HomeMy WebLinkAboutAgenda - Mail Packet - 4/19/2016 - Council Finance Committee And Ura Finance Committee Agenda - April 18, 2016Council Finance Committee & URA Finance Committee
Agenda Planning Calendar 2016
RVSD 04/02 mnb
Apr 18 TOPIC TIME WHO
CFC
RMI – Business & Refinancing Update 30 min M. Freeman
Utility CIP & LTFP Review 60 min L. Smith
CML Tax Code Definitions 15 min T. Smith
Unclaimed Financial Asset: Recommended Code Modifications 15 min J. Voss
May 16 TOPIC TIME WHO
CFC
Mental Health & Substance Use 30 min C. Block
Science & Cultural Facilities District 30 min C. Donaldson
Revenue Diversification Recommendations 30 min T. Smith
Vine / Lemay / BNSF project 30 min T. Kemp
URA
June 20 TOPIC TIME WHO
CFC
Hourly Positions to Classified 30 min K. DiMartino
Career Progression & Compensation 30 min K. DiMartino
Downtown Parking 30 min K. Ravenschlag
Wastewater Bond Refinancing 15 min J. Voss
URA
July 18
Capital Expansion Fee - Revision 30 min T. Smith
2015 Year End Fund Balances 30 min T. Storin
2015 Year End Financial Summary 30 min T. Storin
URA
Future Council Finance Committee Topics:
CAP Financing Strategies
Parking Garage Financing
Benefits - Historical Forecast Accuracy & Possible Plan Changes – July or August
Full Time Hourly Administrative Position Changes (2017-18 Offers)
Compensation & Total Rewards
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
April 18, 2016
9:30 – 11:30 a.m.
CIC Room – City Hall
Approval of the Minutes from the March 22, 2016 meeting
1. RMI – Business & Refinancing Update 30 minutes M. Freeman
2. Utility CIP & LTFP Review 60 minutes L. Smith
3. CML Tax Code Definitions 15 minutes T. Smith
4. Unclaimed Financial Asset: Recommended Code Modifications
15 minutes J. Voss
OTHER BUSINESS:
1. Scheduling for future meeting on HR benefits and compensation philosophies
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
03/22/16
7:30 – 9:00 a.m.
CIC Room
Council Attendees: Mayor Wade Troxell, Gerry Horak, Ross Cunniff
Staff: Darin Atteberry, Tyler Marr, Mike Beckstead, John Duvall, Tiana Smith, Kelly
DiMartino, Chris Martinez, Blaine Dunn, Kristi Hess, Steve Engemoen, Travis
Storin, Noelle Currell, Claire Turney, Lawrence Pollack, Carrie Daggett, Jeff
Mihelich, Jamie Heckman, Andres Gavaldon
Others:
Absent:
Meeting started at 7:30 am
APPROVAL OF MINUTES
Gerry Horak made a motion to approve the February 22, 2016 Council Finance Committee minutes.
Ross Cunniff made a second to the motion. The minutes were approved unanimously.
BFO ASSUMPTIONS FOR SALES TAX GROWTH, BENEFITS COSTS AND SALARY ADJUSTMENTS
In 2016 the City will again use Budgeting for Outcomes (BFO) to prepare the City Manager’s
Recommended Budget for 2017-18. Key assumptions are established at the beginning of the process
and will be reviewed with Council Finance.
A. BFO ASSUMPTIONS – SALES TAX GROWTH
Tiana Smith presented the BFO Assumptions for Sales Tax Growth.
• During the largest recession in the recent past of 2008-2009, sales tax collection decreased
3.84%. Population growth contributes to our stability.
• Use tax is volatile and difficult to predict.
• Development in Fort Collins is projected to slow but continue in 2017.
• Several economic factors were considered (quantitative and qualitative), looking both
historically and forward, to understand the relationship to sales and use tax growth.
2
Per Mike Beckstead: we don’t have a lot of data in order to forecast with except for CPI & GDP.
Sales Tax Forecast options considered:
• Option 1: 2017 forecast is 3% growth and in 2018 is 2% growth.
o The Sales tax growth average since 2008 has been 2.8%.
o The plan is to assign $4.4M of the General Fund reserves to hedge against the potential
of an upcoming recession.
• Option 2: 2017 forecast is -1% growth and in 2018 is 0% growth.
o This is the worst case scenario.
o This is anticipating a recession that will hit in late 2016.
o This would result in a reduction in services.
Darin Atteberry comment: he thinks this is very important and input is wanted from the committee.
Tiana Smith and Mike Beckstead are putting forward choosing option is #1. The $4.4M estimate comes
from the “lost” revenue between the two forecasts. This assignment of $4.4M would allow the City to
use general fund money to make up the lost revenue due to a recession.
Gerry Horak comment: We should remove the 90% confidence level wording and rephrase it as
pessimistic or strongest confidence level. It should be a qualitative term.
Ross Cunniff asked if the projections/correlations were used to analyze past data. Tiana Smith said
that they did and there was no single factor that was a perfect correlation. Ross asked for more
information on how confident we are with the assumption numbers to get at the $4.4M.
Ross Cunniff asked about the Mall and its impact on these numbers. Mike Beckstead responded that it
acts like a buffer against worst case forecasts.
Ross Cunniff asked if there is some sort of model that we could use instead of, or in addition to, the
analysis that was used. Mike Beckstead responded that when he first started with the City there was a
model that was not very accurate. This analysis is not a model, but it is a good best estimate.
Gerry Horak wondered if this estimate includes the possibility of slowing building due to a recession.
Mike Beckstead responded that he is having those discussions to anticipate what is needed.
Support for Option #1 was given by the committee.
B. BFO ASSUMPTIONS – BENEFITS COST
Kristi Hess and Steve Engemoen presented the BFO Assumptions for the Benefits Cost. Premiums, plan
design, claims, along with employer and employee cost are looked at to do the analysis. There are 3
3
primary sources for market data: Mountain States Employers’ council, Mercer national survey and
Benergy survey. Claims and prescriptions have increased over the past 5 years, but it looks like that
will level off as of 2016. Current policy states the Benefits Fund must maintain a 30% reserve of
medical and dental expenses. The current shortfall in the reserve is $200K. There is a projected
increase to employees over the next few years to get to the 70/30 split that the City wants to maintain.
The increase in 2017 will be 10.5% for employees and 9% for the City and in 2018 will be 10% for
employees and 5% for the City.
A Request for Proposal (RFP) for a carrier review will occur in 2016, this may result in a carrier change
that could reduce cost.
Darin Atteberry comment: Self-insurance has been a deliberate path for the City. This is not the first
time the deliberate effort was done; it’s more of a continuous improvement process. We don’t want
to get too skewed from the market both on salary or benefits.
Ross Cunniff question: Could we put some plus or minus on the budget before final approval? Ross
would like to see a range. Mike Beckstead said they will conduct some research and get back to the
committee.
Ross Cunniff question: Is 70/30 split a policy? Kelly DiMartino comment: market comparison is
premium market split. It does not reflect total cost share. We would like to look at total cost share.
The 70/30 is not a policy; rather, it is a decision that was made for what “felt” fair. Kristi Hess
responded: new survey data is coming out late spring/early summer that we can use to re-evaluate this
split.
Gerry Horak question: What is our policy? Is it market? Need to look at data that compares to
organizations that are a similar size of the City. Using the employee only is not accurate as most
people in the City who use benefits are employee plus family. Kristi Hess responded: from the data we
are using, most employers use an 85/15 split for employee only plans. Looking at an overall plan cost,
that is where the City has decided to adopt the 70/30 split.
Gerry Horak comment: we need to choose an index and track that over time.
Mike Beckstead comment: when there is a higher cost, the City absorbs it, when there is a lower cost,
the fund balance remains healthy. Risk is on City’s side.
Gerry Horak question: do we circle back to check our accuracy? I.E. Are we off by 2% contribution on
City or Employee side when we forecast? Why should tax payers have to subsidize us getting
somewhere? Why don’t we have a specific policy and why aren’t we presenting a path to get there?
Darin Atteberry comment: market is the driver… and it is moving. We are striving to meet that moving
target. Which market are we comparing to? We are taking market comparisons and saying “is this a
fair competitive share? We are not the highest and we are not the lowest.”
4
Gerry Horak comment: We need a specific method, whether it is weighted average, average, a
pinpoint, etc. Is the City picking up too much of the share? Argument could be given that employees
are picking up too much?
Darin Atteberry: We don’t want to get too precise on methodology as it may back us into a corner.
Team will come back with more updates. Show explicitly what we are working towards.
What will Team come back with?
• Hone in more on data and methodology behind the data
• Relate the data better to City’s plan and philosophy
• Come back with historical data on the split and show the trend
C. BFO ASSUMPTIONS – SALARY ADJUSTMENT
Kelly DiMartino, Chris Martinez and Blaine Dunn presented the BFO Assumptions for the Salary
Adjustment. Within the last year there was a change made for pay increases from forced distribution
to giving discretionary increase decisions to the Service Area Directors. The factors used for pay
increases are performance (results & behaviors) and position (reclassifications) and range (within the
position).
Gerry Horak question: Do we use one time award bonuses as opposed to always increasing wages?
Kelly DiMartino response: we use them sparingly right now, although we are looking to expand use.
Data was gathered at both the private and public sector for market comparisons. They initially looked
at multiple factors over a 15 year timeframe (2000-2015) to gage what our salary increase should be.
Methodologies using the Employment Cost Index (ECI) shows an increase of 2.7%-3.47% for
2017/2018. The average 2016 salary budget of peer cities is 2.87%, which is higher than our 2% salary
adjustment. Mike Beckstead comment: the recommendation for the budgeted increase is 2.5% for
2017/2018 at the current time. If something changes due to a recession, we want to keep the option
open to revisit this recommendation.
Ross Cunniff comment: providing the spreadsheet he received last week every year would be beneficial
to Council.
Gerry Horak question: Why is there a difference between the sales tax projections and this salary
adjustment? Mike Beckstead response: There are different methodologies used for Sales Tax
forecasts based on our prior historical data. Sales Tax needs a high degree of confidence and we are
not trying to peg to GDP or CPI, but base the projections on our historical experience. Gerry Horak
comment: Logic between Salary increases and Sales Tax should be the same.
Ross Cunniff comment: Make budgeted increase v. actual employee compensation changes clear to
Council.
5
Gerry Horak comment: We should set up some type of cloud database for peer cities to share this type
of data. Avoid 10 cities all calling each other. The City could provide leadership here.
OTHER DISCUSSIONS:
Kelly DiMartino presented: There is a personnel item that will come forward in the budget. The
Affordable Care Act impacts compensation & benefits for full time hourly employees. Roughly 156
positions will be proposed to become classified. There is an approximately $2.7M per year impact.
Kelly DiMartino indicated that we will be very transparent on how it plays out and is reflected in BFO
Offers.
Ross Cunniff question: Did we look at other options? I.E. having more part time hourlies as opposed to
converting full time hourlies? Kelly DiMartino response: We are unique in the number of permanent
full-time hourlies we were using. Going forward we cannot hire full-time hourly, we will have to hire
part-time, seasonal or classified.
Meeting Adjourned at 9:00 am
COUNCIL FINANCE COMMITTEE
AGENDA ITEM SUMMARY
Staff: Mike Freeman (Innosphere)
Date: 4/18/16
SUBJECT FOR DISCUSSION (a short title)
Update on Innosphere operations and update for City Council Finance Committee.
EXECUTIVE SUMMARY (a brief paragraph or two that succinctly summarizes important
points that are covered in more detail in the body of the AIS.)
Innosphere is a 501 (c)3 technology incubator founded by the City of Fort Collins and CSU in
1998. We provide services for technology startups focused mainly in the Front Range of
Colorado.
Innosphere mission: we create economic impact and power the innovation ecosystem by
supporting high growth technology startups in Colorado. Our niche is working with science and
engineering focused startups.
GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED
(Work session questions should be designed to gather direction from Council without requiring
Councilmembers to make a decision.)
This is an update on Innosphere operations. No action is being sought.
BACKGROUND/DISCUSSION (details of item – History, current policy, previous Council
actions, alternatives or options, costs or benefits, considerations leading to staff conclusions, data
and statistics, next steps, etc.)
The City of Fort Collins is a significant partner of Innosphere and has been a financial and
otherwise major backer of the organization since its inception in 1998. The briefing will provide
an update to City Council on recent Innosphere activities and will focus on providing an update
to the Council Finance Committee on four specific topics:
• Innosphere expansion
• Innosphere funding
• Innosphere building financing
• Diversification strategies for revenue
ATTACHMENTS
1. RMI – Business & Refinancing Update Power Point
INNOSPHERE OVERVIEW
ACCELERATING JOB CREATION AND
ENTREPRENEURSHIP
We create economic impact and power the
innovation ecosystem by supporting high growth
technology startups in Colorado.
Our niche is working with science and
engineering focused startups.
INNOSPHERE
INNOSPHERE OFFICES
3
Innosphere’s Strategy
Attract
15+ New
Clients/
Year
Incubate
35+ Total
Clients/
Year
Graduate
10+ Total
Grads/
Year
Financial Sustainability
50-75%
Organizational Evolution
Virtual
Software
FC Only
FCTI
Space
Mult./Tech
No. CO
Impact
RMII
New Bldg.
Sector Focus
NC/Golden
Impact
RMI
Operations
Focused
Colorado
Consistency
Innosphere
1998-2005 2006-2009 2010-2013 2014-2015+
Health Innovation
Energy & Advanced Materials
Software/Hardware
INNOSPHERE INDUSTRIES
Digital Health – Medical Device - Diagnostics
Water – Cleantech – Transportation
Sensors – Internet of Things – Enterprise Software
Family Office, Venture Capital and
Corporate Strategics Lead the Way
Total capital raised by current clients
and 2015 graduates.
Second highest level of job creation in
our history.
Highest number of graduate
companies in our history!
$86.3M
Cumulative
$31.8M
Capital
268
Jobs
18
Grads
2015 Metrics
Family Office, Venture Capital and
Corporate Strategics Lead the Way
Total capital raised by current clients
and 2015 graduates.
Second highest level of job creation in
our history.
Highest number of graduate
companies in our history!
$17.4M
Cumulative
$3.7M
Capital
41
Jobs
6
Grads
2015 Metrics – Fort Collins Graduates
Graduate Companies
Our most important metric of success.
Graduate companies create the most
economic impact.
Cumulative Metrics 2009 - 2015
Jobs Created
An important outcome of the
Innosphere program. Often times the
key metric for our funders.
Capital Raised
Capital is one of the most important
startup metrics. Companies raise
funding from a variety of sources.
Revenue Generated
A short-term metric of success for
startups that often dictate how much
funding they can raise and how much
traction they can gain.
1409
Jobs
52
Grads
$220M
Capital
$63M
Revenue
We are an Impact Organization
START APPLICATION REVIEW ADMISSIONS ONBOARDING CLIENT/
ACTUATOR
ONGOING
SERVICE
Phase 01
Becoming an Innosphere
client starts with an initial
online application.
Phase 02
The review focuses on market
& technology readiness and
your starting team.
Phase 03
We agree to move forward to the
last step which is an admissions
interview with outside advisors.
Phase 04
We focus on early success and
traction through acquisition of
customers, capital, and talent.
Onboarding lasts 2 months.
Phase 05
We mutually commit to work
together for up two years. You
access all of Innosphere’s services.
Phase 06
We focus on growing the business
and meeting key milestones. You
graduate Innosphere based hitting
targets of success.
Client Application Process
No Market Need
Tackling problems that are interesting
to solve rather than those that serve a
market need.
Out of Cash
Running out of cash was often tied to other
reasons for startup failure into product-market
fit and failed pivots.
Team
A diverse team with different skill sets
was often cited as being critical to the
success of a starting a company.
Competition
Despite the belief that startups shouldn’t pay
attention to the competition, the reality is that
once an idea gets hot or gets market validation,
there may be many entrants in a space.
42%
28% 25%
18%
Onboarding Addresses Key Risk Factors
CB Insights
Investor Readiness is the Primary Outcome
Launch Well Customers Capital Team Investor Ready
Onboarding Program Focus Areas
Customers
1. Exit Strategy
2. Refined executive summary
3. Customer acquisition strategy
4. Corporate connectivity needs Talent
1. Team Matrix
2. Board Strategy
3. PR Plan
4. Go-to-market
5. Pitch deck
Capital
1. Equity Model
2. M&A Landscape
3. Capital Plan
4. Executive Summary
Launch
1. Personal Goals
2. IP Strategy
3. Analogs, Antilogs, Leap of
Faith or BMC
Onboarding Program Deliverables
Development Plan
INNOSPHERE CLIENT COMPANY PATHS TO SUCCESS
14
HQ Company • Goal is to build and operate the business on an
extended basis
Early Exit • Goal is to create an early exit and there are significant
gaps in the management team
Venture Backed • Goal is create a high growth venture backed company
that has large capital requirements
Onboarding Program
The onboarding program guides new companies
through a structured process of evaluation and
deliverables that lead to investment ready stage.
Customer/Market/Competitor Research
Client companies need regular and ongoing strategic
information to shape their business. Our team
supports research and analysis needs.
Access to Capital
Raising capital can be a long and frustrating process.
Our team works to make this process as efficient and
effective as possible.
Corporate Ventures
Startups need to access corporates for insight, to gain
customer relationships, and eventually an exit. We
connect you with companies of interest.
PR/Communication
Raising the profile of your startup in the early stages is
important. Strategies for promoting your business and
getting the word out are key.
Exit Strategy & Planning
Our Early Exit program is a first of its kind. For
companies that are ready and are aligned, this program
may be for you.
Innosphere Core Programs
Advisors, Mentors, Technical Resources
Connecting you early with aligned advisors, mentors,
and resources needed by startup companies is a core
program.
SAGE
Advisors
Executive
Advisors
Preferred
Providers
Service
Providers
Product
Discounts
Volunteers to
help you with
specific issues
“C” level
ongoing
assistance
Closely
connected
partners
Vetted service
provider DB
for clients
Products and services
designed for SU’s
Innosphere Resources: Advisors, Partners & Providers
Networking
/Education
Ongoing
engagement
and education
Innosphere Client Company Business Model
17
1. Formal application process
2. Annual client fee of $5000 – billed after onboarding session
3. No blanket equity to participate
4. Early Exit program equity participation
Start the application: www.innosphere.org/apply
Mike Freeman
CEO, Innosphere
mike@innosphere.org
(970) 818-7736
18
Update Item One: Innosphere Expansion
19
• 2013 Innosphere expands to NREL – Golden
• Innosphere assumes Clean Launch program
• 2014 Innosphere opens Industry office – Denver
• Office opens to accommodate Denver clients
• 2015 Innosphere moves to Commons – Denver
• Office moved to City of Denver location
2016 Funding Breakdown
20
Fort Collins
City of Fort Collins 60,000
Bank Partner 50,000
NoCoBio 30,000
PRPA 20,000
Bank Partner 15,000
Bank Partner 15,000
Sub-total 190,000
Not Dedicated
Client Fees 150,000
Corporate Partners 90,000
CSU/CSUV 65,000
City of Denver 50,000
Bank Partner 50,000
Canada Program 50,000
Turkey Program 50,000
Family Office 30,000
Bank Partner 25,000
Family Office 25,000
Family Office 25,000
Corporate 25,000
Corporate 25,000
Corporate 25,000
City of Loveland 20,000
Family Office 10,000
Sub-total 565,000
Update Two: Innosphere Properties
21
• Building financing:
• $1.8M New Market Tax Credits
• $2.8M URA funding
• 2017 building refinancing in process
• Refinance URA/City of Fort Collins debt by December 2016
• Outstanding debt approximately $2.5M
• Fundraising program launches
• 2016 goal identify approximately $1M in capital commitments
Update Three: Revenue Diversification
22
• 2013 – implemented higher client fees
• 2014 – fundraising focus on Denver
• 2015 – developed corporate partner program
• 2015 – launched early exit program
CLIENT COMPANY PATHS TO SUCCESS
23
HQ Company • Goal is to build and operate the business on an
extended basis
Early Exit • Goal is to create an early exit and the management
team is in place
Venture Backed • Goal is create a high growth venture backed company
that has large capital requirements
Equity Model and Transaction Fee
24
• Annual fee: $5,000
HQ’s & VC’s • Innosphere Equity: 1-3%
• Annual fee: $5,000/$10,000
Early Exit • 5+% Equity/Transaction Fee
WORK SESSION
AGENDA ITEM SUMMARY TEMPLATE
Staff: Lance Smith, Utilities Strategic Financial Director
SUBJECT FOR DISCUSSION – Utilities 2016 Capital Improvement Plans and Strategic Financial Plan
Update
EXECUTIVE SUMMARY
The purpose of this agenda item is to provide the Council Finance Committee with an overview of the
planning processes underway within Fort Collins Utilities. The 2016 Capital Improvement Plans (CIPs)
and the process behind them are outlined. The resulting investment projections set the stage for a follow
up discussion in a few months on the long term Utilities Strategic Financial Plan.
