HomeMy WebLinkAboutAgenda - Mail Packet - 3/18/2014 - Council Finance Committee & Ura Finance Committee Agenda - March 17, 2014Council Finance Committee & URA Finance Committee
Agenda Planning Calendar 2014
RVSD 3/12/14 kw
Mar. 17 TOPIC TIME WHO
CFC
PFA IGA Revenue Allocation Formula 30 min M. Beckstead
T. Demint
On-Site Health Clinic 30 min A. Sharkey
2013 Financial Highlights 30 min J. Voss
URA
Apr. 21 TOPIC TIME WHO
CFC
Policy Review – Reserve/Fund Balances 30 min J. Voss
General Policy Review 5 min J. Voss
Fund Policies 5 min J. Voss
URA
May 19 TOPIC TIME WHO
CFC
Actuary Annual Pension Valuation Report (GERP) 30 min J. Stewart
Affordable Housing 30 min Beck-Ferkiss
Fund Balance Review 45 min J. Voss
URA
June 16 TOPIC TIME WHO
CFC
URA
Future Council Finance Committee Topics:
• IGA—Police Training Facility
• Capital Improvement Funds Policy Review
• Review Special Improvement Districts
• Budget Policy Review
• Auditor Report (July)
• Budget Briefing (Q3)
Future URA Committee Topics:
Finance Administration
215 N. Mason
2nd Floor
PO Box 580
Fort Collins, CO 80522
970.221.6788
970.221.6782 - fax
fcgov.com
AGENDA
Council Finance & Audit Committee
March 17, 2014
10:00 to noon
CIC Room – City Hall
Approval of the Minutes from the February 10, 2014 meeting
1. PFA IGA Revenue Allocation Formula 30 minutes M. Beckstead
T. Demint
2. On-Site Health Clinic 30 minutes A. Sharkey
3. 2013 Financial Highlights 30 minutes J. Voss
Finance Administration
215 N. Mason
2nd Floor
PO Box 580
Fort Collins, CO 80522
970.221.6788
970.221.6782 - fax
fcgov.com
Council Audit & Finance Committee
Minutes
2/10/14
10:00 to 12:00
CIC Room
Council Attendees: Mayor Karen Weitkunat, Bob Overbeck, Ross Cunniff
Staff: Mike Beckstead, Ed Bonnette, Mike DeKock, Bruce Hendee,
Randy Hensley, Tom Leeson, Sandra O’Brian, Gerry S. Paul,
John Voss, Wendy Williams, Katie Wiggett
Others: Dale Adamy, Beth Flowers (AIR), Bruce Freestone (AIR),
Gerry Horak, Kevin Jones (Chamber of Commerce), Doug
Leavell (AIR), Eric Sutherland
Approval of the Minutes
Mayor Karen Weitkunat moved to approve the minutes from the January 27 meeting. Bob Overbeck
seconded the motion. Minutes approved unanimously.
*Due to the tightness of timing, Mike Beckstead asked that Council Finance Committee adjourn
their meeting after the first two topics and adjourn after the URA Meeting. Council Finance
agreed to this change.
AIR Proposal
Bruce Hendee presented a supplemental appropriation request by Arts Incubator of the Rockies (AIR). AIR
submitted a proposal before, but was asked to come back with a new financing plan. However, City Council
did elect to raise funding for AIR in 2012/2013 above the line in the budget process. The Economic Health
Strategic Plan calls for increased support of Arts in the community, and Sustainability Staff believes AIR’s
program aligns with the Economic Health Strategic Plan.
AIR was created in 2011 through a partnership between Beet Street, the City of Fort Collins and Colorado
State University’s School of the Arts. AIR is an ecosystem that partners creative and business professionals
to furnish artists, businesses and communities with the tools and support they need to ultimately succeed.
Located in the historic Carnegie Library Building in downtown Fort Collins, AIR has the potential to serve
artists and creative professionals in the ten Intermountain west states.
2
From 2011-2013, AIR has operated at a loss. However, they expect that with help, they can start becoming
self-sustaining in 2014. Below is a summary of their request:
• AIR request an additional $150,000 to be paid out in three payments
o $75,000 Q1 2014
o $37,500 Q2 2014
o $37,500 Q3 2014
• Funding will be secured by an agreement between the City and AIR that outlines the conditions of
funding
• AIR has a commitment for $75,000 in matching funds already secured
Staff gave Council Finance several items to consider:
• AIR spent $235 K in 2013 for a website, a questionable use of funds
• This request occurs out of sequence with the City’s normal budgeting process
• The 2014 City budget appropriated $60,000 to support AIR activities in 2014; this money has
already been paid and was used to pay off 2013 debts
• The additional $150,000 request only addresses AIR’s funding needs for the first quarter of 2014
• The Harvests proposal is for $239,000, a substantial amount
• The AIR service area includes a 10 state Intermountain region
• $2 and $3 million 3-year ramp-up period needed to attain self-sufficiency
Bruce also noted that there are many positives to helping AIR succeed. There is a potential for Fort Collins
to become a cultural hub and a potential for new life for the Carnegie Building.
Bruce said that AIR’s need for funding is critical, and their ability to succeed should be apparent by end of Q1
2014. Staff wants to be diligent in monitoring any program the City aids financially, so has set up funding
conditions for AIR. Staff recommends adoption of an appropriation Ordinance subject to these conditions:
1. AIR staff will provide a timeline of activities, deliverables and performance milestones acceptable to
the City for 2014.
2. Distribute City funds in quarterly payments.
3. All payments must be matched $1 for every $1 from other verified sources prior to distributing City
funds.
4. City funds may only be used to support AIR.
5. AIR staff must meet with the Economic Health Office on a monthly basis.
6. AIR finances will be reviewed monthly by the City Finance department.
At any time, if one of the above conditions is not met, the City reserves the right to halt all payments from
this appropriation. In addition, the funding of AIR under this appropriation will be secured by a grant
agreement or similar document stating explicitly the activities funded, deliverables to be provided, and
performance milestones to be achieved by AIR.
Ross then asked if Staff truly recommends adopting this proposal. Bruce answered that there are many
concerns; however, Economic Staff do believe there is value in AIR’s program and want to back the
pairing of art and business.
3
Mike Beckstead said that, looking at the proposal purely from a financial perspective, he has three
questions:
1. Why, after two years, does AIR need another quarter to know whether it can become self-
supporting?
2. With many other competing needs for the money requested, is this truly the best investment?
3. How much additional money will they need over the next two years?
Mike concluded that there is clearly a rational for supporting AIR, but there are many concerns and
cautions as well. Bruce responded that it is the innovation of AIR that Staff supports funding, and
innovation is risky.
The Mayor asked what the City’s level of financial oversight has been with AIR in the past when we’ve
loaned them money. Bruce replied that AIR had not been sending any financial reports in to Finance or
Economic Development until recently when the City did an in-depth review of AIR’s financials. The
Mayor said that the purpose of the money we loan to AIR in the future need to be clear and their use
needs to be clearly reported.
Ross asked to see a report of where the money from the past three years has been spent. He is
concerned because opportunity cost cannot be seen outside the budget cycle and asked that footnotes
be included showing where the money is going and how AIR is held accountable.
Bob asked if the set of conditions being proposed for AIR have been used in the past. Bruce said that
they are new and are the result of negotiations with the applicant. Bob asked what happens to the
appropriated money if the applicant is not able to meet all conditions. Bruce replied that the money
would stay in the innovation fund.
Ross noted that he is for AIR’s basic business model, but he wants to ensure financial accountability.
The mayor agreed; the City supports the arts, but it also is enforcing a good policy of accountability that
will help avoid future problems. Bruce noted that these kind of conditions will become standard.
Council Finance supports moving forward with negotiations with AIR.
TIF—Exempt Tax Districts Analysis
The URA has applied TIF financing to eight projects in the North College district and two projects in the
Prospect South district. Mike Beckstead presented staff’s analysis on the effects of TIF on the viability of
projects, public benefits acquired and District Taxing entity impact.
Mike walked through a summary of all deals generating TIF, pointing out that the number for RMI has
been revised because TIF was overestimated for that project. With the exceptions of RMI and Summit,
the percentage of total URA cost to total increment has been below 75%. Through the City’s investment
in these deals, the City reaped significant public improvements and benefits. Citing improvements such
as intersections, roundabouts and street improvements, Mike said that TIF acts as public improvement
funding, not just as a developer incentive.
4
Staff has been asked to examine the hypothetical scenario of the projects having been completed
without TIF. In total, the ten projects are anticipated to collect $24,066 in TIF, and that money would
have gone to other taxing entities if the projects could have been completed without the TIF support.
Mike emphasized the importance of realizing that this scenario is hypothetical as it is improbable that
the projects would have occurred without TIF. Mike also showed that, if the URA used the DDA’s
current 50% model, available funding would be have been reduced by $14M, again assuming that the
projects would have been completed at their current level without TIF support. While we cannot know
what would have happened if the funding had been reduced, we do know that 4 of the 10 projects used
more than 50%. North College road improvement funding of $3.8M would not have been available and
5 large projects that generated public benefit would not have been funded with a 50% share model.
Ross asserted that we can only say that the projects would have been impacted without TIF, not that
they would have failed, because we cannot know what would have happened.
Mike noted that the URA has implemented the following significant process improvements:
• Reorganization allowing for an independent review by Finance
• Changes to the method for estimating Tax Increment generated by a project – County Estimate
of Value as basis
• Increased consultation with outside legal counsel
• New financial parameters and pay over time approach
Ross asked that RMI and Summit be highlighted on slide 4 to emphasize that they are not models for
future projects. Ross also asked that the term “Place-Making” for public improvements be changed as it
does not accurately describe all the improvements listed. Mike said that they can change the term
“Place-Making”; it had been used to emphasize the URA’s blight remediation role. The Mayor wanted to
keep the term because it speaks to City’s larger vision. Ross suggested that it remain but be used only to
label improvements that truly fit the description of place-making.
Ross asked how the URA tracks whether these improvements actually get done. Tom Leeson answered
that the developers are not reimbursed until they have provided reports. While Ross would like to see a
50% share model used eventually, he said that he feels it is the smaller tax districts that are most
strongly affected by TIF and that 50% share with only these smaller districts could be used in future
projects while still achieving excellent public improvements.
The Mayor commended Staff on the many improvements to TIF and URA policy. The City is learning
how to use this tool effectively and, even though mistakes have been made in the past, Staff can tell a
positive story of growth.
