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Agenda - Mail Packet - 5/20/2014 - Council Finance And Audit Committee Agenda - May 19, 2014
Council Finance Committee & URA Finance Committee Agenda Planning Calendar 2014 RVSD 5/6/14 kw May 19 TOPIC TIME WHO CFC Budget Policy Review 20 min L. Pollack Affordable Housing 30 min Beck-Ferkiss Fund Balance Review 45 min J. Voss Long Range Financial Plan Work Scope 20 min A. Gavaldon URA June 16 TOPIC TIME WHO CFC URA July 21 TOPIC TIME WHO CFC Capital Improvement Funds Policy Review 30 min J Voss Auditor Report 30 min J Voss Utilities – Fee 30 min L Smith URA Aug. 18 TOPIC TIME WHO CFC URA Future Council Finance Committee Topics: • IGA—Police Training Facility • Review Special Improvement Districts • Budget Briefing (Q3) • General Policy (Q3) • Fund Management Policy (Q3) • Economic Health Policy (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 May 19, 2014 10:00 to 12:00 noon CIC Room – City Hall Approval of the Minutes from the April 21, 2014 meeting 1. Budget Policy Review 20 minutes L. Pollack 2. Affordable Housing 30 minutes Beck-Ferkiss 3. Fund Balance Review 45 minutes J. Voss 4. Long Range Financial Plan Work Scope 20 minutes A. Gavaldon 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 4/21/14 10:00 a.m. to 12:00 noon CIC Room Council Attendees: Bob Overbeck, Ross Cunniff Staff: Darin Atteberry, Mike Beckstead, Megan Bolin, Carrie Daggett, John Duval, Harold Hall; Bruce Hendee, Tom Leeson, Jeff Mihelich, Lawrence Pollack, John Voss, Katie Wiggett Others: Rob Kauffmann, Alberta; Ron Lautzenheiser, CAG; Neil McCaffrey, CAG; Tim Kenney, CAG; Kevin Jones, Chamber; Bob Brown, CAG; Dean Hoag, CAG Approval of the Minutes Bob Overbeck asked that the April 11 minutes be amended to include the following information under bond ratings: “Bob Overbeck met with Jim Manier and Mike Beckstead to discuss bond ratings. The interest rate environment is positive due to a shortage of high deal paper in the market.” Ross Cunniff asked that his request for an analysis of what would happen if only 155k sq. ft. was leased be included in the April 11 minutes. Minutes will be amended to reflect requested changes. Bob Overbeck moved to approve the minutes from the March 17 meeting. Ross Cunniff seconded the motion. Minutes approved unanimously. Actuary Annual Pension Valuation Report (GERP) John Voss explained that Council Finance annually reviews the Actuary Annual Pension Valuation Report for the General Employee Retirement Plan (GERP). The GERP review covers Plan highlights, economic and demographic assumptions, unfunded actuarial accrued liabilities, and the solvency / sensitivity model. The Unfunded Liability at the end of 2013 was $14.7M compared to $15.7M in 2012. The only change to the Plan’s assumptions was to the assumed investment return, which was lowered from 6.8% to 6.5%. Ross asked if the new target allocation is based on historical data. Mike answered that it is based on both Staff’s own research and the actuary’s historical average. The 2013 investment return of 18.7% exceeded the 2013 Plan return assumption of 6.8%. Positive investment returns added to supplemental and payroll contributions exceeded retiree payouts which contributed to a year over year market value increase of $5.2 million. The future impact to the Plan from the increase in market value is a projected reduction in the end date for supplemental contributions from year 2033 to year 2025. The market value calculation recognizes total asset gains and losses in the 2 current year. Supplemental contribution end dates fluctuate annually based on actual Plan economic and demographic performance. New accounting standards (GASB 67 and 68) change the reporting requirements for the City from Net Pension Obligations of $3.2M to an Unfunded Actuarial Liability of $14.7M. This change will not impact the Plan’s anticipated cash flows or the City’s credit rating. The General Employees’ Retirement Committee reviewed and approved the 2014 actuary report in at their March 13th meeting. Staff recommends the City continue to fund the current $1.12M supplemental contribution. Council Finance supports the changes to GERP and recommends moving forward. Policy Review – Reserve/Fund Balances Mike Beckstead said that Council Finance has been reviewing policies over the last few years. Staff has proposed to Council Finance that these policies be broken into three categories: 1. City Council Approved 2. Council and URA Board Approved 3. City Manager and CFO Approved John Voss reviewed the updated Fund Balance Minimum Policy. Bob Overbeck asked for Staff to explain the many changes to this policy. John explained that Staff used Government Finance Officer Association best practices when updating the policy and had both updated and defined terminology. John outlined all changes made to the funds’ requirements. No change was made to the General Fund or Golf Fund; no minimums are now required in the policy for Special Revenue Funds. In the Utility Funds, Staff simplified and combined various minimums, changing all except purchased power to 25% of operating expense. Mike Beckstead noted that John Voss had worked closely with Utilities to set these new limits. Ross asked where the information on things like why we have purchase power can be found. Staff will follow-up with a memo. Bob asked that, under 5.6, the word should be changed to shall. Staff will make that change. Council Finance can make no recommendation on the policy until questions are answered. *Due to the tightness of timing, Mike Beckstead suggested that Council Finance Committee adjourn the meeting until after the URA Meeting. Bob Overbeck adjourned the Council Finance meeting until after the URA meeting. Other Business Council Finance postponed the discussion on the Budget Policy in favor of discussing questions about the mall deal in the remaining time. Bob Overbeck asked if we can split the difference—issue ½ of the bonds now and ½ later. Mike answered that the equity and construction financer has been clear that all capital must be aligned at the same time to avoid any financing being contingent on a future event, i.e. the issuing of the second half of the bonds. Bob asked if the $72M is recognized in Alberta’s balance fund. Attorney Rob Kauffman replied that all the 3 money goes into the district’s account and is never seen on Alberta’s balance sheet. Ross noted that currently, we are signing up for 3 years of carrying cost. Bob asked if it is possible to drop that down to 2 years of carrying costs. Mike answered that the amount of time is driven by IRS tax code; the City Attorney’s Office would need to look into that possibility. Bob asked that Staff look into the option of a 2 year call provision. Bob asked if Staff researches business partners, such as Alberta and Walton, to see if they have had any legal issues, bankruptcies, etc. Do we use some sort of background check to insure that they are a good corporate partner? Staff responded that we do not do research to that extent. Ross said that he would like to know if the companies we elect as corporate partners are viable and not prone to half-finished projects. Darin said that he would like to know what due diligence Council wants from Staff concerning researching business partners. Council should outline that for Staff so we can perform that research in the future. Bob agreed, noting that he would like to know as much as possible about our business partners at the beginning so we can anticipate future problems. Darin noted that projects such as the mall deal are extremely complicated and future amendments are possible. Mike noted that Centerra’s contract was considered a “living document” and had seven amendments. Mike then addressed Ross’s question about what would happened to the Metro District cash flow if only 155k sq. ft. of space was leased in the mall. • Without additional leasing, signed leases would become void • Developer would have access to a limited portion of both the bond proceeds and the construction loan • What ultimately gets built and who occupies it is unknown Ross said that this information is useful. He then asked, in the case of a stalled project, how would Alberta act and how could the City still benefit from the deal. Kauffman answered that 3M of the first 23M in released funds would already have gone to the underpass. Ross asked if we can ensure that the moving of Sears is at least completed, even if the project is stalled. In exchange for releasing the funding early, could we stipulate that Sears be complete before the next $10M is released? Ross asked whether Council could see the past and present data on leasing for the mall. Mike said that he would ask for that information. In the future, Staff will be receiving updates on leases, including the numbers for what is new to Fort Collins. Ross also asked for a model for the mall opening at less square footage than anticipated. This analysis was provided to Council on April 28th. Attachment Origin and Purpose of Purchase Power Reserve Memo (Follow Up to Reserve Fund Balances Discussion) Utilities electric · stormwater · wastewater · water 700 Wood Street PO Box 580 Fort Collins, CO 80522 970.221.6700 970.221.6619 – fax 970.224.6003 – TDD utilities@fcgov.com fcgov.com/utilities MEMORANDUM Date: April 23, 2014 To: Council Finance Committee From: Lance Smith, Utilities Strategic Financial Manager Re: Origin and Purpose of Purchase Power Reserve At the April Council Finance Committee, members asked for additional background information related to the proposed elimination of the Purchase Power Reserve. The requested information follows. Current Reserve Policy: The current purchase power reserve policy states: “To provide a purchase power reserve up to approximately 25% of the annual revenue from the sale of electrical energy. This reserve shall be used to partially offset, defer, or mitigate the impact of purchase power cost increases due to factors such as federal power issues.” (Excerpt from the City of Fort Collins Financial Management Policies, Resolution 2008-038) Background: The Purchase Power Reserve was authorized by City Council in 1985 in order to accumulate funds to partially offset future rate increases. The reserve was established when public preference policies related to the availability and cost of Federal hydropower were being threatened. At that time, sudden large purchase power cost increases appeared probable, however, these concerns never materialized. The Purchase Power Reserve has never been used as originally envisioned. Since the reserve was established, the Utilities has enjoyed relatively stable purchase power rates from Platte River and all purchase power increases have been passed directly on to customers through the retail electric rates. This direct pass through sends a more immediate price signal to customers about the cost of energy and the value of conservation. Rates have never been established to accumulate the Purchase Power Reserve, however, reserves built up over the years whenever actual expenses were less than budget and actual revenues exceeded projections. Pros and Cons: Phase out and eliminate the purchase power reserve. Pros: 1. Existing funds can be used for needed capital improvement and replacements and could be refocused to Energy Policy / Climate Change implementation. 2. Retail electric rates should reflect the full cost of purchased energy to better encourage conservation. 3. Current customers should not contribute to a reserve to benefit future customers. 4. While the rationale for the reserve may have been valid when established in 1985, it is no longer necessary for the Utilities operations or our customers. 5. While projections show reserves being utilized in the future, current reserves levels could be considered excessive. Cons: 1. Fewer financial resources available for future unknowns. Staff Recommendation: As early as 2008, it was recommended that the Purchase Power Reserve be eliminated. This recommendation was supported by the Council Finance Committee at that time but, due to staff turnover, was not acted upon. Staff continues to support the elimination of the Purchase Power Reserve. May 19, 2014 COUNCIL FINANCE COMMITTEE AGENDA ITEM SUMMARY Staff: Mike Beckstead, Chief Financial Officer Lawrence Pollack, Budget and Performance Management Manager SUBJECT FOR DISCUSSION Budget Policy Review EXECUTIVE SUMMARY The proposed revisions to the City's Budget policies are subject to review periodically. These policies reflect the existing budget methodology and alignment with City Charter and Code. It is recommended that this policy change from requiring Council review to administrative review since the policy is primarily administrative. GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED 1. Are there any questions about the revised policy? 2. Are there any changes requested? 