserve banks by depository institutions in excess of current
reserve requirements. These depository institutions may lend fed funds to each other overnight or
on a longer basis. They may also transfer funds among each other on a same-day basis through the
Federal Reserve banking system. Fed funds are considered to be immediately available funds.
Federal Funds Rate: The interest rate that banks charge each other for the use of Federal funds.
Government Securities: An obligation of the U.S. government, backed by the full faith and credit of the
government. These securities are regarded as the highest quality of investment securities available
in the U.S. securities market.
Green Investments: Mutual funds that are considered “ethical investments.” These funds screen
companies to ensure that they have sound environmental practices such as: maintaining or
improving the environment, industrial relations, racial equality, community involvement, education,
training, healthcare and various other environmental criteria. Negative screens include but are not
limited to: alcohol, gambling, tobacco, irresponsible marketing, armaments, pornography, and
animal rights.
Interest Rate Risk: The risk associated with declines or rises in interest rates which cause an investment in
a fixed-income security to increase or decrease in value.
Investment-grade Obligations: An investment instrument suitable for purchase by institutional investors
under the prudent person rule. Investment-grade is restricted to those obligations rated BBB or
higher by a rating agency.
14 Financial Policy 8 – Investments
Liquidity: An asset that can be converted easily and quickly into cash without a substantial loss of value.
Local Government Investment Pool (LGIP): An investment by local governments in which their money is
pooled as a method for managing local funds.
Mark-to-Market: The process whereby the book value or collateral value of a security is adjusted to reflect
its current market value.
Market Value: Current market price of a security.
Master Repurchase Agreement: A written contract covering all future transactions between the parties
to repurchase and reverse repurchase. Establishes each party’s rights in the transaction.
Maturity: The date on which payment of a financial obligation is due. The final state maturity is the date
on which the issuer must retire a bond and pay the face value to the bondholder.
Money Market Mutual Fund: Mutual funds that invest solely in money market instruments (short-term
debt instruments, such as Treasury bills, commercial paper, bankers’ acceptances, repurchase
agreements, and federal funds).
Mutual Fund: An investment company that pools money and can invest in a variety of securities, including
fixed-income securities and money market instruments. Mutual funds are regulated by the
investment company Act of 1940 and must abide by the Securities and Exchange Commission (SEC)
disclosure guidelines.
National Association of Securities Dealers (NASD): A self-regulatory organization of brokers and
dealers in the over-the-counter securities business. Its regulatory mandate includes authority over
firms that distribute mutual fund shares as well as other securities.
Net Asset Value: The market value of one share of an investment company, such as a mutual fund. This
figure is calculated by totaling a fund’s assets which includes securities, cash, and any accrued
earnings, subtracting this from the fund’s liabilities and dividing this total by the number of shares
outstanding. This is calculated once a day based on the closing price for each security in the fund’s
portfolio.
No Load Fund: A mutual fund which does not levy a sales charge on the purchase of its shares.
Portfolio: Collection of securities held by an investor.
Primary Dealer: A group of government securities dealers who submit daily reports of market activity and
positions and monthly financial statements to the Federal Reserve Bank of New York and are
subject to its informal oversight.
Real Estate Investment Trust (REIT): A company that buys, develops, manages and sells real estate
assets. Allows participants to invest in a professionally managed portfolio of real-estate properties.
The main function is to pass profits on to investors; business activities are generally restricted to
generation of property rental income.
15 Financial Policy 8 – Investments
Repurchase Agreement (Repo): An agreement of one party to sell securities at a specified price to a
second party and a simultaneous agreement of the first party to repurchase the securities at a
specified price or at a specified later date.
Reverse Repurchase Agreement: An agreement of one party to purchase securities at a specified price
from a second party and a simultaneous agreement of the first party to resell the securities at a
specified price to the second party on demand or at a specified date.
Rule 2a-7 of the Investment Company Act: Applies to all money market mutual funds and mandates
such funds to maintain certain standards, including a 13-month maturity limit and a 90-day
average maturity on investments, to help maintain a constant net asset value of one dollar ($1.00).
Securities and Exchange Commission (SEC): Agency created by Congress to protect investors in
securities transactions by administering securities legislation.
Total Return: The sum of all investment income plus changes in the capital value of the portfolio. For
mutual funds, return on an investment is composed of share price appreciation plus any realized
dividends or capital gains. This is calculated by taking the following components during a certain
time period. (Price Appreciation) + (Dividends Paid) + (Capital Gains) = Total Return
Treasury Bills: Short-term U.S. government non-interest-bearing debt securities with maturities of
no longer than one year.
Treasury Bonds: Long-term U.S. government debt securities with maturities of more than ten years.
Currently, the longest outstanding maturity is 30 years.
Treasury Notes: Intermediate U.S. government debt securities with maturities of two to ten years.
Tri-party Repurchase Agreement: In a “normal repurchase” transaction there are two parties, the buyer
and the seller. A tri-party repurchase agreement adds a custodian as the third party to act as an
impartial entity to the repurchase transaction to administer the agreement and to relieve the buyer
and seller of many administrative details.
Weighted Average Maturity (WAM): The average maturity of all the securities that comprise a portfolio.
Yield: The current rate of return on an investment security. Generally expressed as a percentage of the
security’s current price.
Yield Curve: A graphical representation that depicts the relationship at a given point in time between
yields and maturity for bonds that are identical in every way except maturity. A normal yield curve
may be alternatively referred to as a positive yield curve.
Yield-to-Maturity: The rate of return yielded by a debt security held to maturity when both interest
payments and the investor’s potential capital gain or loss are included in the calculation of return.
Zero-Coupon Securities: A security that is issued at a discount and makes no periodic interest payments.
The rate of return consists of a gradual accretion of the principal of the security and is payable at
par upon maturity.