The 2016 CIPs have been prioritized in a consistent, quantitative process for the water, wastewater and
stormwater utilities. The 2016 CIP for the electric utility is based largely on a 20 year load assessment
completed earlier this year with Leidos. It is expected that the quantitative prioritization process will be
utilized for the electric utility ahead of the next budget cycle.
Each of these plans is projecting substantial capital investment being needed for each utility over the next
decade. Because the projected levels of investment are not achievable through current operating
revenues alone it will be necessary to further analyze the best means of achieving these operational
needs without negatively impacting the financial integrity of the utilities while maintaining affordable
utilities to the community. This analysis and the long term Utilities Strategic Financial Plan will be the
focus of the follow up discussion in a few months.
GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED
1. Does the Council Finance Committee support proceeding with the analysis and publication of a
long term Utilities Strategic Financial Plan for each utility within the next few months?
2. Does the Council Finance Committee support the Utilities Strategic Financial Plan assumptions?
BACKGROUND/DISCUSSION
The capital investment required to operate and maintain each of the four utility services provided by the
City to the community requires a long planning horizon and consistent needs assessment and
prioritization in order to ensure that the levels of service established are sustained well into the future.
This process begins with periodically developing and updating Operational Master Plans for each utility.
These plans assess current infrastructure for needs and risks and review expected growth and regulatory
requirements. The Master Plans generate a list of recommended capital projects over the planning
horizon which are then included in the Capital Improvement Plans. The Utility Asset Management
program has developed a rigorous process to identify and prioritize necessary capital investments. This
prioritized list includes the annual capital investment which becomes an input into the long term Strategic
Financial Plan. The financial position of each utility is also reviewed in this step with the output being a
recommended path forward which may involve rate adjustments and future debt issuances in order to
achieve the operational objectives and needs of each utility.
Capital Improvement Plans
Capital Improvement Plan Prioritization Process
The list of projects identified through the Master Planning process serve as a basis for the Capital
Improvement Plans (CIPs) being presented here. These projects are prioritized through the process
outlined in the following flow diagram:
Assess Operational
Needs / Risks
Determine Optimal
Solutions &
Mitigations
Identify Anticipated
Capital Projects Over
Planning Horizon
Establish Capital
Project Prioritization
Criteria
Determine Relative
Weighting of Criteria
Prioritize Projects with
Criteria
Review Financial
Position of Each Utility
Determine Capital
Investment
Capacities
Recommend
Financial Strategy to
Achieve Operational
Objectives
Master
Planning
Capital
Improvement
Planning
Strategic
Financial
Planning
Confirm
Prioritization
Criteria
Prioritization
Criteria Rating
Confirm List of
Projects
Rate Projects
Against Criteria
First Prioritized
List of Projects
Review & Adjust if
Necessary
Final List of
Prioritized
Projects
CPRC Review of
Framework &
Projects
Allocate Capital
Dollars to Projects
Determine
Schedule Based
This process involves many stakeholders throughout the Utilities organization from field and facility staff
to the Executive Director. Throughout the Master Planning and CIP development quantitative analysis is
utilized in the assessment of all capital projects. Industry benchmarking, engineering analysis, and Asset
Management Plans are incorporated wherever possible in the processes.
In 2014, a Capital Project Review Committee (CPRC) was created within the Utilities Service Area to
review the project prioritization prior to budget offers being submitted for the Budgeting for Outcomes
process. The CPRC is composed of the following positions:
• Executive Director
• Utilities Strategic Finance Director
• Water Resources Treatment Operations Manager
• Water Engineering & Field Services Manager
• Light & Power Operations Manager
The CPRC is responsible for reviewing and approving the capital project prioritization for each enterprise
fund prior to submitting funding requests to the City’s bi-annual Budgeting for Outcomes (BFO) process.
The process outlined above was first utilized for the 10 year CIPs for the three wet utilities in 2014. This
process has been utilized again for the 2016 CIPs for these utilities. While significant progress has been
made in socializing asset management in the electric utility, there was first a need to complete a 20 year
load and capacity study for the electric distribution system before implementing such a process in 2016.
For the 2016 electric utility CIP preliminary allocations were made to asset categories for system renewal,
known annexations were scheduled and the system capacity additions identified the Leidos study were
included. It is fully expected that the process outlined above will be utilized for the electric utility ahead of
the next budget cycle.
The CPRC has reviewed and approved the initial 2016 Capital Improvement Plans for each of the four
utilities. While the 10 year assessment of available capital may require a change in the timing of some
capital investments over the next few months as the Strategic Financial Plans are finalized, the most
immediate capital needs will be submitted through the Budgeting For Outcomes process for the 2017-18
City Budget.
The prioritization criteria identified and weighted by management and a group of subject matter experts
from the water, wastewater and stormwater utilities are:
Relative Weights
Operational Objectives 502 - Water Fund
503 - Wastewater
Fund
504 - Stormwater
Fund
Safety 38% 36% 52%
Regulatory Compliance 29% 24%
Reliability 13% 24% 22%
Sustainability 4% 9% 16%
Customer Satisfaction 7% 7% 10%
Product Quality 9%
Given the City’s commitment to safety and regulatory compliance, these two criteria were weighted the
most heavily in the project prioritization followed by reliability. The relatively low ranking of customer
satisfaction and product quality reflect the previous efforts in both of these categories and the confidence
that both will remain strong into the future mainly through operational practices rather than capital
investments.
10 Year Capital Projections
The 10 year CIP for the Light & Power Fund consists of projects needed to provide adequate substation
and distribution capacity to developing areas of the City, anticipated annexations including the Mulberry
Corridor, operational technology improvements and system renewal of existing substations and
underground distribution assets.
The Mulberry Annexation is expected to cost this utility $15M in asset acquisition and integration costs
over several years with some of the preliminary work potentially starting as soon as 2018 ahead of the
annexation itself to minimize acquisition costs. Two new substations will also be required in 2022 and
2023.
The 10 year CIP for the Water Fund includes the construction of the Halligan Reservoir in 2019-20, an
additional treated water storage facility in 2022 and significant renewal costs for the Poudre Pipeline in
the Poudre Canyon potentially starting in 2018. It also includes significant investment in the distribution
system throughout the City as the renewal rate for the distribution assets is increased. Significant
investment has been made in the Water Treatment Facility since its expansion in 1999 allowing for more
attention to be given to the source of supply and distribution systems over the coming decade.
501 - Light & Power
Project or Program 2017 2018 2019 2020 2021
Substation Improvements $ 445,000 $ 590,000 $ 750,000 $ 620,000 $ 605,000
Distribution System Improvements $ 2,950,000 $ 2,536,000 $ 2,843,000 $ 3,452,000 $ 3,263,000
New Capacity $ 4,654,000 $ 3,628,000 $ 1,034,000 $ 1,770,000 $ 2,970,000
Annexations $ 140,000 $ 3,015,000 $ 3,000,000 $ 3,000,000 $ 3,000,000
Operational Technology & Fiber $ 3,150,000 $ 2,027,000 $ 159,000 $ 161,000 $ 163,000
Total $ 11,339,000 $ 11,796,000 $ 7,786,000 $ 9,003,000 $ 10,001,000
Project or Program 2022 2023 2024 2025 2026
Substation Improvements $ 440,000 $ 440,000 $ 440,000 $ 315,000 $ -
Distribution System Improvements $ 1,785,000 $ 1,839,000 $ 1,894,000 $ 1,950,000 $ 2,008,000
New Capacity $ 7,550,000 $ 13,370,000 $ 3,304,000 $ - $ -
Annexations $ 3,000,000 $ - $ - $ - $ -
Operational Technology & Fiber $ 165,000 $ 167,000 $ 169,000 $ 171,000 $ 173,000
Total $ 12,940,000 $ 15,816,000 $ 5,807,000 $ 2,436,000 $ 2,181,000
The 10 year CIP for the Wastewater Fund consists of increased funding for replacement of the collection
system assets over the next decade and some significant investments in asset improvements over the
next few years at the Water Reclamation Facility. Not shown below are the expected costs associated
with additional nutrient removal regulations that are anticipated just beyond the next decade but which are
anticipated to cost between $70-90M soon thereafter. This expense will be included in the financial
analysis incorporating this CIP.
The 10 year CIP for the Stormwater Fund reflects several large infrastructure projects yet to be built,
including over $100M in a 4 year timespan (2019-2022). It is unlikely that the financial position of this
utility will accommodate such spend over 4 years so further analysis will need to be completed and the
operational impacts of delaying some of this investment analyzed further.
502 - Water
Division 2017 2018 2019 2020 2021
Water Production $ 4,046,000 $ 12,821,000 $ 3,174,000 $ 2,535,000 $ 1,000,000
Water Distribution $ 6,957,000 $ 4,610,000 $ 4,537,000 $ 6,483,000 $ 6,757,000
Water Resources $ 553,000 $ 555,000 $ 13,135,000 $ 14,417,000 $ 2,680,000
Environmental Services $ 1,455,000 $ 1,350,000 $ 50,000 $ 50,000 $ 50,000
Total $ 13,011,000 $ 19,336,000 $ 20,896,000 $ 23,485,000 $ 10,487,000
Division 2022 2023 2024 2025 2026
Water Production $ 16,771,000 $ 3,395,000 $ 14,031,000 $ 1,000,000 $ 1,000,000
Water Distribution $ 6,315,000 $ 7,311,000 $ 7,251,000 $ 7,251,000 $ 7,251,000
Water Resources $ 216,000 $ 222,000 $ 228,000 $ 237,000 $ 183,000
Environmental Services $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000
Total $ 23,352,000 $ 10,978,000 $ 21,560,000 $ 8,538,000 $ 8,484,000
503 - Wastewater
Division 2017 2018 2019 2020 2021
Water Reclamation $ 7,810,000 $ 10,880,000 $ 5,733,000 $ 3,540,000 $ 3,050,000
Wastewater Collection $ 2,050,000 $ 2,570,000 $ 3,202,000 $ 3,048,000 $ 2,907,000
Environmental Services $ 355,000 $ 30,000 $ 50,000 $ 50,000 $ 50,000
Total $ 10,215,000 $ 13,480,000 $ 8,985,000 $ 6,638,000 $ 6,007,000
Division 2022 2023 2024 2025 2026
Water Reclamation $ 3,050,000 $ 2,050,000 $ 2,050,000 $ 2,259,500 $ 5,362,000
Wastewater Collection $ 3,383,000 $ 3,276,000 $ 3,889,000 $ 4,123,000 $ 3,980,000
Environmental Services $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000
Total $ 6,483,000 $ 5,376,000 $ 5,989,000 $ 6,432,500 $ 9,392,000
Operating Revenues Available for Capital Investment
Each utility collects operating revenues through monthly charges to its ratepayers. These revenues are
used to operate and maintain each utility including making capital investments in system renewal and
improvements. The chart below looks at the 2015 realized operating revenues for each of the four utilities
and highlights the amount of operating revenue that was available for such capital investments.
The asterisk denotes that for the electric utility the portion of the operating revenue that is necessary to
pay for the purchased power expenses from Platte River and the portion of the Payments In-Lieu of
Taxes (PILOTs) associated with this expense have been removed to show how the remaining portion of
the operating revenues available to Utilities was allocated. This represents 77% of the total operating
revenues collected from electric customers, or $90.4M of the $117.5M total operating revenue. Platte
River allocates those revenues across many of the same categories separately.
Category 2017 2018 2019 2020 2021
Major Capital $ 5,750,000 $ 6,510,000 $ 25,500,000 $ 22,750,000 $ 24,050,000
Minor Capital $ 1,400,000 $ 1,500,000 $ 1,600,000 $ 1,700,000 $ 1,800,000
Boxelder Basin Stormwater Authority $ 350,000 $ 350,000 $ 350,000 $ 350,000 $ 350,000
Stream Rehabilitation $ 350,000 $ 1,400,000 $ 800,000 $ 850,000 $ 900,000
Total $ 7,850,000 $ 9,760,000 $ 28,250,000 $ 25,650,000 $ 27,100,000
Category 2022 2023 2024 2025 2026
Major Capital $ 17,950,000 $ 6,250,000 $ 5,750,000 $ 3,750,000 $ 4,280,000
Minor Capital $ 1,900,000 $ 2,000,000 $ 2,100,000 $ 2,200,000 $ 2,300,000
Boxelder Basin Stormwater Authority $ 350,000 $ 350,000 $ 350,000 $ 350,000 $ 350,000
Stream Rehabilitation $ 950,000 $ 1,000,000 $ 1,050,000 $ 1,100,000 $ 1,150,000
Total $ 21,150,000 $ 9,600,000 $ 9,250,000 $ 7,400,000 $ 8,080,000
33%
46%
35%
19%
19%
11%
10%
15%
9%
11%
7%
5%
7%
12%
13%
27%
6%
5%
6%
16%
10% 15%
30% 34%
0%
20%
40%
60%
80%
100%
Light & Power * Water Wastewater Stormwater
2015 Expenses as % of Operating Revenues
Operating Revenues
Available for Capital
Energy Services
PILOTs
Debt Service
Other Transfers
CS&A
Shortfall of Forecasted Operational Revenues and Development Fees
As the chart above shows, within each Enterprise Fund’s operating revenues there is some capacity to
make capital investment in infrastructure. This is appropriate and necessary to ensure that infrastructure
that has aged beyond its useful life can be renewed. Development fees, or Plant Investment Fees (PIFs),
are also collected as new development occurs within the utility service area. PIFs cover both the
additional cost of connecting the new customers to the existing infrastructure and the portion of existing or
new capacity that will be utilized by the new customers. As the tables above from the CIPs show, capital
investments can vary significantly more than operating revenues from one year to the next.
PIFs also fluctuate significantly from one year to the next. Debt service varies over time as debt is
incurred or retired. Operational expenses also vary year over year depending on the amount of proactive
replacement versus reactive replacement being done. For these reasons a ten year average is
considered when estimating future availability of operating revenues and PIFs for capital investment.
The tables below show how on a year by year basis the portion of operating revenues available for capital
investments and the average annual PIFs are not sufficient to meet the projected capital investments
needed for the utilities even when the current cash reserves are fully utilized above the minimum required
reserves per City Financial Policies. A modest growth in operating expenses of 1.5% is assumed year
over year which is why the amount available through operating revenues decreases over the 10 years.
The first two tables show the electric utility has sufficient capacity within its existing rates and cash
reserve to support the capital investment needed for the first 6 years assuming no other appropriations
are made for use of the reserves.
10 Year Average Operating
Revenues Available for Capital $5,000,000 $3,600,000 $3,000,000 $4,600,000
10 Year Average PIF Revenues
Available for Capital $3,400,000 $4,000,000 $2,900,000 $700,000
10 Year Average Total
Revenues Available for Capital $8,400,000 $7,600,000 $5,900,000 $5,300,000
501 - L&P Fund 2017 2018 2019 2020 2021
Capital Investment from CIP $ 11,340,000 $11,800,000 $7,790,000 $9,000,000 $10,000,000
Available through Operating Revenues
& PIFs
$8,400,000 $8,270,000 $8,150,000 $8,030,000 $7,910,000
Annual Excess / (Shortfall) ($2,940,000) ($3,530,000) $360,000 ($970,000) ($2,090,000)
Available Working Capital $15,000,000 $12,060,000 $8,530,000 $8,890,000 $7,920,000
Running Shortfall $12,060,000 $8,530,000 $8,890,000 $7,920,000 $5,830,000
501 - L&P Fund 2022 2023 2024 2025 2026
Capital Investment from CIP $12,940,000 $15,820,000 $5,810,000 $2,440,000 $2,180,000
Available through Operating Revenues
& PIFs
$7,790,000 $7,670,000 $7,560,000 $7,440,000 $7,330,000
Annual Excess / (Shortfall) ($5,150,000) ($8,150,000) $1,750,000 $5,000,000 $5,150,000
Available Working Capital $5,830,000 $680,000 ($7,470,000) ($5,720,000) ($720,000)
Running Shortfall $680,000 ($7,470,000) ($5,720,000) ($720,000) $4,430,000
The next two tables look at the water utility. Because there is little unappropriated reserves currently
available in this utility, the current rates are not sufficient to meet the anticipated capital needs in 2017.
Over the next decade the shortfall is estimated to be $86M.
The wastewater utility has a significant unappropriated reserve which will allow it to support the capital
investments needed though the first 5 years without a need for a rate adjustment. However, anticipated
new regulatory requirements for nutrient removal and temperature thresholds are expected to require an
additional $60-70M just beyond the ten year planning horizon. This represents an anticipated capital
investment equivalent to 3 years of operating revenue.
502 - Water Fund 2017 2018 2019 2020 2021
Capital Investment from CIP $ 13,010,000 $19,340,000 $20,900,000 $23,490,000 $10,490,000
Available through Operating Revenues
& PIFs
$ 7,600,000 $7,490,000 $7,370,000 $7,260,000 $7,150,000
Annual Excess / (Shortfall) ($5,410,000) ($11,850,000) ($13,530,000) ($16,230,000) ($3,340,000)
Available Working Capital $3,000,000 ($2,410,000) ($14,260,000) ($27,790,000) ($44,020,000)
Running Shortfall ($2,410,000) ($14,260,000) ($27,790,000) ($44,020,000) ($47,360,000)
502 - Water Fund 2022 2023 2024 2025 2026
Capital Investment from CIP $23,350,000 $10,980,000 $21,560,000 $8,540,000 $8,480,000
Available through Operating Revenues
& PIFs
$7,050,000 $6,940,000 $6,840,000 $6,730,000 $6,630,000
Annual Excess / (Shortfall) ($16,300,000) ($4,040,000) ($14,720,000) ($1,810,000) ($1,850,000)
Available Working Capital ($47,360,000) ($63,660,000) ($67,700,000) ($82,420,000) ($84,230,000)
Running Shortfall ($63,660,000) ($67,700,000) ($82,420,000) ($84,230,000) ($86,080,000)
503 - Wastewater Fund 2017 2018 2019 2020 2021
Capital Investment from CIP $ 10,220,000 $13,480,000 $8,990,000 $6,640,000 $6,010,000
Available through Operating Revenues
& PIFs
$ 5,900,000 $5,810,000 $5,720,000 $5,640,000 $5,550,000
Annual Excess / (Shortfall) ($4,320,000) ($7,670,000) ($3,270,000) ($1,000,000) ($460,000)
Available Working Capital $17,000,000 $12,680,000 $5,010,000 $1,740,000 $740,000
Running Shortfall $12,680,000 $5,010,000 $1,740,000 $740,000 $280,000
503 - Wastewater Fund 2022 2023 2024 2025 2026
Capital Investment from CIP $6,480,000 $5,380,000 $5,990,000 $6,430,000 $9,390,000
Available through Operating Revenues
& PIFs
$5,470,000 $5,390,000 $5,310,000 $5,230,000 $5,150,000
Annual Excess / (Shortfall) ($1,010,000) $10,000 ($680,000) ($1,200,000) ($4,240,000)
Available Working Capital $280,000 ($730,000) ($720,000) ($1,400,000) ($2,600,000)
Running Shortfall ($730,000) ($720,000) ($1,400,000) ($2,600,000) ($6,840,000)
The stormwater utility has such a modest unappropriated reserve balance that the capital investment
needed in 2017 immediately produces a funding shortfall.
Is Growth Paying Its Own Way?
Given the forecasted shortfall for capital investment it is reasonable to ask if growth is paying for itself.
Each Enterprise Fund assesses PIFs based on the actual cost of connecting new customers including the
amount of system capacity being allocated to those customers. The determination of what is included in
and how the PIFs are calculated is through a cost of service model similar to the cost of service models
that are updated every two years for existing ratepayers. The PIF model utilized by the three wet utilities
was last reviewed by an outside entity in 2009 and is based on industry best principles. In 2016 a
consultant is being contracted to review and modify as necessary the existing Light & Power PIF model.
The intention of all of the utilities’ PIF models is that growth is paying its own way.
It is important, however, to recognize that capacity is normally built ahead of the new development
requiring such capacity. This is done to both ensure that adequate capacity exists so as to not be a
barrier to economic growth and because capacity is usually added in larger amounts than a single new
customer may need so as to realize the economies of scale for such large capital investments. For
example, the Water Treatment Facility was last expanded in 1999 to its present treatment capacity. This
capacity is expected to be sufficient to serve all customers even through buildout of the water utility’s
service territory. That expansion was paid for through existing cash reserves, the portion of operating
revenues available for capital investment and revenue bonds. As new customers are connected to the
water system the PIFs assessed to those customers will recover the amounts paid by existing customers
for the portion of that capital investment now being allocated to the new customers.