3. Do you support switching this policy to administrative review and approval? BACKGROUND/DISCUSSION The previous budget policy evolved as part of the Budget document. In that context it focused on explaining budget concepts rather than setting policy. The new policy was created from scratch based upon policy guidelines from the Government Finance Officers Association (GFOA) presented as best practices. As such, a red line version of the previous policy was not deemed valuable or useful. Staff has come up with a new format for financial policies to keep them consistent across all departments within Financial Services. In staff review of this document is was determined that it is really administrative in nature with many references to City Code and City Charter. Staff proposes this policy no longer require periodic City Council review and approval. Rather, future reviews would be handled administratively. ATTACHMENTS 1. PowerPoint Presentation 2. Previous Budget Policy 3. Draft 2014 Budget Policy 1 Budget Policy Council Finance Committee May 19, 2013 2 Revised Budget Policy • Researched other municipal budget policies • Added specific linkages to City Charter; examples include: − City Charter Article II, Section 5 (c): City Council has the power to adopt a budget − City Charter Article V, Part 1, Section 2: City Manager shall submit a proposed budget to City Council on or before the first Monday in September − City Charter Article V, Part 1, Section 5: Fixing of the levy − City Charter Article V, Part I, Section 11: Lapsed appropriations 3 Revised Budget Policy • Selected structure based on the Government Finance Officers Association (GFOA) − 1.1 Overview − 1.2 Principals for Budget Planning Summary of current process (BFO) − 1.3 Scope Comprehensiveness; content of the Recommended Budget Budget Form; high-level steps to build the budget Basis of Budgeting; alignment with generally accepted accounting principles Budget Calendar; fiscal year = calendar yearSummary of current process (BFO) 4 Revised Budget Policy • Selected structure based on the Government Finance Officers Association (GFOA) − 1.4 Roles and Responsibilities − 1.5 Budgeting Control System Budget Transfers; ordinance required across funds or capital projects Applicable Amendments to the Budget; require appropriation ordinance approved by City Council − 1.6 Balanced Budget Definition Expenses must not be greater than revenues for each fund Revenues can include unallocated reserves 5 Proposed Change to Review and Approval • Review of the revised policy highlighted most content was administrative in nature • Specifics on Budgeting for Outcomes (BFO) is minimal since BFO is a process rather than a policy • Substantive changes would be derived from changes to City Charter • Staff proposes to shift the Budget Policy from a periodic City Council review and approval to Administrative review and approval Proposal: Change to Administrative Review and Approval 6 Closing • New budget policy based on Government Finance Office Association (GFOA) recommended guidelines • Budget Policy proposed to shift to administrative review and approval • Will be brought forward for City Council consideration if CFC recommends FINANCIAL MANAGEMENT POLICIES TABLE OF CONTENTS The Financial Management Policies are a compendium of all City policies that shape the Budget. They are intended to assist the Council and the City Manager in preparing the Budget and help communicate to residents and customers how the community goals are being addressed. BUDGET POLICY 1.1 Overview ...................................................................................................... 1.2 Charter Process Requirements .................................................................... 1.3 Changes to Adopted Budget ........................................................................ 1.4 Lapsed Appropriations ................................................................................. 1.5 Budget Philosophy and Preparation ............................................................ 1.6 Principles for Budget Planning ..................................................................... BUDGET POLICY 1.1. OVERVIEW The budget is a long-range plan by which the City Council sets financial policy. Through the budget, services are implemented. The budget along with the annual appropriation ordinance provides the basis for the control of expenditures. For the City of Fort Collins, direction for the budget emanates from many distinct sources. The State Constitution and the City Charter provide the basic legal requirements and time lines for the process. Council goals, ordinances and resolutions provide additional direction and respond to the needs of the community. (INCLUDED) 1.2. CHARTER PROCESS REQUIREMENTS a. Budget Term The fiscal year of the City is the calendar year. The City may adopt budgets for a budget term of one fiscal year or more. After the Charter amendment in 1997 allowing the budget term to be more than one fiscal year, the Council has adopted two-year budgets that correspond with the election cycle. (INCLUDED) b. Budget Recommendation On or before the first Monday in September preceding each budget term, the City Manager shall file with the City Clerk a proposed budget for the ensuing budget term along with an explanatory message. The proposed budget shall provide a complete financial plan for each fund of the City and shall include appropriate financial statements for each type of fund showing comparative figures for the last completed fiscal year, comparative figures for the current year, and the City Manager=s recommendations for the ensuing budget term. (INCLUDED) c. Public Record, Hearing The City Manager=s proposed budget shall be a public record and be available to the public for inspection and copying. The City Council shall, within ten (10) days after the filing of the proposed budget, set a time for a public hearing. At the hearing, the public may comment upon the proposed budget. (INCLUDED) d. Adoption of Budget and Appropriation of Funds After the public hearing and before the last day of November preceding the budget term, the Council shall adopt the budget, by ordinance, for the ensuing term. Before the last day of November of each fiscal year, the Council shall appropriate such sums of money as it deems necessary to defray all expenditures of the City during the ensuing fiscal year. The appropriation of funds shall be accomplished by passage of the annual appropriation ordinance. The appropriation of funds shall be based upon the budget as approved by the Council but need not be itemized further than by fund with the exception of capital projects and federal or state grants, which shall be summarized by individual project or grant. (INCLUDED) 1.3. CHANGES TO ADOPTED BUDGET After the commencement of the fiscal year, the amounts appropriated for the proposed expenditures in the adopted budget are not subject to repeal and are considered appropriated for the purposes specified. The expenditures of City operating funds cannot exceed the budgeted appropriations for their respective fund. In certain cases, however, adopted budgets may be increased, decreased, or amounts transferred between funds. a. Budget Increases (INCLUDED) 1. Supplemental Appropriations B The Council, upon recommendation by the City Manager, may make supplemental appropriations from actual revenues received, anticipated revenues, and prior year reserves provided that the total amount of the supplemental appropriation plus previous appropriations for the fiscal year does not exceed the actual or anticipated revenue total or the available reserve balance. No appropriation can be made which exceeds the revenues, reserves, or other funds anticipated or available except for emergencies due to accident or unforeseen event arising after the adoption of the annual appropriation. 2. Unanticipated Revenue B If a fund receives revenue during the fiscal year from a source that was not anticipated at the time of budget adoption such as grants, bond issue or implementation of a new fee, Council may appropriate such revenue for expenditure. 3. Encumbrance Carryover B If a fund has open and valid purchase orders at the end of a fiscal year, those related appropriations are encumbered and carried over to the ensuing fiscal year and added to the budgeted appropriations to cover the actual expense when it occurs. b. Budget Decreases (INCLUDED) The budget may also be decreased below adopted appropriations during the fiscal year. Changes in service demand, economic conditions, projected growth limits, and Council goals and direction may cause such budget reductions. Each service area is responsible for developing a plan to reduce appropriations. Each plan must be in place and ready for implementation should the need arise. If the City Manager directs budget reductions, Council will be informed immediately and the appropriations will be set aside through administrative action. While this administrative action does not lower the appropriations within a fund, expenditures from the fund shall not exceed the amount recommended by the City Manager. If the circumstances leading to the implementation of reductions change, the appropriations may be made available for expenditure. c. Level of Control and Budget Transfers (INCLUDED) 1. Control of expenditures is exercised at the fund level. Fund managers are responsible for all expenditures made against appropriations within their fund and can allocate available resources within the fund. 2. During the fiscal year, the Council may by ordinance and upon the recommendation of the City Manager, transfer any unexpended and unencumbered appropriated amount from one fund or capital project account to another fund or capital project account, provided that: (a) the purpose for which the transferred funds are to be spent remains unchanged; (b) the purpose for which the funds were initially appropriated no longer exists; or (c) the transfer is from a fund or capital project account in which the amount appropriated exceeds the amount needed to accomplish the purpose specified by the appropriation. 1.4. LAPSED APPROPRIATIONS (INCLUDED) All appropriations not spent or unencumbered at the end of the fiscal year lapse into the fund balance applicable to the specific fund, except for: a. Capital Projects - appropriations for capital projects which do not lapse until the project is completed and closed out; and b. Grant Funds - appropriations for federal or state grants which do not lapse until the expiration of the grant. Council can terminate a capital project or a federal or state grant at any time prior to completion of the project or expiration of the grant. 1.5. BUDGET PHILOSOPHY a. Philosophy (NOT INCLUDED) The City of Fort Collins is committed to presenting a sound financial plan for operations and capital improvements within growth limit guidelines. To achieve this end, the City utilizes conservative growth and revenue forecasts and: $ Prepares multi-year financial plans for operations and capital improvements; $ Allows staff to manage the operating and capital budgets, with City Council deciding allocations in both; $ Adopts financial management policies which establish guidelines for multi- year financial plans; $ Establishes budgets for all funds based on adopted policies; $ Appropriates the budget in accordance with the City Charter and State Constitution; $ Adjusts the budget to reflect changes in the local economy, changes in priorities, and receipt of unbudgeted revenues; $ Organizes the budget so that revenues are related to expenditures as much as possible; $ Provides department managers with immediate access to revenue and expenditure information for controlling their annual expenditures against appropriations; $ Utilizes a performance measurement system for all activities in the City; $ Evaluates recommendations that have a budget impact in light of annual appropriations and multi-year financial plans. b. Budget Preparation (INCLUDED) While the Charter establishes time limits and the essential content of the City Manager=s proposed budget and the adoption of the budget, the language is silent on the budget preparation process. The City=s Financial and Management Policies guide budget preparation and long- range planning. The City Manager, Deputy City Manager, Budget Director, and designated Service Area Directors develops the guidelines, consistent with the Policies, to be used for budget preparation. The aforementioned individuals are collectively referred to as the Budget Leadership Team. During the development of the budget, various department and division representatives may be called on to provide their expertise . In addition, the City Council and the Executive Lead Team provide guidance during preparation. The City=s 2006-2007 biennial budget was prepared using a process called Budgeting for Outcomes (ABFO@). The purpose of utilizing the BFO approach is to: $ Identify what=s important to a community and develop a sound financial and service plan to achieve those outcomes; $ Allocate dollars based on current priorities and results, not simply increase last year=s spending; $ Effectively deal with revenue limitations; and $ Emphasize accountability, efficiency, innovation and partnerships. In March, programs develop multi-year revenue projections and submit them to the Budget Office. These revenue projections effectively Aset the price of government@; the amount available for purchasing outcomes/results. City Council adopts the outcomes/results that form the foundation of the budget. The revenues are then allocated, by the Leadership Team, across the outcomes. Results Teams, organized by outcome/result, prepare ARequests for Results@ (ARFR=s@) that include strategy maps, two to three high level indicators to measure results, and purchasing strategies. Sellers (departments/divisions) prepare Aoffers@ in response to the RFR=s. The Seller=s offers are reviewed by the Results Teams, ranked, and recommended for inclusion or omission from the City Manager=s recommended budget, based upon the offer=s merits and the resources available, given the outcome/result. The City Manager=s budget recommendation is submitted to City Council before the first Monday in September. The recommended budget is made available for public inspection at this time. In September, a recommended budget-in-brief is published in the local newspaper for public information. In addition, two public hearings and Council work sessions are held in September and October. The budget for the ensuing budget term is adopted no later than November 30. 