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HomeMy WebLinkAboutAgenda - Mail Packet - 6/23/2015 - Council Finance Committee Agenda - June 23, 2015Council Finance Committee & URA Finance Committee Agenda Planning Calendar 2015 RVSD 06/08 mnb June 23 TOPIC TIME WHO CFC Exempt Organization – Potential Code Updates 30 min J. Ping-Small 2014 Year End Financial Highlights 30 min J. Voss 2014 Year End Fund Balance Review 30 min J. Voss Sales Tax Recapture Initiative - Discussion 30 min M. Beckstead URA July 20 TOPIC TIME WHO CFC Auditors Report 20 min T. Storin K. Smith Revenue Diversification - Sales Tax on Services and Admissions Tax 45 min J. Ping-Small DDA Bond Interest Adjustment 20 min M. Robenalt Pension Liability Funding 30 min M. Beckstead URA Aug 17 TOPIC TIME WHO CFC 2016 Budget Revisions 30 min L. Pollack Use Tax Utilization Policy - Discussion 30 min M. Beckstead URA Sept 21 TOPIC TIME WHO CFC Annual Adjustment Ordinance (clean-up) Review 15 min L. Pollack URA Future Council Finance Committee Topics: 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 June 23, 2015 2:30 – 4:30 p.m. Community Room – 215 N. Mason Approval of the Minutes from the May 18, 2015 meeting 1. Exempt Organization – Potential Code Updates 30 minutes J. Ping-Small 2. 2014 Year End Financial Highlights 30 minutes J. Voss 3. 2014 Year End Fund Balance Review 30 minutes J. Voss 4. Sales Tax Recapture Initiative – Discussion Only 15 minutes M. Beckstead 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 05/18/15 10:00 am to 12:00 Noon CIC Room Council Attendees: Mayor Wade Troxell, Ross Cunniff, Gerry Horack Staff: Darin Atteberry, Mike Beckstead, John Duvall, John Voss, Josh Birks, Travis Storin, Nancy James Others: Joel Stewart, Jim Manire Approval of Minutes Ross Cunniff made a motion to approve the March 16, 2015 Council Finance Committee minutes. (No meeting was held in April.) Gerry Horack made a second to the motion. The minutes were approved unanimously. Introductions Prior to the remaining agenda items, Mike introduced Nancy James, who replaced Katie Wiggett a week ago in the admin role. Nancy comes to Financial Services from Utilities. He also introduced Travis Storin, who joined Financial Services in April, as the Accounting Director. Travis was previously the Director of Financial Planning and Analyses for Kaiser Permanente in Atlanta, GA, and an auditor for KPMG prior to that. GERP Update The actuary firm engaged on the GERP is Milliman, Inc. The presentation was led by Joel Stewart, who puts together the annual review of the General Employees’ Retirement Plan, which covers plan highlights, economic and demographic assumptions, unfunded actuarial accrued liabilities, and the solvency/sensitivity model. The presentation reviewed the Plan’s Actuarial valuation for year ending 2014, and discussed the impact to the Plan from investment return sensitivity, which included: • Pension Plan Overview • GERP Plan Summary • Valuation Results • Solvency Model 2 Pension Plan Overview All benefits and expenses must be provided for by current assets, future contributions and future investment returns. Mike added that over the last three years the estimates have become more conservative as a couple of significant things have taken place, 1) we have increased the supplemental contribution from the City from a little over $500,000 to a little over a $1,100,000. We did this for the first time in 2013. This is bringing down the City’s unfunded pension liability; and 2) three years ago, the anticipated annual return was 7.5%; after a study and analysis it was initially brought down to 6.8% and is now down to 6.5%, which is a reasonable benchmark number. The reduction in anticipated investment returns would, in isolation, increase the City’s unfunded pension liability, but it is currently staying the same because we have had some fairly strong returns, and because of the supplemental contribution increase. GERP Plan Summary Demographics as of 1/1/2015: • Total Participants = 431 (113 Active, 184 Retired, 113 Term Vested & 21 Beneficiaries) • Active Participant Ave. Age = 59.0 & Ave. Years of Service = 25.7 (Employees hired before 1/1/1999) Plan Summary: • Normal Retirement Date (NRD) = Age 65 (Early retirement would produce a slightly reduced payment.) • Benefit Payable at NRD = Final Ave. Monthly Salary x 1.5% x Years of Service • Benefit Example assuming $65,000 average salary and 25 years of service ($5,417 x 1.5% x 25 = $2,031 Key Assumption: • Investment Return Assumption = 6.5% • Life Expectancy • City Contribution = 10.5% of Salary + Supplemental Contribution (currently $1.12m) Valuation Results • The plan assets returned 6.0% during the 2014 plan year on a market value basis. The average annual return over the last 21 years is 6.4%. The assumed rate of return for the 2014 plan year was 6.5%. • At the end of 2014, the market value of assets was $45,722.416, up from the previous year ending market value of $44,692,556. o Total Pension Liability (TPL) $ 57,796,305 o Fiduciary net Position (FNP) $ 45,772,416 o Net Pension Liability (NPL) = TPL – FNP $ 12,073,889 o FNP as a % of TPL 79.11% 3 The City Manager indicated that overall this is a very good position for the City to be in, as many cities have a much higher unfunded pension liability. Mike concurred that the decision in 1999 to discontinue the General Employees' Retirement Plan was very well thought out. Financial/Economic Impacts: The 2014 investment return of 6% was less than the Plan return assumption of 6.5%. Investment returns added to supplemental and payroll contributions exceeded retiree payouts which contributed to a year over year increase of $1.0 million to the Fiduciary Net Position (FNP). 