Sustainable Purchasing Update
Gerry Paul said that the City of Fort Collins is a recognized leader in the sustainable purchasing arena
and is working to develop processes, practices, policies and metrics that will increase the percent spent
in sustainable materials, products and services. In March 2012, the Green Purchasing Institute
completed an evaluation of the City’s Sustainable Purchasing practices and program. At the time, the
City did not have a formal Sustainable Purchasing Program, so the 2013-2014 Purchasing Budget
included a dedicated resource to develop a comprehensive Sustainable Purchasing program based on
the input from the Institute and best-in-class peers.
5
Gerry walked through the following 2013 Sustainable Purchasing Accomplishments:
• Created Foundation for Metrics and Reporting of Spend Analytics
• Established Definitions for Green/Sustainable Purchases
• Published Green/Sustainable Purchase Criteria Checklist
• Developed Abbreviated Commodity Code List to Capture Spend Categories
• Initiated PO Coding as Sustainable Y/N and Assigned Commodity Codes
• Benchmarked with Best In Class Peer Agencies
• Mandated Office Depot Business Solutions for all Office Supplies – October 2013
• Total Green Spend increased:
• Q1 – 31%
• Q2 – 34%
• Q3 – 37%
• Q4 – 43%
• Initiated 30% Post Recycle Content (PCR) Mandate – October 2013
• PCR Purchases increased:
• Q1 – 57%
• Q1 – 67%
• Q3 – 70%
• Q1 – 85%
• Launched External Sustainable Purchasing Web Site with Enviro Portal Links
• Piloted DocuSign Electronic Agreement Routing and Signature
• Enrolled in the State Electronics Challenge & Submitted 2013 Benchmark Report
Bob asked Gerry about the dynamic reduction in Commodity Codes, from 270 to only 37. Gerry replied
that we’re in a state of evolution, moving toward the industry standard. This reduction of codes makes
it much easier to track green spending and set goals.
Gerry also noted that, while we are enrolled in the State Electronics Challenge (SEC), we are not yet to
bronze level. We are working with the departments to improve, using SEC standards.
Gerry presented Purchasing’s 2014 Work Plan:
• Implement Sustainable Purchasing reports using newly developed JDE commodity codes
• Target 3-5 high impact commodity codes to convert to greener alternatives – track progress
• Incorporate Sustainability & Triple Bottom Line into RFP Evaluation
• Complete DocuSign pilot and deploy for all Purchasing contacts & renewals
• Standardize Acquisition & Use of Printers/Copiers Across City
• Develop Purchasing literacy course for City wide training i.e. Sustainable Purchasing 101
Ross said that he is glad to see Staff will be standardizing acquisition and use of printers and copiers as
that will undoubtable have a large impact in cost savings and energy reduction. Mike Beckstead added
that Purchasing will provide 3 levels of copiers/printers to allow for some flexibility based on individual
need. The Mayor thanked staff for their report and the many improvements.
6
Briefing on Forming a Parking Fund
Rand Hensley explained that parking financial transactions currently are accounted for in the City’s
Transportation Fund, a fund which includes other transportation departments such as Streets, Traffic,
Engineering and FC Moves. Transportation Fund revenues come primarily from taxes and fees, such as
General Fund taxes, the Highway Users Tax Fund, development review fees, and others. However, while
the Parking department used to receive some funding from those sources, is it now funded entirely from
revenue generated by Parking operations.
The ability for Parking to be self-sustaining was made possible in 2010, when revenues from Parking
operations became sufficient to pay for parking-related operations and maintenance expenditures.
Because Parking is a self-sustaining operation, a recommendation was included in the recently-
completed Parking Plan to move parking-related financial transactions out of the Transportation Fund
into a new fund exclusively for Parking.
Randy presented the following benefits of forming a Parking Fund:
1. Provides a cleaner, more transparent method of demonstrating that Parking is self-funded
2. Helps facilitate the evaluation of Parking offers in the Budgeting for Outcomes process
3. Helps the public better understand where Parking revenues are being used and the services they
provide
4. Accumulation of unused revenues in a Parking reserve fund will make it easier to fund and
justify one-time major maintain and repair projects in parking facilities
Mike Beckstead added that there is a parking problem in Old Town, and having a separate Parking Fund
will help us identify how to raise future revenue to fix that problem. Ross noted that the transparency
of such a fund would show the public that Parking Funds do not go into the General Fund.
Ross asked why revenues in 2013 decreased, but expenditures did not. Randy explained that the
reserves were used for special projects. To make that clear, Staff will break the revenue down to 2
categories: revenue reserves and straight revenue.
John Voss explained that this fund can be created by the Chief Financial Officer without Council vote.
Council Finance Committee asked that the fund still be put on the Council Work Session agenda or in a
Staff Report to ensure Council and the public are aware of the new fund.
Page | 1 March 17, 2014
Agenda Item Summary
Council Finance Committee
DATE: March 17, 2014 STAFF: Mike Beckstead
Tom DeMint
SUBJECT
Poudre Fire Authority Intergovernmental Agreement and Revenue Allocation Formula
EXECUTIVE SUMMARY
The purpose of this item is to review the proposed Intergovernmental Agreement (IGA) which
forms the Poudre Fire Authority and the associated Revenue Allocation Formula (RAF) which
allocates a share of City revenue toward the provision of fire and rescue services within Fort
Collins.
GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED
Staff is seeking Finance Committee feedback on the Revenue Allocation Formula in the
proposed IGA between the City of Fort Collins and the Poudre Valley Fire Protection District
(PVFPD).
BACKGROUND / DISCUSSION
Beginning in 1981, the City of Fort Collins and the PVFPD has had an intergovernmental
agreement to provide joint fire protection and rescue services within their respective
boundaries. The two “parent” entities jointly govern PFA through representation on the PFA
Board of Directors. The overall purpose of the joint service model has been to consolidate two
existing fire departments into one Fire Authority which would provide timely, efficient and cost
effective service within the combined boundaries of the two entities. The Revenue Allocation
Formula (RAF) was designed to “pass through” a predictable revenue stream from each entity
to the PFA for its operations and capital needs. The PFA Board of Directors is charged with
administering that funding stream for the benefit of both partners.
Over the past 6 months, City staff and PFA staff have been working together to update the
current IGA between the City and PVFPD. While some changes will be recommended in the
general terms of the IGA (see below) the primary issue under review has been the RAF which
details the financial contributions of each party to the operation of the Poudre Fire Authority.
The basic components of both the original and the proposed 2015 RAF include the following
factors:
Page | 2 March 17, 2014
• Cost Sharing between City and District
The original formula was based on an 80%/20% split in the total costs of operating PFA
between the City of Fort Collins and PVFPD. The split was calculated based on the
relative share of call volume and assessed value of properties protected.
• City Contribution Calculation
The City has calculated its share of the funding formula based on a share of its general
sales and use tax revenue plus shares of its property tax revenue. In 2010, the City also
added a dedicated funding stream from its Keep Fort Collins Great voter approved sales
and use tax.
• District Contribution
The District contributes its entire property tax mill levy revenues (less minimal district
expenses) directly to PFA. The mill levy rate has fluctuated through the years based on
the amount of revenue it needed to generate to meet its share of the cost of PFA
operations. In 2010, the District increased its mill levy to 10.595 mills to match the
increase in City contributions through KFCG. In addition, the Town of Timnath
contributes a share of its Urban Renewal Authority tax increment to PFA in lieu of the
District property taxes the URA properties would have otherwise paid to the District.
These three components were applied to developing a new proposed RAF for 2015. The
components of the proposed formula include:
Total Cost
Current Budget Level of Service 2014 $24.7Million
Adequate Funding for Level of Service, 2014 $27.5 Million
Split (based on the 5 year average blend of service calls & assessed value):
City 82.5% $22.7Million
District 17.5% $ 4.8 Million
City Funding Shortfall:
City 2014 Contribution $20.1Million
City Funding Shortfall $ 2.6 Million
City Contribution:
Sales and Use Tax .29 cents of one cent of 2.25% General Sales and Use Tax
Property Tax 64% of Property Tax
Capital Mill levy 1 Mill
KFCG As defined in ballot language
District Contribution:
Property Tax 10.595 Mills
Timnath URA Tax Increment in lieu of District Property Tax
The proposed RAF variables (29% of one cent of sales tax and 64% of property tax) were
determined based on the City’s 2014 revenue forecasts and the targeted $22.7M for the
Page | 3 March 17, 2014
City contribution. At $22.7M, the City’s contribution equals 82.5% of the PFA Level of
Service Budget and requires an additional $2.6M of funding over the budgeted 2014
funding of $20.1M. The 82.5% reflects a blend of service calls and assessed value between
the City and the District. City staff is proposing that the $2.6M funding gap be closed over a
five year period. Going forward, the RAF will utilize the City’s Sales, Use & Property Tax
revenue forecasts to develop PFA funding, and during the next 5 years, a declining portion
of the $2.6M shortfall will be deducted from the RAF calculated PFA funding. The table
below reflects how the phase in will work. The City RAF Amount calculation below
assumes a 3% per year growth assumption for illustration purposes only.
2014 2015 2016 2017 2018 2019 2020
City RAF Amount $18.6 $19.3 $19.9 $20.6 $21.3 $22.0 $22.8
+ 1 mill Capital 1.8 1.8 1.9 2.0 2.1 2.1 2.2
+ KFCG $2.3 $2.4 $2.5 $2.6 $2.6 $2.7 $2.8
City Calculated Contribution $22.7 $23.5 $24.3 $25.1 $26.0 $26.9 $27.8
Escalation Adjustment
Yrs Total = 5 80% 60% 40% 20% 0%
- Escalation Adj Amount - $2.6 - $2.1 - $1.6 - $1.0 - $0.5 $0.0
City Actual Contribution $20.1 $21.4 $22.7 $24.1 $25.5 $26.9 $27.8
Intergovernmental Agreement Update
City staff and PFA staff have met regularly over the past several months to review the
details of the IGA document. Key issues in the terms of the agreement have included such
provisions as:
• Appointment of the “5th
Member” of the Board;
• Impact of annexations on the financial agreement;
• Appointment of a legal advisor to the Authority;
• Inclusion of specific references to “Rescue” services as part of the scope of
PFA’s services;
• Elimination of language which distinguishes between an “Administrative
Chief” and “Executive Chief;” and
• Additions regarding TABOR limitations.