1.6 PRINCIPLES FOR BUDGET PLANNING The City provides a wide variety of services to the residents of the community. It is the responsibility of City Council to adopt a budget and manage the available resources to best meet the service needs for the overall good of the community. (INCLUDED) To aid in planning for the allocation of resources to meet the good of the whole community, Council adopted Resolution 2001-161, that set forth the Principles for Budget Planning. Those Principles as adopted by Council are as follows: (NOT INCLUDED FROM HERE DOWN) a. The City should strive to attain the lowest possible interest rates on debt in order to minimize the cost to taxpayers and users of City services. b. The City should maintain adequate reserve levels to ensure minimal loss of service to the community should there be unforeseen reductions in revenues or a catastrophic occurrence. c. Employees of the City are a valuable resource in providing services to the community, and a compensation policy should be maintained for City employees that reflects the value of attracting and retaining quality employees. d. Primary services are those services that are necessary for the good of the entire community. They are basic to the safety, health, and welfare of the community, and the allocation of all resources necessary for the provision of primary services is the first priority in budget preparation. Primary services are: Police Fire Development Review Affordable Housing Neighborhood and Building Services Water Transportation Electric Engineering Pedestrian Access Wastewater Stormwater Natural Resources Facilities Maintenance (all public facilities including parks) e. Secondary services are those services that enhance the quality of life of the residents and to many, increase the value of living and working in the community. While the value of secondary services is recognized, the allocation of resources to those services shall be considered only after the necessary allocation has been made to fund primary services. Secondary services are: Recreation Human Rights Golf Parks Library Human Services Contract Natural Areas Performing Arts Cemeteries Airport Museum f. Support services provide the management, guidelines, and operational assistance to carry out the provision of primary and secondary services. Resources should be allocated to support services to support the level and quality of primary and secondary services expected and desired by the community. Support services are: General Administration Budget Clerical Support Information Technology Real Estate Services Finance Human Resources Fleet Management Geographic Information Systems Legal City Clerk Municipal Court g. No new services, other than those identified as primary services, shall be undertaken by the City until all existing primary, secondary, and support services have received a sufficient level of funding to meet the needs of the community. h. Any adjustment to the existing budget shall take into account the effect that such adjustment would have on future budget resources. Financial Management Policy Budget Policy Issue Date: Version: Issued by: Financial Policy – Budget Policy 1 1.1 Overview The Fort Collins City Charter establishes time limits and the essential content of the City Manager’s proposed budget, however the budget preparation process is not prescribed, but is developed by the City Manager with input from the City Council. The fiscal year of the City is the calendar year. The City may adopt budgets for a budget term of one fiscal year or more. After the Charter amendment in 1997 allowing the budget term to be more than one fiscal year, the Council has adopted two-year budgets that correspond with the election cycle. The budget is a 2-year plan by which the City Council sets the financial and operational priorities for the City - through the budget, services are implemented. The budget along with the annual appropriation ordinance provides the basis for the control of expenditures. The State Constitution and the City Charter provide the basic legal requirements and time lines for the process. Council goals, ordinances and resolutions provide additional direction and respond to the needs of the community. 1.2 Principals for Budget Planning The City provides a wide variety of services to the residents of the community. It is in the power of the City Council to adopt a budget and manage the available resources to best meet the service needs for the overall good of the community (City Charter Article II, Section 5 (c)). In 2005 the City Council, on recommendation from the City manager, endorsed the Objective: Governments allocate scarce resources to programs and services through the budget process. As a result, it is one of the most important activities undertaken by governments. The purpose of this policy is to establish parameters and provide guidance governing the budget for the City of Fort Collins (City). Applicability: This budget policy applies to all funds and Service Areas of the City. Authorized by: City Council Financial Policy – Budget Policy 2 Budgeting for Outcomes budget process. At a high level, the budgeting for outcomes methodology can be summarized as: 1. Determine how much money is available. The budget should be built on expected revenues. This would include base revenues, any new revenue sources, and the potential use of fund balance. 2. Prioritize results. The results or outcomes that matter most to citizens should be defined. Elected leaders should determine what programs are most important to their constituents. 3. Allocate resources among high priority results. The allocations should be made in a fair and objective manner. 4. Conduct analysis to determine what strategies, programs, and activities will best achieve desired results. 5. Budget available dollars to the most significant programs and activities. The objective is to maximize the benefit of the available resources. 6. Set measures of annual progress, monitor, and close the feedback loop. These measures should spell out the expected results and outcomes and how they will be measured. 7. Check what actually happened. This involves using performance measures to compare actual versus budgeted results. 8. Communicate performance results. Internal and external stakeholders should be informed of the results in an understandable format. At that time, the City Council also identified the key outcomes it believed should be used in the new budget process. In addition, the 2005-2007 Policy Agenda sets forth the implementation and continued improvement of the collaborative budget process, aligning spending with desired outcomes. In 2012, the City Council passed resolution 2012-076 promoting improved results through performance measures and data-driven decision making. In reference to the budget, an outcome-based performance measurement system will help ensure that available resources are used to achieve excellent results at low cost to the taxpayers and will enhance the citizen’s understanding of the City and the services it provides. 1.3 Scope A. Comprehensiveness The proposed budget shall provide a complete financial plan for each fund of the city and shall include appropriate financial statements for each type of fund showing comparative figures for the last completed fiscal year, comparative figures for the current year, and the City Manager's recommendations for the ensuing budget term (City Charter Article V, Part 1, Section 2). In addition, the City of Fort Collins Budget Document may include items such as: Financial Policy – Budget Policy 3 1) Statement of organization-wide strategic goals. 2) A description of the budget process, including a timeline. 3) A Glossary of Budget Terms. 4) A City of Fort Collins organizational chart. 5) Letter from the City Manager. 6) Budget Overview which may include: a) The economic outlook; b) Revenue assumptions; c) Summary of use of reserves; d) Budget priorities and highlights. 7) Copy of signed appropriation ordinance and a schedule of 2nd year proposed appropriations. 8) Revenue, expense and changes in fund balance summaries. 9) Summary of employee full-time equivalent staffing by service area and department. 10) A section for each of the key strategic Outcomes, which may include: a) Information indicating how the Offers in the Outcome are funded, by fund; b) Major key purchases; c) Major enhancements purchased; d) Detailed listing of all offers funded and unfunded; e) Strategic objectives of the Outcome. 11) Fund Statements. 12) Overview of debt position. 13) Current Capital Improvement Plan. 14) Summary of changes to user fees. 15) Summary of property tax mill levy and assessments. The annual appropriation ordinance shall also include the levy in mills, as fixed by the Council, upon each dollar of the assessed valuation of all taxable property within the city, such levy representing the amount of taxes for city purposes necessary to provide, during the ensuing fiscal year, for all properly authorized expenditures to be incurred by the city, including interest and principal of general obligation bonds. If the Council fails in any year to make said tax levy as above provided, then the rate last fixed shall be the levy fixed for the ensuing fiscal year and the Financial Officer shall so certify (City Charter Article V, Part 1, section 5). B. Budget Form The City of Fort Collins uses the Budgeting For Outcomes model to create the City budget. A new budget is designed from the ground up based on the results desired in each of the Outcomes defined by the City. The BFO budget-building process includes four steps: 1) Determine how much revenue will be available (the price people pay); 2) Determine the priorities of the City and its citizens and the results to be achieved; Financial Policy – Budget Policy 4 3) Allocate the revenue needed to achieve the desired results; 4) Determine which budget items will best produce the desired results at the price allocated. C. Basis of Budgeting All budgetary procedures conform to state regulations and to generally accepted accounting principles. The basis or principle used for budgeting is the same as that used for accounting, with a few exceptions, and varies according to the fund type. Governmental Funds use the modified-accrual basis of accounting. This means that revenues are recognized when they are earned, measurable and available. Expenditures are recognized in the period that liabilities are due and payable. The budgetary basis is the same and is used in the General Fund, Special Revenue and Debt Service Funds, and Capital Project Funds. Proprietary and Fiduciary Funds use the full accrual basis of accounting. Revenues are recognized when they are earned and expenses are recognized when liabilities are incurred. However, the budgetary basis in these funds is primarily based on the modified-accrual approach. Instead of authorizing budget for depreciation of capital assets, the budget measures and appropriates cash outflows for capital acquisition and construction, which is a modified-accrual approach. In full accrual based accounting debt proceeds are recorded as liabilities rather than a revenue (funding source). For these reasons a reconciliation and adjustment is made on these fund statements to show the difference between the budgetary basis and the accounting basis. D. Budget Calendar The fiscal and accounting year shall be the same as the calendar year. "Budget term" shall mean the fiscal year(s) for which any budget is adopted and in which it is to be administered. Council shall set by ordinance the term for which it shall adopt budgets in accordance with this Article (City Charter Article V, Part 1, section 1). On or before the first Monday in September, commencing in 2010 and every other year thereafter, the City Manager shall file with the City Clerk a proposed budget for the City for the ensuing two-year term (City Charter Article V, Part 1, section 2). The Council shall, within ten (10) days after the filing of said proposed budget with the City Clerk, set a time certain for public hearing and cause notice of such public hearing to be given by publication. At the hearing, all persons may appear and comment on any or all items and estimates in the proposed budget. Upon completion of the public hearing the Council may revise the budget estimates (City Charter Article V, Part 1, section 3). After said public hearing and before the last day of November preceding the budget term, Financial Policy – Budget Policy 5 the Council shall adopt the budget for the ensuing term. The adoption of the budget shall be by ordinance. Before the last day of November of each fiscal year, the Council shall appropriate such sums of money as it deems necessary to defray all expenditures of the city during the ensuing fiscal year. The appropriation of funds shall be accomplished by passage of the annual appropriation ordinance. Such appropriation of funds shall be based upon the budget as approved by the Council but need not be itemized further than by fund with the exception of capital projects and federal or state grants which shall be summarized by individual project or grant (City Charter Article V, Part 1, section 4). Appropriations for each year of the two-year budget will be approved by the City Council annually. Appropriations for the 2nd year of the biannual budget are adopted during the budget revision process. That process allows for adjustments to the originally adopted biennial budget that address new Council priorities or support changing needs based on economic conditions. The City Manager may present any budget adjustment recommendations to the City Council in Work Sessions and then Council may amend the budget and, as required by the State and City Charter, appropriate or authorize expenditures for the coming fiscal year. 1.4 Roles and Responsibilities All powers of the city and the determination of all matters of policy shall be vested in the Council except as otherwise provided by the Charter. Without limitation of the foregoing, the Council shall have power to adopt the budget of the city. The City Manager shall be responsible to the Council for the proper administration of all affairs of the City and to that end shall have power and be required to prepare the budget and submit it to the Council and be responsible for its administration after adoption. The City Manager and Chief Financial Officer, along with the other executive directors, known as the Budget Lead Team (BLT), develop the guidelines, consistent with the policies, to be used for budget preparation. During the development of the budget, various department and division representatives may be called upon to provide their expertise. From April through June, City staff from all departments and divisions prepares the Offers (budget requests) for inclusion in the budget. 