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 $3.7M to a net Pension Liability of $12.1M. However, this change will not impact the Plan’s anticipated cash flows or the City’s credit rating. The Council Finance Committee asked what the average monthly salary was for people currently in the program. The current average is $65,000. It was further questioned why the average salary wasn’t shown for retirees who are retiring in the program. Staff will make this update for next year. The Council Finance Committee also questioned why we are not using use tax revenue to pay down the liability of the Plan. Staff indicated that this conversation has not taken place to date, but is one that we can certainly have. Staff further proposed that before the 17/18 budget is complete, that a decision be made on whether a shift be made on how we handle this liability, which also ties into the discussion of whether or not we have a policy in place that deals with the additional revenue from use tax within a year. Staff will schedule this item prior to July, August at the latest, for budgetary purposes. The Council Finance Committee also asked what happens to the money that is left over after all recipients and beneficiaries have received all of their appropriate funds. Staff’s follow-up report indicates that after the beneficiaries are paid their vested amounts, the remaining monies will be refunded to the City. This information is referenced on pages 33-34, section 6, in the General Employees Retirement Plan document. City Debt Capacity Mike introduced Jim Manire, the City’s Financial Advisor who works for the City and guides us in making sure the City evaluates all of the alternatives and proceeds in the correct way in regard to future bond issuances and debt issues, etc. Mike further explained that Staff worked with Jim to evaluate the current debt capacity of the City in anticipation of some future borrowing needs of the city associated with projects such as Parking, a Regional Police Training Center, Vine/Lemay intersection, Climate Action Plan. Debt capacity was analyzed assuming a commitment to maintain the City’s current Moody’s credit rating of Aaa. Jim’s presentation provided information in a general capacity. Debt capacity is a range that will vary based on economic conditions, type of debt taken on, funded from existing or new revenue sources, etc. Without new 4 revenue sources a range of $75M to $100M is estimated. With new revenue sources (mill levy or sales tax) a range of $125M to $150M is estimated. The analysis excludes Utility debt supported by rate revenue. The total debt on the governmental side, excluding Utilities is about $55M, which includes the DDA and the URA. The City alone is in the low $40M range for total debt, with $6M that will being paid off in 2018, which is associated with the 215 Mason Street building and the Civic parking structure. What is left is the Police Facility which was refinanced in 2012 at 1.82%. The City currently has a Aaa Issuer and GO rating by Moody’s. Moody’s description of a Aaa rating is obligations that have been judged to be of the highest quality, subject to the lowest level of credit risk. There are only 24 other cities with Moody’s Aaa (qualifier is population; medium size American cities). Fort Collins is in a very elite class in this regard. Multiple weighted factors are used by Moody’s to determine a rating: • Economy/Tax Base 30% • Finances 30% • Management 20% • Debt/Pensions 20% (Half of this is pension related) Most important is budgetary actuals and performance. Moody’s has an Annual Surveillance Cycle – each rating is reviewed annually by the agencies who publish them. The City Manager stated that the report on both of these items (GERP Update and the City Debt Capacity), are very good news for the City, and are solid statements about our city and financial situation. The Council Finance Committee stated that they would like to continue to see more conversation with Council about overall capacity. Woodward Governor – Rebate: Ross asked Staff when the Woodward agreement was signed, if the City set aside the funds intended for repayment when they met their side of the obligation. Staff indicated that that is not generally done at the time an agreement is signed, but rather when the revenue comes in. The Revenue Dept. within Financial Services coordinates with Planning and Utilities on a monthly basis and Finance records the liability associated with all of the rebates that they have earned. There is capacity in the General Fund to pay this liability. Ross further asked if using the funds this way match the intended use of the expansion fee buckets, and wanted an explanation on how staff chose the three different funds that were used, and how that fits the expenditure. John Duval