Page | 4 March 17, 2014
The overall schedule for consideration of the financial proposal and the IGA update is
expected to be:
City Council Finance Committee review (Financial issues)
March 17
PVFPD Board briefing and discussion (Financial Implications
and provisions of IGA)
March 24
PFA Board discussion (Update to Board on PVFPD and City
discussions)
March 25
PVFPD and City Council Joint Meeting (Review terms of IGA
and RAF; develop consensus on terms to prepare for formal
consideration)
April 2
PVFPD Consideration of Resolution to Approve IGA and RAF
May 12
City Council Consideration of Resolution to Approve IGA and
RAF
June 3
Incorporation of RAF into City Budget Process
June 2014
Attachments:
Powerpoint Presentation
Red-lined version of proposed IGA
Attachment 3 – Poudre Fire Authority History
Page | 5 March 17, 2014
Attachment 3
Poudre Fire Authority History
(Previously Provided to City Council at October 29, 2013 Joint Meeting)
In 1981, the City of Fort Collins and the Poudre Valley Fire Protection District developed an
intergovernmental agreement to provide joint fire protection and rescue services within their
respective boundaries. The two entities entered into a “trial period” of consolidation and then
entered into the current Intergovernmental Agreement (IGA) in 1987. The Poudre Fire
Authority is a consolidated fire service model which combined the City Fire Department with
the District Fire Department to provide service in both the District and the City.
The District surrounds the City of Fort Collins, and also encompasses the Town of Timnath,
LaPorte, Bellvue, and Redstone Canyon for a total of 235 square miles of Northern Colorado. It
is a Special District under Colorado law, governed by a five-member Board of Directors elected
by residents of the District. Prior to the consolidation, the District was serving areas on all
sides of the City, and often crossing through the City to reach calls in various parts of its service
area. In addition, each entity provided mutual aid within the other’s boundaries. The
combination of the two departments created a much more efficient service plan, saved
resources by using existing and future stations to serve both urban and rural settings, and
reduced overhead costs.
Other service models were considered, including mutual aid contracts, contracts for service
and creation of a Special District which encompassed both the City limits and the existing
District boundaries. Changes in State law created an opportunity for a Fire Authority to be
establish which would take advantage of the assets of both existing departments, maintain the
relationship between the City and the District, and provide an efficient response system. The
consolidated departments brought together staff, facilities, equipment, dispatch services and
administration to provide services in the PFA boundaries.
At the time of consolidation, the participants estimated that the creation of the PFA would
result in a cost savings of over $1 million per year for the City and the District because of
shared resources and shared stations. Over the years, these savings have increased. A 2007
estimate concluded that the savings to the City alone resulting from the PFA would have been
over $2 million. If the partnership with PVFPD did not exist the City would likely need to
increase its O&M funding by $2,400,000 to maintain existing services, plus some portion of a
capital cost to replace facilities and apparatus that now jointly serve both areas. These figures
were calculated based on the cost of replacing stations and staff located in the District but with
current response areas substantially within the City limits. The District would also likely see
cost increases as it relocated or revised its service plan to provide services to areas on all sides
Page | 6 March 17, 2014
of the City. Since this analysis, annual savings have continued to increase through the shared
model.
The joining of forces created by PFA have resulted in improved insurance ratings, lower long-
term costs to the taxpayer, enhanced ability to respond to large scale emergencies, and
coordinated strategic planning.
Governance of the PFA was established as an independent Board of Directors. The Board was
established to include two members appointed from the City Council, two members appointed
from the PVFPD Board, and one member appointed by the other members. This 5th member
has typically been the Fort Collins City Manager. A set of Bylaws was adopted in 1987 which
sets forth the structure and timing of the PFA Board meetings and the process for selection of
officers of the Board. The PFA relies on the City, Town of Timnath, Larimer County or the
District to adopt any policy or regulation which requires the force of law, since PFA does not
have any regulatory power separate from those entities.
Growth of Poudre Fire Authority
When the PFA was created in 1981, the combined City and District population was
approximately 91,400. It provided service from seven paid fire stations with 104 paid
employees. Calls for service totaled 3,141 in 1981.
As both the City and the District have grown over time, so has the PFA. The PFA population
has grown to the current 185,000 residents. Employees have increased to 185 full-time
employees, plus 30 volunteer firefighters. Calls for service are 5.5 times higher than in 1981,
and since 1993 calls per line fire staff member have nearly doubled. This increase in demand
and workload reflects both the growth of the communities and the increasing call for more
types of services than were provided in the past. The addition of technical rescue services,
swift water rescue, hazardous materials response and other types of services reflect the
expectations of the community for emergency services response well beyond fire response
alone.
Other measures of growth in the PFA include the addition of six stations, additional crews for
truck companies within existing stations, and the development of the Training Center. Over
time, a greater percentage of growth in several measures is attributable to the City. A greater
percentage of assessed valuation of protected structures is within the City, as are a larger
percentage of calls. These facts are consistent with a gradual growth of the City through
annexations of District properties into the City limits.
Page | 7 March 17, 2014
Original PFA Revenue Allocation Formula
The City and PVFPD have shared in the funding of PFA through a model outlined in the 1987
Intergovernmental Agreement. Each partner has its own method for providing funding for its
share of operations and maintenance and capital needs.
CITY OF FORT COLLINS: The funding formula agreement for the City’s share of PFA was
established as a fixed sum contract each year. The formula was developed to provide a
relatively stable funding source, but which would follow the growth and decline of City
revenues in both sales and use taxes and property taxes. The fixed sum was to be estimated
during the budget process to be the equivalent of .303 of one cent of the existing 2.25%
sales and use tax, and 67.09% of the City’s property tax mill levy. This amount was to be
appropriated as a part of the City’s annual budget. The PFA’s appropriation was not to vary
based on actual year end collections, whether they were higher or lower than the budget
projection. Early documents from the City note that in a downturn in the economy, the City
“may approach the Authority to accept a lesser amount than what has been budgeted. The
City could not require the Authority to cut back.” These funds were directed to the
Operation and Maintenance needs of PFA.
In 1993, City Council acknowledged that it needed to provide additional funding to PFA for
capital needs and increased its mill levy to provide a dedicated 1 mill allocation to PFA’s
capital fund. In 1996 the dedicated 1 mill usage was expanded to include operations and
maintenance costs in addition to apparatus replacement and capital needs not funded.
In the 1990’s, the City applied TABOR limits to its allocations to PFA and made adjustments
(increases or decreases) for items such as annexations, economic downturns, etc. After
2008, the City began to allocate funds to PFA based on a percentage increase over previous
years, rather than a calculation of the previous Revenue Allocation Formula.
In 2010, City voters approved the Keep Fort Collins Great sales and use tax package
including dedicated funds for new fire services.
POUDRE VALLEY FIRE PROTECTION DISTRICT: The District’s financial commitment to
the PFA for each year is based on property tax receipts as projected by Larimer County in
August of each year. The District’s mill levy has fluctuated between 4.75 mills and 11.81
mills since 1981. The highest rate was in place in 1987 as the District raised revenues to
pay off a bond for Station 7 in LaPorte.
In 2010, District voters approved a mill levy increase from 9.301 to 10.595 mills, to provide
PFA with additional funds matching the increase in revenue provided by the City in the
Keep Fort Collins Great (KFCG) program. The District’s increase did not include a sunset
provision similar to the one included in the KFCG program.
Page | 8 March 17, 2014
Each year, the District Board allocates most of its revenue directly to PFA, holding back
enough revenue to cover the District’s operating costs and projected capital needs. Over
recent years, the District has built up a capital fund dedicated to the construction of Station
8 in Timnath. The District is expected to transfer $1.4 million from these funds to PFA’s
capital budget in either 2014 or 2015 for the planned construction of Station 8.
PFA BOARD: The IGA requires the City Council and the District to annually approve their
PFA budget contribution as an appropriation prior to the end of each year. After the
allocation is set, the funds are turned over to PFA to be budgeted by the PFA Board. All
funds are transferred to PFA, which receives is expenditure authorization from the PFA
Board. Under the terms of the IGA, PFA is authorized to retain any unexpended funds in
reserve, without further approval of the City or the District.
Poudre Fire Authority Revenue Allocation Formula History
1987-2014
City of Fort Collins PVFPD
Sales and
Use Tax
Property
Tax
Capital
Mill levy
Keep Fort
Collins Great
Property Tax
1987- 1990 .303 cents
of City’s
2.25% base
sales tax
rate
67.09 % of
City
Property
Tax
N/A 11.81 Mills (varied
with debt service
level)
1991 – 2006 .303 cents
of City’s
2.25% base
sales tax
rate
.6709 % of
City
Property
Tax
1 mill N/A 9.301 Mills
2007-2010 Fixed percent increase
over previous year
1 mill N/A 9.301 Mills
2010-2014 Fixed percent increase
over previous year
1 mill 11% of .085 %
KFCG sales and
use tax
10.595 Mills
Proposed 2015 .29 cents of
City’s
2.25% base
sales tax
rate
1
PFA IGA - Update
March 17, 2014
2
IGA History
IGA Agreement and Revenue Allocation Formula has met the needs
of the Authority and City for over 30 years
• Current IGA established in 1987
• Defined authority of the PFA Board & Fire Chief
• Governing Board
• Personnel
• Purchases & Disposition of Assets
• Described funding mechanism for the District and the City
• District – Mill Levy based
• City – Revenue Allocation Formula
o Original approximately 50%/50% Property Tax & Sales tax
o Recent data 2/3 Property Tax, 1/3 Sales Tax (w/o KFCG)
• Objective of revising the IGA:
• Update authority levels & services provided by City
• Update Revenue Allocation Formula
3
Revenue
Revenue Growth from the District is Greater than from the City…
City’s Contribution has Grown at a Rate Greater than City Revenue
0
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
30,000,000
1997 - 2014 PFA City and District Revenue
City Contribution District Contribution
Growth Rates
4.99% = City Revenue (Sales, Use,
Property Tax, & KFCG)
5.03% = City Contribution to PFA
5.45% = District Contribution to PFA
5.12% = PFA Revenue
4
-
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
30,000,000
1997 - 2014 PFA Expenses
Personnel Exp Non-Personnel Exp Capital Exp
Expenditures
Personnel Cost Consistently at 87% of O&M….
Capital Funding has Been Used to Support O&M
Growth Rates
4.57% = Non-Personnel Expense
4.94% = Personnel Expense
5.73% = Total Expense (Incl Capital)
86% of
O&M
14% of
O&M
87% of
O&M
13% of
O&M
5
Calls Per Firefighter/Captain
Average 3% Annual Improvement in Productivity
67.20
75.63
72.32
74.88 74.23 74.04
81.54
86.10
92.69
95.89
98.83
102.86
92.84
95.43
99.88
105.09
110.54
114.90
117.77 118.04
50
60
70
80
90
100
110
120
130
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
6
Staffing Analysis
Line, Command & Uniform Staffing has Declined Since 1998
From 93.8% to 89.7% of Total Staffing
0
20
40
60
80
100
120
140
160
180
200
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Employee count by category
Line and Command Staff 40 hour Uniformed Professional/Technical Support Clerical Admin Support
93.8%
6.2%
10.3%
89.7%
7
Comparative Data
77.6% 82.0%
22.4% 18.0%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
City Assessed Valuation District Assessed Valuation
City
Contribution
81.0%
District
Contribution
19.0%
Last 5 yr Avg
Contribution
City
82.5%
District
17.5%
2020 Projected Contributions
75.9%
83.7%
24.1%
16.4%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
8
RAF Alternatives Explored
Proposed RAF Based on #3….