1.5 Budgeting Control System No appropriation shall be made by the Council which exceeds the revenues, reserves or other funds anticipated or available at the time of the appropriation, except for emergency expenses incurred by reason of a casualty, accident or unforeseen contingency arising after the passage of the annual appropriation ordinance (City Charter Article V, Part I, Section 8 (a)). Financial Policy – Budget Policy 6 Control of expenditures is exercised at the fund level. Fund managers are responsible for all expenditures made against appropriations within their fund and can allocate available resources within the fund. All appropriations unexpended or unencumbered at the end of the fiscal year shall lapse to the applicable general or special fund, except for: • appropriations for capital projects which shall not lapse until the completion of the capital project; and • federal or state grants which shall not lapse until the expiration of the federal or state grant (City Charter Article V, Part I, Section 11). A. Budget Transfers Between Funds or Capital Projects During the fiscal year, the Council may, by ordinance, upon the recommendation of the City Manager, transfer any unexpended and unencumbered appropriated amount or portion thereof from one fund or capital project account to another fund or capital project account provided that: 1) the purpose for which the transferred funds are to be expended remains unchanged; 2) the purpose for which the funds were initially appropriated no longer exists; or 3) the proposed transfer is from a fund or capital project account in which the amount appropriated exceeds the amount needed to accomplish the purpose specified in the appropriation ordinance (City Charter Article V, Part I, Section 10 (b)). Within a Fund Budget control is maintained at the departmental level. The Chief Financial Officer Manager has the authority to approve departmental expenses greater than budget so long as expenses are less than budget within a fund. In no case may the total expenditures of a particular fund exceed that which is appropriated by the City Council (City Charter Article V, Part I, Section 10 (a)). B. Applicable Amendments to the Budget Budget Increases There generally are four opportunities during the fiscal year for supplemental additions to the current year annual appropriation approved by Council: 1) The first is through the encumbrance carry-forward process whereby approved purchase orders that cannot be executed prior to the end of the fiscal year will have available budget carried forward into the new year. Financial Policy – Budget Policy 7 2) The second is usually adopted in March/April to re-appropriate funds from the previous year’s ending balance for projects or obligations that were approved but not completed during that year. 3) The third opportunity in the 2nd half of the year is used to fine-tune (clean-up) the current fiscal year for previously unforeseen events. In addition, if revenue is received during the fiscal year from a source that was not anticipated at the time of budget adoption or appropriation for the fiscal year, such as grants or implementation of a new fee, Council may appropriate that unanticipated revenue for expenditure when received anytime during the year. 4) Lastly, the Council, upon recommendation of the City Manager, may make supplemental appropriations by ordinance at any time during the fiscal year; provided, however, that the total amount of such supplemental appropriations, in combination with all previous appropriations for that fiscal year, shall not exceed the then current estimate of actual and anticipated revenues to be received by the city during the fiscal year. This provision shall not prevent the Council from appropriating by ordinance at any time during the fiscal year such funds for expenditure as may be available from reserves accumulated in prior years, notwithstanding that such reserves were not previously appropriated (City Charter Article V, Part I, Section 9). Budget Decreases/Frozen Appropriations The budget may be decreased below adopted appropriations during the fiscal year due to changes in service demand, changes in economic conditions, and/or changes in Council goals. Each service area is responsible for developing a plan to reduce appropriations, which will be ready for implementation should the need arise. If the City Manager directs budget reductions, Council will be informed and the appropriations will be “set aside” through administrative action. While the appropriation amount is not changed, expenditures shall not exceed the reduced amount recommended by the City Manager. 1.6 Balanced Budget Definition All funds are required to balance. As such, total anticipated revenues must equal the sum of budgeted expenditures for each fund. Revenues are derived from two sources: current revenue charges and unallocated reserves carried forward from prior years. May 19, 2014 COUNCIL FINANCE COMMITTEE AGENDA ITEM SUMMARY Staff: Sue Beck-Ferkiss, Social Sustainability Specialist, Social Sustainability Department SUBJECT FOR DISCUSSION The City has commissioned a Housing Affordability Policy Study to determine what tools and funding strategies are appropriate to our housing market and could be used to encourage the production of affordable housing. EXECUTIVE SUMMARY The Affordable Housing Policy Study began in January 2014. Denver based Economic & Planning Systems, Inc. (EPS) is the lead consulting firm assisting staff with defining the current community housing needs and identifying future trends for the purpose of proposing recommendations on policy and regulatory programs the City might use to provide housing choices for all residents. While EPS is still finalizing their report, they have suggested options for review that will be presented to City Council in a work session late in May. Staff will be seeking direction from City Council on which, if any, options should be explored further. GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED • What is the City’s role in ensuring housing affordability for all residents? • Which, if any, options identified by study consultants merit further inquiry for potential adoption as policy by the City? BACKGROUND/DISCUSSION Affordable housing has been identified as a critical issue affecting our community in the most recent Citizen’s Survey administered by the City. The interest in this topic was echoed in further City public outreach though the City’s IdeaLab and in group discussions. Also, the issue of lack of affordable housing was raised in the Social Sustainability Gap Analysis which will be used to prioritize the work of the Social Sustainability Department. Also, the development agreement between the City and Alberta Partners for the Foothills mall redevelopment contains a provision that commits the project to pay any affordable housing impact fee that is in place by December 1, 2014. A technical team of City staff was created to assist EPS in their work. Representatives from Economic Health, Finance, Environmental Services, Planning, City Attorney’s Office, Communications and Public Involvement, as well as Social Sustainability serve on that team. Three Stakeholder Workshops were held to inform the study. Stakeholders specifically invited were from the development community, government and CSU personnel, and housing advocates. All three workshops were well attended with up to 50 people at each workshop. The first workshop focused on regulatory programs, alternative funding sources and best practices from around the country. The second workshop looked at current conditions and future trends. This was organized in to four topic areas: Ownership and Commuting patterns; Rental and Student Housing; Housing Cost Components; and Distressed Populations. In the last workshop, EPS had May 19, 2014 stakeholders respond to options that might help Fort Collins produce more affordable housing units and provide more housing choice to all residents. In addition to the Stakeholder Workshops, Staff has presented, or will present, information about this study to several City Boards and Commissions including: the Affordable Housing Board (who is acting in an advisory capacity); the Senior Advisory Board, the Planning and Zoning Board, the Economic Advisory Commission, the Community Development Block Grant Commission, as well as the Council Finance Committee. Staff has also presented, or plans to present, to outside groups such as: the Fort Collins Board of Realtors, Vida Sana, Circles Leaders with the Education and Life Training Center, and the Fort Collins Chamber of Commerce. It is anticipated that multiple presentations may be needed at different stages of this study. One public open house was held on May 14 that attracted about 25 attendees, and another public open house is scheduled for May 21. EPS found that generally our housing system is healthy but there are distressed populations that do not have adequate housing choice. Also, there are trends that suggest housing costs are escalating which is translating into higher purchase prices and rents. With current low vacancy rates, rents have increased causing more Fort Collins residents to pay more than 30% of their income on rent. According to the Social Sustainability Gap Analysis, 59% of renters and 28% of home owners are rent burdened, meaning the amount they pay for housing makes it difficult to have enough income for the rest of their needs. EPS looked at both home ownership and rental markets. They found seniors, people with disabilities, homeless individuals and people with household income less than $25,000 to be distressed populations. First time home buyers are also having trouble finding affordable homes, especially as the local market heats up with winning offers for homes coming in above asking price and even above appraised value. This is also aggravated by the lack of inventory for for –sale attached products such as condominiums and town homes. EPS analyzed data about our community and tried to estimate the impact of students on our overall housing inventory. See attachments for detailed information on regulatory programs, alternative funding sources, and detailed data about our housing market. Providing affordable housing is difficult and complex. EPS, short of making recommendations, have provided options to be considered by the City to address the needs of the identified distressed populations and create more housing choice for all residents. These options fall into the following categories: Legislative; Cost Reductions; Regulatory; and Alternative Funding Sources. Legislative options include lobbying the State Legislature about construction defect litigation legislation that is limiting the production of attached for-sale housing products, supporting a State Low Income Tax Credit program and supporting any additional state-wide affordable housing funding since cities throughout the state are experiencing difficulties providing housing to the lowest income categories. Cost reduction options include revisiting the City’s current fee waiver eligibility requirements. Currently, only Fort Collins Housing Authority projects providing housing for disabled, formerly homeless or households making 30% or less of the area median income are eligible for fee waivers. Other jurisdictions provide fee waivers based on the nature of the project as affordable housing regardless of whether the developer is a for-profit, a not-for-profit or a housing authority. Other cost reduction options include: creating a streamlined process for affordable May 19, 2014 housing projects; examining the marginal cost structure for development fees to provide incentives, or remove disincentives, to building smaller units; and reduce or remove minimum square footage requirements for homes to allow for new housing types. Regulatory options are offered in four categories. EPS suggests reviewing the City’s 3 unrelated occupancy rule and consider: a) relaxing the rule to 4 unrelated city-wide; b) relaxing to 4 unrelated in certain zones or for certain populations such as seniors; c)streamlining the process for exception from the 3 unrelated rule for owner-occupied housing or for seniors; or d) consider a Landlord Licensing Program. EPS suggests considering an incentive policy ordinance that would provide for the production or affordable units or payment-in-lieu for projects receiving specified exceptions or adjustments permitted by code, or when a non-housing public financing subsidy is negotiated. Also, EPS suggests that we consider changing our Growth Management Area or alternatively look at ways to remove impediments on available land. Specifically, they recommend looking at providing infrastructure