stated that this item was placed on the agenda less than 24 hours in advance and could not be posted. The question is related to the legal opinion that Council received previously that is confidential, and cannot be discussed without an executive session, which cannot be held as it was not posted in ample time. In the general sense that nexus isn’t the issue; the opinions that Council were given doesn’t depend on that. 5 Ross asked Staff if the City has previously used the various fee funds in this way. Staff stated that with the exception of affordable housing, the City has not rebated capital expansion fees in the near term past. Economic Health Policy Staff introduced and reviewed the Financial Policy webpage for the new council member’s information. Each year Staff will review a third of the policies that are listed in the policy section of this webpage. The Fort Collins City Council has adopted Financial Management Policies pursuant to the provisions of Article V, Section 12 of the City Charter, to guide the administration, management, deposit and investment of City funds. In addition, City Council and staff have committed to regularly review and update these Financial Management Policies. The current Economic Development financial policy was last updated in 1999. Staff presented the Council Finance Committee with an updated policy for their review. The bulk of the new policy comes from documents previously approved by City Council in recent years. The new financial policy will replace the existing policy in its entirety. In addition, Economic Health Office staff is currently finalizing a proposed update to the 2012 Economic Health Strategic Plan. The update responds to a City Council request to evaluate changes to the existing strategic plan and seeks alignment with the objectives of the Sustainability Service Area (formed in 2012). The update introduces five themes around which to organize the City’s economic health activities: • Community Prosperity • Grow Our Own • Place Matters • The Climate Economy • Think Regionally The City Manager stated that a council member recently received a call from a cluster grant applicant who did not get selected. Bob did not know a whole lot about the program, but Josh has done a really good job of relaying the information. It was very methodical, and streamlined. The Council Finance Committee asked staff if they periodically review performance relative to the policy. Staff indicated that they look very closely at the performance they get out of the money invested. They self-report at the end of each year. They will also extend programs over to other departments to continue to improve processes. The Economic Health Policy will be placed on the Council Consent Agenda in the near future. 6 Other Business The City Manager requested that the time of the Council Finance Committee meetings be moved back to begin at 9:30 a.m. vs. 10:00 a.m., as Leadership ends at 9:30 a.m. It was agreed by all that this would be acceptable. It was also requested that the date of the next meeting currently scheduled for June 15th be moved to another date due to the Weld County Transportation Summit being held on the 15th of June. Staff will schedule the meeting on another day, and notify all members and the public. The City Manager closed the meeting by stating that credit goes to the City Council and the Council Finance Committee for driving improvements for all of these programs. Meeting Adjourned at 11:44 a.m. COUNCIL FINANCE COMMITTEE AGENDA ITEM SUMMARY Staff: Jessica Ping-Small, Revenue and Project Manager Date: June 23, 2015 SUBJECT FOR DISCUSSION Consideration of potential code changes for charitable organizations as defined by Chapter 25 of the Municipal Code. EXECUTIVE SUMMARY Chapter 25 of the Municipal Code allows organizations that meet the definition of charitable, per City code, to purchase tangible personal property for use in the organizations’ activities free from City of Fort Collins sales and use tax. Recently, Colorado case law was discovered that may have a substantial impact on staff’s interpretation of the charitable organization definition. Staff is recommending City Council consider amending the code to mitigate the impact of the case law to a substantial number the city’s 300 exempt organizations. GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED Staff is seeking the following direction from the Council Finance Committee (CFC): 1. Does the CFC support potential code changes to amend the definition of charitable organization? 