Develop Level of Service Budget & Modify Existing RAF
1. Use District Mill Revenue & blended call & assessed
values
• i.e. if district revenue is $5M and blended values are 20%,
City would target proportional revenue of $20M
2. Develop Level of Service Budget & Cost per Service Call
• Create cost per service call and adjust funding each year
based on service calls within District and City
3. Develop Level of Service Budget & Modify existing RAF
• Allocate funding by blended call & assess value relationship
• Adjust property tax & sales tax variables within formula to
achieve target revenue
9
Level of Service Based Budget Analysis
PFA Level of Service Budget requires an additional $2.8M
over current 2014 budget of $24.7M
2014
O&M Capital Total
Current Budget (w/o fees & review) $23.8 $0.9 $24.7
Personnel Net 0.7 0.7
Other Costs .4 0.4
Legal costs .1 0.1
Funding to restore Capital 1.6 1.6
Level of Service Budget Target $25.0 $2.5 $27.5
10
Required Funding Adjustments
2014 Level of Service Budget Calculates $2.6M
Shortfall from City Contribution
District City
Average 5 yr Calls 16.1% 83.9%
Average 5 yr Assessed Value 18.8% 81.2%
Blended 17.5% 82.5%
Budget Share $4.8M $22.7M
2014 Current Contributions $4.6M $20.1M
2014 Funding Shortfall $0.2M $2.6M
11
Funding Mechanism
Phase in of Additional City Contribution Over Five Years Avoids a
Large Hit to the City’s Budget….
Provides PFA Certainty of Revenue Growth
District Revenue - $4.6M 2014 revenue:
• Property Taxes at 10.595 mills
• TIF Revenue for Station 8 from Town of Timnath
City Revenue – $22.7M 2014 revenue:
• Sales Tax - 29% of one cent of 2.25% GF Sales and Use Tax
revenue
• 1 mill of City property tax for Capital
• 64% of remaining City property tax revenue after 1 mill
• 11% of KFCG revenue
Phase in of City’s additional $2.6M
• Phased in over 5 years
12
City Funding over Time
Proposed New RAF Goes Into Effect in 2015.
$-
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
$35,000,000
2014
Actual
2015 2016 2017 2018 2019 2020
$2,100,000 $1,600,000
$1,000,000 $500,000
Contributions, City and District, with 5-year Phase-in
District Property Tax City Capital Property Tax City Sales/Use Tax City General Property Tax
KFCG Sales/Use Tax City Phase-in not included Current Year Funding Gap
Current
year
funding
gap $2.6 M
13
IGA Terms Updated
All IGA Changes Have Been Reviewed by Both the
City and District Attorneys
• Updated to reflect previously approved amendments
• Reaffirm selection of “5th” member of Board
• Update authorities of Chief
• Purchases
• Asset Disposition
• Update to reflect current services provided by City
• See Exhibit B of the IGA
• RAF formula and worksheet included as attachment to IGA
• Future transparency and consistency – Exhibit A in the IGA
• Impact of Annexations and URA’s included with IGA
• Large annexations – adjust RAF variables to be revenue neutral
• URA/TIF – discussion to understand implications
14
BACK-UP
15
Station 5 and 7
Kitchen Wear
and Tear
16
Deferred
Maintenance
Station 5
Roof
17
Station 7
inadequate
facilities for male
and female
firefighters
working together
Bathroom privacy
issues and single
dorm room for all
firefighters
1
DRAFT 3-12-14 #2: SUBJECT TO FURTHER REVIEW AND MODIFICATION
AMENDED AND RESTATED
INTERGOVERNMENTAL AGREEMENT
ESTABLISHING THE POUDRE FIRE AUTHORITY
THIS AGREEMENT, entered into this ___ day of ________________, 2014, pursuant to
Section 29-1-201 et seq., C.R.S., by and between THE CITY OF FORT COLLINS,
COLORADO, a municipal corporation, hereinafter referred to as the "City", and THE POUDRE
VALLEY FIRE PROTECTION DISTRICT, Larimer County, State of Colorado, hereinafter
referred to as the "District".
WITNESSETH:
WHEREAS, the parties to this Agreement have entered into a previous intergovernmental
agreements providing for the formation of an independent governmental entity for the purpose of
providing fire protection and related services, as noted in such previous intergovernmental
agreements, within the respective territorial limits of the parties hereto, which entity is known as
the POUDRE FIRE AUTHORITY; and
WHEREAS, that those previous agreements, as amended, has have been mutually
beneficial in providing a higher degree of protection to persons and property within the
respective territorial limits of the parties hereto; and
WHEREAS, the parties desire to provide for the continued existence of the POUDRE
FIRE AUTHORITY, and to amend and restate in full all previous intergovernmental agreements
regarding the establishment and operation of the Poudre Fire Authority.
NOW, THEREFORE, in consideration of the mutual covenants and obligations herein
expressed, it is agreed by and between the parties hereto as follows:
ARTICLE I
GENERAL PROVISIONS
1.1. Term of the Agreement. This Agreement shall be in effect from January 1, 1988
from the date first above written until terminated by the parties as herein provided. In addition to
the option to terminate for non-appropriation as described in Section 5.4., below, this Agreement
may be terminated by either party hereto, provided written notice of termination is given to the
other party. The effective date of termination shall be on December 31 of any calendar year,
provided said termination shall be no sooner than twenty-four (24) months after service of the
written notice of termination.
2
1.2. Poudre Fire Authority. The existence of the independent governmental entity
known as the "POUDRE FIRE AUTHORITY", hereinafter referred to as the "Authority",
created by the intergovernmental agreement of the parties dated December 22, 1981, as such
agreement was amended thereafter, is hereby continued. The Authority is an independent
governmental entity separate and distinct from the City and the District. The Authority may
provide, either directly or by contract, fire protection, emergency medical, rescue and ambulance
transport services, enforcement of fire prevention codes, hazardous materials response, and other
emergency services typically provided by a public fire department and that may be provided by a
fire department under the City Charter and by a fire protection district organized pursuant to
Article 1, Title 32, C.R.S., within the respective territorial limits of the parties (collectively, the
“Fire Rescue Services”).
1.3. Nature of the Authority. The Authority is a separate legal entity organized
pursuant to Section 29-1-203(4), C.R.S. In carrying out its purposes, the Authority will observe
and comply with statutes and laws applicable to the District and the City, including, but not
limited to Parts 1, 5, and 6 of Article 1, Title 29, C.R.S., regarding budget preparation,
accounting, and auditing; and Part 4 of Article 6, and Parts 2 and 3 of Article 72 as applicable to
the Authority, and Article 10 of Title 24, C.R.S., regarding open meetings, open records,
criminal justice records, and governmental immunity. The parties intend that the Authority not
be considered a “district” subject to Article X, Section 20 of the Colorado Constitution. The
Authority boundaries shall consist of the combined territorial boundaries of the parties.
1.34. Governing Board. The Authority shall be administered by a governing Board of
five (5) members, hereinafter referred to as the "Board." The City shall appoint two (2) members
and the District shall appoint two (2) members. The fifth member shall be appointed annually at
the first regular meeting of the Board in August of each year by majority vote of by the four
other members as appointed by the City and District.
A. All appointees and terms of appointment shall be at the discretion of the
appointing entity.
B. All vacancies on the Board shall be filled by the appointing entity.
1.45. Meetings of the Board.
A. Regular Meetings. The Board shall provide for regular meetings at a time
and place fixed by resolution of the Board.
B. Special Meetings. The Board may conduct special meetings for the
purpose of taking immediate action for emergency measures, as necessary
Special meetings may be called by the Chair of the Board or by the Board
at such times as the Chair or the Board may determine to be necessary,
provided that written notice or notice by telephone or electronic mail of
the time, place, and business of such meeting is given to each Board
member at least twenty-four (24) hours prior to such meeting. Any Board
member may sign a waiver of notice which waiver shall then be in lieu of
3
any other notice requirement. A Board member attending any special
meeting shall be deemed to have received the necessary notice.
C. Open Meetings. All meetings of the Board shall be open to the public,
except that the Board, by majority vote of members present, may go into
executive session for the purpose of discussing personnel matters, meeting
with attorneys representing the Authority to discuss legal matters, and
consideration of real property acquisitions by the Authority as permitted
by state law.
D. Electronic Attendance. If approved by the Board, the Board members
may participate by telephone or other technology that allows them to
participate in a meaningful manner, so long as meetings are open to the
public and the Board is not acting in a quasi-judicial capacity.
1.56. Minutes. The Secretary shall cause all minutes of the meetings of the Board to be
kept and shall, prior to the next meeting, provide a copy draft of the minutes to each member of
the Board for consideration at the next meeting.
1.67. Voting; Quorum; Required Votes. Each member of the Board shall have one (1)
vote. A quorum of the Board shall consist of three (3) members, provided that the City and the
District are represented by at least one of their appointees, and no official action on any matter may
be taken by the Board unless a quorum is present. Unless otherwise required by law, the affirmative
votes of a majority of the Board members present shall be required for the Board to take any action.
1.78. By-laws. The Board may adopt such by-laws, rules and regulations as necessary
for the conduct of its meetings and affairs.
ARTICLE II
OFFICERS AND EMPLOYEES
2.1. Chairman, Vice Chairman and Secretary. The Board shall elect a Chairman and
Vice Chairman from its members, and shall appoint a Secretary who may, but need not, be a
member of the Board. Said officers shall perform the duties normal for said offices, including the
following:
A. The Chairman shall sign all contracts on behalf of the Authority, except
contracts or agreements that may be signed by the Administrative Chief or
Executive Fire Chief of the Authority, as herein provided, and shall
perform such other duties as may be imposed by the Board.
B. The Vice Chairman shall perform all of the Chairman's duties in the
absence of the Chairman.
4
C. The Secretary shall attest to all contracts signed on behalf of the Authority
and perform such other duties as may be imposed by the Board.