improvements in the northeast quadrant of the city (Mountain Vista area). Lastly, EPS urges the City to address manufactured housing and mobile homes as a valuable source of affordable housing. One option to do this is to consider the creation of an affordable housing preservation easement program that would allow the owner of a mobile home park to agree to use their land as a mobile home park or for affordable housing for a period of time. This would be a voluntary program and the city could decide to offer this only to parks without failing infrastructure. Other options would be to explore additional ways to preserve existing high quality mobile home parks and/or streamline current regulations to promote the creation of new manufactured or mobile home communities. Alternative funding sources put forward as options by EPS include: a new excise tax; a dedicated sales tax; or a new mill levy property tax. Any of these options would require voter approval. Any of these options could be time limited. Also, in the category of alternative funding sources, is the question of what is the best use of the land the City holds currently in the Land Bank Program. ESP states that we can put this land into a Community Land Trust or a foundation similar to the Urban Land Conservancy whereby ownership of the land is held in perpetuity with development conducted through long term land leases. It may be time to consider selling all or some of the properties for the development of affordable housing and putting the proceeds of such sale back into the affordable housing fund for the purpose of purchasing more land. Because this study is still underway and the consultants have not issued a report, Staff would be pleased to return to the Council Finance Committee after receiving guidance from City Council. It is anticipated that many, if not all, boards and commissions may request a follow-up visit when this project is further along. Staff has not formulated recommendations at this juncture, nor has the City Attorney’s Office reviewed all these options. ATTACHMENTS 1. Housing Program Matrix 2. Alternative Funding Options Matrix 3. Supplemental Materials for Stakeholder Workshop #2 – data 4. HAPS Presentation Inclusionary Housing Ordinance Incentive Zoning Ordinances Commercial Linkage Residential Linkage What is it? ● Addresses housing gaps from inflated housing prices ● Requires a percent of housing be provided at affordable levels ● Responds to development and redevelopment pressure requesting special permits ● Requires residential / commercial development to provide affordable housing and/or public amenities ● Addresses housing need by commercial growth ● Requires commercial development to provide housing units (or pay a fee) based on new employees generated ● Addresses housing need from market for large second-homes ● Developer provides employee housing units or pays fee in-lieu What is a typical requirement? 10% to 30% 10% to 20% 20% to 100% of employee generation by land use 10% to 20% What incentives are used? Bonus density, fee waivers, expedited review, parking reduction, unit equivalency; public funding assistance Density bonus, reduced parking requirement, reduced open space, or any variance to zoning Bonus density; fee waivers Bonus density, fee waivers, expedited review, parking reduction, unit equivalency Are there alternative satisfaction options? Payment of fee in-lieu; offsite units; housing certificates; combination IH/RO units and voluntary adoption of RETA Payment of fee in-lieu Payment of fee in-lieu; land dedication; offsite units; deed- restricted commercial space Payment of fee in-lieu; land dedication; offsite units What are the legal / nexus issues? Excise Tax Dedicated Sales Tax Occupational Privilege Tax (Head Tax) Use Tax (on Construction Materials) Dedicated Lodging Tax Document Recording Fee RETT / RETA Dedicated Property Tax What is it? Residential and commercial development pay a fee per sqft of new floor area Additional assessment on taxable goods Tax assessed per worker per month Additional assessment on construction materials Additional assessment on lodging Additional fee per document Ad valorem tax (RETT) or voluntary assessment on sale of home (RETA) Additional mill levy What is a typical assessment? $0.50 to $13.00 per sqft 0.25% to 0.50% $4 to $10 per month per worker 0.35% to 3.00% 2% to 4% $3 per document 0.1% to 2.0% 0.17 to 0.80 mills How is it administered? Need collection system Existing sales tax structure Need collection system; need to educate businesses Existing tax structure Existing tax structure If collected, existing Oakland Denver Los Angeles Sacramento Housing Affordability Policy Study: Supplemental Material for Stakeholder Workshop #2 Material Prepared by: Dan Guimond, Principal David Schwartz, Vice President Economic & Planning Systems Wednesday, April 16, 2014 Fort Collins Housing Affordability Policy Study: Stakeholder Workshop #2 1 4 Major Topic Areas • Ownership Housing and Commuting Patterns • Rental and Student Housing • Housing Cost Components • Distressed Populations Fort Collins Housing Affordability Policy Study: Stakeholder Workshop #2 2 OWNERSHIP HOUSING & COMMUTING Table Topic 1 Fort Collins Housing Affordability Policy Study: Stakeholder Workshop #2 3 80% 90% 100% 110% 120% 130% 140% 150% 160% 170% 180% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Overall Sales Price as % of 2000 Sales Price Fort Collins (42.8%) Berthoud (35.6%) Greeley (24.0%) Johnstown (42.2%) Longmont (30.3%) Loveland (32.5%) Wellington (27.0%) Windsor (60.9%) Source: Elevation Real Estate; Economic & Planning Systems Average Sales Price Change, 2000-2013 (Shown with 2000 as Baseline; Subsequent years show % increase over 2000 Baseline) Increase: +42% (2nd Largest Increase) Averages 2000 = $194,900 2013 = $278,400 Source: MLS Fort Collins Housing Affordability Policy Study: Stakeholder Workshop #2 4 Actual Average Sales Prices, 2000-2013 (All Product Types) $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 $400,000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Overall Sales Prices Fort Collins (2.8%) Berthoud (2.4%) Greeley (1.7%) Johnstown (2.7%) Longmont (2.1%) Loveland (2.2%) Wellington (1.9%) Windsor (3.7%) Source: Elevation Real Estate; Economic & Planning Systems Fort Collins Average 2000 = $194,900 2013 = $278,400 Parentheses denotes annual average rate of change Source: MLS Fort Collins Housing Affordability Policy Study: Stakeholder Workshop #2 5 How is housing affordability defined? • Income – Census (2012, most recent available) = $53,400 HH size = approx. 2.4 – HUD (2014) = $62,500 (2nd decrease in a row) HH size = 2.5 • Housing Costs – Cost-burden (HUD term) = no more than 30% of income spent on housing – Rental affordability = 30% of income ÷ 12 months – Ownership affordability = 30%, factoring in PITI + HOA dues Fort Collins Housing Affordability Policy Study: Stakeholder Workshop #2 6 $124,500 $151,200 $98,500 $144,400 $145,800 $132,600 $146,000 $135,500 $158,000 $43,500 $63,651 $36,500 $22,750 $40,775 $28,850 $9,000 $22,125 $19,615 $0 $100,000 $200,000 $300,000 $400,000 Fort Collins Berthoud Greeley Johnstown Longmont Loveland Timnath Wellington Windsor Affordable Purchase Price Gap Median Sales Price Source: U.S. Census; Economic & Planning Systems Affordability Gaps for HHs w/ Median Income (Shown are Affordable Price (Gray); Median Sales Price (Outline); and Gaps (Red) Sources: U.S. Census 2000, 2012 & MLS $190,600 $261,900 $151,800 $273,500 $207,300 $200,800 $385,800 $256,700 $303,400 $54,400 $8,000 $15,575 $42,850 $18,200 $0 $100,000 $200,000 $300,000 $400,000 Fort Collins Berthoud Greeley Johnstown Longmont Loveland Timnath Wellington Fort Collins Housing Affordability Policy Study: Stakeholder Workshop #2 7 Commuting Patterns (2011 data) • Total Wage & Salary Jobs – 72,600+ (2011) • Commuting – 39,000 in-commuters 32% increase since ‘03 – 29,500 out-commuters 2% increase since ‘03 Source: U.S. Census / LEHD 2011 Fort Collins Housing Affordability Policy Study: Stakeholder Workshop #2 8 Commuting Patterns (by location, 2011) • Out-Commuting (2003-11) – Net Change ▲ 560 – to Denver Metro ▼ 880 • In-Commuting (2003-11) – Net Change ▲ 9,400 – from Surrounding Communities ▲ 5,000 from Greeley ▲ 780 * from Johnstown ▲ 300 * from Longmont ▲ 360 from Loveland ▲ 1,820 * from Wellington ▲ 620 * from Windsor ▲ 1,110 from Timnath ▲ 30 from Berthoud ▲ 50 – from Denver Metro ▼ 180 2,300 1,950 730 800 4,750 6,200 2,300 1,200 1,150 450 * Median Sales Price = Lower than Ft. Collins Source: U.S. Census / LEHD 2011 Fort Collins Housing Affordability Policy Study: Stakeholder Workshop #2 9 Ownership Gaps • A) What is a gap? – It DOES identify housing cost-burden at certain income levels – It DOES NOT just mean that more units need to be built • B) Preliminary Estimates – Where are the gaps? i.e. Who is cost-burdened? 2,150 HHs earning under $25K / year 490 HHs earning $25K to $50K • C) Who are they? – Elderly – Disabled – Mobile home owners – Other? Fort Collins Housing Affordability Policy Study: Stakeholder Workshop #2 10 RENTAL & STUDENT HOUSING MARKET Table Topic 2 Fort Collins Housing Affordability Policy Study: Stakeholder Workshop #2 11 Questions (posed by Stakeholders in Workshop #1) • What is the student population? – Undergrads – Grads • What is the housing implication of this? • What is CSU doing? • How are they dealing with their housing issues? – On-campus – Off-campus (i.e. through encouragement of alternative transportation modes, etc.) • What else are they doing? – Investment in bike/ped infrastructure – Parent/student alternative transportation sessions Fort Collins Housing Affordability Policy Study: Stakeholder Workshop #2 12 Residential Construction, 2000-2013 (City of Fort Collins information) 985 1,144 1,224 973 987 735 458 408 264 153 177 258 469 650 597 748 312 425 308 409 320 211 524 79 66 456 674 781 0 250 500 750 1,000 1,250 1,500 1,750 2,000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 New Residential Unit Construction Multi‐Family / Mixed‐ Use Single‐Family Source: City of Fort Collins; Economic & Planning Systems Annual Average MF/MU = 520 SF = 400 Source: City of Ft. Collins Fort Collins Housing Affordability Policy Study: Stakeholder Workshop #2 13 Housing Inventory, 2000 & 2012 (U.S. Census information) 26,175 31,583 19,707 25,095 1,884 2,744 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 2000 2012 Total Housing Units Vacant Renter‐Occupied Owner‐Occupied Source: Economic & Planning Systems 4% 41% 55% 5% 42% 53% +11,110 net new units: +7,331 SF +3,933 MF / MU Source: U.S. Census Fort Collins Housing Affordability Policy Study: Stakeholder Workshop #2 14 Rental Market (incl. Student) Housing (and pipeline of development activity) 0% 2% 4% 6% 8% 10% 12% 14% $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 1995.3 1997.3 1999.3 2001.3 2003.3 2005.3 2007.1 2008.1 2009.1 2010.1 2011.1 2012.1 2013.1 Vacancy Rate Average Monthly Rent Source: CDOH; Economic & Planning Systems 2,984 1,843 4,827 0 1,000 2,000 3,000 4,000 5,000 6,000 Multi‐Family Student‐Oriented MF (excl. dormitory) Total Recently Completed / Approved / Submitted / Under Review / Conceptual Source: City of Fort Collins; Economic & Planning Systems Source: CDOH Source: City Multi‐Family Development Pipeline Fort Collins Housing Affordability Policy Study: Stakeholder Workshop #2 15 Student Population Trends (CSU Institutional Research information, 2014) Source: CSU Fort Collins Housing Affordability Policy Study: Stakeholder Workshop #2 16 0 5,000 10,000 15,000 20,000 25,000 30,000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Graduate / Professional Students Undergraduates Source: CSU, Institutional Research; Economic & Planning Systems Student Population Trends (CSU Institutional Research information, 2000-2013) Graduate / Prof. Students ≈ 17% Graduate / Prof. Students ≈ 17% Average Annual Growth ≈ 300 students / year At this rate, the student pop won’t reach 35,000 until 2040 Source: CSU Fort Collins Housing Affordability Policy Study: Stakeholder Workshop #2 17 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2010 2011 2012 2013 2014 Other President Intra‐University Warner College of Natural Resources Veterinary Medicine + Biomedical Sci Natural Sciences Liberal Arts Health and Human Sciences Engineering Business Agricultural Sciences Source: CSU, Institutional Research Dept.; Economic & Planning Systems Graduate / Professional Assistants (CSU Institutional Research information) 1,615 Total Assistants Source: CSU Fort Collins Housing Affordability Policy Study: Stakeholder Workshop #2 18 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2010 2011 2012 2013 2014 $25,000 or higher Below $25,000 / Year Source: CSU, Institutional Research Dept.; Economic & Planning Systems Graduate Assistantships by Salary (CSU Institutional Research Department information) 144 (9%) 74 (6%) Source: CSU *This is just student income, not household income. Fort Collins Housing Affordability Policy Study: Stakeholder Workshop #2 19 What is CSU’s Housing Capacity? (Now and Projected) NOW • Student Body = 27,000 – Growing @ 300 students / year • On-Campus Housing – Halls = 5,600 beds – Apartments = 1,200 beds – Total = 6,800 (25% student body) • Off-Campus Housing Demand (75% student body ≈ 20,250) – 10% (2,025) Outside Ft. Collins – ~5% (1,010) at Home – 85% (17,210) in Ft. Collins: @ 2.5 students / unit = 6,885 units @ 3.0 students / unit = 5,740 units PROJECTED • On-Campus Growth – Adding 1,950 beds over 4 years • Off-Campus Growth – 1,843 student-oriented units (5,158 beds) in pipeline • CSU projects that “most, if not all, …housing needs will be met” by on- and off-campus developments (SHAP, 2013) Fort Collins Housing Affordability Policy Study: Stakeholder Workshop #2 20 On-Campus Capacity Projection (Information provided by CSU Housing & Dining Services) 4,000 4,500 5,000 5,500 6,000 6,500 7,000 7,500 8,000 2011‐12 2012‐13 2013‐14 2014‐15 2015‐16 2016‐17 2017‐18 2018‐19 2019‐20 CSU Student Housing Program Capacity 1st Year Student Unit Demand Total Program Capacity Source: CSU Student Housing Action Plan, 2013; Economic & Planning Systems Lory Site: +600 beds ‐400 offline 4th Floors: +200 net +240 beds North Aggie: +1,000 beds ‐150 offline +850 net Newsom/ Aylesworth: +900 net 2013‐14 Program Capacity = 5,600 beds 2017‐18 Program Capacity = 7,550 beds Average Annual Growth ≈ 490 beds / year Average Annual Undergrad growth ≈ 270 students / year vs Source: CSU Fort Collins Housing Affordability Policy Study: Stakeholder Workshop #2 21 Off-Campus Rental Development (Information provided by CSU Student Housing Action Plan) • Student-Oriented – Approved / Under Construction / Recently Completed 821 units (2,267 beds) – Approved PDP / Submitted 303 units (879 beds) – Under Review 113 units (227 beds) – Conceptual or Preliminary 606 units (1,785 beds) – Total = 1,843 units (5,158 beds) Average Unit Size = 2.8‐bedroom Source: City of Ft. Collins Fort Collins Housing Affordability Policy Study: Stakeholder Workshop #2 22 Off-Campus Rental Development (Information provided by CSU Student Housing Action Plan) • Non-Student-Oriented – Approved / Under Construction / Recently Completed 797 units (1,234 beds) – Approved PDP / Submitted 1,708 units (2,706 beds) – Under Review 94 units (123 beds) – Conceptual or Preliminary 385 units (431 beds) – Total = 2,984 units (4,494 beds) Average Unit Size = 1.5‐bedroom Source: City of Ft. Collins Fort Collins Housing Affordability Policy Study: Stakeholder Workshop #2 23 Permanent Rental Gaps (with Student Population removed) • A) What is a gap? – It DOES identify housing cost-burden at certain income levels – It DOES NOT just mean that more units need to be built • B) Preliminary Estimates – Where are the gaps? i.e. Who is cost-burdened? 