504 - Stormwater Fund 2017 2018 2019 2020 2021
Capital Investment from CIP $ 7,850,000 $9,760,000 $28,250,000 $25,650,000 $27,100,000
Available through Operating Revenues
& PIFs
$ 5,300,000 $5,220,000 $5,140,000 $5,070,000 $4,990,000
Annual Excess / (Shortfall) ($2,550,000) ($4,540,000) ($23,110,000) ($20,580,000) ($22,110,000)
Available Working Capital $2,000,000 ($550,000) ($5,090,000) ($28,200,000) ($48,780,000)
Running Shortfall ($550,000) ($5,090,000) ($28,200,000) ($48,780,000) ($70,890,000)
504 - Stormwater Fund 2022 2023 2024 2025 2026
Capital Investment from CIP $21,150,000 $9,600,000 $9,250,000 $7,400,000 $8,080,000
Available through Operating Revenues
& PIFs
$4,910,000 $4,840,000 $4,770,000 $4,700,000 $4,630,000
Annual Excess / (Shortfall) ($16,240,000) ($4,760,000) ($4,480,000) ($2,700,000) ($3,450,000)
Available Working Capital ($70,890,000) ($87,130,000) ($91,890,000) ($96,370,000) ($99,070,000)
Running Shortfall ($87,130,000) ($91,890,000) ($96,370,000) ($99,070,000) ($102,520,000)
Next Step: Strategic Financial Planning
Estimated Rate Increases Required to Avoid Issuing Debt
Each of the four utilities show a shortfall in available funding for the needed capital investment at some
point over the next decade with the water and stormwater utilities each showing a shortfall in every year.
This is only the initial step in developing the Strategic Financial Plan. While it does show that there will
need to be rate increases and debt issuances over the coming decade in order to achieve the capital
investment necessary, a reasonable path forward will be developed for each utility and presented to the
City Council for further consideration.
The next table shows the amount of annual rate increase that would be necessary to meet these
shortfalls year by year for each utility. This assumes there is no debt issuance for any utility and
operational expenses increases with inflation at 1.5% annually. Because capital investments fluctuate
from one year to the next, rate decreases are also necessary from year to year to avoid building up
excessive reserves. While the average annual rate change only exceeds 6% for the wastewater utility
and the net 10 year rate increases are relatively small, the year over year volatility would not be
acceptable to our community.
Relative Rate Increases
Fort Collins citizens and businesses benefit from the low cost of utility services along with many
neighboring communities. Through long term planning and prudent operations, the City has maintained
these competitive rates through a rate philosophy of gradual, modest rate adjustments. Below is a table
comparing the recent rate increases of several neighboring communities to those of Fort Collins Utilities.
Utility 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
10 Yr Ave Annual
Rate Change
Light & Power -38% 81% -11% 4% 3% 9% 8% -25% -11% -1% 2%
Water 8% 29% 4% 6% -28% 39% -27% 32% -29% 0% 4%
Wastewater -53% 179% -14% -8% -2% 2% -4% 3% 2% 12% 12%
Stormwater 4% 26% 97% -7% 4% -16% -37% -2% -9% 4% 6%
2014 2015 2016 2014 2015 2016
Ft Collins 2.0% 1.9% 3.2% 4.0% 0.0% 0.0%
Loveland 8.4% 0.9% 5.5% 19.0% 13.1% 9.0%
Longmont 8.2% 4.9% 0.0% 4.5% 0.0% 7.0%
Greeley 5.8% 6.6% -4.4% 7.9% 3.7% 0.7%
Boulder 5.8% 6.6% -4.4% 3.0% 3.9% 4.7%
Colorado Springs 0.0% 3.7% 5.7% 11.2% 11.7% 0.0%
Electric Water
Relative rate increases can be misleading if not put into context of actual charges. The table below
shows the actual charges for a typical residential customer.
2014 2015 2016 2014 2015 2016
Ft Collins 3.0% 3.0% 3.0% 0.0% 0.0% 0.0%
Loveland 3.9% 11.1% 21.7% 0.0% 9.6% 9.6%
Longmont 16.7% 16.4% 15.1% 0.0% 68.0% 0.0%
Greeley -2.1% -0.7% 3.4% 0.0% 14.6% 0.0%
Boulder 5.0% 1.2% 27.5% 3.0% 2.9% 75.0%
Colorado Springs 0.0% 0.0% 0.0% N/A N/A N/A
Wastewater Stormwater
2016 2016 2016 2016 2016
Ft Collins $ 68.21 $ 43.57 $ 35.07 $ 14.26 $ 161.11
Loveland $ 67.01 $ 34.00 $ 25.43 $ 12.48 $ 138.92
Longmont $ 63.25 $ 31.47 $ 33.63 $ 13.05 $ 141.40
Greeley $ 79.67 $ 51.35 $ 20.62 $ 6.45 $ 158.09
Boulder $ 79.67 $ 35.84 $ 29.08 $ 13.46 $ 158.05
Colorado Springs $ 85.46 $ 77.82 $ 31.27 N/A $ 194.55
Electric Water Wastewater Stormwater Total
Debt Schedules
Given the anticipated funding shortfall to meet the expected capital investments required in the Enterprise
Funds over the next decade and the variable nature of such capital investments, it will be necessary from
time to time to issue revenue bonds in a prudent manner to minimize rate adjustments and still ensure
that adequate capacity exists for new development and existing assets are renewed as needed to
maintain the level of service and reliability expected by our community. Below are the annual debt
service costs for all current debt by Enterprise Fund. The annual debt service costs depend on both the
term of the debt issuance (typically 10 or 20 years) and the interest rate which in turn depends on the
bond rating at issuance. Just for some context, a $10M debt issuance may cost $700-900K annually for a
20 year term or $1.1-1.3M for a 10 year term.
The Light & Power Fund issued its first debt in many years in 2010 to pay for the portion of the Advanced
Meter Fort Collins project not covered through the matching federal grants. This debt has a current bond
rating of AA- and will be retired in 2020.
The Water Fund has a longer history of issuing debt for capital investment. In part because the size of
some of the capital projects can exceed several years of operating revenue, making it difficult to have
sufficient cash reserves for such large investments. The Water Enterprise Fund debt has a current bond
rating of AAA. As the chart shows this Fund has carried significant debt service costs in the recent past
and most of this debt will be retired over the next few years.
$0
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026
Annual Debt Service
501 - Light & Power Fund
The Wastewater Enterprise Fund has issued several 20 year bonds. The bond rating for the Wastewater
utility is currently AA+.
The Stormwater Fund has issued debt to support the initial build-out of the stormwater infrastructure. The
bond rating for the Stormwater Fund is AA+, as well. The debt service costs for this Fund will be reduced
over the next few years as existing debt is retired. This will modestly increase the amount of operating
revenue available for either new debt service or directly for capital investments.
$0
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
$7,000,000
$8,000,000
2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026
Annual Debt Service
502 - Water Fund
2002 GO WATER
2009 WATER
2008 WATER
1998 WATER
2003 WATER SUBORD
1997 WATER
1999 WATER
$0
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026
Annual Debt Service
503 - Wastewater Fund
2010 SEWER
2009 SEWER
2005 SEWER
1992 SEWER
Conclusion
As shown there will be a need for considerable capital investment in each of the utility services in the
coming decade. This is not unexpected given the growth of our community and the high levels of service
required to support its economic development and sustainability. The low utility rates and high level of
customer satisfaction are the results of City Leadership, both past and present, showing tremendous
foresight and commitment to these municipal services and to the planning, operational and customer
focused efforts of City staff. This update to the Council Finance Committee is intended to maintain this
tradition through a long term Utilities Strategic Financial Plan.
Staff will continue the analysis from inputting the capital needs into the long term financial models for
each utility. These capital investment needs along with the projected trends in operational costs and
uncertainties in revenue and expense projections will be modeled to understand the rate implications and
need for debt issuances over the next decade. The model inputs, methodology and outputs will then be
presented to the Council Finance Committee within a few months including a recommended path for each
utility for the 2017-18 City Budget being considered by the City Manager and the Mayor and City Council.
Attachments
Light & Power Enterprise Fund Capital Improvement Plan
Water Enterprise Fund Capital Improvement Plan
Wastewater Enterprise Fund Capital Improvement Plan
Stormwater Enterprise Fund Capital Improvement Plan
$0
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
$4,500,000
2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026
Annual Debt Service
504 - Stormwater Fund
2011 STORMWATER
2007B STORMWATER
2007A
STORMWATER
2002 STORMWATER
REFUND
Council Finance Committee – Utilities 2016 Capital
Improvement Plans and Strategic Financial Plan
Lance Smith, Utilities Financial Planning Director
04/18/16
Purpose and Direction Sought
Objective:
• Review CIP process and prioritization criteria
• Review the 2016 Ten Year Capital Improvement Plans
• Review future funding requirements & considerations
• Outline next steps
Direction Sought:
• Does the Council Finance Committee support proceeding with analysis of a
long term Utilities Strategic Financial Plan?
• Does the Council Finance Committee support the Utilities Strategic Financial
Planning assumptions?
2
How do the Capital Improvement Plans (CIPs) and
Strategic Financial Plan (SFP) fit into the Utilities
planning process?
3
Utilities Planning Process
4
Assess Operational
Needs / Risks
Determine Optimal
Solutions &
Mitigations
Identify Anticipated
Capital Projects
Over Planning
Horizon
Establish Capital
Project Prioritization
Criteria
Determine Relative
Weighting of Criteria
Prioritize Projects
with Criteria
Review Financial
Position of Each
Utility
Determine Capital
Investment
Capacities
Recommend
Financial Strategy to
Achieve
Operational
Objectives
Master
Planning
Capital
Improvement
Planning
Strategic
Financial
Planning
We are here now
CIP Team Members
Senior Operations Managers
Strategic Finance Director
Division Managers
Engineers
Asset Manager
Field & Facility Staff
5
Capital Improvement
Planning Process
Inputs Used
Master Plans
Asset Management Plans
System Operations Knowledge
Metrics from Industry
Engineering Analyses
Regulatory Requirements
• Objectives chosen based on
Effective Utility Management
• Those objectives are
represented in the Utility
Scorecard
6
Capital Improvement
Planning Process
7
Capital Improvement
Planning Process
8
Relative Weights
Operational Objectives 502 - Water Fund
503 - Wastewater
Fund
504 - Stormwater
Fund
Safety 38% 36% 52%
Reliability 13% 24% 22%
Regulatory Compliance 29% 24%
Sustainability 4% 9% 16%
Customer Satisfaction 7% 7% 10%
Product Quality 9%
Total: 100% 100% 100%
Capital Improvement
Planning Process
What are the capital needs for the next 10 years as
identified in the Capital Improvement Plans?
9
Light & Power Fund
CIP Major Projects
10
New Capacity
Projects
Annexations Replacement
Projects
Operational
Technology
New circuits Mulberry Corridor
(anticipate some asset
replacement ahead of
actual asset acquisition)
Distribution System Mapping system
conversion
New duct banks Leistikow Substations Automated
Distribution
Management System
New substations in
2022 & 2023
Arapahoe Bend Fiber Optics
Fiber Optic
Management
Software
Riverwalk CMMS
Implementation
Light & Power Fund CIP
11
$-
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
$14,000,000
$16,000,000
$18,000,000
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
Annual Capital Investment
501 - Light & Power Fund Operational Technology
& Fiber
Annexations
New Capacity
Substation Improvements
Distribution System
Improvements
2015 Operating Revenue not used for Purchased Power expense was $27.1M
Water Fund
CIP Major Projects
12
Water Distribution Water Production Water Resources
Increase in renewal rate for
a sustainable system
Safety Projects Halligan Reservoir
2019-2020
Focus in downtown area Poudre Canyon Pipeline
Evaluation & Rehabilitation
Additional Treated Water
Storage
Removal of chlorine gas for
disinfection
Water Fund CIP
13
$-
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
Annual Capital Investment
502 - Water Fund Environmental Services
Water Resources
Water Distribution
Water Production
2015 Operating Revenue was $27.7M
Wastewater Fund
CIP Major Projects
14
Wastewater Collection Water Reclamation
Increase in renewal rate for sustainable
system
Replacement of aging equipment and
infrastructure
Focus in downtown area Preparation for regulatory requirements for
nutrient removal
Study to determine source of excess flow in
the collection system
Nutrient projects are currently scheduled
for 2027.
Wastewater Fund CIP
15
$-
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
$14,000,000
$16,000,000
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
Annual Capital Investment
503 - Wastewater Fund
Environmental Services
Wastewater Collection
Water Reclamation
2015 Operating Revenue was $22.1M
Stormwater Fund
CIP Major Projects
16
Stormwater Capital Projects
Replacement of existing infrastructure
Rehabilitation of streams in Fort Collins
Buildout of major flood conveyance infrastructure
1. Magnolia Street Outfall – 2 phases
2. Oak Street Outfall
3. Myrtle Street
Stormwater Fund CIP
17
$-
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
Annual Capital Investment
504 - Stormwater Fund
Boxelder Basin Stormwater
Authority
Stream Rehabilitation
Minor Capital
Major Capital
2015 Operating Revenue was $15.0M
Funding requirements and considerations
18
Capital Investment
from Operating Revenues
19
33%
46%
35%
19%
19%
11%
10%
15%
9%
11%
7%
5%
7%
12%
13%
27%
6%
5%
6%
16%
10% 15%
30% 34%
0%
20%
40%
60%
80%
100%
Light & Power * Water Wastewater Stormwater
2015 Expenses as % of Operating Revenues
Operating Revenues
Available for Capital
Energy Services
PILOTs
Debt Service
Other Transfers
CS&A
Operations
* Purchased Power expenses, PILOTs associated with it and the necessary operating revenue for this expense have been removed for this table.
Capital Investment
from Operating Revenues
20
10% 15%
30% 34%
0%
20%
40%
60%
80%
100%
Light & Power * Water Wastewater Stormwater
2015 Expenses as % of Operating Revenues
Operating Revenues
Available for Capital
$5,000,000 $3,600,000 $3,000,000 $4,600,000
10 Yr Ave Operating Revenues
Available for Capital
$3,400,000 $4,000,000 $2,900,000 $700,000
10 Yr Ave PIF Revenues
Available for Capital
$8,400,000 $7,600,000 $5,900,000 $5,300,000
10 Yr Ave Total Revenues
Available for Capital
Variability of PIFs
21
$0
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
$7,000,000
$8,000,000
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Plant Investment Fees Collected 2006-2015
L&P
Water
Wastewater
Stormwater
If we maintain the existing utility rates and allow
operating expenses to increase with inflation (1.5%
annually), how would funding all projects as
outlined impact fund balances?
22
Light & Power Shortfall
23
($10,000,000)
($5,000,000)
$0
$5,000,000
$10,000,000
$15,000,000
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
Light & Power Available Reserves
2017 - 2026
($100,000,000)
($80,000,000)
($60,000,000)
($40,000,000)
($20,000,000)
$0
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
Water Available Reserves
2017 - 2026
Water Shortfall
24
($10,000,000)
($5,000,000)
$0
$5,000,000
$10,000,000
$15,000,000
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
Wastewater Available Reserves
2017 - 2026
Wastewater Shortfall
25
($120,000,000)
($100,000,000)
($80,000,000)
($60,000,000)
($40,000,000)
($20,000,000)
$0
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
Stormwater Available Reserves
2017 - 2026
Stormwater Shortfall
26
Rate increases will be necessary to fully implement
the CIPs.
How do recent rate adjustments compare to other
communities?
27
8.4% 8.2%
6.6% 6.6%
-4.4% -4.4%
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
Ft Collins Loveland Longmont Greeley Boulder Colorado
Springs
Annual Electric Rate Adjustments
2014 2015 2016
Residential Electric Increases
28
Xcel Energy serves Greeley and Boulder and has a Power Cost Adjustment
factor which was reduced in 2016 due to low natural gas prices
19.0%
11.2%
13.1%
11.7%
0.0%
5.0%
10.0%
15.0%
20.0%
Ft Collins Loveland Longmont Greeley Boulder Colorado
Springs
Annual Water Rate Adjustments
2014 2015 2016
Residential Water Increases
29
Residential Wastewater Increases
30
21.7%
27.5%
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
Ft Collins Loveland Longmont Greeley Boulder Colorado
Springs
Annual Wastewater Rate Adjustments
2014 2015 2016
Residential Stormwater Increases
31
68.0%
75.0%
0.0%
20.0%
40.0%
60.0%
80.0%
Ft Collins Loveland Longmont Greeley Boulder
Annual Stormwater Rate Adjustments
2014 2015 2016
Residential Utility Rate Comparison
32
2016 2016 2016 2016 2016
Ft Collins $ 68.21 $ 43.57 $ 35.07 $ 14.26 $ 161.11
Loveland $ 67.01 $ 34.00 $ 25.43 $ 12.48 $ 138.92
Longmont $ 63.25 $ 31.47 $ 33.63 $ 13.05 $ 141.40
Greeley $ 79.67 $ 51.35 $ 20.62 $ 6.45 $ 158.09
Boulder $ 79.67 $ 35.84 $ 29.08 $ 13.46 $ 158.05
Colorado Springs $ 85.46 $ 77.82 $ 31.27 N/A $ 194.55
Electric Water Wastewater Stormwater Total
Given the rate philosophy of modest and gradual
adjustments, what are the next steps in addressing
the anticipated shortfalls that would result from
implementing the CIPs?
33
Next Steps
Utilities Strategic Financial Plan
• Analyzing the anticipated capital expenses into the long
term financial models
• Perform scenario analyses to understand cash vs. debt
funding impacts on rates, reserves, debt capacity and the
financial position of each Enterprise Fund
• Develop recommendations on rate increases and debt
issuances to meet the expected needs of the Fund
34
Assumptions
Utilities Strategic Financial Plan
• Maintain adequate reserve balances
• Maintain current credit ratings for each Enterprise Fund and the City
• Avoid rate spikes by limiting rate increases to no more than 5% annually
• Adjust rates if:
• Previous 3 years have negative operating income
• Debt coverage ratio is less than 2.0
• Working Capital is forecasted to be below minimum required reserve within
5 years
• Issue debt if:
• Capital expenses are forecasted to exceed available reserves over the
next 5 years
35
Purpose and Direction Sought
Objective:
• Review CIP process and prioritization criteria
• Review the 2016 Ten Year Capital Improvement Plans
• Review future funding requirements & considerations
• Outline next steps
Direction Sought:
• Does the Council Finance Committee support proceeding with analysis of a
long term Utilities Strategic Financial Plan?
• Does the Council Finance Committee support the Utilities Strategic Financial
Planning assumptions?
36
37
Back-Up
38
When will existing debt be retired?
39
Light & Power Debt Schedule
40
$0
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026
Annual Debt Service
501 - Light & Power Fund
$0
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
$7,000,000
$8,000,000
2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026
Annual Debt Service
502 - Water Fund
2002 GO WATER
2009 WATER
2008 WATER
1998 WATER
2003 WATER SUBORD
1997 WATER
1999 WATER
Water Debt Schedule
41
$0
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026
Annual Debt Service
503 - Wastewater Fund
2010 SEWER
2009 SEWER
2005 SEWER
1992 SEWER
Wastewater Debt Schedule
42
$0
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026
Annual Debt Service
504 - Stormwater Fund
2011 STORMWATER
2007B STORMWATER
2002 STORMWATER
REFUND
2002 STORMWATER
2001 STORMWATER
Stormwater Debt Schedule
43
How do the expected levels of capital investment
compare to historical investment levels?
44
Light & Power
Historical Capital Investment
45
$0
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
$35,000,000
$40,000,000
$45,000,000
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 10 Yr
Ave
501 - Light & Power Capital Investments
New Appropriations
Capital Spent
10 Yr CIP Ave (2017-2026)
Water
Historical Capital Investment
46
$0
$5,000,000
$10,000,000
$15,000,000
$20,000,000
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 10 Yr
Ave
502 - Water Capital Investments
New Appropriations
Capital Spent
10 Yr CIP Ave (2017-2026)
Wastewater
Historical Capital Investment
47
$0
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
$35,000,000
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 10 Yr
Ave
503 - Wastewater Capital Investments
New Appropriations
Capital Spent
10 Yr CIP Ave (2017-2026)
Stormwater
Historical Capital Investment
48
$0
$5,000,000
$10,000,000
$15,000,000
$20,000,000
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 10 Yr
Ave
504 - Stormwater Capital Investments
New Appropriations
Capital Spent
10 Yr CIP Ave (2017-2026)
Fort Collins Utilities
Light & Power Enterprise Fund
Capital Improvement Plan
2016
Prepared: March 2016
By: Chris Parton
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Table of Contents
Purpose ........................................................................................................................... 1
Executive Summary ........................................................................................................ 3
Capital Project Prioritization ............................................................................................ 8
Capital Funding Needs .................................................................................................. 13
Capital Projects ............................................................................................................. 20
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1
Purpose
The purpose of this document is to serve as a central repository for information relating
to capital projects within the Light & Power Enterprise Fund.
Ownership
The Asset Manager maintains ownership of this document. It is the responsibility of the
person in this role to ensure that the plan is updated when necessary and that all
interested parties are allowed input into the preparation and update of this document.
Frequency of Updates
This document shall be updated on a yearly basis so that the Strategic Financial
Planning Manager has the information necessary to prepare forward-looking documents
dealing with expense and revenue projections, rate-setting, and the financial health of
the Light & Power Fund.
2
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3
Executive Summary
The scope of this document is to provide information pertaining to capital projects,
project prioritization, and funding needs within the Light & Power Enterprise Fund
managed by Fort Collins Utilities (FCU). The planning period for this document is for a
10-year horizon beginning in 2017.