2. 2. Management. The Board shall appoint an Administrative Chief and an Executive
a Fire Chief to manage the Authority. The Executive Chief shall perform all the
Administrative Chief's duties in the absence of the Administrative Chief. The Fire Chief shall
assume responsibilities of the Fire Chief for both parties pursuant to this Agreement. Subject to
the supervision of the Board and the powers specifically reserved to the Board as described in
Article III of this Agreement, the Fire Chief shall have all powers and authorities provided for a
municipal fire chief and a fire chief under Section 32- 1-1002, C.R.S., and shall oversee and
manage all business and affairs of the Authority, including the operation, maintenance,
management, administration, and provision of all facilities, improvements, equipment, services
and personnel, in the manner typically associated with a fire and emergency rescue agency for
which the fire chief has been delegated authority by the governing body to manage all aspects of
the agency, including the authority associated with a chief executive, administrative, and
operational officer. The Administrative Fire Chief shall have the power:
A. To provide for the planning, design and construction of any buildings,
additions or improvements to the facilities owned by the Authority.
B. To execute any contract for capital costs, costs of special services,
equipment, materials, supplies, maintenance or repair that involves any
expenditure by the Authority of less than Twenty Seventy-Five Thousand
Dollars ($20,00075,000), providing such expenditure is within budget.
C. To employee all personnel of the Authority required for the provision of
Fire Rescue Services and maintenance and operation of all facilities and to
make such personnel decisions as he or she deems appropriate, including
without limitation, decisions as to organizations, staffing levels,
deployment, promotions, demotions, discipline and, where deemed
necessary by the Fire Chief, termination.
D. To employ all personnel required in connection with the planning, design
and construction of any buildings, additions or improvements to the
facilities owned by the Authority.
E. To expend funds and enter into contracts, whenever required, for the
immediate preservation of the public health, safety, and welfare, provided
that the amount of funds involved does not exceed one percent (1%) of the
annual budget of the Authority for the year in which the funds are
expended or the contract is made.
F. To dispose of by sale any personal property of the Authority with a value
of less than Ten Fifty Thousand Dollars ($10,000.0050,000).
5
G. To approve payroll payments and other demands for payments by the
Authority, provided such payments are within budget and an individual
payment does not exceed Twenty Seventy-Five Thousand Dollars
($20,000.0075,000).
H. To prepare and submit to the Board an annual operating budget for the
next fiscal year in accordance with the budget schedules of the City and
District.
I. To adopt general operating guidelines, including but not limited to non-
personnel matter policies and procedures, operating policies and
inspection policies, as deemed appropriate by the Fire Chief.
J. Generally, To generally supervise the acquisition, construction,
management, maintenance and operation of the Authority's facilities and
personnel.
K. To negotiate with labor groups as may be required by state law or
authorized by the Board.
L. To negotiate with a provider of ambulance services within the Authority’s
service area, including but not limited to, an exclusive service agreement,
performance standards, and other provisions as deemed appropriate, to be
approved by the Board.
M. To conduct procurement and purchasing processes consistent with the
City’s administrative procurement policies and procedures, unless
excepted from those policies and procedures by the Board.
N. To provide an Annual Report regarding the activities and
accomplishments of the Authority, including reports to the City and
District for the purpose of reviewing annual performance measurements,
goals, actual spending to budget, benefits to the community related to
strategic outcome goals, operational efficiency, productivity
improvements, and issues of concern to the Board, the District, and the
City, with such report to be submitted annually in the second quarter of
each year.
KO. To perform such other duties as directed by the Board and report to the
Board at such times and on such matters as the Board may direct.
2.3 Legal Advisor. The Board shall have the power to appoint, through a
competitive selection process as determined by the Board, an attorney to provide legal
services to the Authority a legal advisor of the Authority who shall perform such duties as
directed by the Board.
6
2.4. Other Employees. The Board shall have the power to appoint and employ such
other persons, agents, and consultants for the purpose of providing professional, technical or
consulting services as may be necessary for the purposes of this Agreement.
ARTICLE III
POWERS OF THE AUTHORITY
3.1. General Powers. The Authority shall exercise, in the manner herein provided, the
-
powers common lawfully authorized to the City and the District each of the parties, as provided
by the laws of the State of Colorado, and all incidental, implied, expressed or necessary powers
for the accomplishment of the purposes of this Agreement as provided herein. The Authority’s
powers shall be exercised by the Board unless otherwise designated by this Agreement,
applicable law, or delegation of the Board. The Authority shall not have the power to levy taxes.
3.2. Specific Powers. The Authority is hereby authorized, in its own name, to do all
acts necessary for the exercise of the foregoing powers including, but not limited to, the
following:
A. To make, and enter into, and perform contracts, including those with the
parties hereto, for goods or services of every kind as authorized by law
with other governmental entities, the State of Colorado, or any political
subdivision thereof, the United States, or any political subdivision thereof,
and any individual, firm, association, partnership, corporation or any other
organization of any kind.
B. To employ all necessary personnel.
C. To acquire, construct, manage, maintain, and operate any buildings,
works, improvements or other facilities.
D. To acquire, hold or dispose of property.
E. To sue and be sued in its own name.
F. To incur debts, liabilities, or obligations, provided that no debt, liability or
obligation shall constitute a debt, liability or obligation of either the City
or the District to the extent and in the manner permitted by law, and
borrow money and, from time to time, make, accept, endorse, execute,
issue and deliver bonds, notes and other obligations of the Authority for
monies borrowed, or in payment for property acquired, or for any of the
other purposes, services or functions of the Authority; and as provided by
law, and to the extent permitted by law, to secure the payment of any such
obligations by mortgage, pledge, deed, indenture, agreement, or other
collateral instrument, or by other lien upon or assignment of all or any part
of the properties, rights, assets, contracts, easements, revenues and
7
privileges of the Authority; and providing that all debts, liabilities, and
obligations of the Authority shall be limited to or secured only to the
extent of the Authority’s assets; and further providing that no obligation of
the Authority shall be or become an obligation of either the City or the
District without the express written consent of such party.
G. To apply for, accept, receive and disperse grants, loans and other aid from any
governmental entity or political subdivision thereof.
H. To invest any unexpended funds that are not required for the immediate
operation of the Authority, as the Authority determines is advisable, in
accordance with the laws of the State of Colorado; provided however, that
such investment management and cash management services will be
provided by the City through its Finance Department.
I. To administer and enforce the Fire Code adopted by the City and District,
and as adopted or consented to by other municipalities and counties within
the Authority’s service area.
J. To contract with a provider of ambulance services within the Authority’s
service area through any lawful means, including but not limited to an
exclusive service agreement, performance standards or other provisions as
deemed appropriate by the Board.
K. To adopt bylaws, rules, and regulations respecting the exercise of its
powers and carrying out of its purposes.
L. To fix, maintain, and revise fees, rates, and charges for functions, services,
or facilities provided by the Authority in the manner provided by law.
M. To own, operate, and maintain real and personal property and facilities in
common with others, and to conduct joint, partnership, cooperative, or
operations with others, and to exercise all the powers granted herein in
joint, partnership, cooperative, or other operations with others.
N. To act as agent on behalf of the parties with regard to the functions and
services described hereinabove and any existing contracts and agreements
between either or both of the parties or any other party, to the extent
permitted by law and the terms of such contracts and agreements.
JO. To carry out and enforce all provisions of this Agreement.
ARTICLE IV
ORGANIZATIONAL PROCEDURE
4.1. Delegation of Powers. Duties and Responsibilities.
8
A. Each of the parties hereto delegates to the Authority the power, duty and
responsibility to maintain, operate, manage and control all of the fire
protection Fire Rescue Services facilities, equipment, resources and
property of the Authority, including without limitation, all fire stations,
land, buildings and firefighting, emergency medical and rescue
equipment, and to employ the necessary personnel and do any and all
other things necessary or desirable to provide continued efficient and
economical fire protection Fire Rescue Services to all persons and
property within the respective territorial limits of the parties hereto,
which area shall be considered the jurisdiction of the Authority.
B. The Authority is hereby empowered to provide Fire Rescue Services to
persons and property outside the jurisdiction of the Authority by
agreement in exchange for payment or reciprocal services, as long as
such additional services can be provided through the use of existing
facilities, equipment, resources, and personnel of the Authority.
4.2. Personnel.
A. The Board shall adopt the necessary rules, regulations and procedures
which shall govern personnel matters.
B. During the term of this Agreement, all employees transferred from the City
and the District under the original Intergovernmental Agreement and all
employees hired by the Authority shall be employees of the Authority
subject to the terms and conditions of employment in effect as stated in
Authority Personnel Rules and Regulations, as amended from time to
time.
C. All of the time that a transferred employee has spent as a Fire Department
employee of either the City or the District shall be considered as time
employed by the Authority for the purpose of determining any conditions
or benefits of employment with the Authority.
D. The establishment of the Authority as an independent governmental entity
shall not affect in any manner the rights of City or District employees,
hired prior to January 1, 1982, insofar as they relate to pension benefits
provided by the laws of the State of Colorado.
E. The City and the District shall be responsible for their respective unfunded
pension liabilities incurred prior to January 1, 1982.
FE. At the termination of this Agreement, any unfunded pension liabilities
incurred by the Authority during the term of this Agreement shall be
9
assumed by the City or the District in proportion to the allocation of
Authority personnel to the City and the District.
GF. If this Agreement is terminated, the parties agree that any employee of the
Authority who was an employee of the City or the District on January 1, 1982
shall have the right be restored to
-
employment with the employee's original
employer (City or District as applicable) or the entity which has need for
additional employees. Said employment shall be subject to the terms and
conditions of employment then in effect as stated in City or District personnel
rules.
4.3 Authority Fund. The Board shall establish an Authority Fund to account for all
financial transactions of the Authority in accordance with generally accepted accounting principles.
ARTICLE V
BUDGET; MAINTENANCE AND OPERATION
COSTS; OTHER COSTS
5.1 Annual Budget.
A. The Board shall adopt a preliminary budget for maintenance and operation
costs, capital costs, and costs of special other services in accordance with
the budget schedules of the City and the District, which budget may be
amended from time to time based on changes in revenue projections made
by the City and the District. The Board shall submit the budget to the
respective governing bodies of the parties hereto. The budget shall become
the Authority budget only after approval of the appropriations by the
respective governing bodies and final approval by the Board.