2. Does the CFC support one of the options presented by staff? BACKGROUND/DISCUSSION General Information City code defines a charitable organization as: Charitable organization shall mean any entity which: (i) has been certified as a not-for-profit organization under Section 501(c)(3) of the Internal Revenue Code; and (ii) is a religious or charitable organization. As used in this definition, a "charitable organization" is an organization which exclusively, and in a manner consistent with existing laws and for the benefit of an indefinite number of persons, freely and voluntarily ministers to the physical, mental or spiritual needs of persons, and which thereby lessens the burdens of government. The City currently has 301 exempt organizations. In general terms, the code allows the organizations to make purchases free of sales and use tax but does not exempt them from collecting sales tax on transactions. For example, if an exempt organization, as defined by City code, purchases materials for use in their activities, they don’t pay sales tax. However, if the organization sells tangible goods, for example a book sale, they are still required to collect and remit the tax to the City. This is an important distinction. The process to become an exempt organization with the City is as follows: • Application submitted with following documents: o List of officers o Articles of Incorporation o 501(c)3 letter o Bylaws o Colorado Certificate of Incorporation o Copy of State exemption certificate o Financial statements • Application reviewed by staff for completeness and determines if organization meets definition of charitable • Application approved or denied (2 year renewable period) o If denied, organization can request a hearing with the Financial Officer or designee Issue to Address In the fall of 2014, City staff denied an application for exemption based on the code definition. The organization appealed the decision and during the hearing process, the City Attorney’s Office discovered a ruling from the Colorado Supreme Court for the City of Pueblo that uses the same definition of charitable organization as the City of Fort Collins. If staff applies the Colorado Supreme Court’s interpretation of our definition to our existing exempt organizations, 23% would no longer qualify. Based on this impact, staff is recommending that City Council consider amending the definition of charitable organization. Below are potential approaches for consideration: Options Impact Pro Con No code change 70/301 exempt organizations impacted – 23% Follows case law Existing exempt orgs lose designation Redefine “charitable organization” to align with past application of the definition Existing exempt entities maintain exemption Improved clarity for staff when determining eligibility Creates unique definition for Fort Collins, adds confusion for orgs and retailers Amend code to exempt any religious or charitable organization that has been granted tax exempt status by the state or eligible for tax exemption under state law Existing exempt entities maintain exemption Additional orgs will qualify Reduced staff time reviewing applicants Simple process for Benchmark Data Staff completed the following research to support the discussion: Municipality Fort Collins language Current State language Other language Aurora X Boulder X Broomfield X Cherry Hills Village X Colorado Springs X Denver X Greeley X Longmont X Loveland X Westminster X Pueblo X Windsor X Thornton X Staff also reached out to numerous jurisdictions with the same definition as ours to understand if cities had changed their code based on the Colorado Supreme Court ruling. The majority of the cities queried reported that they would continue their existing application of the code regardless of the ruling. Conclusion Based on the analysis and impact to existing and potential organizations that qualify for exemption under the City of Fort Collins code, staff recommends that City Council consider amending Chapter 25 of the Municipal Code to exempt any entity that has been granted tax exempt status by the state or is eligible for tax exemption under state law. ATTACHMENTS 1. PowerPoint Presentation 1 Exempt Organizations Council Finance Committee June 23, 2015 2 Overview • Direction Sought • Current State • Issue to Address • Options • Recommendation 3 Questions for Council Finance • Does CFC support potential code changes to amend the definition of charitable organization? • Does the CFC support one of the options presented by staff? 4 Current State • Chapter 25 of the Municipal Code defines a charitable organization as: – Charitable organization shall mean any entity which: (i) has been certified as a not-for-profit organization under Section 501(c)(3) of the Internal Revenue Code; and (ii) is a religious or charitable organization. As used in this definition, a "charitable organization" is an organization which exclusively, and in a manner consistent with existing laws and for the benefit of an indefinite number of persons, freely and voluntarily ministers to the physical, mental or spiritual needs of persons, and which thereby lessens the burdens of government. 5 Current State • 301 organizations have been approved for sales and use tax exemption – Applications are made to Sales Tax Dept. – Staff reviews application to determine eligibility – Exemption granted for 2 year renewable period • Code allows the entities exemption from paying sales and use tax on purchases BUT does not exempt them from collecting sales tax if selling tangible goods 6 Issue to Address • In fall of 2014 staff denied an application for exemption based on definition • During appeal process, City Attorney’s Office discovered a ruling from the CO Supreme Court: – Definition of charitable organization the same as Fort Collins – CO Supreme Court interpreted definition differently than staff has historically Impact of Ruling: 23% (70) of City Exempt Orgs No Longer Qualify Under Existing Definition 7 Options Options