Outlined below are summaries of each area of this document.
Capital Projects
This document contains information pertaining to capital projects that will serve new
development, projects that will annex new service territory, and projects that replace
existing infrastructure. FCU project managers were asked to provide the Asset Manager
with as much information as possible about known capital projects within the fund.
Capital Project Prioritization
A working group of approximately 20 FCU staff from the wastewater, water, &
stormwater, & light & power businesses compiled the process for prioritizing projects. A
high-level snapshot of the process is included below.
The process above was not used for prioritizing projects in the Light & Power fund. For
the 2016 Light & Power Fund CIP, funding allocations were made to asset categories for
system renewal and replacement, known annexations were scheduled, and the system
capacity additions identified the Light & Power 20-Year Plan were included. It is fully
expected that the process outlined above will be utilized to prioritize projects for the Light
& Power fund ahead of the next budget cycle.
The project prioritization for the different kinds of projects in the fund is shown on the
next page.
Confirm
Prioritization
Criteria
Prioritization
Criteria Rating
Confirm List of
Projects
Rate Projects
Against Criteria
First Prioritized
List of Projects
Review & Adjust if
Necessary
Final List of
Prioritized
Projects
CPRC Review of
Framework &
Projects
Allocate Capital
Dollars to Projects
Determine
Schedule Based
on Available
Capital
Review &
Approval of
Prioritization
Budget Offers
4
5
Projects to Serve New Growth
Number Project Name
New Circuits
1 Install circuit 826 to unload 802, 804, and 834
2 Install circuit 936 to unload circuits 804, 834, and 906
3 Install circuit 322 to unload circuits 308 and 332 and serve Mulberry
4 Install circuit 724 to unload circuits 714, 722, and 732
5 Re-route circuit 716 due to cable ampacity
6 Re-route circuit 736 due to cable ampacity
7 Install circuit on existing breaker 554 to unload circuit 554
8 Install circuit on existing breaker 576 to unload circuit 576
9 Install circuit 934 to unload circuits 518 and 526
10 Install circuit 314 to unload circuit 308
11 Install circuit 616 to unload circuit 622
12 Install circuit 904 to unload circuit 504
13 Install new circuit 336 to serve Woodard
14 Install circuit on existing breaker 518 to unload circuit 518
15 Install circuit 572 to serve Avago
16 Install circuit 832 to serve system expansion in west
17 Install circuit on existing breaker 502 to unload ckts 502, 518 & 534
18 Install circuit on existing breaker 566 to unload circuit 522
19 Install circuit on existing breaker 548 to unload circuits 326 and 568
20 Install circuit 926 to serve system expansion in the southeast
21 Install circuit on existing breaker 508 to serve Intel and Avago
22 Install circuit 402 to unload circuit 832
23 Install circuit 404 to unload circuit 832
24 Install circuit 406 to unload circuits 732 and 822
25 Install circuit 408 to unload circuits 822 and 832
26 Install circuit 422 to serve system expansion in the northwest
27 Install circuit 424 to unload circuit 812
28 Install circuit 426 to backup Linden Tech serving downtown
29 Install circuit 428 to backup Linden Tech serving downtown
30 Future circuits
New Duct Banks
1 County Rd 5 - Prospect to Mulberry
2 Shields Duct Bank - Harmony to Fossil Creek
3 Lincoln Ave. - Timberline to Lemay
4 Straus Cabin Rd Harmony to Horsetooth
5 Northeast Substation Duct Bank System
6 Trilby - Lemay to Timberline Road
7 Northwest Substation Duct Bank System
New Substations
1 Northwest Substation
2 Northeast Substation
6
Projects to Annex New Service Territory
Projects to Replace Existing Infrastructure
Miscellaneous Capital Projects
In 2014. the Capital Project Review Committee (CPRC) was created to review the
project prioritization prior to budget offers being submitted for the Budgeting for
Outcomes process. The CPRC is composed of the following positions:
• Executive Director
• Utilities Strategic Finance Director
• Water Resources & Treatment Operations Manager
• Water Engineering & Field Services Manager
• Light & Power Operations Manager
The CPRC is responsible for reviewing and approving the capital project prioritization for
each enterprise fund prior to submitting funding requests to the City’s bi-annual
Budgeting for Outcomes (BFO) process.
Number Annexation Name
1 Riverwalk Annexation
2 Arapahoe Bend 2nd Annexation
3 Leistikow Annexation
4 Mulberry Annexation
5 Fossil Creek Open Space Annexation
6 South Taft Hill Road (West Side) Annexation
7 South Taft Hill Road (East Side) Annexation
Number Distribution System
1 Cable Replacement
2 Transformer Replacement
3 1/O to electric heated homes
4 Streetlight System Replacement
Number Fiber Optic System Improvements
1 Fiber Management Software
2 Fiber Cable Relocation
3 Fiber Panel upgrades
4 Fiber Optic Splicing equipment
Number Miscellaneous Project
1 Light & Power Mapping System Conversion
2 Advance Distribution Management System
3 Maximo Implementation
4 Total for Miscellaneous Projects
7
Light & Power Fund Capital Funding Needs
The graph and table below show the capital funding needs for the enterprise fund for the
next ten years. This funding contains projects to serve new growth, annexations,
replacement of existing infrastructure, and miscellaneous capital projects.
Light & Power Fund Capital Expenditures
1-5 Year Light & Power Fund Capital Expenditures
6-10 Year Light & Power Fund Capital Expenditures
Type of Project 2017 2018 2019 2020 2021
Total for New Capacity $4,654,000 $3,628,000 $1,034,000 $1,770,000 $2,970,000
Total for Annexations $140,000 $3,015,000 $3,000,000 $3,000,000 $3,000,000
Total for Replacement Projects $3,555,000 $3,223,000 $3,662,000 $4,143,000 $3,941,000
Total for Operational Technology Projects $2,990,000 $1,930,000 $90,000 $90,000 $90,000
Grand total for all LPO Capital Projects $11,339,000 $11,796,000 $7,786,000 $9,003,000 $10,001,000
Type of Project 2022 2023 2024 2025 2026
Total for New Capacity $8,050,000 $13,370,000 $3,303,139 $0 $0
Total for Annexations $3,150,000 $3,150,000 $0 $0 $0
Total for Replacement Projects $2,300,000 $2,356,000 $2,413,000 $2,346,000 $2,091,000
Total for Operational Technology Projects $90,000 $90,000 $90,000 $90,000 $90,000
Grand total for all LPO Capital Projects $12,940,000 $15,816,000 $5,807,000 $2,436,000 $2,181,000
8
Capital Project Prioritization
Prioritization Methodology
FCU staff developed a process for prioritizing capital projects across all of the enterprise
funds. The need for this process was driven by the need for defensible and transparent
capital budgeting requests, and ultimately to be able to defend any needed increases in
revenue for capital expenditures in each of the enterprise funds. This process is
designed to include the following kinds of projects and their asscoiated costs:
• renewal & replacement of existing infrastructure, i.e. cables, transformers, etc.
• the annexation of new customers into the FCU service territory
Projects that are constructed to serve new development are prioritized by a separate
effort and are not subject to this process.
A working group of approximately 20 FCU staff from the light & power, stormwater,
water, & wastewater funds compiled the process for prioritizing projects. A high-level
snapshot of the process is included below.
Capital Project Prioritizaton Business Process
The process above was not used for prioritizing projects in the Light & Power fund. For
the 2016 Light & Power Fund CIP, funding allocations were made to asset categories for
system renewal and replacement, known annexations were scheduled, and the system
capacity additions identified the Light & Power 20-Year Plan were included. It is fully
expected that the process outlined above will be utilized for the Light & Power fund
ahead of the next budget cycle.
Confirm
Prioritization
Criteria
Prioritization
Criteria Rating
Confirm List of
Projects
Rate Projects
Against Criteria
First Prioritized
List of Projects
Review & Adjust if
Necessary
Final List of
Prioritized
Projects
CPRC Review of
Framework &
Projects
Allocate Capital
Dollars to Projects
Determine
Schedule Based
on Available
Capital
Review &
Approval of
Prioritization
Budget Offers
9
Capital Projects Selection
Capital projects are brought forth for inclusion in the CIP by one of three ways:
• Suggestion by Electric Design & IT Staff,
• Suggestion by Project Engineering Staff, or
• Suggestion by Standards Engineering Staff.
These methods apply to both renewal and replacement of existing infrastructure and the
addition of new capital to the fund. Each project is then evaluated against the evaluation
criteria described above.
Prioritization of Projects
The respective prioritizations for each type of project that will be constructed by the fund,
i.e. new capacity, annexation, or replacement, are shown below. The required funding
for each type of project is shown in the next section.
10
Projects to Serve New Growth
Number Project Name
New Circuits
1 Install circuit 826 to unload 802, 804, and 834
2 Install circuit 936 to unload circuits 804, 834, and 906
3 Install circuit 322 to unload circuits 308 and 332 and serve Mulberry
4 Install circuit 724 to unload circuits 714, 722, and 732
5 Re-route circuit 716 due to cable ampacity
6 Re-route circuit 736 due to cable ampacity
7 Install circuit on existing breaker 554 to unload circuit 554
8 Install circuit on existing breaker 576 to unload circuit 576
9 Install circuit 934 to unload circuits 518 and 526
10 Install circuit 314 to unload circuit 308
11 Install circuit 616 to unload circuit 622
12 Install circuit 904 to unload circuit 504
13 Install new circuit 336 to serve Woodard
14 Install circuit on existing breaker 518 to unload circuit 518
15 Install circuit 572 to serve Avago
16 Install circuit 832 to serve system expansion in west
17 Install circuit on existing breaker 502 to unload ckts 502, 518 & 534
18 Install circuit on existing breaker 566 to unload circuit 522
19 Install circuit on existing breaker 548 to unload circuits 326 and 568
20 Install circuit 926 to serve system expansion in the southeast
21 Install circuit on existing breaker 508 to serve Intel and Avago
22 Install circuit 402 to unload circuit 832
23 Install circuit 404 to unload circuit 832
24 Install circuit 406 to unload circuits 732 and 822
25 Install circuit 408 to unload circuits 822 and 832
26 Install circuit 422 to serve system expansion in the northwest
27 Install circuit 424 to unload circuit 812
28 Install circuit 426 to backup Linden Tech serving downtown
29 Install circuit 428 to backup Linden Tech serving downtown
30 Future circuits
New Duct Banks
1 County Rd 5 - Prospect to Mulberry
2 Shields Duct Bank - Harmony to Fossil Creek
3 Lincoln Ave. - Timberline to Lemay
4 Straus Cabin Rd Harmony to Horsetooth
5 Northeast Substation Duct Bank System
6 Trilby - Lemay to Timberline Road
7 Northwest Substation Duct Bank System
New Substations
1 Northwest Substation
2 Northeast Substation
11
Projects to Annex New Service Territory
Projects to Replace Existing Infrastructure
Miscellaneous Capital Projects
Capital Project Prioritization Updates
Since capital creation and renewal is such an integral part of FCU’s bi-annual Budgeting
for Outcomes (BFO) process, the capital project prioritization shall be updated every
year. The process for prioritizing projects and the levels of service shall be reviewed
annually to ensure that priorities of FCU senior management are being met by the
project prioritization efforts.
Number Annexation Name
1 Riverwalk Annexation
2 Arapahoe Bend 2nd Annexation
3 Leistikow Annexation
4 Mulberry Annexation
5 Fossil Creek Open Space Annexation
6 South Taft Hill Road (West Side) Annexation
7 South Taft Hill Road (East Side) Annexation
Number Distribution System
1 Cable Replacement
2 Transformer Replacement
3 1/O to electric heated homes
4 Streetlight System Replacement
Number Fiber Optic System Improvements
1 Fiber Management Software
2 Fiber Cable Relocation
3 Fiber Panel upgrades
4 Fiber Optic Splicing equipment
Number Miscellaneous Project
1 Light & Power Mapping System Conversion
2 Advance Distribution Management System
3 Maximo Implementation
4 Total for Miscellaneous Projects
12
13
Capital Funding Needs
The following section presents funding levels necessary for all known Light & Power
Fund capital projects in the next 10 years.
Funding Needs for Growth-Related Projects
Funding needs for additional circuits, duct banks, and substations to accommodate
future growth are shown in the graph and tables below. These projects were identified in
the development of the Light & Power 20-Year Plan in 2016 by Leidos Engineering.
New Capacity Capital Spending
New Capacity 1-5 Year Capital Needs
New Capacity 6-10 Year Capital Needs
Type of Project 2017 2018 2019 2020 2021
New Circuits $ 3,328,800.00 $ 1,777,440.00 $ 1,033,440.00 $ 1,769,280.00 $ 2,969,280.00
New Duct Banks $ 1,325,000.00 $ 1,850,000.00 $ - $ - $ -
New Substations $ - $ - $ - $ - $ -
Total $ 4,653,800 $ 3,627,440 $ 1,033,440 $ 1,769,280 $ 2,969,280
Type of Project 2022 2023 2024 2025 2026
New Circuits $0 $0 $3,303,139 $0 $0
New Duct Banks $0 $5,820,000 $0 $0 $0
New Substations $7,550,000 $7,550,000 $0 $0 $0
Total $7,550,000 $13,370,000 $3,303,139 $0 $0
14
Annexation of New Service Territory
Funding needs for annexations are shown in the table below. The costs below do not
include the acquisition costs paid to the adjacent service provider with the exception of
the Mulberry Annexation. The monthly volumetric charges that are paid to the adjacent
service providers are considered a pass-through expense and are therefore not included
in the costs below.
Capital Spending for Annexations
Annexation 1-5 Year Funding Needs
Annexation 6-10 Year Funding Needs
Annexation Name 2017 2018 2019 2020 2021
Riverwalk Annexation $50,000
Arapahoe Bend 2nd Annexation $75,000
Leistikow Annexation $15,000
Mulberry Annexation $3,000,000 $3,000,000 $3,000,000
Total $50,000 $75,000 $3,015,000 $3,000,000 $3,000,000
Annexation Name 2022 2023 2024 2025 2026
Mulberry Annexation $3,000,000 $3,000,000
Fossil Creek Open Space Annexation $15,000
South Taft Hill Road (West Side) Annexation $150,000
South Taft Hill Road (East Side) Annexation $150,000
Total $3,015,000 $3,150,000 $150,000 $0 $0
15
The costs above reflect a starting year of 2019 for the annexation of the Mulberry
corridor into the FCU service territory from Xcel Energy and Poudre Valley Rural Electric
Association. This is an estimate of when the annexation could start. No probable dates
have been received from City of Fort Collins Planning Department staff. Since the
geographical area to be annexed is so large, this is currently planned as a five year
effort to convert the existing facilities to FCU Light & Power standards. If that timeframe
is accelerated, then the costs will need to be adjusted accordingly.
Replacement of Existing Infrastructure
Funding needs for the replacement of existing infrastructure are included in this section.
This funding group provides funding for replacement of equipment at substations and
replacement of existing infrastructure in the distribution system, items such as cables,
transformers, and switches.
The graph and tables below show 1-5 and 6-10 year funding needs for the replacement
of existing infrastructure. Since the Light & Power Operations group is in the preliminary
stages of implementing a strategic asset management program, a robust estimate of
funding needs for transformer, switch, and cable replacement is not available at this
time. The amount of budget requested for each of these areas is based, generally, on
historical capital expenditures for each category.
As the asset management program becomes more mature in the Light & Power
Enterprise Fund, it is expected that these expenditures will increase to address better
understood needs for maintaining reliability of the electric distribution system.
System Replacement Capital Spending
16
Replacement of Existing Infrastructure 1-5 Year Needs
Replacement of Existing Infrastructure 6-10 Year Needs
Improvement of Existing Capital
Substations 2017 2018 2019 2020 2021
Substation Improvements
Sub security capital $20,000 $20,000 $20,000 $20,000 $20,000
Automated Distribution and Load Control (3 switches/year) $80,000 $80,000 $80,000 $80,000 $80,000
Replace battery bank at Dixon $15,000
Replace battery banks at Drake, Rich, Linden, and Portner $30,000 $15,000
Substation Improvements misc $200,000 $200,000 $200,000 $200,000 $200,000
Re-gasket and paint substation transformers-2 per year (Harm, Drake, Linden, Rich) $30,000 $30,000 $30,000 $30,000 $30,000
Install cap bank buildings (Dixon, Portner,Timberline, Northeast) $150,000 $150,000 $150,000 $150,000
Install new power quality meters at substations $10,000 $10,000 $10,000 $10,000
Improve oil containment on substation power transformers $100,000 $100,000 $100,000 $100,000 $100,000
Replcement of electro-mechanical feeder relays at Richard's lake sub $160,000
Total for Substation Improvements $445,000 $590,000 $750,000 $620,000 $605,000
Distribution System Improvements 2017 2018 2019 2020 2021
Cable Replacement $850,000 $876,000 $902,000 $929,000 $957,000
Transformer Replacement $670,000 $710,000 $731,000 $753,000 $776,000
1/O to electric heated homes - Lemay/Brookwood $30,000
Streetlight System Replacement $500,000 $950,000 $1,210,000 $1,770,000 $1,530,000
Cable handling facility for cut-to-length program $900,000
System conversions - overhead to underground or rear lot to front lot. $0 $0
Total for Distribution System Improvements $2,950,000 $2,536,000 $2,843,000 $3,452,000 $3,263,000
Fiber Optic System Improvements 2017 2018 2019 2020 2021
Fiber Cable Relocation $40,000 $41,000 $42,000 $43,000 $44,000
Fiber Panel upgrades $25,000 $26,000 $27,000 $28,000 $29,000
Fiber Optic Splicing equipment $95,000 $30,000
Total for Fiber Optics Improvements $160,000 $97,000 $69,000 $71,000 $73,000
Total for Improvement Projects $3,555,000 $3,223,000 $3,662,000 $4,143,000 $3,941,000
Improvement of Existing Capital
Substations 2022 2023 2024 2025 2026
Substation Improvements
Sub security capital $20,000 $20,000 $20,000 $20,000
Automated Distribution and Load Control (3 switches/year) $80,000 $80,000 $80,000 $80,000
Replace battery bank at Dixon
Replace battery banks at Drake, Rich, Linden, and Portner $15,000
Substation Improvements misc $200,000 $200,000 $200,000 $200,000
Re-gasket and paint substation transformers-2 per year (Harm, Drake, Linden, Rich) $30,000 $30,000 $30,000
Install cap bank buildings (Dixon, Portner,Timberline, Northeast)
Install new power quality meters at substations $10,000 $10,000 $10,000
Improve oil containment on substation power transformers $100,000 $100,000 $100,000
Replcement of electro-mechanical feeder relays at Richard's lake sub
Total for Substation Improvements $440,000 $440,000 $440,000 $315,000 $0
Distribution System Improvements 2022 2023 2024 2025 2026
Cable Replacement $986,000 $1,016,000 $1,046,000 $1,077,000 $1,109,000
Transformer Replacement $799,000 $823,000 $848,000 $873,000 $899,000
1/O to electric heated homes - Lemay/Brookwood
Streetlight System Replacement
Cable handling facility for cut-to-length program
System conversions - overhead to underground or rear lot to front lot.
Total for Distribution System Improvements $1,787,000 $1,841,000 $1,896,000 $1,952,000 $2,010,000
Fiber Optic System Improvements 2022 2023 2024 2025 2026
Fiber Cable Relocation $45,000 $46,000 $47,000 $48,000 $49,000
Fiber Panel upgrades $30,000 $31,000 $32,000 $33,000 $34,000
Fiber Optic Splicing equipment
Total for Fiber Optics Improvements $75,000 $77,000 $79,000 $81,000 $83,000
Total for Improvement Projects $2,302,000 $2,358,000 $2,415,000 $2,348,000 $2,093,000
17
Light & Power Fund Aggregate Funding Needs
The table and graph below show the total capital funding needs for the fund for the 10-
year planning horizon. This aggregate funding contains capital funding for replacement
of existing infrastructure, projects to install new capacity for development, annexation of
new service territory, and miscellaneous capital projects to support LPO such as
modernizing the mapping system.
Light & Power Fund Capital Expenditures
1-5 Year Light & Power Fund Capital Expenditures
Type of Project 2017 2018 2019 2020 2021
Total for New Capacity $4,654,000 $3,628,000 $1,034,000 $1,770,000 $2,970,000
Total for Annexations $140,000 $3,015,000 $3,000,000 $3,000,000 $3,000,000
Total for Replacement Projects $3,555,000 $3,223,000 $3,662,000 $4,143,000 $3,941,000
Total for Operational Technology Projects $2,990,000 $1,930,000 $90,000 $90,000 $90,000
Grand total for all LPO Capital Projects $11,339,000 $11,796,000 $7,786,000 $9,003,000 $10,001,000
18
6-10 Year Light & Power Fund Capital Expenditures
FUTURE CAPITAL EXPENDITURES
The planning period for this document is 10 years; however, due to the need to serve
new development and the finite nature of infrastructure, there will be capital needs for
the fund beyond that 10-year planning period. It is anticipated that certain annual
programs such as the replacement of cables, transformers, and substation equipment
will continue beyond the 10-year planning period. The amount of those expenditures is
unknown at this time, but it is expected that those expenditures will be considerably
more than they are today due to the aging underground distribution system.