B. The City shall contribute funding for maintenance and operation costs to the
Authority based on a "Revenue Allocation Formula" which shall be set
annually based upon a percentage of sales and use tax revenues (excluding
sales tax revenue which must be spent on specific projects) and a portion of
the operating mill levy of the City's property taxes. The dollar amount of the
City's contribution, determined through the use of the “Revenue Allocation
Formula”, shall be based upon the City's revenue projections made during the
City's budgetary process. The District shall adopt a mill levy annually pursuant
to state law and a portion of said levy shall be dedicated to the Authority for
maintenance and operation costs. The Authority shall request funds for capital
costs pursuant to the procedures set by the City and District. The financial
contributions of the parties for the funding of the Authority shall be determined
by the Revenue Allocation Formula, hereafter referred to as the “RAF,” as set
forth in Exhibit A, attached hereto and incorporated by this reference.
C. The Board shall present requests for supplemental appropriations to the
respective governing bodies of the parties hereto. For the purposes of this
10
Agreement, "supplemental appropriations" shall mean any appropriation
made above and beyond the annual appropriation made during the
budgetary process.
D. The Board shall have the power to reappropriate funds in the fund balance
for whatever purpose the Board deems appropriate or necessary without
approval of the City or District. Such reappropriations shall be made only
at meetings of the Board held after proper notice has been given,
according to the bylaws of the Authority.
5 2. Records and Accounts. Through the City’s Finance Department, the Authority
shall provide for the keeping of accurate and correct books of account, showing in detail the capital
costs, cost of special services, maintenance and operating costs and all financial
transactions of the Authority which books of account shall correctly show any receipts and also
any costs, expenses or charges paid to or to be paid by each of the parties hereto. Said books and
records shall be open to inspection at all times during normal business hours by any representative
of either party or by the accountant or other person authorized by either party to inspect said books
or records. The Board shall provide for the auditing of all books and accounts and other financial
records of the Authority on an annual basis, with such auditing to be conducted by a utilizing the
same certified public accountant as is used by the City in the auditing of its financial records.
The results of said audit shall be presented to the City and the District not later than thirty (30)
days after receipt by the Board.
5.3. Payment of Costs. Each of the parties agrees to pay to The City shall pay the
Authority monthly and the District shall pay the Authority quarterly, in advance, its allocated
share of the total estimated budgeted annual costs and expenses. The Board is authorized to
approve other arrangements for payments by the City and the District, provided the financial security
of the Authority is not impaired. In addition to supplemental appropriation requests, the Board is
authorized to request amounts in excess of any regular payment for the costs and expenses of the
Authority, provided the total annual allocation does not exceed the estimated share of costs and
expenses for either party to this Agreement. The Authority shall make available to each of the
agencies a final detailed statement of the final costs and expenses for the fiscal year allocated in the
same manner as estimated expenses were allocated, as soon as possible after the close of each fiscal
year.
5.4. Sources of Funds. Each party shall provide the funds required to be paid by it to
the Authority under this Agreement from any source of funds legally available to such entity for
such purpose. All financial obligations of the City and the District incurred pursuant to this
Agreement are expressly contingent upon the actual appropriation of funds by each party. Upon
an event of non-appropriation by one party, the party that has appropriated funds may, in its sole
discretion, terminate this Agreement effective as of the last day of the year in which funds have
been appropriated by both parties, or choose to continue this Agreement in effect, in which case
the Authority shall adjust the level of service consistent with the revenues available from the
appropriating party. If both parties fail to appropriate funds under this Agreement, unless
otherwise agreed to by the parties, this Agreement shall terminate effective as of the last day of
the year in which funds have been appropriated by both parties.
11
ARTICLE VI
SERVICES
6.1 Professional, Administrative and Support Services. The parties may provide the
necessary professional, administrative and support services to the authority at no cost on the
same basis and to the same extent as such services were historically provided by the parties prior
to January 1, 1982, except that the parties may enter into additional agreements for the propose
of securing any necessary professional, administrative and support services. The City shall
provide to the Authority those professional, administrative, and support services described in
Exhibit B, attached hereto and incorporated herein by this reference, upon the terms and
conditions set forth therein. The provision of those services shall be at no additional charge
unless otherwise indicated on Exhibit B. Upon the written agreement of the City Manager and
the Fire Chief, Exhibit B may be amended from time to time.
6.2. Additional Services. The City may agree to provide other additional services to
the Authority, provided the Authority complies with the operating procedures of the City.
ARTICLE VII
OWNERSHIP OF PROPERTY
7.1. Real and Personal Property. The Authority shall continue to hold all right, title
and interest in any and all real property and personal property transferred to the Authority by the
City or the District or acquired by the Authority since January 1, 1982 for the purpose of
providing fire protection Fire Rescue Services, unless such property is disposed of in compliance
with the terms of this Agreement.
7.2. Asset Inventory Schedules. The Authority shall maintain separate asset inventory
schedules for any and all property transferred from the City or the District which remains under
the ownership of the Authority, as well as any and all property acquired by the Authority since
January 1, 1982.
ARTICLE VIII
TERMINATION
8.1. Disposition of Assets. Upon termination of this Agreement pursuant to
paragraphs 1.1. or 5.4., above, the assets of the Authority shall be disposed of as follows:
A. All assets acquired by the Authority from contributions from the parties
shall be returned to the contributing party if said assets are still owned by
the Authority.
B. If assets contributed to the Authority are not in existence, the contributing
party shall have the option of receiving the fair market value of the asset at
the time of disposal by the Authority in either cash (if available) or assets of
the Authority acquired from funds provided by the parties.
12
C. All remaining assets acquired by the Authority after January 1, 1982, from
funds provided by the parties shall be distributed to the parties on the basis
of the appraised value of said assets at the time of termination and in the
same proportion as the respective contributions of funds by the parties for
acquisition of the assets over the life of this Agreement.
D. The parties may agree to dispose of any assets of the Authority in any
other acceptable manner.
E. If the parties cannot agree on the disposition of certain assets of the
Authority, said assets shall be subject to an independent appraisal and
shall be sold at public auction with the proceeds allocated to the parties in
the same proportion as the respective contributions of funds by the parties
for acquisition of the asset.
ARTICLE IX
MISCELLANEOUS PROVISIONS
9.1 Notices. Any notice required hereunder shall be in writing and shall be
sufficient if deposited in the United States mail, postage prepaid to:
CITY: City Manager
City of Fort Collins
P.O. Box 580
Fort Collins, Colorado 80522
DISTRICT: Chairman
Poudre Valley Fire Protection District
102 Remington Street
Fort Collins, Colorado 80524
9.2. Consent. Whenever any provision of this Agreement requires consent or approval
of the parties hereto, the same shall not be unreasonably withheld.
9.3 Amendments. This Agreement may only be amended in writing, as required,
by the parties hereto in furtherance of purposes of this Agreement.
9.4 Severability. In the event any provision of this Agreement is determined to be
illegal or invalid for any reason, all other provisions of this Agreement shall remain in full
force and effect unless and until otherwise determined. The illegality of any provision of this
Agreement shall in no way affect the legality and enforceability of any other provision of the
Agreement.
95. Successors. This Agreement shall be binding upon and shall inure to the
benefit of the successors of the parties.
9.6 Assignment and Delegation. A party shall neither assign any of the rights nor
delegate any of the duties created by this Agreement without the written consent of the other
party.
13
9.7 Effect Upon Prior Agreements. This Agreement shall extinguish and replace
the intergovernmental agreement entitled Intergovernmental Agreement dated November 3,
1987, and the three addenda to that Intergovernmental Agreement referenced in the Third
Addendum to the Intergovernmental Agreement Between the City of Fort Collins and Poudre
Valley Fire Protection District dated May 21, 2013.
9.8 No Third Party Beneficiaries. This Agreement is made for the exclusive
benefit of the parties hereto and shall not be construed to be an agreement for the benefit of
any third party or parties and no third party shall have a right of action hereunder for any
cause whatsoever.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed
on the date hereinabove written.
CITY OF FORT COLLINS, COLORADO
a municipal corporation
By: _____________________________________
Mayor
ATTEST:
_____________________________
City Clerk
APPROVED AS TO FORM:
____________________________
City Attorney
POUDRE VALLEY FIRE PROTECTION DISTRICT
By: __________________________________________
President of the Board
ATTEST:
___________________________
Secretary
APPROVED AS TO FORM:
___________________________
Counsel for District
1
Draft 3-12-14
Exhibit A. Revenue Allocation Formula (RAF)
Subject to the adjustments described below, the City will annually contribute to the funding of the
Authority the following amounts:
1. .29 of one cent of the City’s 2.25 cent sales and use tax rate applicable to sales and use
tax revenues (excluding sales and use tax revenue which must be spent on specific
projects and debt service); and
2. 1 mill of the City’s property tax mill levy and a sum equal to 64 percent of the operating
mill levy (minus the 1 mill contribution) of the City’s property taxes; and
3. sales and use tax revenue from the voter approved funding program tax measure
currently known as “Keep Fort Collins Great” (KFCG) per legislative guidelines the tax
measure provision for fire protection and other emergency services funding.
City Sales & Use Tax and City Property Tax refer to forecasts per the City’s Financial Services April
projection. The RAF may be updated throughout that same year if there are material changes to the City
Sales & Use Tax and City Property Tax April projections.
City Contribution to the Authority calculation per RAF
City Sales & Use Tax Revenue (per Financial Services April projection)
÷ 0.0225 DIVIDE: 2.25 cent City sales and use tax
× 0.01 MULTIPLY: one cent of 2.25 cent
× 0.29 MULTIPLY: RAF sales and use tax percentage
Sales and use tax RAF Amount
City Property Tax Revenue (per Financial Services April projection)
MINUS: 1 mill Capital
Subtotal
× 0.64 MULTIPLY: RAF property tax percentage
Property tax RAF Amount
Sales and use tax RAF Amount
ADD: Property tax RAF Amount
Revenue Allocation Formula Amount
+ 1 mill capital
+ KFCG fire protection
Subtotal City Contribution Amount
2
Escalation Adjustment:
The City’s current (2014) budgeted contribution to the Authority is $2.6M below the RAF calculated
amount. It is the City’s intent to phase in their its total contribution to equal the RAF calculation over a 5
year time period per the following calculations as follows:
Subtotal City Contribution Amount
MINUS: Escalation Adjustment for year
Total City Contribution
Escalation Adjustment by year:
2014 = $2.6M
2015 = $2.1M
2016 = $1.6M
2017 = $1.0M
2018 = $0.5M
Annexation:
In the event of a City approved annexation of District land, the RAF sales and use tax percentage and RAF
property tax percentage will be adjusted to result in a revenue neutral situation for the Authority. The
total combined contribution from District and City will therefore be equivalent remain the same before
and after the annexation.
URA / TIF / Other Implications:
In the event of Urban Redevelopment Authority (URA) implementation of tax increment financing (TIF)
that materially affects the City contribution to the Authority or cost of service to the Authority, the RAF
may be renegotiated to provide a solution that is agreeable to all parties involved.