7,970 HHs earning under $25K / year • C) What about students? – Btw. 5,740 and 6,885 HHs (under $25K) are students • D) And grad/professional student HHs? – 1,300 assistants – est’d 50% live in HHs above $25K = 650 HHs • E) Where does that leave the cost-burden estimate? – 7,970 – (5,740 or 6,885) + 650 = 1,735 to 2,880 HHs are cost-burdened • F) Who are they? – Elderly – Disabled – Single-Parent Families – Other? Fort Collins Housing Affordability Policy Study: Stakeholder Workshop #2 24 INCOMES Fort Collins Housing Affordability Policy Study: Stakeholder Workshop #2 25 Median Household Incomes (U.S. Census information) $44,459 $52,672 $36,414 $50,404 $51,174 $47,119 $51,250 $47,917 $54,976 $53,359 $70,301 $44,226 $72,653 $57,142 $55,838 $99,167 $68,831 $79,948 $0 $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 Fort Collins (1.5%) Berthoud (2.4%) Greeley (1.6%) Johnstown (3.1%) Longmont (0.9%) Loveland (1.4%) Timnath (5.7%) Wellington (3.1%) Windsor (3.2%) Median Household Income Community (Annual Average Income Growth) 2000 2012 Source: U.S. Census; Economic & Planning Systems Denotes decrease in inflation‐adj'd income Denotes increase in inflation‐adj'd income Source: U.S. Census In parentheses, annual average growth Fort Collins Housing Affordability Policy Study: Stakeholder Workshop #2 26 HUD Median Incomes $40,000 $45,000 $50,000 $55,000 $60,000 $65,000 $70,000 $75,000 $80,000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Median for Household of 4 persons Median for Household of 2.5 persons Source: HUD; Economic & Planning Systems Source: HUD $73,500 $62,500 $66,100 Fort Collins Housing Affordability Policy Study: Stakeholder Workshop #2 27 HOUSING COST COMPONENT ESCALATION Table Topic 3 Fort Collins Housing Affordability Policy Study: Stakeholder Workshop #2 28 Questions (posed by Stakeholders in Workshop #1) • What causes housing costs to escalate? • What are the components of housing cost? – Differentiate between building permit fees, impact fees, etc. • How much has land supply impacted the cost of housing? • What can be done to keep the cost of housing down? …or lower it? Fort Collins Housing Affordability Policy Study: Stakeholder Workshop #2 29 Housing Cost Breakdown • What are the Components of Housing Costs? – 1) Land – 20% to 25% – 2) Hard Costs (materials, labor, etc.) – 55% – 3) Soft Costs - City/County Fees & Taxes Permit fee Plan Check Capital Expansion Fees (Street Oversizing, Fire, Police, General Government, Parks) Utility fees (Water, Wastewater, Stormwater Plant Investment Fees) Use Taxes – 4) Other Soft Costs & Profit Developer Fee / Profit Architectural / Engineering General Contractor Legal Insurance Financing Fort Collins Housing Affordability Policy Study: Stakeholder Workshop #2 30 Sources of Data on Cost Changes • Land – Larimer County Assessor bulk sales data • Hard Costs – Residential Construction PPI • Soft Costs – Permit/Plan Check fees – City information; new formula implemented Jan 1, 2012 – Capital Expansion fees – City information; no major update during time period Costs escalated using Denver-Boulder-Greeley CPI – Utility fees – major update in 2003 Fees escalated by ENR City Cost Index and other local building information – Use taxes City rate increased in 2011 from 3.00% to 3.85% County rate decreased in 2013 from 0.8% to 0.6% – A&E – BLS wage index for Professional & Technical Services – GC – BLS wage index for Construction Trade Fort Collins Housing Affordability Policy Study: Stakeholder Workshop #2 31 $0 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Average Housing Costs by Component City Fees & Taxes Other Soft Costs + Profit Hard Costs Land Source: City of Fort Collins; Larimer County Assessor; Elevations Real Estate; Economic & Planning Systems Overall Cost Trend, 2000-2013 25% 55% 11% 9% As % of Total Escalation in Costs: City Fees & Taxes = 9% ▲ ($7,500) Other Soft Costs + Profit = ‐6% ▼ ($4,800) Hard Costs = 60% ▲ ($50,200) Land = 37% ▲ ($30,620) 20% 53% 18% 9% Change 2000‐2013: 42% ▲ ($83,500) Profit margins squeezed? Sources: City of Ft. Collins; MLS; Larimer County Assessor Average 2000 = $194,900 2013 = $278,400 As % of Total Fort Collins Housing Affordability Policy Study: Stakeholder Workshop #2 32 What costs have escalated? • Overall Housing Cost – Increased at 2.8% / yr – Increase = $83,500 • 1) Land Costs – Increased at 4.6% / yr – Total increase = $30,620 • 2) Hard Costs (Materials & Labor) – Increased at average of 3.1% / yr – Total increase = $50,200 • 3) Soft Costs – City/County Fees & Taxes – Increased 2.8% / yr – Increase = $7,500 • 4) Other Soft Costs & Profit – Decreased at -1.1% / yr – Decrease = $4,800 Fort Collins Housing Affordability Policy Study: Stakeholder Workshop #2 33 DISTRESSED POPULATIONS Table Topic 4 Fort Collins Housing Affordability Policy Study: Stakeholder Workshop #2 34 Ft. Collins Housing Authority • Under FCHA Management – Wellington – Fort Collins – Housing Choice Vouchers (closed, but opened for disabled) – Project-based vouchers • Waiting List – 1,726 as of April 2014 Elderly – 207 Disabled – 520 53% looking for 1-bedroom; 31%, 2-bedroom • Income Distribution – Less than 30% AMI (2.5 person HH, $18,750) = 84% – 30 to 50% AMI (up to $31,250) = 15% Fort Collins Housing Affordability Policy Study: Stakeholder Workshop #2 35 Distressed Populations • Persons with Disabilities – Est’d 10,000 residents w/ one or more disabilities 50% are 18 to 64 years old; 46% seniors; 4% children – 47% employed (16% unemployed) – Housing Needs (accessible units) - Est’d 350 rental units < $500/month • Seniors – Est’d 12,500 (4,575 with disability) – 40% live alone • Poverty – Federal poverty level (2013) = $19,530 – Est’d 27,200 residents in poverty (56% of which are students) – Btw 2005 and 2012, ~4,000 more non-student residents are in poverty – ~2,900 families in poverty – Overall poverty rate: single dads = 28%; single moms = 36% • Homeless – Est’d 250 to 500 – 1,000 HHs receiving prevention assistance – 60 supportive housing units under development 4.25.14 Sue Beck-Ferkiss, Social Sustainability ©Copyright 2014 City of Fort Collins. All Rights Reserved. 2 ©Copyright 2014 City of Fort Collins. All Rights Reserved. 3 Why? • Citizen survey, Idea Lab, focus groups • Social Sustainability Gap Analysis • Foothills Mall Agreement • Affordable Housing vs. Housing Affordability 0-50% AMI Very Low Income 50-80% AMI Service Workforce 80-100% AMI Community Workforce ©Copyright 2014 City of Fort Collins. All Rights Reserved. 4 Interdepartmental City Team Economic & Policy Systems, lead consultants Stakeholder Workshops Two Public Open Houses Scheduled (May) Board Involvement • Affordable Housing Board (Advisory) • Senior Advisory Board • Planning and Zoning Work Session • Council Finance Committee • Economic Advisory Commission City Council Work Session The Process ©Copyright 2014 City of Fort Collins. All Rights Reserved. 6 ©Copyright 2014 City of Fort Collins. All Rights Reserved. 7 #1 - Best Practices Identified affordable housing tools, funding sources, comparable cities #2 - What is the Need? Defined, reviewed data & questions, identified and discuss trends #3 - Recommendations Discuss policy & direction fcgov.com/socialsustainability Stakeholder Workshops ©Copyright 2014 City of Fort Collins. All Rights Reserved. 8 fcgov.com/socialsustainability Regulatory Programs & Funding Options ©Copyright 2014 City of Fort Collins. All Rights Reserved. 9 - Ownership Housing & Commuting Patterns - Rental & Student Housing - Housing Cost Components - Distressed Populations Four Major Topic Areas ©Copyright 2014 City of Fort Collins. All Rights Reserved. 10 Average Housing Costs • 2.8% annual--42% increase since 2000 • 2nd highest among surrounding communities Affordability Comparisons, 2000-2012 • Fort Collins less affordable to median income earners* • Greeley, Johnstown, Loveland, Timnath & Wellington more affordable in 2000 • However, Timnath became less affordable by 2012 *Source: MLS, Census Ownership Housing ©Copyright 2014 City of Fort Collins. All Rights Reserved. 11 2003-2011 Price or Preference • Nearly 60% of new jobs are in-commuters* • In-commuting up 32% over 2003 • Out-commuting flat *Source: LEHD Commuting ©Copyright 2014 City of Fort Collins. All Rights Reserved. 12 Market Conditions Rents increasing 3.2%/yr. since 2000* Vacancy rates low, tight market CSU growing at 300 students/yr. since 2000 *Sources: CDOH & CSU Rental & Student Housing ©Copyright 2014 City of Fort Collins. All Rights Reserved. 13 Multi-Family Development 4,827 off-campus units in pipeline • 1,843 units (5,158 beds) student-oriented • 2,984 units other On-campus will increase 1,950 beds over 4yrs. Gaps in the Market? Most significant for households under $25k/yr. Students are a large part of this, but who else? *Source: CDOH Rental & Student Housing ©Copyright 2014 City of Fort Collins. All Rights Reserved. 14 Trends • Land values increased 4.6%/yr. since 2000 • Hard costs increased 3.1%/yr. • City/County fees and taxes up 2.8%/yr. Analysis of community-wide affordability - Includes new and existing home sales *Sources: MLS, Assessor. BLS, Res. Const. PPI, City data Housing Cost Components ©Copyright 2014 City of Fort Collins. All Rights Reserved. 15 Sources: City of Fort Collins, Larimer County Assessor, Elevations Real Estate, Economic & Planning Systems $0 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Average Housing Costs by Component City Fees & Taxes Other Soft Costs + Profit Hard Costs Land Source: City of Fort Collins; Larimer County Assessor; Elevations Real Estate; Economic & Planning Systems 25% 55% 11% 9% As % of Total Escalation in Costs: City Fees & Taxes = 9% ▲ ($7,500) Other Soft Costs + Profit = -6% ▼ ($4,800) Hard Costs = 60% ▲ ($50,200) Land = 37% ▲ ($30,620) 20% 53% 18% 9% 2000-2013: Average Sales Price = 42% ▲ ($83,500) Profit margins squeezed? Housing Cost Components ©Copyright 2014 City of Fort Collins. All Rights Reserved. 16 Escalation in Costs City Fees & Taxes = 9% ▲ ($7,500) Other Soft Costs & Profit = -6% ▼ ($4,800) Hard Costs = 60% ▲ ($50,200) Land = 37% ▲ ($30,620) 2000-2013: Average Sales Price = 42% ▲ ($83,500) ©Copyright 2014 City of Fort Collins. All Rights Reserved. 17 Who are they? Cost-burdened Households Disabilities, Seniors, In-poverty, Homeless First-time Homebuyers Mobile Home Park Residents Houses going for more than asking/appraisal Distressed Populations ©Copyright 2014 City of Fort Collins. All Rights Reserved. 18 What is needed? FCHA has Growing Wait List (85% with household incomes under $19k/yr.) ADA Accessible Units Senior Housing Supportive Services Homelessness Prevention Assistance Distressed Populations Preliminary Options • Consultants – Economic & Planning Systems, Inc. – Clarion & Associates Denver, Colorado ©Copyright 2014 City of Fort Collins. All Rights Reserved. 21 LEGISLATIVE: Lobby State Legislature Options • Fix Construction Defects law • Approve the State Low Income Tax Credit Program • Pass state-wide funding measure for affordable housing COST REDUCTION: Options • Fee Waivers for Affordable Housing • Streamline Process for Affordable Housing • Adjust Marginal Cost Structure of Fees (reduce fees for smaller units) • Reduce/remove minimum size for homes COST REDUCTION OPTION: Who Should Be Eligible for Fee Waivers? Options • Housing Authority • Not-for-Profit Developers • For-Profit Developers • All Affordable Housing Projects REGULATORY: Relax the 3-Unrelated Rule Options • Relax to four unrelated citywide • Relax to four unrelated in certain zones • Relax to four unrelated for seniors aged 55 and up • Streamline exemption process for owner-occupied homes • Streamline exemption process for seniors aged 55 and up • Landlord Licensing Program REGULATORY: Incentive Policy Ordinance Options • Non-Subsidy Triggered Ideas for Trigger? • Subsidy Variety Part of Negotiation Triggered by Public Financing REGULATORY: Evaluate Land Constraints Options • Growth Management Area • Remove Impediments on Available Land • Provide Infrastructure Improvements in Northeast Quadrant REGULATORY: Address Manufactured Housing Options • Affordable Housing Easement Option • Preserve Existing Mobile Home Parks • Create New Manufactured Housing Communities ALTERNATIVE FUNDING SOURCES: Options • Excise Tax • Dedicated Sales Tax • Time Limited Property Tax ALTERNATIVE FUNDING SOURCES: Land Bank Program Options • Community Land Trust • Create Endowed Foundation • Sell for Affordable Housing • Maintain for Future Use ©Copyright 2014 City of Fort Collins. All Rights Reserved. 