New development beyond the 10-year planning period will result in more than $12million
dollars in capital expenditures, as shown in the chart above.
Type of Project 2022 2023 2024 2025 2026
Total for New Capacity $8,050,000 $13,370,000 $3,303,139 $0 $0
Total for Annexations $3,150,000 $3,150,000 $0 $0 $0
Total for Replacement Projects $2,300,000 $2,356,000 $2,413,000 $2,346,000 $2,091,000
Total for Operational Technology Projects $90,000 $90,000 $90,000 $90,000 $90,000
Grand total for all LPO Capital Projects $12,940,000 $15,816,000 $5,807,000 $2,436,000 $2,181,000
19
20
Capital Projects
The following section contains schedule and funding needs for the known capital
projects that will be funded by the enterprise fund in the next ten years.
21
Light & Power Enterprise Fund Project Prioritization
Project or Program 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Future Years Notes
New Capacity
New Circuits 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Future Years
Install circuit 826 to unload 802, 804, and 834 $585,600
Install circuit 936 to unload circuits 804, 834, and 906 $842,400
Install circuit 322 to unload circuits 308 and 332 and serve Mulberry $914,400
Install circuit 724 to unload circuits 714, 722, and 732 $911,520
Re-route circuit 716 due to cable ampacity $37,540
Re-route circuit 736 due to cable ampacity $37,540
Install circuit on existing breaker 554 to unload circuit 554 $490,560
Install circuit on existing breaker 576 to unload circuit 576 $346,840
Install circuit 934 to unload circuits 518 and 526 $940,600
Install circuit 314 to unload circuit 308 $461,760
Install circuit 616 to unload circuit 622 $176,440
Install circuit 904 to unload circuit 504 $395,800
Install new circuit 336 to serve Woodard $727,560
Install circuit on existing breaker 518 to unload circuit 518 $686,880
Install circuit 572 to serve Avago $355,560
Install circuit 832 to serve system expansion in west $404,520
Install circuit on existing breaker 502 to unload ckts 502, 518 & 534 $530,880
Install circuit on existing breaker 566 to unload circuit 522 $389,760
Install circuit on existing breaker 548 to unload circuits 326 and 568 $207,840
Install circuit 926 to serve system expansion in the southeast $992,160
Install circuit on existing breaker 508 to serve Intel and Avago $444,840
Install circuit 402 to unload circuit 832 $144,947
Install circuit 404 to unload circuit 832 $484,800
Install circuit 406 to unload circuits 732 and 822 $144,086
Install circuit 408 to unload circuits 822 and 832 $484,800
Install circuit 422 to serve system expansion in the northwest $804,960
Install circuit 424 to unload circuit 812 $144,086
Install circuit 426 to backup Linden Tech serving downtown $548,160
Install circuit 428 to backup Linden Tech serving downtown $548,160
Future circuits $12,230,000
These expenditure includes 16 circutis that are
beyond the 10-year planning horizon.
Total for New Circuits $3,329,000 $1,778,000 $1,034,000 $1,770,000 $2,970,000 $0 $0 $3,304,000 $0 $0 $12,230,000
New Duct Banks 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Future Years
County Rd 5 - Prospect to Mulberry $662,500
Shields Duct Bank - Harmony to Fossil Creek $662,500
Lincoln Ave. - Timberline to Lemay $875,000
Straus Cabin Rd Harmony to Horsetooth $975,000
Northeast Substation Duct Bank System $4,000,000
Trilby - Lemay to Timberline Road $500,000
Northwest Substation Duct Bank System $1,320,000
Total for New Duct Banks $1,325,000 $1,850,000 $0 $0 $0 $0 $5,820,000 $0 $0 $0 $0
New Substations 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Future Years
Northwest Substation $7,550,000 Does not include land purchase costs
Northeast Substation $7,550,000 Does not include land purchase costs
Total for New Substations $0 $0 $0 $0 $0 $7,550,000 $7,550,000 $0 $0 $0 $0
System Additions 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Future Years
System Additions
System Connections
Total for New Capacity $4,654,000 $3,628,000 $1,034,000 $1,770,000 $2,970,000 $7,550,000 $13,370,000 $3,304,000 $0 $0 $12,230,000
Annexations
22
Annexations
Riverwalk Annexation $50,000
Arapahoe Bend 2nd Annexation $75,000
Leistikow Annexation $15,000
Mulberry Annexation $3,000,000 $3,000,000 $3,000,000 $3,000,000 $3,000,000 Estimate includes acquisition cost
Fossil Creek Open Space Annexation $15,000
Total for Annexations $140,000 $3,015,000 $3,000,000 $3,000,000 $3,000,000 $3,000,000 $0 $0 $0 $0 $0
Replacement of Existing Capital
Substations 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Future Years
Substation Improvements
Sub security capital $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000
Automated Distribution and Load Control (3 switches/year) $80,000 $80,000 $80,000 $80,000 $80,000 $80,000 $80,000 $80,000 $80,000
Replace battery bank at Dixon $15,000
Replace battery banks at Drake, Rich, Linden, and Portner $30,000 $15,000 $15,000
Substation Improvements misc $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000
Re-gasket and paint substation transformers-2 per year (Harm, Drake, Linden, Rich) $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000
Install cap bank buildings (Dixon, Portner,Timberline, Northeast) $150,000 $150,000 $150,000 $150,000
Install new power quality meters at substations $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000
Improve oil containment on substation power transformers $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000
Replcement of electro-mechanical feeder relays at Richard's lake sub $160,000
Total for Substation Improvements $445,000 $590,000 $750,000 $620,000 $605,000 $440,000 $440,000 $440,000 $315,000 $0 $0
Distribution System Improvements 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Future Years
Cable Replacement $850,000 $876,000 $902,000 $929,000 $957,000 $986,000 $1,016,000 $1,046,000 $1,077,000 $1,109,000 $1,142,000
Transformer Replacement $670,000 $710,000 $731,000 $753,000 $776,000 $799,000 $823,000 $848,000 $873,000 $899,000 $926,000
1/O to electric heated homes - Lemay/Brookwood $30,000
Streetlight System Replacement $500,000 $950,000 $1,210,000 $1,770,000 $1,530,000
Cable handling facility for cut-to-length program $900,000
System conversions - overhead to underground or rear lot to front lot. $0 $0
Total for Distribution System Improvements $2,950,000 $2,536,000 $2,843,000 $3,452,000 $3,263,000 $1,785,000 $1,839,000 $1,894,000 $1,950,000 $2,008,000 $2,068,000
Fiber Optic System Improvements 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Future Years
Fiber Cable Relocation $40,000 $41,000 $42,000 $43,000 $44,000 $45,000 $46,000 $47,000 $48,000 $49,000 $50,000
Fiber Panel upgrades $25,000 $26,000 $27,000 $28,000 $29,000 $30,000 $31,000 $32,000 $33,000 $34,000 $35,000
Fiber Optic Splicing equipment $95,000 $30,000
Total for Fiber Optics Improvements $160,000 $97,000 $69,000 $71,000 $73,000 $75,000 $77,000 $79,000 $81,000 $83,000 $85,000
Total for Replacement Projects $3,555,000 $3,223,000 $3,662,000 $4,143,000 $3,941,000 $2,300,000 $2,356,000 $2,413,000 $2,346,000 $2,091,000 $2,068,000
Operational Technology Projects
Fiber Management Software $90,000 $90,000 $90,000 $90,000 $90,000 $90,000 $90,000 $90,000 $90,000 $90,000 $90,000
Light & Power Mapping System Conversion $2,400,000
Advance Distribution Management System $1,840,000
CMMS Implementation $500,000
Total for Operational Technology Projects $2,990,000 $1,930,000 $90,000 $90,000 $90,000 $90,000 $90,000 $90,000 $90,000 $90,000 $90,000
Grand total for all LPO Capital Projects $11,339,000 $11,796,000 $7,786,000 $9,003,000 $10,001,000 $12,940,000 $15,816,000 $5,807,000 $2,436,000 $2,181,000 $14,388,000
Average 10-Year Capital Spend $8,910,500 $8,910,500 $8,910,500 $8,910,500 $8,910,500 $8,910,500 $8,910,500 $8,910,500 $8,910,500 $8,910,500
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Future Years
23
24
Fort Collins Utilities
Water Enterprise Fund
Capital Improvement Plan
2016
Revised: March 2016
By: Chris Parton
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Table of Contents
Purpose ........................................................................................................................... 1
Executive Summary ........................................................................................................ 3
Capital Project Prioritization ............................................................................................ 8
Capital Funding Needs .................................................................................................. 12
Capital Projects ............................................................................................................. 18
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1
Purpose
The purpose of this Capital Improvement Plan (CIP) is to serve as a central repository
for information relating to capital projects within the water enterprise fund.
Ownership
The Asset Manager maintains ownership of this document. It is the responsibility of the
person in this role to ensure that the plan is updated when necessary and that all
interested parties are allowed input into the preparation and update of this document.
Frequency of Updates
This document shall be updated on a yearly basis so that the Utilities Strategic Finance
Director has the information necessary to prepare forward-looking documents dealing
with cost projections, revenue projections, and rate-setting.
2
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3
Executive Summary
The scope of this document is to provide information pertaining to capital projects,
project prioritization, and funding needs within the Water Enterprise Fund managed by
Fort Collins Utilities (FCU). The planning period for this document is for a 10-year
horizon beginning in 2017. Where they are known, major capital projects that are
planned beyond the 10-year planning horizon are included.
Capital Projects
This document contains information pertaining to the Water Production & Water
Distribution divisions in the water enterprise fund. FCU project managers were asked to
provide the Asset Manager with as much information as possible about known capital
projects within the water fund.
Capital Project Prioritization
A working group of approximately 20 FCU staff from the wastewater, water, stormwater,
and light & power businesses compiled the process for prioritizing projects. A high-level
snapshot of the process is included below. This process was used to prioritize projects
for water production and water distribution.
The project prioritization for the water fund is shown on the next page.
Confirm
Prioritization
Criteria
Prioritization
Criteria Rating
Confirm List of
Projects
Rate Projects
Against Criteria
First Prioritized
List of Projects
Review & Adjust if
Necessary
Final List of
Prioritized
Projects
CPRC Review of
Framework &
Projects
Allocate Capital
Dollars to Projects
Determine
Schedule Based
on Available
Capital
Review &
Approval of
Prioritization
Budget Offers
4
C
Water Fund Project Prioritization
In 2014, the Capital Project Review Committee (CPRC) was created to review the
project prioritization prior to budget offers being submitted for the Budgeting for
Outcomes process. The CPRC is composed of the following positions:
• Executive Director
• Utilities Strategic Finance Director
• Water Resources & Treatment Operations Manager
Priority Alternative Name Division
1 Water Treatment Facility Replacement Program Water Production
2 Water Quality Lab Remodel Environmental Services
3 Azalea Waterline Repairs Water Distribution
4 Water System Replacement Master Plan Priority 1 Water Distribution
5 Water System Replacement Master Plan Priority 2 Water Distribution
6 Water Distribution System Replacement Water Distribution
7 Water Meter Replacement Program Water Distribution
8 Water System Replacement Master Plan Priority 3 Water Distribution
9 Water Quality Lab Instrumentation Replacement Program Environmental Services
10 Water System Replacement Master Plan Priority 4 Water Distribution
11 24" Poudre Pipeline Replacement Evaluation & Installation Water Production
12 Water System Replacement Master Plan Priority 5 Water Distribution
13 Water System Replacement Master Plan Priority 6 Water Distribution
14 Water System Replacement Master Plan Priority 7 Water Distribution
15 Water System Replacement Master Plan Priority 8 Water Distribution
16 Sodium Hypochlorite On-site Generation Water Production
17 Cathodic Protection - A-B Line Water Distribution
18 Finished Water Treated Storage Water Production
19 PAC Contact Time Improvements Water Production
20 Cathodic Protection - Trans & Dist Mains Water Distribution
21 Poudre Pipeline blowoff installation, valve replacement and slope stabilization. Water Production
22 Water System Replacement Master Plan Priority 9 Water Distribution
23 Finished Water Metering Water Production
24 Water System Replacement Master Plan Priority 10 Water Distribution
25 Sludge Drying Pad Water Production
26 East Backwash Waste Pond Liner Water Production
27 Horsetooth Reservoir Second Outlet Water Production
28 HT Reservoir PVP Connection Water Production
29 Solar Power Project Water Production
30 Finished Water Reservoir Bypass Water Production
31 Solids Drying Lagoons Liner Water Production
32 Rapid Drain Recycle Pond Liner Water Production
33 Granular Activated Carbon Filters Water Production
34 Ozone\BAC Water Production
35 UV Disinfection Water Production
36 Environmental Services Division Master Plan Environmental Services
Unranked Filter to Waste Water Production
Unranked Solids Handling - Centrifuge Water Production
Division
1 Water Supply Development Water Resources
2 Halligan Reservoir Enlargement Project Water Resources
3 ELC Diversion Structure Water Resources
Water Resources
5
• Water Engineering & Field Services Manager
• Light & Power Operations Manager
The CPRC is responsible for reviewing and approving the capital project prioritization for
each enterprise fund prior to submitting funding requests to the City’s bi-annual
Budgeting for Outcomes (BFO) process.
Water Fund Capital Funding Needs
The graph and table below show the capital funding needs for the water enterprise fund
for near- and long-term capital projects. This funding contains water production,
distribution system, water resources, and environmental services capital projects.
Water Enterprise Fund Capital Spend
1-5 Year Water Fund Capital Needs
Division 2017 2018 2019 2020 2021
Water Production $4,665,000 $12,821,000 $3,174,000 $2,535,000 $1,000,000
Water Distribution $6,153,000 $3,810,000 $3,737,000 $5,683,000 $5,957,000
Water Resources $554,000 $558,000 $13,128,000 $14,418,000 $2,680,000
Environmental Services $1,350,000 $1,350,000 $50,000 $50,000 $50,000
Total $12,722,000 $18,539,000 $20,089,000 $22,686,000 $9,687,000
6
6-10 Year Water Fund Capital Needs
Enhancements from Previous Plans
1. Capital funding for the water distribution system (WDS) is expected to increase
through year 5 of this plan. The length of replacement is proposed to increase by
0.10% each year to the proposed level of 1% per year. This increase will allow
the distribution system superintendent and his staff to become more proactive in
replacing the system and avoid probable increases in corrective maintenance as
the system continues to deteriorate. This will also increase the replacement rate
of the system to 1% per year, which is considered an industry best practice.
2. The Water Production Group updated the master plan for its facilities and
infrastructure. This update resulted in the addition of several new projects to the
water fund portfolio.
3. Water Engineering and Field Operations completed a master plan for
replacement of the Old Town area of the water distribution system. The ten
highest priority zones from that plan are identified in this version of the plan and
are scheduled for funding and construction over the next decade.
4. Three capital projects were initiated to allow the Environmental Services Division
to better manage its facilities and instruments. Those programs are for the
completion of a master plan to address long-term needs for the Pollution Control
and Water Quality laboratories, remodeling the existing Water Quality laboratory,
and an annual program for the replacement of instrumentation at the Water
Quality laboratory.
Future Project Costs
It is expected that certain annual capital projects, i.e. distribution system replacement or
water production group replacement, will continue at similar funding levels beyond the
10-year planning horizon; however, of considerable note is one regulatory project
beyond the 10-year planning horizon considered in this document.
The addition of three large projects to the treatment process is a potential regulatory-
driven requirement. Each of these projects is related to the probable deterioration of
water quality in the Cache la Poudre River basin. It is uncertain if and when these
projects might occur, as they are related to a few different water quality parameters that
could change in the future. While these projects are uncertain, they warrant special
consideration due to the significant cost and potential impact on Water Fund reserves.
The projects and their associated costs are shown below.
Division 2022 2023 2024 2025 2026
Water Production $16,772,000 $3,395,000 $14,031,000 $1,000,000 $1,000,000
Water Distribution $5,515,000 $6,511,000 $6,451,000 $6,451,000 $6,451,000
Water Resources $216,000 $222,000 $228,000 $237,000 $247,000
Environmental Services $50,000 $50,000 $50,000 $50,000 $50,000
Total $22,553,000 $10,178,000 $20,760,000 $7,738,000 $7,748,000
7
Project Cost
Granular Activated Carbon Filters $ 72,684,000
Ozone\BAC $ 26,857,000
UV Disinfection $ 17,200,000
8
Capital Project Prioritization
Classification of Capital Projects
Capital construction in FCU’s water enterprise fund consists of two areas of focus:
• construction of capital projects for the water production division; this area
consists of projects at the water treatment facility (WTF) and the Source of
Supply department which manages infrastructure on and near Cameron Pass to
deliver raw water to the water treatment facility.
• renewal and replacement of the existing water distribution system (WDS).
A very large percentage of the distribution system exists today, and the FCU water
service area is bounded by special districts; therefore, additional expansion of the
distribution system through the addition of new capital is not anticipated as an expense
for the water fund.
Similarly, the water treatment facility is built to provide adequate capacity for the 5-year
planning horizon, so construction of additional capacity is not anticipated in that
timeframe. Replacement of existing facility infrastructure as well as addressing new
regulations will be the primary drivers for facility capital projects. A new storage tank will
most likely be needed in year 8 of the plan. The project will be re-evaluated as it gets
closer, as water demand will drive the need for that project.
Capital Projects Creation
Capital projects in the water enterprise fund are brought forth for inclusion in the CIP by
one of three ways:
• suggestion by the water distribution system maintenance superintendent,
• suggestion by Water Treatment Facility staff
• suggestion by Water Systems Engineering staff.
These three methods apply to both renewal and replacement of existing infrastructure
and the addition of new capital to the water fund. Each project is then evaluated against
the CIP framework described below.
Prioritization Methodology
FCU staff developed a process for prioritizing capital projects across all of the enterprise
funds. The need for this process was driven by the need for defensible and transparent
capital budgeting requests, and ultimately to be able to defend any needed increases in
revenue for capital expenditures in these “wet” funds. This process is designed to
include renewal & replacement of existing infrastructure as well as addition of new
capital to the system.
A working group of approximately 20 FCU staff from the light & power, stormwater,
water, & wastewater funds compiled the process for prioritizing projects. A high-level
snapshot of the process is included below.
9
.
Capital Project Prioritization Business Process
Prioritization Criteria
Capital projects were prioritized based on their ability to improve FCU’s adopted levels of
service (LOS). The CPRC identified the following LOS related to the operation of the
water fund and ultimately to the prioritization of capital projects in the fund:
Strategic Objectives
Safety Product Quality
Regulatory Compliance Reliability
Sustainability Customer Satisfaction
A pairwise comparison process was used to determine the relative weights for each of
the LOS. The chart below shows the relative importance for the strategic objectives
used to prioritize projects.
Objectives Relative Weights
Safety 38%
Regulatory Compliance 29%
Reliability 13%
Product Quality 9%
Customer Satisfaction 7%
Sustainability 4%
Levels of Service – Relative Weights
Prioritization of Projects
Confirm
Prioritization
Criteria
Prioritization
Criteria Rating
Confirm List of
Projects
Rate Projects
Against Criteria
First Prioritized
List of Projects
Review & Adjust if
Necessary
Final List of
Prioritized
Projects
CPRC Review of
Framework &
Projects
Allocate Capital
Dollars to Projects
Determine
Schedule Based
on Available
Capital
Review &
Approval of
Prioritization
Budget Offers
10
Once the CIP framework was established and all known capital projects were identified,
each capital project was rated against the framework to determine a total “score” for
each project. Projects were then ranked from highest to lowest score to establish an
order in which projects should be constructed. The prioritization for the water fund is
shown below.