All parties are committed to renegotiating the RAF or contribution amount in good faith in the event
of ”other” implications that affect the efficient implementation of the RAF formula, or management of
the Authority in a fiscally prudent manner.
District Contribution:
The District will annually contribute to the funding of the Authority the following amounts:
The District shall annually adopt a mill levy (minimum 10.595 mills) annually pursuant to state law, and
100% of the mill levy revenue, less reasonable administrative expenses for the operation of the District,
shall be contributed to the funding of the Authority for maintenance and operation costs. The Authority
shall request funds for capital costs pursuant to the procedures set by the City and District.
If District funding of the Authority changes significantly, all parties commit to renegotiating the RAF or
City contribution amount in good faith.
Page 1
EXHIBIT B
Support Services Provided to the Authority by the City of Fort Collins
Department Service Description
Office of Emergency
Management
Coordinated OEM services • Work in close coordination with the
Authority’s designated emergency
manager
• Fund portion costs of the City’s joint
OEM in partnership with the City
General Fund and Utility Services
through the City’s Budget process
Human Resources Pension Administration • Administer 401 Money Purchase Plans
for Authority benefitted employees
• Process new employee enrollment and
changes in participant records
• Provide GERP administration for
existing participants
•
Deferred Compensation Plans
Administration
• Administration and support of 457
Deferred Compensation programs
• Enrollment and changes processed
Health and Welfare Benefits • Administer health and welfare benefits
(medical, dental, vision, life, long-term
disability) within City self-insured plans
and contract group insurance
agreements
• COBRA Administration
• New Employee benefits sign-ups
• Interpret plans to employees
• Act as liaison between employees and
insurance companies
• Maintain records, files and forms
Benefits Open Enrollment • Provide access to health and welfare
benefits through City sponsored plans
in the same way as provided to covered
City employees
• Provide flexible spending accounts
Training • Access to skill development courses
including technology, leadership and
professional development classes.
Access to personal enrichment courses
such as wellness classes provided on a
space available basis
Page 2
Job Posting • Post Authority positions
Pre-employment • Drug Testing
Records • Personnel Records maintenance
• Employment verifications
• Annual EEOC Reporting
Wellness programs • Provide access to City Health Fair
programs
• Provide annual Health Screening/Blood
Draw program to benefited employees
in the same manner as provided to City
employees
• Provide annual flu shots to benefited
employees in the same manner as
provided to City employees
• Provide office ergonomics reviews for
PFA office employees
• Provide EAP services
Financial Services Payroll Administration • Provide payroll services though the
City’s accounting and payroll system
• Add new employees through the same
New Hire process as used for City
employees
• Provide employee exit processing in the
same manner as provided for City
employees
• Administer unemployment claims and
garnishments
Accounting • Provide Accounts Payable, Accounts
Receivable, and Purchasing Cards to
Authority
• Maintain files and records
• Maintain Asset Inventory
• Grant compliance
• Cash Management
Banking and investing • Capital projects investments (fee
charged)
Risk Management • Provide point of contact for citizen
claims
• Process Worker Comp and liability
claims to PFA insurance
• Safety monitoring ( atmospheric
testing, radon, etc)
• Coordinates selection of worker’s comp
providers
• Coordinates insurance renewals :
Support and advice on Property and
Page 3
Casualty and Workers’ Compensation
Insurance contract
• Liaison with insurance broker
• Driver’s License checks
Purchasing • Purchasing advice
• Issuing Purchase Orders
• RFP/Bid creation and coordination
• Service Agreements/Contracts
Annual Financial Audit
Coordination
Operations Services: Fleet • Vehicle Fueling (charged)
• Pool vehicle rentals (charged)
• Fuel payment cards
• Vehicle repair (charged)
Facilities • Facility repairs (charged)
• Service contacts (advice on who to call)
• Preventive Maintenance on HVACs,
A/Cs, furnaces (charged)
• Project management for larger projects
(charged)
• Real estate services (charged)
Police Services Dispatch • Continue to provide dispatch services
to fire and rescue services
Information Technology Network Administration • Work in close coordination with
Authority IT in configuring, maintaining
and managing the Authority’s data
network including network switches,
routers, VPN access and wiring.
• Provide internet access
• Provides access to internet web email
• Partners with the Authority in FCPS
Computer Aided Dispatch (CAD)
systems
• Connectivity to City core switch
GIS • Access to City GIS programs, data and
licenses
Voice/Phone system • Land-line phone system network and
maintenance
• Partners in Verizon wireless purchases
Server/Storage Administration • Active Directory
• Authority equipment in Server room
• Occasional server support
March 17, 2014
COUNCIL FINANCE COMMITTEE
AGENDA ITEM SUMMARY
Staff: Kelly DiMartino, Assistant City Manager
Amy Sharkey, Benefits and HRIS Manager
SUBJECT FOR DISCUSSION – Employee Wellness Center
EXECUTIVE SUMMARY
City Staff is recommending the implementation of an Employee Wellness Center (commonly
referred to as an Onsite Clinic) that supports the health and wellness of City employees and their
dependents. Advantages to offering a Center include:
• greater ability to management health risks through coaching and onsite disease management
program
• anticipated reduction in health care cost trends
• integrated medical records
• established medical home for employees and dependents making health information available
to providers
• enhanced wellness efforts by supporting proactive health care management
The City has selected Marathon as a preferred vendor. In order to open in January, 2015,
facilities preparation and set-up of Center needs to occur in 2014.
GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED
(Work session questions should be designed to gather direction from Council without requiring
Councilmembers to make a decision.)
• What feedback does Council have regarding the implementation of an Employee
Wellness Center?
• Does Council need any additional information before staff brings forward a
reappropriation request for the use of Benefits Fund reserves?
BACKGROUND/DISCUSSION
History
In 2009, Benefits staff began exploring the concept of an Onsite Clinic with the submission of a
BFO offer in the 2010-2011 budgets. The offer was not accepted with the understanding that
further research was needed. Since that time, the healthcare landscape has changed significantly,
and staff has conducted extensive research regarding the feasibility of a City clinic.
In August of 2012, Hays Companies, the City’s Benefits Consultant, met with the Executive
Lead Team and presented a conceptual analysis regarding implementation of a clinic. The
concept was determined to have merit, and staff was directed to more fully research a potential
clinic.
March 17, 2014
In order to fully evaluate the feasibility of a clinic, it was necessary to select a specific vendor
with whom we would be working. In May 2013, the City of Fort Collins posted a Request for
Proposal (RFP) for an Onsite Employee Wellness Center. Staff worked closely with Hays
Companies to construct a RFP that identified the potential needs of a Center with many different
options for services. Nine proposals were received. Three vendors were interviewed. Marathon
Health has been selected as the potential vendor to provide the City with an Employee Wellness
Center. Additionally, the City explored partnerships with other entities who already have onsite
clinics, including Larimer County, Loveland and Greeley. Staff determined this was not a viable
option; however, we gained valuable insight that was utilized during review of the vendor
proposals.
The Employee Wellness Center is intended to augment primary care, not replace it. However,
many employees may not have a primary care physician, so the Wellness Center will provide
primary care resources for those employees.
Costs and Trends
As a self-insured entity, the City seeks to strategically manage our health care costs. One way to
do this is by influencing employee consumerism/behavior as to how they use their health plan;
another is to drive preventative care and wellness to develop a healthier workforce and lower
risks. Since 2008, City claims have risen, on average, by 6.1%, which is lower than national
averages. In 2013, claims rose by 9%, exceeding our projections for the first time since 2007.
The City has conservatively managed benefit costs, and our Benefits Fund reserves are solid.
During the past two years, the City intentionally drew down reserves by $2,050,234 in 2013 and
projecting $1,900,000 in 2014. An additional $565,820 was used in 2013 as a result of higher
than projected claims costs. Managing costs continues to be a priority. In 2015, Healthcare
reform is projected to increase benefits costs by approx. $405,470, and overall healthcare costs
are anticipated to rise at a rate of 5%.
The ongoing cost for the Employee Wellness Center will be approximately $750,000 - $800,000,
in addition to set up costs of approximately $350,000 ($150,000 for Center equipment, and
$200,000 for facility/infrastructure costs). The Center is projected to recoup ½ of the cost in year
one and break even by year two. The cost recovery model for the Employee Wellness Center is
based on two factors: lowering claims costs reducing the overall cost trend.