Impact Pro Con No code change 70/301 exempt organizations impacted – 23% Follows case law Existing exempt orgs lose designation Redefine “charitable organization” to align with past application of the definition Existing exempt entities maintain exemption Improved clarity for staff when determining eligibility Creates unique definition for Fort Collins, adds confusion for orgs and retailers Amend code to exempt any religious or charitable organization that has been granted tax exempt status by the state or eligible for tax exemption under state law Existing exempt entities maintain exemption Additional orgs will qualify Reduced staff time reviewing applicants Simple process for entities Diminishes confusion for retailers Revenue loss from orgs who do not currently qualify 8 Staff Recommendation • Amend code to exempt any entity granted tax exemption from the State: – Allows existing organizations to retain exemption – Supports local charitable organizations – Reduce staff time and subjectivity of definition – Simplifies process for charitable organizations – Diminishes confusion for retailers 9 Questions for Council Finance • Does CFC support potential code changes to amend the definition of charitable organization? • Does the CFC support one of the options presented by staff? June 23, 2015 COUNCIL FINANCE COMMITTEE AGENDA ITEM SUMMARY Staff: John Voss, Controller SUBJECT FOR DISCUSSION – 2014 Financial Highlights EXECUTIVE SUMMARY – The financial condition of the City continues to be healthy. Revenues increased as did expenditures. The population continues to grow and with it a demand for more services. Outstanding debt continues to decline. GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED None. BACKGROUND/DISCUSSION – Todays review focuses on revenues, expenditures and debt. At an upcoming meeting fund balances will looked at with more detail. ATTACHMENTS PowerPoint presentation 1 2014 Financial Highlights Council Finance Committee June 23, 2015 2 Contents • Revenue • Expenditures • Debt • General Fund change in Fund Balance 3 Tale of Two Cities • Governmental Activities – Activities that do not lend themselves to be fully funded by User Fees and are wholly or partially tax supported – Transportation, Police, Fire, Parks, Natural Areas, etc. • Enterprise Activities – 100% funded by User Fees – Light & Power, Water, Wastewater, Storm Drainage, and Golf 4 Revenue 5 Sales & Use Tax and Capital Impact Fees lead revenue increase 6 Capital Grants down, primarily MAX. 2014 Sales & Use Tax up 15.4%. Impact Fees driving increase in Charges for Services 7 Sales & Use Tax is primary source of revenue at 51% 8 Community growth and strong economic rebound are reflected in Sales & Use Tax revenue 9 URA expects an additional $281k in 2015. General Fund expects an additional $566k in 2015. 10 Interest rates continue historic lows, expect slight rise in 2015 Unrealized gains and losses washout when held to maturity 11 Light & Power revenue declines, while the other Enterprise Funds see increased revenue 12 Expenditures 13 14 Efficiency Programs Appear to be Working 15 Personnel Costs 16 Personnel Costs Rise in all Service Areas 17 2014 Full Time Equivalent (FTE) (a) Approved positions (b) Based on actuals divided by 2,080 Service Area Classified & Unclassified (a) Hourly (b) TOTAL Police Services 294.3 6.1 300.3 Financial Services 39.8 0.3 40.1 Community & Operation Services 293.8 222.8 516.6 Utility Services 351.8 45.2 397.0 Planning, Dev & Transportation 219.6 75.9 295.4 ELJS 42.3 1.5 43.8 Employee & Comm Services 33.8 5.2 39.0 Sustainability Services 19.6 5.2 24.8 Total 1,294.9 362.3 1,657.1 18 19 20 Debt 21 Better 22 Compliance with Debt Policy • Annual debt service can not exceed 5% of governmental revenue * Does not include one-time large capital grants, as per policy 2014 Revenue * $ 229.5 M Debt Service $ 5.4 M DS/Revenue 2.20% DS Policy Limit 5.00% 23 Fund Balance in General Fund • At the June CFC meeting we’ll review fund balances for all funds in more detail 2013 Ending $ 60.7 2014 net $ 13.2 2014 Ending $ 73.9 COUNCIL FINANCE COMMITTEE AGENDA ITEM SUMMARY Staff: John Voss, Controller/Assistant Financial Officer Date: June 23, 2015 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 2014 balance that have been appropriated in 2015, 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 1. PowerPoint presentation. 1 Status of Fund Balances Council Finance Committee June 23, 2015 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, re-development agreements, IGA’s) • 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 – Udall Endowment interest is restricted but available to be appropriated for maintenance and improvements of Udall Natural Area • Available for nearly any purpose, examples – Funds available at the discretion of the City Council for any municipal purpose 5 2013 Total 2014 Total Appropriated, Min. Policy, or Scheduled Available but with some Constraints Available for Nearly Any Purpose * General Fund $ 60.7 $ 74.0 $ 64.6 $ 1.9 $ 7.5 * Capital Expansion Fund 18.8 21.8 12.6 9.2 - * Sales & Use Tax Fund 2.5 4.3 4.3 - - GID #1 Fund 1.1 1.2 0.9 0.3 - * Keep Fort Collins Great Fund 12.8 14.9 8.1 6.8 - * Neighborhood Parkland Fund 5.6 7.1 6.4 0.7 - Conservation Trust Fund 