Water Fund Project Prioritization
Priority Alternative Name Division
1 Water Treatment Facility Replacement Program Water Production
2 Water Quality Lab Remodel Environmental Services
3 Azalea Waterline Repairs Water Distribution
4 Water System Replacement Master Plan Priority 1 Water Distribution
5 Water System Replacement Master Plan Priority 2 Water Distribution
6 Water Distribution System Replacement Water Distribution
7 Water Meter Replacement Program Water Distribution
8 Water System Replacement Master Plan Priority 3 Water Distribution
9 Water Quality Lab Instrumentation Replacement Program Environmental Services
10 Water System Replacement Master Plan Priority 4 Water Distribution
11 24" Poudre Pipeline Replacement Evaluation & Installation Water Production
12 Water System Replacement Master Plan Priority 5 Water Distribution
13 Water System Replacement Master Plan Priority 6 Water Distribution
14 Water System Replacement Master Plan Priority 7 Water Distribution
15 Water System Replacement Master Plan Priority 8 Water Distribution
16 Sodium Hypochlorite On-site Generation Water Production
17 Cathodic Protection - A-B Line Water Distribution
18 Finished Water Treated Storage Water Production
19 PAC Contact Time Improvements Water Production
20 Cathodic Protection - Trans & Dist Mains Water Distribution
21 Poudre Pipeline blowoff installation, valve replacement and slope stabilization. Water Production
22 Water System Replacement Master Plan Priority 9 Water Distribution
23 Finished Water Metering Water Production
24 Water System Replacement Master Plan Priority 10 Water Distribution
25 Sludge Drying Pad Water Production
26 East Backwash Waste Pond Liner Water Production
27 Horsetooth Reservoir Second Outlet Water Production
28 HT Reservoir PVP Connection Water Production
29 Solar Power Project Water Production
30 Finished Water Reservoir Bypass Water Production
31 Solids Drying Lagoons Liner Water Production
32 Rapid Drain Recycle Pond Liner Water Production
33 Granular Activated Carbon Filters Water Production
34 Ozone\BAC Water Production
35 UV Disinfection Water Production
36 Environmental Services Division Master Plan Environmental Services
Unranked Filter to Waste Water Production
Unranked Solids Handling - Centrifuge Water Production
Division
1 Water Supply Development Water Resources
2 Halligan Reservoir Enlargement Project Water Resources
3 ELC Diversion Structure Water Resources
Water Resources
11
Capital Project Prioritization Updates
Since capital creation and renewal is such an integral part of FCU’s bi-annual Budgeting
for Outcomes (BFO) process, the capital project prioritization shall be updated every
year. The process for prioritizing projects and the levels of service shall be reviewed
annually to ensure that priorities of FCU senior management are being met by the
project prioritization efforts.
12
Capital Funding Needs
The following section presents funding levels necessary to build water fund capital
projects in the next 10 years.
Water Distribution System
Funding needs for the water distribution system are shown in the graph below. The
annual increase in capital funding is the result of an incremental increase in system
replacement each year from 2015 to 2021 to achieve a more sustainable rate of
replacement.
Water Distribution 10-Year Capital Needs
Water Production Group
Funding needs for the water production group are shown in the graph below. The
updated Water Production Group Master Plan identified significant capital expenditures
necessary in the next decade to add storage capacity and replace existing infrastructure.
Those expenditures are included in the chart below.
13
Water Production Capital Needs
Water Resources Group
The primary mission of the Water Resources Group is to secure water rights to
strengthen FCU’s water rights portfolio and to provide for adequate storage of raw water.
Funding needs to accomplish each of these tasks are shown in the graph below.
Of particular interest in this funding group is the spike in costs in years 2019 and 2020.
These costs are for the enlargement of Halligan Reservoir. The anticipated cost of this
project was revised in 2015. This revision resulted in a higher anticipated cost that is
depicted in the graph below. This project is still being permitted by the Corps of
Engineers, and the timing of the project is still uncertain; however, this is the best
estimate of when the project will be constructed.
To date, $37.4million has been appropriated to the project. It is estimated that an
additional $7.1million in appropriations will be needed to fully fund the project for all
necessary acquisition, design, permitting, construction, and operating costs.
14
Water Resources Capital Needs
ENVIRONMENTAL SERVICES
The Environmental Services Division (ESD) provides laboratory services for the Water
and Wastewater Funds. Services provided for the water fund include testing of raw and
finished water entering and leaving the water treatment facility, testing of the finished
water in the distribution system, and responding to complaints about the quality of water
in the distribution system when customers contact FCU with a concern.
The ESD has three capital projects in this plan. Those projects are for the completion of
a master plan to address long-term needs for the Pollution Control and Water Quality
laboratories, remodeling the existing Water Quality laboratory, and an annual program
for the replacement of instrumentation at the Water Quality laboratory.
15
Water Fund Aggregate Funding Needs
The graph and table below show the capital funding needs for the water enterprise fund
for near- and long-term capital projects. This funding contains water production,
distribution system, water resources, and environmental services capital projects.
.
16
Water Enterprise Fund Capital Spend
1-5 Year Water Fund Capital Needs
6-10 Year Water Fund Capital Needs
The tables below show the projected costs for the Water Fund in near- and mid-term
windows.
Division 2017 2018 2019 2020 2021
Water Production $4,665,000 $12,821,000 $3,174,000 $2,535,000 $1,000,000
Water Distribution $6,153,000 $3,810,000 $3,737,000 $5,683,000 $5,957,000
Water Resources $554,000 $558,000 $13,128,000 $14,418,000 $2,680,000
Environmental Services $1,350,000 $1,350,000 $50,000 $50,000 $50,000
Total $12,722,000 $18,539,000 $20,089,000 $22,686,000 $9,687,000
Division 2022 2023 2024 2025 2026
Water Production $16,772,000 $3,395,000 $14,031,000 $1,000,000 $1,000,000
Water Distribution $5,515,000 $6,511,000 $6,451,000 $6,451,000 $6,451,000
Water Resources $216,000 $222,000 $228,000 $237,000 $247,000
Environmental Services $50,000 $50,000 $50,000 $50,000 $50,000
Total $22,553,000 $10,178,000 $20,760,000 $7,738,000 $7,748,000
17
18
Capital Projects
The following section contains schedule and funding needs for the known capital
projects that will be funded by the water enterprise fund in the next ten years. Detailed
information for each of these projects is available in Appendices A, B, & C.
19
Water Fund Prioritization - 2016
Priority Alternative Name Division 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Future
1 Water Treatment Facility Replacement Program Water Production $ 1,900,000 $ 1,900,000 $ 1,000,000 $ 1,000,000 $ 1,000,000 $ 1,000,000 $ 1,000,000 $ 1,000,000 $ 1,000,000 $ 1,000,000
$ 1,000,000
2 Water Quality Lab Remodel Environmental Services $ 1,300,000 $ 1,300,000
3 Azalea Waterline Repairs Water Distribution $ 450,000
4 Water System Replacement Master Plan Priority 1 Water Distribution $ 1,300,000
5 Water System Replacement Master Plan Priority 2 Water Distribution $ 900,000
6 Water Distribution System Replacement Water Distribution $ 2,127,000 $ 2,910,000 $ 1,825,000 $ 2,173,000 $ 3,300,000 $ 3,515,000 $ 5,211,000 $ 4,651,000 $ 2,351,000 $ 4,751,000 $ 6,451,000
7 Water Meter Replacement Program Water Distribution $ 800,000 $ 800,000 $ 800,000 $ 800,000 $ 800,000 $ 800,000 $ 800,000 $ 800,000 $ 800,000 $ 800,000 $ 800,000
8 Water System Replacement Master Plan Priority 3 Water Distribution $ 1,600,000
9 Water Quality Lab Instrumentation Replacement Program Environmental Services $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000
10 Water System Replacement Master Plan Priority 4 Water Distribution $ 3,000,000
11 24" Poudre Pipeline Replacement Evaluation & Installation Water Production $ 800,000 $ 10,921,000
12 Water System Replacement Master Plan Priority 5 Water Distribution $ 2,300,000
13 Water System Replacement Master Plan Priority 6 Water Distribution $ 2,000,000
14 Water System Replacement Master Plan Priority 7 Water Distribution $ 1,300,000
15 Water System Replacement Master Plan Priority 8 Water Distribution $ 1,800,000
16 Sodium Hypochlorite On-site Generation Water Production $ 10,982,000
17 Cathodic Protection - A-B Line Water Distribution $ 2,280,000
18 Finished Water Treated Storage Water Production $ 13,888,000
19 PAC Contact Time Improvements Water Production $ 688,000
20 Cathodic Protection - Trans & Dist Mains Water Distribution $ 312,000 $ 510,000 $ 357,000
21 Poudre Pipeline blowoff installation, valve replacement and slope stabilization. Water Production $ 569,000
22 Water System Replacement Master Plan Priority 9 Water Distribution $ 4,100,000
23 Finished Water Metering Water Production $ 357,000
24 Water System Replacement Master Plan Priority 10 Water Distribution $ 1,700,000
25 Sludge Drying Pad Water Production $ 1,346,000
26 East Backwash Waste Pond Liner Water Production $ 1,535,000
27 Horsetooth Reservoir Second Outlet Water Production $ 4,680,000
28 HT Reservoir PVP Connection Water Production $ 560,000
29 Solar Power Project Water Production $ 1,883,000
30 Finished Water Reservoir Bypass Water Production $ 530,000
31 Solids Drying Lagoons Liner Water Production $ 2,395,000
32 Rapid Drain Recycle Pond Liner Water Production $ 2,049,000
33 Granular Activated Carbon Filters Water Production $ 72,700,000
34 Ozone\BAC Water Production $ 26,900,000
35 UV Disinfection Water Production $ 17,200,000
36 Environmental Services Division Master Plan Environmental Services $ 105,000
Unranked Filter to Waste Water Production $ 2,000,000
Unranked Solids Handling - Centrifuge Water Production $ 8,000,000
Division 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Future
1 Water Supply Development Water Resources $ 125,000 $ 130,000 $ 135,000 $ 140,000 $ 145,000 $ 151,000 $ 157,000 $ 163,000 $ 169,000 $ 176,000 $ 183,000
2 Halligan Reservoir Enlargement Project Water Resources $ 428,000 $ 425,000 $ 13,000,000 $ 14,277,000 $ 1,285,000 $ 65,000 $ 65,000 $ 65,000 $ 68,000 $ 7,000
3 ELC Diversion Structure Water Resources $ 1,250,000
Division 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Future
Water Production $ 4,046,000 $ 12,821,000 $ 3,174,000 $ 2,535,000 $ 1,000,000 $ 16,771,000 $ 3,395,000 $ 14,031,000 $ 1,000,000 $ 1,000,000 $ 133,010,000
Water Distribution $ 6,957,000 $ 4,610,000 $ 4,537,000 $ 6,483,000 $ 6,757,000 $ 6,315,000 $ 7,311,000 $ 7,251,000 $ 7,251,000 $ 7,251,000 $ 7,251,000
Water Resources $ 553,000 $ 555,000 $ 13,135,000 $ 14,417,000 $ 2,680,000 $ 216,000 $ 222,000 $ 228,000 $ 237,000 $ 183,000 $ 183,000
Environmental Services $ 1,455,000 $ 1,350,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ -
Total $ 13,011,000 $ 19,336,000 $ 20,896,000 $ 23,485,000 $ 10,487,000 $ 23,352,000 $ 10,978,000 $ 21,560,000 $ 8,538,000 $ 8,484,000 $ 140,444,000
Water Resources
20
Fort Collins Utilities
Wastewater Enterprise Fund
Capital Improvement Plan
2016
Revised: March 2016
By: Chris Parton
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Table of Contents
Purpose ........................................................................................................................... 5
Executive Summary ........................................................................................................ 7
Capital Project Prioritization .......................................................................................... 12
Capital Funding Needs .................................................................................................. 18
Wastewater Fund Capital Projects ................................................................................ 24
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5
Purpose
The purpose of this Capital Improvement Plan (CIP) is to serve as a central repository
for information relating to capital projects within the wastewater enterprise fund.
Ownership
The Asset Manager maintains ownership of this document. It is the responsibility of the
person in this role to ensure that the plan is updated when necessary and that all
interested parties are allowed input into the preparation and update of this document.
Frequency of Updates
This document shall be updated on a yearly basis so that the Utilities Strategic Finance
Director has the information necessary to prepare forward-looking documents dealing
with expenditures, revenues, and rate-setting.
6
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7
Executive Summary
The scope of this document is to provide information pertaining to capital projects,
project prioritization, and funding needs within the Wastewater Enterprise Fund
managed by Fort Collins Utilities (FCU). The planning period for this document is for a
10-year horizon beginning in 2017. Where they are known, major capital projects that
are planned beyond the 10-year planning horizon are included.
Capital Projects
This document contains information pertaining to both the Water Reclamation &
Biosolids and Wastewater Collection divisions in the Wastewater enterprise fund. FCU
project managers were asked to provide the Asset Manager with as much information as
possible about known capital projects within the wastewater fund.
Capital Project Prioritization
A working group of approximately 20 FCU staff from the wastewater, water, stormwater,
& light & power businesses compiled the process for prioritizing projects. A high-level
snapshot of the process is included below. This process was used to prioritize both
water reclamation and wastewater collection projects.
A detailed project prioritization is included on the next page.
Confirm
Prioritization
Criteria
Prioritization
Criteria Rating
Confirm List of
Projects
Rate Projects
Against Criteria
First Prioritized
List of Projects
Review & Adjust if
Necessary
Final List of
Prioritized
Projects
CPRC Review of
Framework &
Projects
Allocate Capital
Dollars to Projects
Determine
Schedule Based
on Available
Capital
Review &
Approval of
Prioritization
Budget Offers
8
Wastewater Fund Project Prioritization
Priiority Project Name Division
1 DWRF Digester Lid Replacements (612) Water Reclamation
2 Pollution Control Lab Instrumentation Replacement Program Environmental Services
3 WRF Master Plan Update Water Reclamation
4 DWRF Sidestream Treatment Water Reclamation
5 Pollution Control Lab "Clean Room" Improvements Environmental Services
6 DWRF Carbon Addition Improvements Water Reclamation
7 DWRF Dewatering Improvements Water Reclamation
8 Collection System Replacement Wastewater Collection
9 Collection System CIPP Wastewater Collection
10 Collection System - Old Town Sewer Main Replacement - Priority 1 Wastewater Collection
11 Collection System I&I Study Wastewater Collection
12 WRF Replacement Program 2017 Water Reclamation
13 Collection System - Old Town Sewer Main Replacement - Priority 2 Wastewater Collection
14 DWRF Bar Screen/Wash Press replacement Water Reclamation
15 Collection System - Old Town Sewer Main Replacement - Priority 3 Wastewater Collection
16 Collection System - Old Town Sewer Main Replacement - Priority 4 Wastewater Collection
17 MWRF Carbon Addition Improvements Water Reclamation
18 WRF Replacement Program 2018 Water Reclamation
19 Collection System - Old Town Sewer Main Replacement - Priority 5 Wastewater Collection
20 Collection System - Sewer Hydraulic Model Support Wastewater Collection
21 Collection System - Old Town Sewer Main Replacement - Priority 6 Wastewater Collection
22 DWRF Sludge Strain Press Redundancy Water Reclamation
23 Collection System - Old Town Sewer Main Replacement - Priority 7 Wastewater Collection
24 WRF Replacement Program 2019 Water Reclamation
25 MWRF Future Phosphorus Regulatory Improvements (Filters & Pumps) Water Reclamation
26 Collection System - Old Town Sewer Main Replacement - Priority 8 Wastewater Collection
27 DWRF Future North Process Train Nitrogen Regulatory Improvements Water Reclamation
28 MWRF - Future Nitrogen Regulatory Improvements (ASB Expansion) Water Reclamation
29 Collection System - Septic System Elimination Master Plan Wastewater Collection
30 DWRF Future Phosphorus Regulatory Improvements Water Reclamation
31 WRF Replacement Program 2020 Water Reclamation
32 Collection System - Old Town Sewer Main Replacement - Priority 9 Wastewater Collection
33 MSR Stock Well, Fence, Road, Culvert Replacements Water Reclamation
34 WRF Replacement Program 2021 Water Reclamation
35 Collection System - Old Town Sewer Main Replacement - Priority 10 Wastewater Collection
36 DWRF Future South Process Train Nitrogen Regulatory Improvements Water Reclamation
37 WRF Replacement Program 2022 Water Reclamation
38 MSR - Apron for Drying Pad Pond Water Reclamation
39 MSR - Equipment Storage Facility Water Reclamation
40 MSR - Jordon Residence Demo Water Reclamation
41 DWRF Replace South Process Train Final Clarifier Mechanisms Water Reclamation
42 DWRF - Food Waste Receiving Mods Water Reclamation
43 DWRF Replace Primary Pump Station Boilers and Controls Water Reclamation
44 MWRF House Deconstruction Water Reclamation
45 Environmental Services Division Master Plan Environmental Services
46 Reserve Funding for Anticipated Regulatory Projects* Water Reclamation
9
REVIEW OF PRIORITIZATION
In 2014. the Capital Project Review Committee (CPRC) was created to review the
project prioritization prior to budget offers being submitted for the Budgeting for
Outcomes process. The CPRC is composed of the following positions:
• Executive Director
• Utilities Strategic Finance Director
• Water Resources & Treatment Operations Manager
• Water Engineering & Field Services Manager
• Light & Power Operations Manager
The CPRC is responsible for reviewing and approving the capital project prioritization for
each enterprise fund prior to submitting funding requests to the City’s bi-annual
Budgeting for Outcomes (BFO) process.
Wastewater Capital Funding Needs
The graph and table below show the funding needs for the wastewater enterprise fund
for near- and long-term capital projects. This aggregate funding contains water
reclamation, collection system, and environmental services division capital projects.
Wastewater Fund 10-Year Funding Needs.
10
1-5 Year Wastewater Fund Capital Needs
6-10 Year Wastewater Fund Capital Needs
Regulatory Projects for Water Reclamation Facilities
There are several regulatory-driven projects in the water reclamation & biosolids division
that are beyond the 10-year planning horizon of this document. These projects address
pending regulations from the Environmental Protection Agency and State of Colorado
that will require the removal of excess nitrogen and phosphorus from water reclamation
facility (WRF) effluent. The table below shows the magnitude of these projects. The
costs shown below are the result of taking the costs from the 2009 WRF Master Plan
and applying the Engineering News Record Construction Cost Index (CCI) for the
Denver region to project an expected cost for the timeframe for when these projects will
be built.
Future Water Reclamation Capital Projects
It is now known that some mix of projects at both Drake WRF and Mulberry WRF will be
needed by or about year 2027 to address these regulations; however, it is unclear at this
Division 2017 2018 2019 2020 2021
Water Reclamation $7,810,000 $10,880,000 $5,733,000 $3,540,000 $3,050,000
Wastewater Collection $2,050,000 $2,570,000 $3,202,000 $3,048,000 $2,907,000
Environmental Services $355,000 $30,000 $50,000 $50,000 $50,000
Total $10,215,000 $13,480,000 $8,985,000 $6,638,000 $6,007,000
Division 2022 2023 2024 2025 2026
Water Reclamation $3,050,000 $2,050,000 $2,050,000 $2,259,500 $5,362,000
Wastewater Collection $3,383,000 $3,276,000 $3,889,000 $4,123,000 $3,980,000
Environmental Services $50,000 $50,000 $50,000 $50,000 $50,000
Total $6,483,000 $5,376,000 $5,989,000 $6,432,500 $9,392,000
Project Future Cost
WW Future SPT Nitrogen
Regulatory Improvements $ 8,450,000.00
WW Future NPT Nitrogen
Regulatory Improvements $ 31,950,000.00
WW Future MWFR Nitrogen
Regulatory Improvements
(ASB Expansion) $ 4,635,000.00
WW Future Phosphorus
Regulatory Improvements $ 32,220,000.00
WW MWRF Future
Phosphorus Regulatory
Improvements (Filters &
Pumps) $ 8,240,000.00
Total $ 85,495,000.00
11
time what the projects themselves or the financial impacts of those projects will look like.
FCU will update its WRF Master Plan in 2017, and it is expected that that document,
along with a revised Water Quality Management Plan from the North Front Range Water
Quality Planning Association, will contain more reliable information about the timing and
impact of these projects. This document will be updated with that information once it is
available.
To begin preparing for these projects, an annual appropriation of $2million will be made
to the wastewater fund reserve balance. The remainder of the projects will most likely
be funded by a debt issuance, low interest loans from the State of Colorado, or both of
these mechanisms.
12
Capital Project Prioritization
Classification of Capital Projects
Capital construction in FCU’s wastewater enterprise fund consists of two areas of focus:
• construction of capital projects for the water reclamation and biosolids division
unit; this area consists of projects at the Drake and Mulberry water reclamation
facilities (WRF) and the Meadow Springs Ranch where biosolids from each of the
water reclamation facilities are processed.
• renewal and replacement of the existing wastewater collection system (WWCS).
A very large percentage of the collection system exists today, and the FCU wastewater
service area is bounded by special districts; therefore, additional expansion of the
collection system through the addition of new capital is not anticipated as an expense for
the wastewater fund.
Similarly, the water reclamation facilities are built to provide adequate capacity for the
10-year planning horizon, so construction of additional capacity is not anticipated.
Replacement of existing facility infrastructure as well as addressing new regulations will
be the primary drivers for facility capital projects.
One final component that warrants monitoring for the wastewater fund is the presence of
excessive inflow and infiltration in the collection system. This excessive flow is entering
the collection system at unknown points where it is conveyed to the reclamation facilities
and is treated in the same manner as typical wastewater. Until this issue is addressed,
the reclamation facilities must plan for treating this extra flow from a capacity and
operational perspective. A project to study this issue further is included in this revision of
the CIP. The study will most likely result in some additional projects in the collection
system to address inflow and infiltration before it is received at the water reclamation
facilities.
Capital Projects Creation
Capital projects in the wastewater enterprise fund are brought forth for inclusion in the
CIP by one of three ways:
• suggestion by the Wastewater Collection System maintenance superintendent,
• suggestion by Water Reclamation & Biosolids staff
• Suggestion by Water Systems Engineering staff.
These three methods apply to both renewal and replacement of existing infrastructure
and the addition of new capital to the wastewater fund. Each project is then evaluated
against the CIP framework described above.