31 Remember why we Need affordable housing ©Copyright 2014 City of Fort Collins. All Rights Reserved. 32 For more information: Sue Beck-Ferkiss, Social Sustainability Specialist 970-221-6753 l sbeckferkiss@fcgov.com fcgov.com/socialsustainability May 19, 2014 COUNCIL FINANCE COMMITTEE AGENDA ITEM SUMMARY Staff: John Voss, Controller/Assistant Financial Officer Date: May 19, 2014 SUBJECT FOR DISCUSSION: Status of Fund Balances and Working Capital EXECUTIVE SUMMARY: The attached presentation gives a status of fund balances and working capital. Fund balances are primarily considered for funding one-time offers during the Budgeting for Outcomes process. To a lesser extent available monies are also used to fund supplemental appropriations between BFO cycles. GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED None, this is an update for Council Finance Committee. BACKGROUND/DISCUSSION To aid in answering the question of what funding is available to support emerging issues and initiatives in the next budget cycle. In each fund the balances are shown vertically by the accounting classifications. The amounts are then additionally categorized into Appropriated, Available with Constraints, and Available for Nearly Any Purpose. Appropriated, Minimum Policy or Scheduled is comprised of minimum fund balances established by policy, funds from the 2013 balance that have been appropriated in 2014, and amounts for projects specifically identified by voters. An example of the later is Building on Basics. Available with Constraints are those balances available for appropriation but within defined constraints. An example is 4 th of July donations. They are restricted for that purpose, but still available for appropriation. Available for Nearly Any Purpose are balances that are available for appropriation at the discretion of the City Council. ATTACHMENTS PowerPoint presentation 1 Status of Fund Balances Council Finance Committee May 19, 2014 2 Objectives • Types of constraints • Restricted balances can be available • Review fund balances • Using fund balances in the budget process 3 Fund Balance Definitions • Non-spendable – Not spendable in form (inventory, long-term receivables) – Legally or contractually required to be maintained intact (permanent endowments) • Restricted – Externally enforceable legal restrictions (TABOR emergency reserve, debt covenants, contracts) • Committed – Constraint formally imposed at the highest level of decision making authority through Ordinance (Capital Expansion fees, Neighborhood Parkland fees) • Assigned – Intended to be used for specific purposes (Affordable Housing, Camera Radar, Encumbrances) • Unassigned – Available for any City purpose – Reported only in the General Fund except in cases of negative fund balance most constrained least constrained 4 Restricted balances can be available • Available but with some constraints, examples – BCC-CE residuals are restricted but available only for capital as defined in the ballot language – 4th of July donations are restricted but available only for 4th of July activities • Available for nearly any purpose, examples – Funds available at the discretion of the City Council for any municipal purpose 5 2012 Total 2013 Total Appropriated, Min. Policy, or Scheduled Available but with some Constraints Available for Nearly Any Purpose General Fund $ 40.2 $ 60.7 $ 52.5 $ 2.2 $ 6.0 Capital Expansion Fund 14.6 18.8 5.3 13.5 - Sales & Use Tax Fund 7.4 2.5 2.5 - - GID #1 Fund 1.0 1.1 0.2 0.9 - Keep Fort Collins Great Fund 6.3 12.8 7.9 4.9 - Neighborhood Parkland Fund 5.6 5.6 6.2 (0.6) - Conservation Trust Fund 1.7 1.9 1.7 0.2 - Naturals Areas Fund 4.5 10.1 9.1 1.0 - Cultural Services Fund 1.8 2.5 1.2 1.3 - Recreation Fund 2.2 2.5 0.3 2.2 - Cemeteries Fund 0.6 0.5 0.1 0.4 - Perpetual Care Fund 1.6 1.7 - 1.7 - Transit 2.4 3.5 0.7 2.8 - Street Oversizing 5.2 11.2 1.1 10.1 - Transportation 13.2 15.0 2.4 0.8 11.8 Capital Projects Fund 20.1 21.0 20.9 0.1 - URA Fund (6.9) (1.5) - - (1.5) Light & Power Fund 44.1 55.3 28.7 26.6 - Water Fund 65.9 65.5 57.0 8.5 - Wastewater Fund 30.3 33.1 15.3 17.8 - Storm Drainage Fund 10.6 17.2 10.9 6.3 - Equipment Fund 2.5 2.3 1.0 - 1.3 Self Insurance Fund 2.5 3.6 0.8 2.8 - Data & Communications Fund 1.9 1.4 1.1 - 0.3 Benefits Fund 11.9 10.5 2.0 8.5 - Utility Customer Service Fund 3.3 2.3 1.8 0.5 - TOTAL $ 294.5 $ 361.1 $ 230.7 $ 112.4 $ 17.9 All City Funds 6 2012 Total 2013 Total Appropriated, Min. Policy, or Scheduled Available but with some Constraints Available for Nearly Any Purpose Assigned - Minimum 60 day Policy $ 18.8 $ 20.9 $ 20.9 $ - $ - Non-spendable Advances 5.5 5.0 5.0 - - Landbank inventory 3.0 3.0 3.0 - - Restricted TABOR Emergency 4.7 5.3 5.3 - - Police Programs 1.2 1.4 0.5 0.9 - Donations 0.7 0.7 0.7 - Economic Rebates 3.0 2.4 2.4 - - DDA/Woodward Debt 2.3 2.3 2.3 - - Committed - Traffic Calming 0.5 0.5 0.1 0.4 - Culture & Recreation 0.1 0.2 0.2 Assigned - - - Prior Year Purchase Orders 4.4 4.5 4.5 - - Manufacturing Use Tax Rebate 0.2 0.3 0.3 - - N. College (Conifer to Willox) 5.2 4.3 4.3 - DPS/Comm System 0.7 0.1 - - 0.1 Camera Radar 0.9 0.9 0.2 - 0.7 Affordable Housing Land Bank 0.2 0.3 0.1 - 0.2 Waste Innovation 0.3 0.1 - 0.1 Reappropriation 3.8 0.9 0.9 - - Unassigned (0.3) 7.6 2.7 - 4.9 Year End Total $ 55.2 $ 60.7 $ 52.5 $ 2.2 $ 6.0 General Fund - Year End 2013 - $60.7 7 General Fund Balances • $5.0 loaned to URA (Advances) • $3.0 is value of land held for resale in Landbank program • $5.3 is an emergency reserve required by TABOR, equal to 3% of qualified governmental revenue • $1.4 restricted to Police Programs; for Drug Task Force $371k, dispatch system replacement $1.0, • $0.7 restricted by donor for various purposes (Horticulture, 4th of July, Udall, etc) • $2.4 is restricted to Economic Incentive Rebates • $2.3 is for debt contingency on DDA debt obligation to Woodward • $4.3 for North College Road Improvements (Conifer to Willox) • $0.9 are balances from camera radar and photo red-light, traditionally used for that program • $0.9 are set aside for the re-appropriation process 8 • Monies collected on building permits, revenue varies greatly with development activity • Must be used for new and /or expanding facilities • $2.7 in loans to the URA (RMI2) • Police monies used for debt on new police headquarters • Fire monies used to pay debt on Station #4 • $9.0 in Community Parkland is anticipated for Southeast Community Park 2012 Total 2013 Total Appropriated, Min. Policy, or Scheduled Available but with some Constraints Available for Nearly Any Purpose Committed General Government 1.3 3.9 - 3.9 Advances-General Government 4.8 2.7 2.7 - Police 1.0 0.9 0.4 0.5 Fire 0.3 0.3 0.2 0.1 Community Parkland 9.3 11.0 2.0 9.0 Year End Total $ 16.7 $ 18.8 $ 5.3 $ 13.5 $ - Capital Expansion Fund - Year End 2013 - $18.8 9 • Sales Tax for BOB and Natural Areas deposited here – Voter language requires deposit in Sale & Use Tax Fund – Residual balance owed to Natural Areas and BOB. 2013 revenue exceeded appropriations needed to make transfers. Will be addressed in annual ‘Clean Up’ ordinance in September 2014. 2012 Total 2013 Total Appropriated, Min. Policy, or Scheduled Available but with some Constraints Available for Nearly Any Purpose Restricted - BOB 1.0 1.3 1.3 - Natural Areas 1.0 1.3 1.3 - Year End Total $ 2.0 $ 2.5 $ 2.5 $ - $ - Sales & Use Tax Fund - Year End 2013 - $2.5 10 • Property tax based - 4.924 mill levy generates about $240 K annually • Offer in BFO to contribute the $1M to the Old Town Square Renovation in 2015 2012 Total 2013 Total Appropriated, Min. Policy, or Scheduled Available but with some Constraints Available for Nearly Any Purpose Committed Capital Improvements 0.6 0.9 - 0.9 Assigned Prior Year Purchase Orders 0.5 0.2 0.2 - Year End Total $ 1.1 $ 1.1 $ 0.2 $ 0.9 $ - General Improvement District #1 Fund - Year End 2013 - $1.1 11 • The $4.9 will made available in the BFO process 2012 Total 2013 Total Appropriated, Min. Policy, or Scheduled Available but with some Constraints Available for Nearly Any Purpose Restricted Street Maintenance 1.2 1.6 - 1.6 Other Transportation 3.7 4.8 4.3 0.5 Police Services 2.9 2.9 1.0 1.9 Fire & Emergency Services 0.4 0.5 0.3 0.2 Parks & Recreation 0.7 0.9 0.6 0.3 Other 1.4 2.1 1.7 0.4 Year End Total $ 10.3 $ 12.8 $ 7.9 $ 4.9 $ - Keep Fort Collins Great Fund - Year End 2013 - $12.8 12 • Monies collected on building permits, revenue varies greatly with development activity • $5.5 is for new Neighborhood Parklands • NOTE; Budget office is working with Parks Department to address what appears to have been an appropriation exceeding available fund balance. 2012 Total 2013 Total Appropriated, Min. Policy, or Scheduled Available but with some Constraints Available for Nearly Any Purpose Committed - Neighborhood Parks 4.7 5.5 6.1 (0.6) Assigned Prior Year Purchase Orders 0.4 0.1 0.1 - Year End Total $ 5.1 $ 5.6 $ 6.2 $ (0.6) $ - Neighborhood Parkland Fund - Year End 2013 - $5.6 13 • Shared Lottery Proceeds – an average of $1.3 collected annually • Can be spent on a variety of specified Recreation purposes as defined by the State • City has primarily used these monies for trails 2012 Total 2013 Total Appropriated, Min. Policy, or Scheduled Available but with some Constraints Available for Nearly Any Purpose Restricted Parks, Rec & Open Space Capital Imp 1.4 1.9 1.7 0.2 Assigned Prior Year Purchase Orders 0.3 - - - Year End Total $ 1.7 $ 1.9 $ 1.7 $ 0.2 $ - Conservation Trust Fund - Year End 2013 - $1.9 14 • Major funding sources – About 60% comes from City quarter cent sales tax, expires at end of 2030 – About 30% comes from County Open Space tax, expires at end of 2018 • $6.2 to be appropriated in 2014 for potential land purchases. 2012 Total 2013 Total Appropriated, Min. Policy, or Scheduled Available but with some Constraints Available for Nearly Any Purpose Assigned - 5% Operations $ 0.2 $ 0.2 $ 0.2 $ - Restricted Natural Areas 7.3 9.1 8.1 1.0 Assigned Prior Year Purchase Orders 0.5 0.8 0.8 - Year End Total $ 8.0 $ 10.1 $ 9.1 $ 1.0 $ - Natural Areas Fund - Year End 2013 - $10.1 15 • Accounts for Museum and Lincoln Center. • Their own revenues are about $2.4, and total expenses are $4.0. • Museum activity moved to their own fund in 2013. However, the residual $1 still needs appropriation in 2014 to move to the Museum fund. 2012 Total 2013 Total Appropriated, Min. Policy, or Scheduled Available but with some Constraints Available for Nearly Any Purpose Assigned - 5% Operations $ 0.1 $ 0.1 $ 0.1 $ - Restricted Building on Basics Cultural Plan 0.6 - - - Committed Art in Public Places 0.2 0.3 0.3 - Assigned Prior Year Purchase Orders 0.1 0.1 0.1 - Capital Projects 0.1 0.4 0.4 - Museum Portion 1.0 0.2 0.8 Cultural Services Surplus 0.8 0.6 0.1 0.5 Year End Total $ 1.9 $ 2.5 $ 1.2 $ 1.3 $ - Cultural Services & Facilities Fund - Year End 2013 - $2.5 16 • Fees and charges cover about 85% of operating costs. 2012 Total 2013 Total Appropriated, Min. Policy, or Scheduled Available but with some Constraints Available for Nearly Any Purpose Assigned - 5% Operations $ 0.1 $ 0.1 $ 0.1 $ - Assigned Prior Year Purchase Orders 0.1 0.1 0.1 - Recreation Programs 0.3 0.1 - 0.1 Recreation Surplus 1.8 2.2 0.1 2.1 Year End Total $ 2.3 $ 2.5 $ 0.3 $ 2.2 $ - Recreation Fund - Year End 2013 - $2.5 17 2012 Total 2013 Total Appropriated, Min. Policy, or Scheduled Available but with some Constraints Available for Nearly Any Purpose Assigned Cemeteries Surplus 0.5 0.5 0.1 0.4 Year End Total $ 0.5 $ 0.5 $ 0.1 $ 0.4 $ - Cemeteries Fund - Year End 2013 - $0.5 18 • To be used to maintain the cemeteries once on-going operations cease. 2012 Total 2013 Total Appropriated, Min. Policy, or Scheduled Available but with some Constraints Available for Nearly Any Purpose Restricted Perpetual Care 1.6 1.7 - 1.7 Year End Total $ 1.6 $ 1.7 $ - $ 1.7 $ - Perpetual Care Fund - Year End 2013 - $1.7 19 • Fund balances are used as a local match to FTA capital grants. 