1.9 1.7 1.2 0.5 - * Naturals Areas Fund 10.1 12.1 2.6 9.5 - * Cultural Services Fund 2.5 1.7 0.9 0.8 - * Recreation Fund 2.5 2.6 0.7 1.9 - Cemeteries Fund 0.5 0.5 0.1 0.4 - Perpetual Care Fund 1.7 1.7 - 1.7 - Museum Fund - 0.8 0.4 0.4 - Transit 3.5 1.4 2.0 (0.6) - * Street Oversizing 11.2 15.3 1.4 13.9 - * Transportation 15.0 18.8 5.4 0.6 12.8 Capital Projects Fund 21.0 24.5 18.9 5.6 - * Light & Power Fund 55.3 56.6 37.0 19.6 - * Water Fund 65.5 61.3 56.6 4.7 - * Wastewater Fund 33.1 39.1 18.0 21.1 - * Storm Drainage Fund 17.2 19.6 14.3 5.3 - Equipment Fund 2.3 3.0 1.1 0.5 1.4 * Self Insurance Fund 3.6 1.8 1.8 - - Data & Communications Fund 1.4 1.3 0.6 - 0.7 * Benefits Fund 10.5 7.8 5.6 2.2 - Utility Customer Service Fund 2.3 2.6 1.2 1.4 - TOTAL $ 362.6 $ 397.5 $ 266.7 $ 108.4 $ 22.4 All City Funds 6 2013 Total 2014 Total Appropriated, Min. Policy, or Scheduled Available but with some Constraints Available for Nearly Any Purpose Assigned - Minimum 60 day Policy $ 20.9 $ 21.5 $ 21.5 $ - $ - Non-spendable Advances 5.0 5.3 5.3 - - Landbank inventory 3.0 3.0 3.0 - - Restricted TABOR Emergency 5.3 6.3 6.3 - - Police Programs 1.4 1.5 0.8 0.7 - Donations & Misc 0.7 1.1 - 1.1 - Economic Rebates 2.4 5.2 5.2 - - DDA/Woodward Debt 2.3 2.3 2.3 - - Committed - Traffic Calming 0.5 0.3 0.4 (0.1) - Culture & Recreation 0.2 0.2 0.2 Assigned - - - Prior Year Purchase Orders 4.5 4.9 4.9 - - Manufacturing Use Tax Rebate 0.3 0.5 0.5 - - Council Priorities 2014-16 Bud. 4.3 9.3 9.3 - - Council Priorities - 6.9 3.7 - 3.2 DPS/Comm System 0.1 0.1 - - 0.1 Camera Radar 0.9 0.8 0.2 - 0.6 Affordable Housing Land Bank 0.3 0.2 - 0.2 Waste Innovation 0.1 0.1 - 0.1 Reappropriation 0.9 1.2 1.2 - - Unassigned 7.6 3.3 - - 3.3 Year End Total $ 60.7 $ 74.0 $ 64.6 $ 1.9 $ 7.5 General Fund - Year End 2014 - $74.0 1.0 Police Training Fac. 0.7 Parking Meters 0.5 Transit Buses 0.5 Police CAD 0.5 Golf Irrigation Sys. 3.0 Lincoln Ave 0.3 Lincoln Neighborhood 0.4 FAC 7 General Fund Balances • $5.3 loaned to URA (Advances) • $3.0 is value of land held for resale in Landbank program • $6.3 is an emergency reserve required by TABOR, equal to 3% of qualified governmental revenue • $1.5 restricted to Police Programs; for Drug Task Force $660k, dispatch system replacement $0.9 • $1.1 restricted by donor for various purposes (Horticulture, Udall Endowment, etc) • $5.2 is restricted to Economic Incentive Rebates • $2.3 is for debt contingency on DDA debt obligation to Woodward • Traditionally fund balances are Assigned for camera radar and photo red-light, public safety dispatch system, Affordable Housing and Waste Innovation • $1.2 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) in General Government • Police monies used for debt on new police headquarters • Fire monies used to pay debt on Station #4 • $4.3 in planned for remaining 2 planned Community Parks, excluding S.E. Community Park 2013 Total 2014 Total Appropriated, Min. Policy, or Scheduled Available but with some Constraints Available for Nearly Any Purpose Committed General Government 6.6 7.6 2.7 4.9 Police 0.9 0.9 0.9 - Fire 0.3 0.8 0.8 - Community Parkland 11.0 12.5 8.2 4.3 Year End Total $ 18.8 $ 21.8 $ 12.6 $ 9.2 $ - Capital Expansion Fund - Year End 2014 - $21.8 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. 2014 revenue exceeded appropriations needed to make transfers. Will be addressed in annual year end adjustment ordinance in September 2015. 2013 Total 2014 Total Appropriated, Min. Policy, or Scheduled Available but with some Constraints Available for Nearly Any Purpose Restricted - BOB 1.3 2.1 2.1 - Natural Areas 1.3 2.2 2.2 - Year End Total $ 2.5 $ 4.3 $ 4.3 $ - $ - Sales & Use Tax Fund - Year End 2014 - $4.3 10 • Property tax based - 4.924 mill levy generates about $240 K annually • Contributing $1M to the Old Town Square Renovation in 2015 2013 Total 2014 Total Appropriated, Min. Policy, or Scheduled Available but with some Constraints Available for Nearly Any Purpose Committed Capital Improvements 0.9 1.2 0.9 0.3 Assigned Prior Year Purchase Orders 0.2 - - - Year End Total $ 1.1 $ 1.2 $ 0.9 $ 0.3 $ - General Improvement District #1 Fund - Year End 2014 - $1.2 11 • The $6.8 will be made available in the next BFO process 2013 Total 2014 Total Appropriated, Min. Policy, or Scheduled Available but with some Constraints Available for Nearly Any Purpose Restricted Street Maintenance 1.6 3.1 1.8 1.3 Other Transportation 4.8 4.4 3.4 1.0 Police Services 2.9 3.1 1.1 2.0 Fire & Emergency Services 0.5 0.5 0.1 0.4 Parks & Recreation 0.9 1.2 0.5 0.7 Other 2.1 2.6 1.2 1.4 Year End Total $ 12.8 $ 14.9 $ 8.1 $ 6.8 $ - Keep Fort Collins Great Fund - Year End 2014 - $14.9 12 • Monies collected on building permits, revenue varies greatly with development activity • $0.7 is for new Neighborhood Parklands 2013 Total 2014 Total Appropriated, Min. Policy, or Scheduled Available but with some Constraints Available for Nearly Any Purpose Committed - Neighborhood Parks 5.5 7.0 6.3 0.7 Assigned Prior Year Purchase Orders 0.1 0.1 0.1 - Year End Total $ 5.6 $ 7.1 $ 6.4 $ 0.7 $ - Neighborhood Parkland Fund - Year End 2014 - $7.1 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 2013 Total 2014 Total Appropriated, Min. Policy, or Scheduled Available but with some Constraints Available for Nearly Any Purpose Restricted Parks, Rec & Open Space Capital Imp 1.9 1.7 1.2 0.5 Year End Total $ 1.9 $ 1.7 $ 1.2 $ 0.5 $ - Conservation Trust Fund - Year End 2014 - $1.7 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 2043 • Revenue sharing to municipalities will drop from 58% to 50% beginning in 2019 • $8.3 to be appropriated in 2015 for potential land purchases. 