Prioritization Methodology
FCU staff developed a process for prioritizing capital projects across all of the enterprise
funds. The need for this process was driven by the need for defensible and transparent
capital budgeting requests, and ultimately to be able to defend any needed increases in
13
revenue for capital expenditures in these “wet” funds. This process is designed to
include renewal & replacement of existing infrastructure as well as addition of new
capital to the system.
A working group of approximately 20 FCU staff from the light & power, stormwater,
water, & wastewater funds compiled the process for prioritizing projects. A high-level
snapshot of the process is included below.
Capital Project Prioritizaton Business Process
Prioritization Criteria
Capital projects were prioritized based on their ability to improve FCU’s adopted levels of
service (LOS). The CPRC identified the following LOS related to the operation of the
wastewater fund and ultimately to the prioritization of capital projects in the fund:
Levels of Service
Safety Reliability
Regulatory Compliance Customer Satisfaction
Sustainability
Prioritization Criteria Weights
A pairwise comparison process was used to determine the relative weights for each of
the levels of service. Senior leaders and subject matter experts relevant to the
wastewater fund were asked to provide their individual priorities of the levels of service.
These individual priorities were then combined to determine the group’s priorities. The
chart on the following page shows the relative importance for the strategic objectives.
Confirm
Prioritization
Criteria
Prioritization
Criteria Rating
Confirm List of
Projects
Rate Projects
Against Criteria
First Prioritized
List of Projects
Review & Adjust if
Necessary
Final List of
Prioritized
Projects
CPRC Review of
Framework &
Projects
Allocate Capital
Dollars to Projects
Determine
Schedule Based
on Available
Capital
Review &
Approval of
Prioritization
Budget Offers
14
Strategic Objective Relative Weights
Prioritization of Projects
The LOS listed above drive the selection of capital projects for funding. Each project in
the wastewater fund portfolio is evaluated against the objectives above to determine how
much each project improves each strategic objective. Each project is then assigned a
“benefit” based on how much they improve the objectives in total. Those projects that
provide the most benefit to the fund are funded first, and those that provide the least
benefit are funded last.
All relevant senior leaders and subject matter experts for the wastewater fund evaluated
the projects in the fund based on information provided by respective project managers.
The result of this evaluation is shown in the project prioritization on the following page.
Number Objective Relative Weight
1 Safety 36%
2 Reliability 24%
3 Regulatory Compliance 24%
4 Sustainability 9%
5 Customer Satisfaction 7%
Total 100%
15
Wastewater Fund Project Prioritization
Priiority Project Name Division
1 DWRF Digester Lid Replacements (612) Water Reclamation
2 Pollution Control Lab Instrumentation Replacement Program Environmental Services
3 WRF Master Plan Update Water Reclamation
4 DWRF Sidestream Treatment Water Reclamation
5 Pollution Control Lab "Clean Room" Improvements Environmental Services
6 DWRF Carbon Addition Improvements Water Reclamation
7 DWRF Dewatering Improvements Water Reclamation
8 Collection System Replacement Wastewater Collection
9 Collection System CIPP Wastewater Collection
10 Collection System - Old Town Sewer Main Replacement - Priority 1 Wastewater Collection
11 Collection System I&I Study Wastewater Collection
12 WRF Replacement Program 2017 Water Reclamation
13 Collection System - Old Town Sewer Main Replacement - Priority 2 Wastewater Collection
14 DWRF Bar Screen/Wash Press replacement Water Reclamation
15 Collection System - Old Town Sewer Main Replacement - Priority 3 Wastewater Collection
16 Collection System - Old Town Sewer Main Replacement - Priority 4 Wastewater Collection
17 MWRF Carbon Addition Improvements Water Reclamation
18 WRF Replacement Program 2018 Water Reclamation
19 Collection System - Old Town Sewer Main Replacement - Priority 5 Wastewater Collection
20 Collection System - Sewer Hydraulic Model Support Wastewater Collection
21 Collection System - Old Town Sewer Main Replacement - Priority 6 Wastewater Collection
22 DWRF Sludge Strain Press Redundancy Water Reclamation
23 Collection System - Old Town Sewer Main Replacement - Priority 7 Wastewater Collection
24 WRF Replacement Program 2019 Water Reclamation
25 MWRF Future Phosphorus Regulatory Improvements (Filters & Pumps) Water Reclamation
26 Collection System - Old Town Sewer Main Replacement - Priority 8 Wastewater Collection
27 DWRF Future North Process Train Nitrogen Regulatory Improvements Water Reclamation
28 MWRF - Future Nitrogen Regulatory Improvements (ASB Expansion) Water Reclamation
29 Collection System - Septic System Elimination Master Plan Wastewater Collection
30 DWRF Future Phosphorus Regulatory Improvements Water Reclamation
31 WRF Replacement Program 2020 Water Reclamation
32 Collection System - Old Town Sewer Main Replacement - Priority 9 Wastewater Collection
33 MSR Stock Well, Fence, Road, Culvert Replacements Water Reclamation
34 WRF Replacement Program 2021 Water Reclamation
35 Collection System - Old Town Sewer Main Replacement - Priority 10 Wastewater Collection
36 DWRF Future South Process Train Nitrogen Regulatory Improvements Water Reclamation
37 WRF Replacement Program 2022 Water Reclamation
38 MSR - Apron for Drying Pad Pond Water Reclamation
39 MSR - Equipment Storage Facility Water Reclamation
40 MSR - Jordon Residence Demo Water Reclamation
41 DWRF Replace South Process Train Final Clarifier Mechanisms Water Reclamation
42 DWRF - Food Waste Receiving Mods Water Reclamation
43 DWRF Replace Primary Pump Station Boilers and Controls Water Reclamation
44 MWRF House Deconstruction Water Reclamation
45 Environmental Services Division Master Plan Environmental Services
46 Reserve Funding for Anticipated Regulatory Projects* Water Reclamation
16
Capital Project Prioritization Updates
Since capital creation and renewal is such an integral part of FCU’s bi-annual Budgeting
for Outcomes (BFO) process, the capital project prioritization shall be updated every
year. The process for prioritizing projects and the levels of service shall be reviewed
annually to ensure that priorities of FCU senior management are being met by the
project prioritization efforts.
17
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18
Capital Funding Needs
The following section presents information regarding required capital funding necessary
to build capital projects in the wastewater fund for the next ten years. Project costs are
shown by both a division and a fund-wide view to provide a clear picture of capital needs
for future years.
Water Reclamation & Biosolids
Funding needs for water reclamation & biosolids capital projects are shown in the graph
below. The WRF master plan will be updated in 2017. It is expected that this update will
identify additional capital projects. Those will be included in the next revision of this
document.
Additionally, it is expected that the Asset Management Program will continue to provide
recommended infrastructure replacements as infrastructure continues to age and
deteriorate; therefore, it is expected that replacement costs will continue to increase as
well.
Water Reclamation Capital Funding Needs
19
Wastewater Collection System
Wastewater collection system funding is shown in the graph below. As shown by the
graph, the amount of capital funding for the collection system is projected to increase
each year through 2021 then remain stable for the foreseeable future. This increase in
funding will allow the collection system manager and his staff to become proactive when
replacing the collection system and will result in a more sustainable replacement rate for
the system. A significant amount of the system will be replaced with trenchless
technologies, i.e. lining, pipe bursting, directional drilling, all methods that are generally
better from a triple bottom line perspective when compared to traditional open cut
construction methods.
In addition to this increase in funding for replacement, a study to determine the source of
significant amounts of inflow and infiltration in the collection system is planned for 2017
and 2018. This study will most likely result in some additional costs to address this
issue.
Collection System Capital Funding Needs
20
ENVIRONMENTAL SERVICES
The Environmental Services Division (ESD) provides laboratory services for the Water
and Wastewater Funds. Services provided for the wastewater fund include testing of
treated wastewater leaving the water reclamation facilities and testing of wastewater
effluent for wastewater customers that are enrolled in the Pretreatment Program
administered by the Water Reclamation and Biosolids Division.
The ESD has three capital projects in this plan. Those projects are for the completion of
a master plan to address long-term needs for the Pollution Control and Water Quality
laboratories, renovations to the air handling system in the Pollution Control Laboratory,
and an annual program for the replacement of instrumentation at the Pollution Control
Laboratory.
Environmental Services Capital Funding Needs
Wastewater Fund Aggregate Funding Needs
The graph and table below show the capital funding needs for the wastewater enterprise
fund for the next ten years. This funding contains capital funding for water reclamation,
collection system, and environmental services division capital projects.
21
Wastewater Fund Capital Needs
1-5 Year Wastewater Fund Capital Needs
6-10 Year Wastewater Fund Capital Needs
Potential Regulatory Projects for Water Reclamation Facilities
There are several regulatory-driven projects in the water reclamation & biosolids division
that were beyond the 10-year planning horizon in the previous revision of this document.
These projects address pending regulations from the Environmental Protection Agency
Division 2017 2018 2019 2020 2021
Water Reclamation $7,810,000 $10,880,000 $5,733,000 $3,540,000 $3,050,000
Wastewater Collection $2,050,000 $2,570,000 $3,202,000 $3,048,000 $2,907,000
Environmental Services $355,000 $30,000 $50,000 $50,000 $50,000
Total $10,215,000 $13,480,000 $8,985,000 $6,638,000 $6,007,000
Division 2022 2023 2024 2025 2026
Water Reclamation $3,050,000 $2,050,000 $2,050,000 $2,259,500 $5,362,000
Wastewater Collection $3,383,000 $3,276,000 $3,889,000 $4,123,000 $3,980,000
Environmental Services $50,000 $50,000 $50,000 $50,000 $50,000
Total $6,483,000 $5,376,000 $5,989,000 $6,432,500 $9,392,000
22
and State of Colorado that will require the removal of excess nitrogen and phosphorus
from water reclamation facility (WRF) effluent. The table below shows the magnitude of
these projects. The costs shown below are the result of taking the costs from the 2009
Water Reclamation Facilities Master Plan and applying the Engineering News Record
Construction Cost Index (CCI) for the Denver region to project an expected cost for the
timeframe for when these projects will be built.
Future Water Reclamation Capital Projects
It is now known that some mix of projects at both Drake WRF and Mulberry WRF will be
needed by or about year 2027 to address these regulations; however, it is unclear at this
time what the projects themselves or the financial impacts of those projects will look like.
FCU will update its Water Reclamation Facility Master Plan in 2017, and it is expected
that that document, along with a revised Water Quality Management Plan from the North
Front Range Water Quality Planning Association, will contain more reliable information
about the timing and impact of these projects. This document will be updated with that
information once it is available.
To begin preparing for these projects, an annual appropriation of $2million will be made
to the wastewater fund reserve balance. The remainder of the projects will most likely
be funded by a debt issuance, low interest loans from the State of Colorado, or both of
these mechanisms.
Project Future Cost
WW Future SPT Nitrogen
Regulatory Improvements $ 8,450,000.00
WW Future NPT Nitrogen
Regulatory Improvements $ 31,950,000.00
WW Future MWFR Nitrogen
Regulatory Improvements
(ASB Expansion) $ 4,635,000.00
WW Future Phosphorus
Regulatory Improvements $ 32,220,000.00
WW MWRF Future
Phosphorus Regulatory
Improvements (Filters &
Pumps) $ 8,240,000.00
Total $ 85,495,000.00
23
24
Wastewater Fund Capital Projects
The following section contains prioritization, schedule, and funding needs for capital
projects that will be funded by the wastewater fund in the next ten years.
25
Wastewater Fund Prioritization & Funding Schedule
Priiority Project Name Division 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Future
1 DWRF Digester Lid Replacements (612) Water Reclamation $ 2,010,000
2 Pollution Control Lab Instrumentation Replacement Program Environmental Services $ 55,000 $ 30,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000
3 WRF Master Plan Update Water Reclamation $ 500,000
4 DWRF Sidestream Treatment Water Reclamation $ 4,300,000
5 Pollution Control Lab "Clean Room" Improvements Environmental Services $ 200,000
6 DWRF Carbon Addition Improvements Water Reclamation 370,000
7 DWRF Dewatering Improvements Water Reclamation $ 4,260,000
8 Collection System Replacement Wastewater Collection $ 1,200,000 $ 1,320,000 $ 1,452,000 $ 1,598,000 $ 1,757,000 $ 1,933,000 $ 2,126,000 $ 2,339,000 $ 2,573,000 $ 2,830,000 $ 3,113,000
9 Collection System CIPP Wastewater Collection $ 600,000 $ 600,000 $ 600,000 $ 600,000 $ 600,000 $ 600,000 $ 600,000 $ 600,000 $ 600,000 $ 600,000 $ 600,000
10 Collection System - Old Town Sewer Main Replacement - Priority 1 Wastewater Collection $ 600,000
11 Collection System I&I Study Wastewater Collection $ 200,000
12 WRF Replacement Program 2017 Water Reclamation $ 1,000,000
13 Collection System - Old Town Sewer Main Replacement - Priority 2 Wastewater Collection $ 1,100,000
14 DWRF Bar Screen/Wash Press replacement Water Reclamation $ 2,350,000
15 Collection System - Old Town Sewer Main Replacement - Priority 3 Wastewater Collection $ 800,000
16 Collection System - Old Town Sewer Main Replacement - Priority 4 Wastewater Collection $ 500,000
17 MWRF Carbon Addition Improvements Water Reclamation $ 333,000
18 WRF Replacement Program 2018 Water Reclamation $ 1,000,000
19 Collection System - Old Town Sewer Main Replacement - Priority 5 Wastewater Collection 800,000
20 Collection System - Sewer Hydraulic Model Support Wastewater Collection $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000
21 Collection System - Old Town Sewer Main Replacement - Priority 6 Wastewater Collection $ 500,000
22 DWRF Sludge Strain Press Redundancy Water Reclamation $ 1,520,000
23 Collection System - Old Town Sewer Main Replacement - Priority 7 Wastewater Collection $ 900,000
24 WRF Replacement Program 2019 Water Reclamation $ 1,000,000
25 MWRF Future Phosphorus Regulatory Improvements (Filters & Pumps) Water Reclamation $ 8,240,000
26 Collection System - Old Town Sewer Main Replacement - Priority 8 Wastewater Collection $ 500,000
27 DWRF Future North Process Train Nitrogen Regulatory Improvements Water Reclamation 31,950,000
28 MWRF - Future Nitrogen Regulatory Improvements (ASB Expansion) Water Reclamation $ 4,635,000
29 Collection System - Septic System Elimination Master Plan Wastewater Collection
30 DWRF Future Phosphorus Regulatory Improvements Water Reclamation 32,220,000
31 WRF Replacement Program 2020 Water Reclamation $ 1,000,000
32 Collection System - Old Town Sewer Main Replacement - Priority 9 Wastewater Collection $ 400,000
33 MSR Stock Well, Fence, Road, Culvert Replacements Water Reclamation $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000
34 WRF Replacement Program 2021 Water Reclamation $ 1,000,000
35 Collection System - Old Town Sewer Main Replacement - Priority 10 Wastewater Collection $ 500,000
36 DWRF Future South Process Train Nitrogen Regulatory Improvements Water Reclamation 8,450,000
37 WRF Replacement Program 2022 Water Reclamation $ 1,000,000
38 MSR - Apron for Drying Pad Pond Water Reclamation $ 209,500
39 MSR - Equipment Storage Facility Water Reclamation $ 838,000
40 MSR - Jordon Residence Demo Water Reclamation $ 111,000
41 DWRF Replace South Process Train Final Clarifier Mechanisms Water Reclamation $ 1,070,000
42 DWRF - Food Waste Receiving Mods Water Reclamation $ 120,000
43 DWRF Replace Primary Pump Station Boilers and Controls Water Reclamation $ 1,200,000
44 MWRF House Deconstruction Water Reclamation $ 93,000
45 Environmental Services Division Master Plan Environmental Services $ 100,000
46 Reserve Funding for Anticipated Regulatory Projects* Water Reclamation $ 2,000,000 $ 2,000,000 $ 2,000,000 $ 2,000,000 $ 2,000,000 $ 2,000,000 $ 2,000,000 $ 2,000,000 $ 2,000,000
$ 2,000,000 $ 2,000,000
Water Reclamation $ 7,810,000 $ 10,880,000 $ 5,733,000 $ 3,540,000 $ 3,050,000 $ 3,050,000 $ 2,050,000 $ 2,050,000 $ 2,259,500 $ 5,362,000 $ 87,545,000
Wastewater Collection $ 2,050,000 $ 2,570,000 $ 3,202,000 $ 3,048,000 $ 2,907,000 $ 3,383,000 $ 3,276,000 $ 3,889,000 $ 4,123,000 $ 3,980,000 $ 3,763,000
Environmental Services $ 355,000 $ 30,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000
Total $ 10,215,000 $ 13,480,000 $ 8,985,000 $ 6,638,000 $ 6,007,000 $ 6,483,000 $ 5,376,000 $ 5,989,000 $ 6,432,500 $ 9,392,000 $ 91,358,000
* This funding is earmarked to build a reserve for regulatory projects scheduled for 2027 to remove excess levels of nitrogen and phosphorus from effluent at the water reclamation facilities.
This funding is not available to construct capital projects annually.
26
Fort Collins Utilities
Stormwater Enterprise Fund
Capital Improvement Plan
2016
Prepared by: Chris Parton
Revised: March 2016
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Table of Contents
Purpose ........................................................................................................................... 1
Executive Summary ........................................................................................................ 3
Capital Funding Needs .................................................................................................. 15
Stormwater Fund Capital Projects ................................................................................. 17
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1
Purpose
The purpose of this document is to serve as a central repository for information relating
to capital projects within the stormwater enterprise fund.
Ownership
The Asset Manager maintains ownership of this document. It is the responsibility of the
person in this role to ensure that the plan is updated when necessary and that all
interested parties are allowed input into the preparation and update of this document.
Frequency of Updates
This document shall be updated on a yearly basis so that the Strategic Financial
Planning Manager has the information necessary to prepare forward-looking documents
dealing with expenditures, revenues, and rate-setting.
2
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3
Executive Summary
The scope of this document is to provide information pertaining to capital projects,
project prioritization, and funding needs within the Stormwater Enterprise Fund managed
by Fort Collins Utilities (FCU). The planning period for this document is for a 10-year
horizon beginning in 2017. Where they are known, major capital projects and their costs
that are planned beyond the 10-year planning horizon are included.
Capital Projects
This document contains information pertaining to master-planned capital projects,
stream restoration projects, and minor capital projects that will be funded by the
Stormwater enterprise fund. FCU project managers were asked to provide the Asset
Manager with as much information as possible about known capital projects within the
stormwater fund.
Capital Project Prioritization
A working group of approximately 20 FCU staff from the wastewater, water, stormwater,
& light & power businesses compiled the process for prioritizing projects. A high-level
snapshot of the process is included below. This process was used to prioritize all
projects in the stormwater fund.
A detailed project prioritization for the Stormwater fund is included on the next page.
Confirm
Prioritization
Criteria
Prioritization
Criteria Rating
Confirm List of
Projects
Rate Projects
Against Criteria
First Prioritized
List of Projects
Review & Adjust if
Necessary
Final List of
Prioritized
Projects
CPRC Review of
Framework &
Projects
Allocate Capital
Dollars to Projects
Determine
Schedule Based
on Available
Capital
Review &
Approval of
Prioritization
Budget Offers
4
Stormwater Project Prioritization
Number Project
1 Storm Drainage Small Capital Repairs and Replacements
2 Master Planning
3 Stream Rehabilitation Program
4 Boxelder Basin Regional Stormwater Authority
5 Magnolia Street Outfall - Phase 1
6 Myrtle Street Storm Sewer
7 Oak Street Outfall Extension
8 Magnolia Street Outfall - Phase 2
9 Mulberry Street / Riverside Avenue Storm Sewer
10 NECCO Backbone and Ponds
11 Plum Corridor
12 Central (Vine, Forney Pond, Taft Hill to Cherry)
13 Cooper Slough at SH 14 - County/CDOT Project
14 Poudre River @ Oxbow Levee
15 Laporte Avenue Storm Sewer
16 Southern (LaPorte to Overland)
17 Harmony Road & I-25- road imps.
18 Whedbee Street Storm Sewer
19 North PV&L/PV&L Bank Imp/Langshire Drive
20 South PV&L Corridor
21 Fossil Ridge Drive
22 Cherry Street Storm Sewer
23 Lincoln Channel (reaches 2,3) 100-yr alternative
24 Boxelder Creek at Prospect Road and D/S diversion
25 Prospect & College Phase 1
26 Taft Hill Road at Lang Gulch
27 Prospect / College Storm Sewer
28 Downtown River District (phase 2 - Jefferson St to Pine)
29 Dixon Creek Pond
30 No. College Ave. Property- buyout
31 Total Foothills Basin
32 English Ranch Ponds #2 through #5 & Fox Meadows Pond
33 Buckingham & along Lincoln Avenue- InSitu Outfall
34 Shield Street at Lang Gulch
35 Lincoln and Willow Street Outfall
36 Prospect & College Phase 2
37 Riverside / Pitkin Storm Sewer
38 N. College (NECCO projects)
39 Remington / Lake Storm Sewer
40 Poudre School District Facilities Site - RCBC to LaPorte Ave
41 Lake / Center Storm Sewer
42 Stone Creek (Middle Tributary) Culvert & Pond
43 Ziegler Pond
44 Stone Creek (North Trib) Pond and Outfall
45 New Mercer Ditch Improvements for Mason Street area
46 Strachan / Edinburgh Storm Sewer
47 C&S Railroad No. 4 at Lang Gulch
48 Oakridge Regional Detention Pond Spillway
49 C&S Railroad No. 3 at Lang Gulch
50 C&S Railroad No. 2 at Lang Gulch
51 Swift Pond Embankment
52 Glenmoor Pond Aesthetic Enhancements
5
REVIEW OF PRIORITIZATION
In 2014. the Capital Project Review Committee (CPRC) was created to review the
project prioritization prior to budget offers being submitted for the Budgeting for
Outcomes process. The CPRC is composed of the following positions:
• Executive Director
• Utilities Strategic Finance Director
• Water Resources & Treatment Operations Manager
• Water Engineering & Field Services Manager
• Light & Power Operations Manager
The CPRC is responsible for reviewing and approving the capital project prioritization for
each enterprise fund prior to submitting funding requests to the City’s bi-annual
Budgeting for Outcomes (BFO) process.