2012 Total 2013 Total Appropriated, Min. Policy, or Scheduled Available but with some Constraints Available for Nearly Any Purpose Assigned - 5% Operations $ 0.2 $ 0.2 $ 0.2 $ - Assigned Prior Year Purchase Orders 3.6 4.2 0.5 3.7 Transit Surplus (0.5) (0.9) (0.9) Year End Total $ 3.3 $ 3.5 $ 0.7 $ 2.8 $ - Transit Fund - Year End 2013 - $3.5 20 • Monies are collected from developers, revenue varies greatly with development activity 2012 Total 2013 Total Appropriated, Min. Policy, or Scheduled Available but with some Constraints Available for Nearly Any Purpose Assigned - 5% Operations $ 0.1 $ 0.1 $ 0.1 $ - Restricted Street Oversizing Surplus 6.2 10.1 - 10.1 Assigned Capital Projects 1.0 1.0 1.0 - Year End Total $ 7.3 $ 11.2 $ 1.1 $ 10.1 $ - Street Oversizing Fund - Year End 2013 - $11.2 21 • $0.3 Capital Projects – Primarily Traffic Response Signal System • $0.5 Fiscal Agent – unspent capital leasing proceeds at year end • $0.8 limited to Civic Center Parking Garage per IGA with Larimer County • $6.1 may be reassigned but is intended by management to be used for Harmony Road improvements. – Residual of the $13 million from State when ownership transferred • NOTE: Parking balances will move to their own fund in 2015 2012 Total 2013 Total Appropriated, Min. Policy, or Scheduled Available but with some Constraints Available for Nearly Any Purpose Assigned - 5% Operations $ 0.5 $ 0.5 $ 0.5 $ - Restricted - Fiscal Agent 0.1 0.5 0.5 - CC Parking Garage IGA 0.8 0.8 - 0.8 Assigned - Prior Year Purchase Orders 1.2 0.7 0.7 - Capital Projects 0.6 0.3 0.3 - DT Parking 0.5 0.6 - - 0.6 Harmony Road 6.4 6.1 - - 6.1 Transportation Surplus 3.5 5.5 0.4 - 5.1 Year End Total $ 13.6 $ 15.0 $ 2.4 $ 0.8 $ 11.8 Transportation Fund - Year End 2013 - $15.0 22 • BCC-Natural Areas has $124k waiting to be appropriated 2012 Total 2013 Total Appropriated, Min. Policy, or Scheduled Available but with some Constraints Available for Nearly Any Purpose Restricted - BCC-Streets 0.4 0.1 0.1 - BCC-Community Enhancements 3.7 0.2 0.2 - BCC-Natural Areas 0.3 0.1 - 0.1 Building on Basics (BOB) 12.5 11.5 11.5 - Assigned - General City Projects 3.5 9.1 9.1 - Year End Total $ 20.4 $ 21.0 $ 20.9 $ 0.1 $ - Capital Project Fund - Year End 2013 - $21.0 23 • This perspective does not give a complete picture of the N. College URA Fund. Cash flow statements are more effective • Ending cash balance in N. College URA was $1.8. However, loan liabilities to the City of $10.3 results in a negative fund balance. – $5.0 obligation to City for Capstone – $5.3 obligation to City for RMI2 2012 Total 2013 Total Appropriated, Min. Policy, or Scheduled Available but with some Constraints Available for Nearly Any Purpose Assigned - URA Deficit (9.2) (1.5) - - (1.5) Year End Total $ (9.2) $ (1.5) $ - $ - $ (1.5) URA N. College Fund - Year End 2013 - $(1.5) 24 • Capital improvements is the amount equal to the average annual cost of the approved 5 year capital improvement plan (this is the capital minimum) • Approved but unencumbered capital projects include Smart Grid, Substation Improvements, SW Enclave System, Underground Conversion Program, Service Center Additions and Mason Corridor. 2012 Total 2013 Total Appropriated, Min. Policy, or Scheduled Available but with some Constraints Available for Nearly Any Purpose Assigned - 8% Operations $ 2.9 $ 2.3 $ 2.3 $ - Assigned Prior Year Purchase Orders 3.8 3.2 3.2 - Approved Capital Projects 15.9 15.0 15.0 - Capital Improvements 28.7 34.0 7.4 26.6 Capital Outlay 0.6 0.8 0.8 - Year End Total $ 51.9 $ 55.3 $ 28.7 $ 26.6 $ - Light & Power Fund - Year End 2013 - $55.3 25 • Per policy, monies remaining after the other reserves are met are assigned to Capital Improvements. 2012 Total 2013 Total Appropriated, Min. Policy, or Scheduled Available but with some Constraints Available for Nearly Any Purpose Assigned - 5% Operations $ 1.5 $ 1.5 $ 1.5 $ - Restricted - Debt 0.3 0.3 0.3 - Assigned Prior Year Purchase Orders 2.5 2.1 2.1 - Approved Capital Projects 47.3 45.9 45.9 - Capital Improvements 13.3 13.2 4.7 8.5 Capital Outlay 2.1 2.5 2.5 - Year End Total $ 67.0 $ 65.5 $ 57.0 $ 8.5 $ - Water Fund - Year End 2013 - $65.5 26 • Per policy, monies remaining after the other reserves are met are assigned to Capital Improvements 2012 Total 2013 Total Appropriated, Min. Policy, or Scheduled Available but with some Constraints Available for Nearly Any Purpose Assigned - 5% Operations $ 1.0 $ 1.0 $ 1.0 $ - Restricted - Debt 0.4 0.2 0.2 - Assigned - Prior Year Purchase Orders 0.4 0.3 0.3 - Approved Capital Projects 11.4 12.4 12.4 - Capital Improvements 14.2 18.5 0.7 17.8 Capital Outlay 0.4 0.7 0.7 - Year End Total $ 27.8 $ 33.1 $ 15.3 $ 17.8 $ - Wastewater Fund - Year End 2013 - $33.1 27 • Per policy, monies remaining after the other reserves are met are assigned to Capital Improvements 2012 Total 2013 Total Appropriated, Min. Policy, or Scheduled Available but with some Constraints Available for Nearly Any Purpose Assigned - 5% Operations $ 0.7 $ 0.7 $ 0.7 $ - Restricted Debt 0.3 0.3 0.3 - Assigned Prior Year Purchase Orders 0.4 0.2 0.2 - Approved Capital Projects 8.3 8.1 8.1 - Capital Improvements 3.1 6.7 0.4 6.3 Capital Outlay 1.0 1.2 1.2 - Year End Total $ 13.8 $ 17.2 $ 10.9 $ 6.3 $ - Storm Drainage Fund - Year End 2013 - $17.2 28 • Capital Leasing – unused lease purchase proceeds at year end • Equipment Replacement – $0.4 is for replacement of vehicles and equipment for Police, Forestry and Parks 2012 Total 2013 Total Appropriated, Min. Policy, or Scheduled Available but with some Constraints Available for Nearly Any Purpose Assigned - 5% Operations $ 0.2 $ 0.2 $ 0.2 $ - Capital Leasing 0.9 - - - Assigned - Prior Year Purchase Orders 0.2 0.3 0.3 - Equipment surplus 0.4 1.8 0.5 - 1.3 Year End Total $ 2.2 $ 2.3 $ 1.0 $ - $ 1.3 Equipment Fund - Year End 2013 - $2.3 29 2012 Total 2013 Total Appropriated, Min. Policy, or Scheduled Available but with some Constraints Available for Nearly Any Purpose Assigned - 5% Operations $ 0.1 $ 0.1 $ 0.1 $ - Committed - Self Insurance surplus 3.4 3.4 0.6 2.8 Assigned - Prior Year Purchase Orders - 0.1 0.1 - Year End Total $ 3.5 $ 3.6 $ 0.8 $ 2.8 $ - Self Insurance Fund - Year End 2013 - $3.6 30 2012 Total 2013 Total Appropriated, Min. Policy, or Scheduled Available but with some Constraints Available for Nearly Any Purpose Assigned - 5% Operations $ 0.2 $ 0.1 $ 0.1 $ - Assigned Prior Year Purchase Orders - 0.6 0.6 - Data & Communication Surplus 1.1 0.7 0.4 - 0.3 Year End Total $ 1.3 $ 1.4 $ 1.1 $ - $ 0.3 Data and Communications Fund - Year End 2013 - $1.4 31 • The charges to departments have been reduced slightly to use up some of the fund balance. This will continue through 2014. • The new proposed fund balance policy reviewed at last meeting would change the amount Available but with some Constraints from $8.5 down to $4.1. 2012 Total 2013 Total Appropriated, Min. Policy, or Scheduled Available but with some Constraints Available for Nearly Any Purpose Assigned - 5% Operations $ 0.4 $ 0.4 $ 0.4 $ - Assigned - Medical Claims 11.8 9.7 1.6 8.1 Dental Claims 0.4 0.4 - 0.4 Year End Total $ 12.6 $ 10.5 $ 2.0 $ 8.5 $ - Benefits Fund - Year End 2013 - $10.5 32 • The last couple of years this fund has reduced fees to the four utility funds with intent of using up some of this fund balance. 2012 Total 2013 Total Appropriated, Min. Policy, or Scheduled Available but with some Constraints Available for Nearly Any Purpose Assigned - 5% Operations $ 0.3 $ 0.3 $ 0.3 $ - Assigned - Prior Year Purchase Orders 1.1 0.6 0.6 - Approved Capital projects - 0.2 0.2 - Unrestricted 1.4 1.2 0.7 0.5 Year End Total $ 2.8 $ 2.3 $ 1.8 $ 0.5 $ - Utility Customer Service Fund - Year End 2013 - $2.3 May 19, 2014 COUNCIL FINANCE COMMITTEE AGENDA ITEM SUMMARY Staff: Andres Gavaldon / Financial Policy and Project Manager Date: May 19, 2014 SUBJECT FOR DISCUSSION: Review scope of Long Term Financial Planning exercise EXECUTIVE SUMMARY: Council has requested a Long Term Financial Plan (LTFP). Such an exercise has never been performed by the City of Fort Collins. The potential methodologies for performing an LTFP are quite varied in their resource requirements. The proposed process for this new project is built on recommendations by the President of Government Finance Officers Association (GFOA), improves on our current “5-Line” analysis, and takes an approach which can be completed within the current fiscal year with existing resources. GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED: Does the Council Finance Committee support using the improved “5-Line” approach and utilizing the results for the next strategic plan? BACKGROUND/DISCUSSION: The Long Term Financial Plan is a council requested project without precedent at the City. The options considered were; 1) an in-depth forecast requiring more time and resources than currently available, or 2) an expanded and improved “5-Line” analysis that aligns with GFOA recommendations. Staff recommends the improved “5-Line” approach and utilizing the results for the next strategic plan. ATTACHMENTS: City Long Term Financial Plan Presentation 1 Long Term Financial Planning (LTFP) May 19, 2014 2 Issue to be addressed Council Finance Committee agreement on workscope and deliverable timing of Long Term Financial Plan. 3 Initial Approach In depth, intricate and complicated process: • Revenue • Expense • Balance • Capital • Debt By Fund By Service Area Hurdles: - Resource intensive - Organizationally challenging - Timeline complications 4 Research Bob Eichem • Boulder CFO • President of Government Financial Officers Association (GFOA) • LTFP Trainer Recommendation: • Simplify – high level • Prioritize Funds • Use model appropriately (directional vs forecast) 5 City Financial Plan Evolution Beginning – BFO Process in 2005 • “5-Line” review of major funds • Highlights overall health of fund • Performed every 2 years in conjunction with BFO “5-line: 1) Beginning Balance 2) Revenue 3) Expense 4) Change 5) Ending Balance 2013-2014 Strategic Plan: • Utilized improved “5-Line” as part of Strategic Planning Process • Evolved over time to include: major revenue sources, minor capital / equipment replacement, minimum balance 6 Proposed Scope 2014 Long Range Financial Plan • Intend to leverage evolved “5-line” process • Utilize within 2015/16 Strategic Planning Process • Additional improvements: a. longer term time horizon 20-30 years b. broader fund analysis c. deeper dive into revenue and expense line items d. growth rates by expense line items 7 Scope Continued Funds: General Fund KFCG Natural Areas Transportation Cultural Services Recreation Transit Golf Revenue: • Sales & Use Tax • KFCG • ¼ cent tax sunset scenarios Expenses: • Alignment with MOR / JDE 8 Issues Key funds only Utilities Excluded Major Capital – How to approach? Exact time horizon – to be decided Debt – Inclusion and process? 9 Timeline Deliverable timing would be off cycle, however intent is to use analysis in ‘15/’16 Strategic Plan. July August September October November December January Planning Revenue / Expense Modeling by Fund Fund / Service Area Review Analysis & Implications CFC Review Council Worksession Review 10 Backup 11 “5-Line” By Fund: 1) Beginning Balance 2) Revenue 3) Expense 4) Change 5) Ending Balance RECREATION 5-LINE BUDGET Actual Projected Projected Projected Projected 2012 2013 2014 2015 2016 Beginning Balance 2,160,893 2,333,710 1,530,661 1,367,961 609,961 Total Revenue Sources 7,122,157 7,129,433 7,231,114 7,377,876 7,514,233 Expenses 6,949,340 7,932,482 7,393,814 8,135,876 7,664,233 Surplus / (Deficit) 172,817 (803,049) (162,700) (758,000) (150,000) Ending Balance 2,333,710 1,530,661 1,367,961 609,961 459,961 Windsor Affordable Price Gap Median Sales Price Source: U.S. Census; Economic & Planning Systems 2000 2012 system (typically County in CO) State, county, or city Existing structure Who is affected? ● New development ● Residents ● Businesses ● Visitors ● Employers ● Employees ● Developers ● Contractors ● Visitors ● Legal ● Business ● Real estate ● Real estate ● Real estate What are its advantages / disadvantages? ● Burden on new residential and commercial development ● Generates revenue at pace of development ● Voter approval required ● Could generate high revenues ● Voter approval required ● Broadest distribution of burden ● Would have to be employer-paid ● Addresses both existing and new needs ● Voter approval required ● Strong nexus to new residential development ● Voter approval required ● Reasonable nexus exists ● Lodging industry expects to use funds for tourism ● Voter approval required ● Applies to broader types of documents ● Weak nexus to housing ● Can be imposed voluntarily ● Applies to new sales subject to developer agreement ● Could generate high revenues ● Voter approval required Who uses it? Cambridge, MA San Francisco, CA Berkeley, CA Boulder, CO Parker, CO Aspen/Pitkin County, CO St. Paul, MN Dayton, OH Denver, CO Aurora, CO Greenwood Village, CO St. Louis, MO San Miguel County, CO San Francisco, CA Columbus, OH Snowmass Village, CO Indianapolis, IN Jackson County, MO Bucks County, PA Philadelphia, PA Aspen, CO; Snowmass Village, CO Vail, CO Breckenridge, CO Telluride, CO Winter Park, CO Pitkin County, CO Boulder, CO Cambridge, MA Seattle, WA Source: Economic & Planning Systems Q:\Sustainability Services\Social Sustainability\SUE BF\Housing Affordability Policy Study\Stakeholder Workshops\[Copy of 133074-Housing Program Matrix.xlsx]Funding Options Alternative Funding Options Does not require voter approval, no nexus study required No nexus study required Requires nexus study and documentation Requires nexus study and documentation Who is affected? ● New residential development ● New residental development ● Businesses ● Visitors New commercial development New residential development What are its advantages/ disadvantages? ● Addresses community workforce housing needs (i.e. ownership or rental) ● Limits the burden to new residential development ● Most common among the programs identified ● Value of incentives is relative to the market ● Success is dependent on the value of respective incentives within the market ● Addresses workforce housing needs ● Broadens the burden to wide variety of land uses ● Requires nexus analysis ● Addresses seasonal/service worker housing needs (i.e. rental) ● Limits the burden on market to large 2nd homes ● Requires complicated nexus analysis Who uses it? Boulder, CO Denver, CO Burlington, VT Cambridge, MA Davis, CA Cambridge, MA Seattle, WA Chicago, IL Boston, MA Vail, CO Aspen/Pitkin County, CO Telluride, CO Park City, UT Telluride, CO Jackson/Teton County, WY Source: Economic & Planning Systems S:\Common\Council Finance Commitee\3 Packets\2014 Packets\CFC\5. May\Affordable Housing\[2. Copy of 133074-Housing Program Matrix.xlsx]Housing Programs w Res Linkage Affordable Housing Programs