2013 Total 2014 Total Appropriated, Min. Policy, or Scheduled Available but with some Constraints Available for Nearly Any Purpose Minimum Policy $ 0.2 $ - $ - $ - Restricted Natural Areas 9.1 9.9 0.4 9.5 Assigned Prior Year Purchase Orders 0.8 1.5 1.5 - Capital Projects - 0.7 0.7 - Year End Total $ 10.1 $ 12.1 $ 2.6 $ 9.5 $ - Natural Areas Fund - Year End 2014 - $12.1 15 • Accounts for Lincoln Center and other Cultural Service activites. • Their own revenues are about $2.5, and total expenses are $3.3. • Museum activity moved to their own fund in 2013. Residual fund balance moved to Cultural Service Fund in 2014, approximately $900k. 2013 Total 2014 Total Appropriated, Min. Policy, or Scheduled Available but with some Constraints Available for Nearly Any Purpose Minimum Policy $ 0.1 $ - $ - $ - Committed Art in Public Places 0.3 0.3 0.3 - Assigned Prior Year Purchase Orders 0.1 0.1 0.1 - Capital Projects 0.4 0.4 0.4 - Museum Portion 1.0 - - - Cultural Services Surplus 0.6 0.9 0.1 0.8 Year End Total $ 2.5 $ 1.7 $ 0.9 $ 0.8 $ - Cultural Services & Facilities Fund - Year End 2014 - $1.7 16 • Fees and charges cover about 85% of operating costs. 2013 Total 2014 Total Appropriated, Min. Policy, or Scheduled Available but with some Constraints Available for Nearly Any Purpose Minimum Policy $ 0.1 $ - $ - $ - Assigned Prior Year Purchase Orders 0.1 0.1 0.1 - Recreation Programs 0.1 0.1 - 0.1 Recreation Surplus 2.2 2.4 0.6 1.8 Year End Total $ 2.5 $ 2.6 $ 0.7 $ 1.9 $ - Recreation Fund - Year End 2014 - $2.6 17 2013 Total 2014 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 2014 - $0.5 18 • To be used to maintain the cemeteries once on-going operations cease. 2013 Total 2014 Total Appropriated, Min. Policy, or Scheduled Available but with some Constraints Available for Nearly Any Purpose Restricted Perpetual Care 1.7 1.7 - 1.7 Year End Total $ 1.7 $ 1.7 $ - $ 1.7 $ - Perpetual Care Fund - Year End 2014 - $1.7 19 • Balances and activity moved out of Cultural Services Fund. Desired better transparency because of partnership agreement with Museum non-profit. 2013 Total 2014 Total Appropriated, Min. Policy, or Scheduled Available but with some Constraints Available for Nearly Any Purpose Assigned Capital Projects 0.1 0.1 - Cultural Services Surplus 0.7 0.3 0.4 Year End Total $ - $ 0.8 $ 0.4 $ 0.4 $ - Museum Fund - Year End 2014 - $0.8 20 • Fund balances are used as a local match to FTA capital grants. • Deficit is result of purchases made in 2014 in anticipation of grant that was not fully finalized until early 2015. Federal reimbursement occurred in March 2015. 2013 Total 2014 Total Appropriated, Min. Policy, or Scheduled Available but with some Constraints Available for Nearly Any Purpose Minimum Policy $ 0.2 $ - $ - $ - Assigned Prior Year Purchase Orders 4.2 1.1 1.1 - Transit Surplus (0.9) 0.3 0.9 (0.6) Year End Total $ 3.5 $ 1.4 $ 2.0 $ (0.6) $ - Transit Fund - Year End 2014 - $1.4 21 • Monies are collected from developers, revenue varies greatly with development activity 2013 Total 2014 Total Appropriated, Min. Policy, or Scheduled Available but with some Constraints Available for Nearly Any Purpose Minimum Policy $ 0.1 $ - $ - $ - Restricted Street Oversizing Surplus 10.1 14.6 0.7 13.9 Assigned Capital Projects 1.0 0.7 0.7 - Year End Total $ 11.2 $ 15.3 $ 1.4 $ 13.9 $ - Street Oversizing Fund - Year End 2014 - $15.3 22 • $0.3 Capital Projects – Primarily Traffic Response Signal System • $0.8 Fiscal Agent – unspent capital leasing proceeds at year end • $0.9 limited to Civic Center Parking Garage per IGA with Larimer County • $5.3 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 to City • NOTE: Parking balances will move to their own fund in 2015 2013 Total 2014 Total Appropriated, Min. Policy, or Scheduled Available but with some Constraints Available for Nearly Any Purpose Minimum Policy $ 0.5 $ - $ - $ - Restricted - Fiscal Agent 0.5 0.8 0.8 - CC Parking Garage IGA 0.8 0.9 0.5 0.4 Assigned - Prior Year Purchase Orders 0.7 0.6 0.6 - Capital Projects 0.3 0.3 0.3 - DT Parking 0.6 0.6 0.4 0.2 Harmony Road 6.1 5.8 0.5 - 5.3 Transportation Surplus 5.5 9.8 2.3 - 7.5 Year End Total $ 15.0 $ 18.8 $ 5.4 $ 0.6 $ 12.8 Transportation Fund - Year End 2014 - $18.8 23 • BCC-Community Enhancements has $2.9 available for capital projects • Building on Basics (BOB) is expected to have $2.7 available for capital projects, after the projects are completed 2013 Total 2014 Total Appropriated, Min. Policy, or Scheduled Available but with some Constraints Available for Nearly Any Purpose Restricted - BCC-Streets 0.1 - - BCC-Community Enhancements 0.2 2.9 - 2.9 BCC-Natural Areas 0.1 - - - Building on Basics (BOB) 11.5 17.1 14.4 2.7 Assigned - General City Projects 9.1 4.5 4.5 - Year End Total $ 21.0 $ 24.5 $ 18.9 $ 5.6 $ - Capital Project Fund - Year End 2014 - $24.5 24 • New Policy Minimum is equal to 25% of operating expenses, excluding depreciation and non- renewable energy purchases • Approved but unencumbered capital projects include new Utility Administrative Building, Wood Street Renovations, Smart Grid, Substation Improvements, SW Enclave System, Underground Conversion Program and Art in Public Places. 