ATTACHMENTS (numbered Attachment 1, 2, 3,…)
Attachment 1 – Benefits Fund Summary
Attachment 2 – Marathon Costing Analysis
Attachment 3 – Presentation
Benefits Fund
Statement of Revenue and Expenditures
Unaudited
ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL Actual
2008 2009 2010 2011 2012 2013
Revenue
Contributions
- Medical Insurance $14,826,837 $16,841,816 $16,743,035 $16,019,440 $16,671,456 $15,970,186
- Life Insurance 550,651 509,935 348,167 350,221 380,087 400,403
- Long Term Disability 481,586 460,926 230,019 228,854 243,310 328,795
- Dental Insurance 1,197,427 1,181,577 1,222,839 1,244,796 1,326,459 1,234,313
- Denticare Dental Ins. 000000
- Daycare Reimbursement 181,060 176,574 171,954 169,404 227,877 257,774
- Healthcare Reimbursement 702,208 693,265 696,342 669,131 732,953 712,907
- Supplemental Life Ins. 000000
- Rocky Mountain Life Ins. 198,404 195,875 212,531 215,608 225,668 235,678
- Employee Assistance Program 6,089 6,561 6,280 6,476 6,731 7,554
- Vision 179,029 162,640 140,258 152,731 161,047 178,282
- Death & Disability - FPPA 323,063 342,258 366,975 409,519 471,432 520,349
- Accidental Death & Dismem. 7,861 7,668 7,638 7,585 7,435
- Long Term Care 16,224 15,691 18,378 20,920 13,857 10,899
Wellness Program 52,858 52,854 51,042 48,289 43,187 37,088
Interest on Investments 394,191 307,375 212,201 170,615 136,448 105,110
Interest on Security Lending 152,001 10,957 928 62 0 0
Net Increase (Decrease) in the fair value
of Investments 34,238 (86,560) (44,251) 34,085 6,769 (97,311)
Insurance Recovery 000000
Other - Miscellaneous 40,000 43,560 103,230 99,978 99,645 99,645
Total Revenue 19,343,729 20,922,972 20,487,567 19,847,735 20,754,511 20,009,109
Expenditures
Administration Costs 716,678 666,207 708,849 609,059 611,623 677,631
Securities Lending Interest 129,321 6,328 0 0 0
HMO Administration 0000 0
Medical Claims 11,481,661 12,413,863 13,274,396 13,232,253 14,096,678 15,365,820
Claims Administration 608,103 669,113 680,995 610,004 562,987 662,485
Excess Risk Premiums 956,473 1,040,915 1,047,462 1,287,798 844,796 926,198
Transplant Insurance 141,317 157,766 177,904 0 0 0
Actuarial Adjustment 199,112 106,080 22,654 (502,541) 22,688 136,120
Dental Claims 849,004 944,152 958,202 973,948 979,595 1,097,897
Dental Premiums 69,746 65,998 69,432 68,919 70,656 73,451
Life Insurance Premiums 700,347 730,001 551,639 575,617 594,976 639,349
LTD Premiums 477,074 464,381 208,697 226,514 278,643 328,860
STD Premiums 17,165 17,736 13,863 16,248 17,282 19,714
Death & Disability - FPPA 307,770 340,133 364,097 399,975 484,843 496,628
Accidental Death & Dismem. 000000
Daycare Reimbursements 157,957 172,971 184,182 169,208 216,466 259,721
Healthcare Reimbursements 646,934 689,779 691,570 675,030 703,650 685,939
Vision Insurance 121,848 131,016 150,932 152,391 159,967 177,869
Long Term Care 15,566 15,605 18,182 20,030 14,065 10,890
Wellness Program 234,077 255,677 255,509 307,907 370,267 391,089
Employee Assistance Program 39,862 46,100 41,621 41,765 42,869 44,193
Daycare Referral 15,820 28,156 27,515 34,718 45,119 65,489
Total Expenditures 17,885,833 18,961,979 19,447,700 18,898,843 20,117,169 22,059,343
Change in Net Assets 1,457,895 1,960,994 1,039,867 948,892 637,342 (2,050,234)
Beginning Working Capital (Reserves) $6,541,443 $7,999,338 $9,960,332 $11,000,199 $11,949,091 $12,586,433
Ending Working Capital (Reserves) $7,999,338 $9,960,332 $11,000,199 $11,949,091 $12,586,433 $10,536,199
H:\Benefits\Budgeting\2013\2013 fund statement YE ‐PRE FINAL ‐ Council.xlsx
1
Council Finance Committee
Employee Wellness Center
March 17, 2014
2
Current Landscape
• Solid reserves (intentionally drawing down over
past 2 years)
• Lower than average claims historically; higher
than expected in 2013
• Healthcare Reform increasing costs
• Aging workforce
3
Medical/Rx Claims History
Year Total % Difference
2008 $11,481,881
2009 $12,413,863 8.1%
2010 $13,274,396 6.9%
2011 $13,232,253 -0.3%
2012 $14,096,678 6.5%
2013 $15,365,820 9.0%
Average 6.1%
4
Large Claims History
Over $100,000
Year Total % of Total Claims # of Participants
2011 $2,353,158 18% 13
2012 $2,238,836 16% 11
2013 $4,416,939 27% 24
5
Healthcare Reform
• Healthcare Reform impacts our flexibility & costs
– Variable Hour Employees
• Anticipate adding 150 to 190 FT employees to plan
participation in 2015
– Reinsurance fee
• Approx. $200,000 for 3 years starting in 2014
– Patient-Centered Outcomes Research Fee
• 2014 = approx. $5,500
• increases by CPI through 2019
6
Workforce Demographics
3%
20%
18%
20%
21%
18%
All Employees
<20 20-29 30-39 40-49 50-59 60+
7
Goals
• Review plan costs annually; make adjustments as
necessary
• Find strategic ways to manage our health care cost
that include healthcare reform mandates
• Influence employee consumerism/behavior as to how
they use their health plan
• Drive preventative care and wellness to increase
healthier workforce and lower risks
• Introducing the “Employee Wellness Center”
8
Employee Wellness Center
• What is it? What Services are Provided?
– Preventative care
– Treat primary care, acute and urgent care needs
– Annual exams and screenings
– Immunizations
– Prescription management
• Similar to Onsite Clinic Services
9
Employee Wellness Center
• But wait, it’s more than an Onsite Clinic!
– Medical home model – holistic approach to
managing health
– Drive preventative health and wellness by
managing health risks
– Provide disease management of several risk
factors to help reduce unnecessary expenditures
– Creates an environment where employees can
make their health a priority
10
Clinic Benchmarks
• National Trends
– Predominately private sector incorporating
occupational health; moving into public sector
• Local Trends
– Preventative and Wellness focus
• City of Loveland, Greeley, Westminster, Colo
Springs; County of Larimer, Weld, El Paso
• Intended to augment primary care but not replace
• May provide primary care resource for those employees
who do not have a Primary Care Physician
11
Vendor Information
• Vendor
– Marathon Health selected as potential vendor
– Model is a Patient-Centered Health Center
• Marathon Clinic Stats
– 140 clinic locations across 37 states
– Largest client is 76,000 lives; smallest is 350 lives
– Largest clinic serves 15,000 lives
• Staffing
– 2 Physician Assistants; 1 Office Assistant
– Physician Oversight
12
Cost and Funding
• Center Set-up Costs in 2014
– Approximately $150,000 one-time cost
• Facility Costs in 2014
– Approximately $150 psf for necessary
infrastructure ($200,000 one time costs)
• Ongoing Fixed Cost in 2015-17
– Approximately $750,000 1st
yr; $775,000 2nd
yr;
$800,000 3rd
year
• Funding – Benefits Fund
13
Cost and Funding
• Claims trend changes
– Alter risk profile
– Discover / treat undiagnosed conditions
– Reduce Emergency Room, Urgent Care, Specialist, and
Hospital stays
• Less claims costs due to Center participation
• Drive participation rates through incentives
– Do not raise employee premiums
– Incentive for risk assessments, bio screenings, etc.
– No office copay
– No generic drug copay
March 17, 2014
COUNCIL FINANCE COMMITTEE
AGENDA ITEM SUMMARY
Staff: John Voss, Controller/Assistant Financial Officer
SUBJECT FOR DISCUSSION – 2013 Financial Highlights
EXECUTIVE SUMMARY – The financial condition of the City continues to be healthy.
Revenues increased as did expenditures. The population continues to grow and with it a demand
for more services. Bonds were issued by the URA and yet total outstanding debt was still lower
at the end of the 2013 than at the beginning.
GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED
None.
BACKGROUND/DISCUSSION – Todays review focuses on revenues, expenditures and debt.
At an upcoming meeting fund balances will looked at with more detail.
ATTACHMENTS
PowerPoint presentation
1
2013 Financial Highlights
Council Finance Committee
March 17, 2014
2
Contents
• Revenue
• Expenditures
• Debt
• General Fund change in Fund Balance
3
Tale of Two Cities
• Governmental Activities
– Activities that do not lend themselves to be fully funded
by User Fees are wholly or partially tax supported
– Transportation, Police, Fire, Parks, Natural Areas, etc.
• Enterprise Activities
– 100% funded by User Fees
– Light & Power, Water, Wastewater, Storm Drainage, and
Golf
4
Revenue
5 Capital Grants, Sales Tax and Utility Fees lead to higher revenue
6 Capital Grants & Contributions up $15.7 M, primarily MAX. 2013 Sales Tax
up, but partially offset by decline in Use Tax
7
Sales & Use Tax is primary source of revenue at 45%
8 2013 Finishes Solid, need sales tax to grow 1.3% to make 2014 budget
9 N. College URA expects slight decline in 2014. General Fund expects
additional $850K in 2014.
10 Interest rates continue historic lows, expect slight rise in 2014
Unrealized gains and losses washout when held to maturity
11 Light & Power sees $9.5 M additional revenue, mostly result of rate changes
12
Expenditures
13
14 Efficiency Programs Appear to be Working
15 Monthly Operating Report – Reviewed Monthly By Executive Lead Team
Enhances knowledge of overages, savings and opportunities
Governmental Service Areas 2013 Department Expense
in thousands Percent of Year 100%
Budget Actual
(Over)/
Under (Inc)/Dec
Actual +
PO's
% Annual
Budget
Spent &
Committed
2013 2013 2013 Bud 2012 2013 by PO's
Police Services $ 38,169 $ 34,905 $ 3,265 $ 661 $ 36,216 95%
Financial Services 7,029 6,449 580 (1,061) 6,859 98%
Community & Operation Services 76,733 61,727 15,006 (4,502) 65,705 86%
Planning, Dev & Trans Services 45,305 39,495 5,810 (655) 41,545 92%
ELJS 6,068 5,647 421 (250) 5,809 96%
Employee & Comm Services 24,581 24,402 178 (1,836) 24,829 101%
Sustainability Services 17,065 10,968 6,097 (6,743) 12,398 73%
Other 6,976 6,678 298 1,638 6,875 99%
Poudre Fire Authority 20,119 20,065 54 (782) 20,065 100%
242,045 210,337 31,708 (13,529) 220,301 91%
Non-lapsing Expenses 55,862 (6,741)
TOTAL $ 266,199 $ (20,270)
Year to Date
Encumbered by PO's 9,964
Natural Areas - Land 4,409
Woodward - Debt Pledge 2,272
URA - Capstone withholding 726
Underspend 14,337
16
Personnel Costs
17 Personnel Costs Rise in all Service Areas
18
19 Health Care and Retirement costs are 92% of Benefits
20
Debt
• URA Refinancing August 1, 2013
– $11.1 million principal
– Net Interest Cost 3.7%
– Matures December 1, 2029
• DDA Bonds September 26, 2013
– $6.05 million principal
– Variable rate interest (estimated average 2.5%)
– Matures December 31, 2031
21
22
Compliance with Debt Policy
• Council set new standard (Resolution 2013-093)
– Annual debt service can not exceed 5% of
governmental revenue
* Does not include one-time large capital grants, as per policy
2013
Revenue * $ 223.6 M
Debt Service $ 5.3 M
DS/Revenue 2.40%
DS Policy Limit 5.00%
23
Fund Balance in General Fund
2012 Ending $ 55.3
2013 net $ 5.1
2013 Ending $ 60.4
• At an upcoming CFC meeting we’ll review
fund balances for all funds in more detail
24
Questions
70.0%
80.0%
90.0%
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
City Calls for Service District Calls for Service
City 5 yr avg = 83.9% City 5 yr avg = 81.2%
Service Call Split Assessed Value Split
City Share of Call and Assessed Value has Increased…
Proposed Funding Will Shift to Align Relative Contribution Share
.64 % of
City
Property
Tax
1 mill 11% of .85 %
KFCG sales and
use tax
10.595 Mills plus
Town of Timnath
TIF revenue in lieu
of property tax