2013 Total 2014 Total Appropriated, Min. Policy, or Scheduled Available but with some Constraints Available for Nearly Any Purpose Minimum Policy - 25% Operations $ 2.3 $ 7.2 $ 7.2 $ - Assigned Prior Year Purchase Orders 3.2 1.9 1.9 - Approved Capital Projects 15.0 20.1 18.9 1.2 Capital Improvements 34.0 - - - Capital Outlay 0.8 - - - Available for capital and operations - 27.4 9.0 18.4 Year End Total $ 55.3 $ 56.6 $ 37.0 $ 19.6 $ - Light & Power Fund - Year End 2014 - $56.6 25 • New Policy Minimum is equal to 25% of operating expenses, excluding depreciation 2013 Total 2014 Total Appropriated, Min. Policy, or Scheduled Available but with some Constraints Available for Nearly Any Purpose Minimum Policy - 25% Operations $ 1.5 $ 4.7 $ 4.7 $ - Restricted - Debt 0.3 0.3 0.3 - Assigned Prior Year Purchase Orders 2.1 0.5 0.5 - Approved Capital Projects 45.9 43.7 43.7 - Capital Improvements 13.2 - - - Capital Outlay 2.5 - - - Available for capital and operations - 12.1 7.4 4.7 Year End Total $ 65.5 $ 61.3 $ 56.6 $ 4.7 $ - Water Fund - Year End 2014 - $61.3 26 • New Policy Minimum is equal to 25% of operating expenses, excluding depreciation 2013 Total 2014 Total Appropriated, Min. Policy, or Scheduled Available but with some Constraints Available for Nearly Any Purpose Minimum Policy - 25% Operations $ 1.0 $ 2.9 $ 2.9 $ - Restricted - Debt 0.2 0.2 0.2 - Assigned - Prior Year Purchase Orders 0.3 0.4 0.4 - Approved Capital Projects 12.4 15.1 14.4 0.7 Capital Improvements 18.5 - - - Capital Outlay 0.7 - - - Available for capital and operations - 20.5 0.1 20.4 Year End Total $ 33.1 $ 39.1 $ 18.0 $ 21.1 $ - Wastewater Fund - Year End 2014 - $39.1 27 • New Policy Minimum is equal to 25% of operating expenses, excluding depreciation 2013 Total 2014 Total Appropriated, Min. Policy, or Scheduled Available but with some Constraints Available for Nearly Any Purpose Minimum Policy - 25% Operations $ 0.7 $ 1.5 $ 1.5 $ - Restricted Debt 0.3 0.3 0.3 - Assigned Prior Year Purchase Orders 0.2 0.2 0.2 - Approved Capital Projects 8.1 14.3 10.9 3.4 Capital Improvements 6.7 - - - Capital Outlay 1.2 - - - Available for capital and operations - 3.3 1.4 1.9 Year End Total $ 17.2 $ 19.6 $ 14.3 $ 5.3 $ - Storm Drainage Fund - Year End 2014 - $19.6 28 • Equipment Replacement – $0.5 is for replacement of vehicles and equipment for Police, Forestry and Parks 2013 Total 2014 Total Appropriated, Min. Policy, or Scheduled Available but with some Constraints Available for Nearly Any Purpose Minimum Policy - 8.3% Operations $ 0.2 $ 0.8 $ 0.8 $ - Assigned - Prior Year Purchase Orders 0.3 0.3 0.3 - Equipment surplus 1.8 1.9 - 0.5 1.4 Year End Total $ 2.3 $ 3.0 $ 1.1 $ 0.5 $ 1.4 Equipment Fund - Year End 2014 - $3.0 29 2013 Total 2014 Total Appropriated, Min. Policy, or Scheduled Available but with some Constraints Available for Nearly Any Purpose Minimum Policy - 25% Operations $ 0.1 $ 1.0 $ 1.0 $ - Committed - Self Insurance surplus 3.4 0.6 0.6 - Assigned - Prior Year Purchase Orders 0.1 0.2 0.2 - Year End Total $ 3.6 $ 1.8 $ 1.8 $ - $ - Self Insurance Fund - Year End 2014 - $1.8 • New Policy Minimum is equal to 25% of operating expenses • Loss fund reserves have declined significantly over the last 7 years due to a major settlement and using reserves during the recession 30 2013 Total 2014 Total Appropriated, Min. Policy, or Scheduled Available but with some Constraints Available for Nearly Any Purpose Minimum policy $ 0.1 $ - $ - $ - Assigned Prior Year Purchase Orders 0.6 0.3 0.3 - Data & Communication Surplus 0.7 1.0 0.3 - 0.7 Year End Total $ 1.4 $ 1.3 $ 0.6 $ - $ 0.7 Data and Communications Fund - Year End 2014 - $1.3 31 • The charges to departments have been reduced slightly to use up some of the fund balance. This continues through 2016. • New Policy Minimum is equal to 30% of medical and dental expenses 2013 Total 2014 Total Appropriated, Min. Policy, or Scheduled Available but with some Constraints Available for Nearly Any Purpose Policy minimum - 30% Operations $ 0.4 $ 5.3 $ 5.3 $ - Assigned - Medical Claims 9.7 - - Dental Claims 0.4 - - Benefit Surplus - 2.5 0.3 2.2 - Year End Total $ 10.5 $ 7.8 $ 5.6 $ 2.2 $ - Benefits Fund - Year End 2014 - $7.8 32 • The last couple of years USC has reduced fees to the four utility funds with intent of using some of this fund balance. Another $400k of reserves per year are planned to be used in 2015-16. 2013 Total 2014 Total Appropriated, Min. Policy, or Scheduled Available but with some Constraints Available for Nearly Any Purpose Policy minimum $ 0.3 $ - $ - $ - Assigned - Prior Year Purchase Orders 0.6 0.4 0.4 - Approved Capital projects 0.2 - - - Unrestricted 1.2 2.2 0.8 1.4 Year End Total $ 2.3 $ 2.6 $ 1.2 $ 1.4 $ - Utility Customer Service Fund - Year End 2014 - $2.6 entities Diminishes confusion for retailers Revenue loss from orgs who do not currently qualify* *Difficult to quantify – in many cases City not capturing revenue currently because vendors accept State exemption when purchases made.