Stormwater Fund Capital Funding Needs
The graph and table below show the capital funding needs for the stormwater enterprise
fund for the next ten years. This aggregate funding contains capital funding for master
planned projects, stream restoration projects, and minor capital projects.
Stormwater 10-Year Capital Expenditures
6
1-5 Year Stormwater Fund Capital Needs
6-10 Year Stormwater Fund Capital Needs
It is important to note that a large number of the costs above are from the Stormwater
Basin Master Plans that were completed in the early 2000’s. As such, some of the costs
included in this version of the CIP may be much lower than current construction costs. It
is recommended that these older costs be updated before any sort of long-term funding
strategy such as the issuance of debt is considered.
Category 2017 2018 2019 2020 2021
Major Capital $ 5,750,000 $ 6,510,000 $ 25,500,000 $ 22,750,000 $ 24,050,000
Small Capital $ 1,400,000 $ 1,500,000 $ 1,600,000 $ 1,700,000 $ 1,800,000
Boxelder Basin Stormwater Authority $ 350,000 $ 350,000 $ 350,000 $ 350,000 $ 350,000
Stream Rehabilitation $ 350,000 $ 1,400,000 $ 800,000 $ 850,000 $ 900,000
Total $ 7,850,000 $ 9,760,000 $ 28,250,000 $ 25,650,000 $ 27,100,000
Average Annual Expenditure $ 15,409,000 $ 15,409,000 $ 15,409,000 $ 15,409,000 $ 15,409,000
Category 2022 2023 2024 2025 2026
Major Capital $ 17,950,000 $ 6,250,000 $ 5,750,000 $ 3,750,000 $ 4,280,000
Small Capital $ 1,900,000 $ 2,000,000 $ 2,100,000 $ 2,200,000 $ 2,300,000
Boxelder Basin Stormwater Authority $ 350,000 $ 350,000 $ 350,000 $ 350,000 $ 350,000
Stream Rehabilitation $ 950,000 $ 1,000,000 $ 1,050,000 $ 1,100,000 $ 1,150,000
Total $ 21,150,000 $ 9,600,000 $ 9,250,000 $ 7,400,000 $ 8,080,000
Average Annual Expenditure $ 15,409,000 $ 15,409,000 $ 15,409,000 $ 15,409,000 $ 15,409,000
7
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8
Capital Project Prioritization
Classification of Capital Projects
Capital construction for FCU’s stormwater collection system consists of three areas of
focus:
• construction of new master-planned facilities for flood control purposes (master-
planned projects)
• construction of stream restoration projects aimed at restoring reaches of various
streams throughout Fort Collins to their native state (stream restoration projects)
• replacement of existing stormwater collection infrastructure (minor capital
projects)
Many of the master-planned projects were identified through the Stormwater Basin
Master Plans that were completed in the early 2000’s. Since the completion of those
master plans, Utilities, specifically the Stormwater Fund, has been working to complete
as many of those projects as possible; however, due to the issuance of a large amount
of debt to complete some of these projects after the Spring Creek Flood in 1997, the
fund has been unable to issue more debt due to debt capacity limitations. This has
resulted in a large number of projects from the basin master plans being incomplete. In
addition to those projects, new projects have been identified since the master plans were
completed. These projects are included in this revised CIP for the fund.
In 2012, FCU staff completed a multi-criteria decision analysis to prioritize the restoration
of several sections of existing streams within the Stormwater Fund service territory.
Those projects are completed through an annual program titled “Stream Restoration
Program.” This project was identified in this version of the plan and was prioritized
amongst the other projects in the stormwater fund.
The replacement of existing stormwater infrastructure is typically completed under the
program titled “Minor Capital Improvement Program.” This is an annual program that
replaces different components of the existing system that are either undersized, in poor
condition, or deficient in some other aspect. This work is typically completed by internal
construction crews.
Capital Projects Creation
Capital projects in the stormwater fund are brought forth for inclusion in the CIP by one
of three ways:
• Suggestion by the Stormwater Collection System maintenance superintendent
• Suggestion by the Stormwater and Floodplain Program Management staff
• Suggestion by the Water Systems Engineering Group
Each of these methods applies to both the renewal and replacement of existing
infrastructure and the addition of new capital to the SCS. Each project is then evaluated
against the CIP framework described above.
9
Prioritization Methodology
FCU staff developed a process for prioritizing capital projects across all of the enterprise
funds. The need for this process was driven by the need for defensible and transparent
capital budgeting requests, and ultimately to be able to defend any needed increases in
revenue for capital expenditures in these “wet” funds. This process is designed to
include renewal & replacement of existing infrastructure as well as addition of new
capital to the system.
A working group of approximately 20 FCU staff from the light & power, stormwater,
water, & wastewater funds compiled the process for prioritizing projects. A high-level
snapshot of the process is included below.
Capital Project Prioritizaton Business Process
Prioritization Criteria
Capital projects were prioritized based on their ability to improve FCU’s adopted levels of
service (LOS). The relevant subject matter experts identified the following LOS related
to the operation of the stormwater fund and ultimately to the prioritization of capital
projects in the fund:
Levels of Service
Safety Reliability
Sustainability Customer Satisfaction
Stormwater Fund Levels of Service
In addition to these strategic LOS, operational objectives were identified to support the
strategic LOS listed above. Those operational objectives are shown below.
Confirm
Prioritization
Criteria
Prioritization
Criteria Rating
Confirm List of
Projects
Rate Projects
Against Criteria
First Prioritized
List of Projects
Review & Adjust if
Necessary
Final List of
Prioritized
Projects
CPRC Review of
Framework &
Projects
Allocate Capital
Dollars to Projects
Determine
Schedule Based
on Available
Capital
Review &
Approval of
Prioritization
Budget Offers
10
Operational Objectives
Leveraging Funding Public Health & Safety
Benefit-Cost Score Protected Structures
Habitat Improvement Reducing the Flooding of Streets
Improving Stormwater Quality Road Overtopping
Employee Health & Safety Public Perception
Stormwater Fund Operational Objectives
These operational objectives ultimately support one of the strategic LOS listed above.
The relationship between the strategic LOS and the operational objectives is shown in
the table below.
Strategic Level of Service Operational Objective
Sustainability Leveraging Funding
Benefit-Cost Score
Habitat Improvement
Improving Stormwater Quality
Safety Employee Health & Safety
Public Health & Safety
Reliability Protected Structures
Reducing the Flooding of Streets
Road Overtopping
Customer Satisfaction Public Perception
Leveraging Funding
Habitat Improvement
Improving Stormwater Quality
Relationship between Levels of Service and Operational Objectives
Prioritization Criteria Weights
A pairwise comparison process was used to determine the relative weights of the four
levels of service for the stormwater fund. These weights were determined by all
members of the CIP team for the fund.
Level of Service Relative Weight
Safety 52%
Reliability 22%
Sustainability 16%
Customer Satisfaction 10%
Stormwater Levels of Service Weights
A pairwise comparison process was used to determine the relative weights of the
operational objectives for the stormwater fund. These weights were determined by all
members of the CIP team for the fund.
11
Strategic Level of
Service
Operational Objective Relative Weight
Sustainability Leveraging Funding 31%
Benefit-Cost Score 33%
Habitat Improvement 14%
Improving Stormwater Quality 22%
Total 100%
Safety Employee Health & Safety 49%
Public Health & Safety 51%
Total 100%
Reliability Protected Structures 52%
Reducing the Flooding of
Streets 21%
Road Overtopping 27%
Total 100%
Customer Satisfaction Public Perception 36%
Habitat Improvement 26%
Improving Stormwater Quality 38%
Total 100%
Stormwater Operational Objective Relative Weights
Prioritization of Projects
The LOS and operational objectives listed above drive the selection of capital projects
for funding. Each project in the stormwater fund portfolio is evaluated against the
objectives above to determine how much each project improves each strategic objective.
Each project is then assigned a “benefit” based on how much they improve the
objectives in total. Those projects that provide the most benefit to the fund are funded
first, and those that provide the least benefit are funded last.
All relevant senior leaders and subject matter experts for the stormwater fund evaluated
the projects in the fund based on information provided by relevant subject matter
experts. The result of this evaluation is shown in the project prioritization on the
following page.
12
Stormwater Fund Project Prioritization
Number Project
1 Storm Drainage Small Capital Repairs and Replacements
2 Master Planning
3 Stream Rehabilitation Program
4 Boxelder Basin Regional Stormwater Authority
5 Magnolia Street Outfall - Phase 1
6 Myrtle Street Storm Sewer
7 Oak Street Outfall Extension
8 Magnolia Street Outfall - Phase 2
9 Mulberry Street / Riverside Avenue Storm Sewer
10 NECCO Backbone and Ponds
11 Plum Corridor
12 Central (Vine, Forney Pond, Taft Hill to Cherry)
13 Cooper Slough at SH 14 - County/CDOT Project
14 Poudre River @ Oxbow Levee
15 Laporte Avenue Storm Sewer
16 Southern (LaPorte to Overland)
17 Harmony Road & I-25- road imps.
18 Whedbee Street Storm Sewer
19 North PV&L/PV&L Bank Imp/Langshire Drive
20 South PV&L Corridor
21 Fossil Ridge Drive
22 Cherry Street Storm Sewer
23 Lincoln Channel (reaches 2,3) 100-yr alternative
24 Boxelder Creek at Prospect Road and D/S diversion
25 Prospect & College Phase 1
26 Taft Hill Road at Lang Gulch
27 Prospect / College Storm Sewer
28 Downtown River District (phase 2 - Jefferson St to Pine)
29 Dixon Creek Pond
30 No. College Ave. Property- buyout
31 Total Foothills Basin
32 English Ranch Ponds #2 through #5 & Fox Meadows Pond
33 Buckingham & along Lincoln Avenue- InSitu Outfall
34 Shield Street at Lang Gulch
35 Lincoln and Willow Street Outfall
36 Prospect & College Phase 2
37 Riverside / Pitkin Storm Sewer
38 N. College (NECCO projects)
39 Remington / Lake Storm Sewer
40 Poudre School District Facilities Site - RCBC to LaPorte Ave
41 Lake / Center Storm Sewer
42 Stone Creek (Middle Tributary) Culvert & Pond
43 Ziegler Pond
44 Stone Creek (North Trib) Pond and Outfall
45 New Mercer Ditch Improvements for Mason Street area
46 Strachan / Edinburgh Storm Sewer
47 C&S Railroad No. 4 at Lang Gulch
48 Oakridge Regional Detention Pond Spillway
49 C&S Railroad No. 3 at Lang Gulch
50 C&S Railroad No. 2 at Lang Gulch
51 Swift Pond Embankment
52 Glenmoor Pond Aesthetic Enhancements
13
Capital Project Prioritization Updates
Since capital creation and renewal is such an integral part of FCU’s bi-annual Budgeting
for Outcomes (BFO) process, the capital project prioritization shall be updated yearly.
The process for prioritizing projects and the levels of service shall be reviewed annually
to ensure that priorities of FCU senior management are being met by the project
prioritization efforts.
14
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15
Capital Funding Needs
The following section presents funding levels necessary to build stormwater fund capital
projects in the next ten years. Project costs are shown by type of project and a fund-
wide combined view to provide a fund-wide picture of capital needs for future years.
Stormwater Fund Capital Funding Needs
The graph and table below show the capital funding needs for the stormwater enterprise
fund for the next ten years. This aggregate funding contains capital funding for master
planned projects, stream restoration projects, and minor capital projects.
Stormwater 10-Year Capital Expenditures
1-5 Year Stormwater Fund Capital Needs
Category 2017 2018 2019 2020 2021
Major Capital $ 5,750,000 $ 6,510,000 $ 25,500,000 $ 22,750,000 $ 24,050,000
Small Capital $ 1,400,000 $ 1,500,000 $ 1,600,000 $ 1,700,000 $ 1,800,000
Boxelder Basin Stormwater Authority $ 350,000 $ 350,000 $ 350,000 $ 350,000 $ 350,000
Stream Rehabilitation $ 350,000 $ 1,400,000 $ 800,000 $ 850,000 $ 900,000
Total $ 7,850,000 $ 9,760,000 $ 28,250,000 $ 25,650,000 $ 27,100,000
Average Annual Expenditure $ 15,409,000 $ 15,409,000 $ 15,409,000 $ 15,409,000 $ 15,409,000
16
6-10 Year Stormwater Fund Capital Needs
FUTURE STORMWATER FUND CAPITAL FUNDING NEEDS
The needs depicted in the chart and tables above depict ten years of funding needs for
the stormwater fund for both ongoing programs such as stream rehabilitation and small
capital replacement in addition to the larger one-time capital expenditures; however,
there are significant needs beyond the ten year planning horizon.
It is anticipated that those annual programs such as stream rehabilitation and small
capital replacement will continue at similar or slightly increased funding levels beyond
the 10-year included in this document. In addition to those annual programs, to
complete the buildout of stormwater infrastructure in the FCU service territory, an
additional ~$50million in capital investment will be required beyond the 10-year planning
horizon.
Category 2022 2023 2024 2025 2026
Major Capital $ 17,950,000 $ 6,250,000 $ 5,750,000 $ 3,750,000 $ 4,280,000
Small Capital $ 1,900,000 $ 2,000,000 $ 2,100,000 $ 2,200,000 $ 2,300,000
Boxelder Basin Stormwater Authority $ 350,000 $ 350,000 $ 350,000 $ 350,000 $ 350,000
Stream Rehabilitation $ 950,000 $ 1,000,000 $ 1,050,000 $ 1,100,000 $ 1,150,000
Total $ 21,150,000 $ 9,600,000 $ 9,250,000 $ 7,400,000 $ 8,080,000
Average Annual Expenditure $ 15,409,000 $ 15,409,000 $ 15,409,000 $ 15,409,000 $ 15,409,000
17
Stormwater Fund Capital Projects
The following section contains schedule and funding needs drivers for the known capital
projects that will be funded by the stormwater enterprise fund in the next ten years. All
types of projects, i.e. stream rehabilitation, small capital, and major capital are
represented.
.
18
Stormwater Project Prioritization - 2016 Update
Number Project Cost 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Future
1 Storm Drainage Small Capital Repairs and Replacements $ 1,400,000 $ 1,500,000 $ 1,600,000 $ 1,700,000 $ 1,800,000 $ 1,900,000 $ 2,000,000 $ 2,100,000 $ 2,200,000 $ 2,300,000 $ 2,400,000
2 Master Planning $ 250,000 $ 250,000 $ 250,000 $ 250,000 $ 250,000 $ 250,000 $ 250,000 $ 250,000 $ 250,000 $ 250,000 $ 250,000
3 Stream Rehabilitation Program $ 650,000 $ 350,000 $ 1,400,000 $ 800,000 $ 850,000 $ 900,000 $ 950,000 $ 1,000,000 $ 1,050,000 $ 1,100,000 $ 1,150,000 $ 1,200,000
4 Boxelder Basin Regional Stormwater Authority $ 350,000 $ 350,000 $ 350,000 $ 350,000 $ 350,000 $ 350,000 $ 350,000 $ 350,000 $ 350,000 $ 350,000 $ 350,000
5 Magnolia Street Outfall - Phase 1 $ 18,000,000 $ 300,000 $ 1,200,000 $ 1,500,000 $ 15,000,000
6 Myrtle Street Storm Sewer $ 8,000,000 $ 1,000,000 $ 7,000,000
7 Oak Street Outfall Extension $ 18,800,000 $ 1,800,000 $ 17,000,000
8 Magnolia Street Outfall - Phase 2 $ 16,000,000 $ 1,000,000 $ 15,000,000
9 Mulberry Street / Riverside Avenue Storm Sewer $ 1,510,000 $ 1,510,000
10 NECCO Backbone and Ponds $ 8,700,000 $ 3,100,000
11 Plum Corridor $ 6,011,000 $ 500,000 $ 5,500,000
12 Central (Vine, Forney Pond, Taft Hill to Cherry) $ 6,202,000 $ 700,000 $ 5,500,000
13 Cooper Slough at SH 14 - County/CDOT Project $ 15,254,000 $ 2,000,000 $ 13,250,000
14 Poudre River @ Oxbow Levee $ 850,000 $ 850,000
15 Laporte Avenue Storm Sewer $ 5,320,000 $ 500,000 $ 5,000,000
16 Southern (LaPorte to Overland) $ 4,017,200 $ 500,000 $ 3,500,000
17 Harmony Road & I-25- road imps. $ 10,000,000 $ 10,000,000
18 Whedbee Street Storm Sewer $ 1,100,000 $ 1,100,000
19 North PV&L/PV&L Bank Imp/Langshire Drive $ 2,930,000 $ 2,930,000
20 South PV&L Corridor $ 4,290,000 $ 4,290,000
21 Fossil Ridge Drive $ 748,900 $ 750,000
22 Cherry Street Storm Sewer $ 4,720,000 $ 4,720,000
23 Lincoln Channel (reaches 2,3) 100-yr alternative Unknown Unknown
24 Boxelder Creek at Prospect Road and D/S diversion $ 4,100,000
25 Prospect & College Phase 1 $ 750,000 $ 750,000
26 Taft Hill Road at Lang Gulch $ 464,300 $ 464,300
27 Prospect / College Storm Sewer $ 1,294,000
28 Downtown River District (phase 2 - Jefferson St to Pine) $ 6,000,000 $ 6,000,000
29 Dixon Creek Pond $ 712,000 $ 712,000
30 No. College Ave. Property- buyout $ 2,316,700 $ 2,316,700
31 Total Foothills Basin Unknown Unknown
32 English Ranch Ponds #2 through #5 & Fox Meadows Pond $ 501,100 $ 501,100
33 Buckingham & along Lincoln Avenue- InSitu Outfall $ 1,526,474 $ 200,000
34 Shield Street at Lang Gulch $ 2,262,700 $ 2,262,700
35 Lincoln and Willow Street Outfall $ 2,600,000
36 Prospect & College Phase 2 $ 800,000 $ 800,000
37 Riverside / Pitkin Storm Sewer $ 407,000 $ 407,000
38 N. College (NECCO projects) $ 3,656,000 $ 3,656,000
39 Remington / Lake Storm Sewer $ 515,000 $ 515,000
40 Poudre School District Facilities Site - RCBC to LaPorte Ave $ 2,900,000 $ 2,900,000
41 Lake / Center Storm Sewer $ 678,000 $ 678,000
42 Stone Creek (Middle Tributary) Culvert & Pond $ 1,227,752 $ 1,227,752
43 Ziegler Pond $ 673,200 $ 673,200
44 Stone Creek (North Trib) Pond and Outfall $ 1,108,823 $ 1,108,823
45 New Mercer Ditch Improvements for Mason Street area $ 5,050,200 $ 5,050,200
46 Strachan / Edinburgh Storm Sewer $ 1,376,000 $ 1,376,000
47 C&S Railroad No. 4 at Lang Gulch $ 402,200 $ 402,200
48 Oakridge Regional Detention Pond Spillway $ 1,758,100 $ 1,758,100
49 C&S Railroad No. 3 at Lang Gulch $ 664,100 $ 664,100
50 C&S Railroad No. 2 at Lang Gulch $ 811,400 $ 811,400
51 Swift Pond Embankment $ 2,366,700 $ 2,366,700
52 Glenmoor Pond Aesthetic Enhancements $ 300,000 $ 300,000
Total $ 7,850,000 $ 9,760,000 $ 28,250,000 $ 25,650,000 $ 27,100,000 $ 21,150,000 $ 9,600,000 $ 9,250,000 $ 7,400,000 $ 8,080,000 $ 49,061,275
Year 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Future
19
COUNCIL FINANCE COMMITTEE
AGENDA ITEM SUMMARY
Staff: Tiana Smith
Date: 4-18-16
SUBJECT FOR DISCUSSION
Update to Tax Code Definitions Timeline and Impacts to Fort Collins
EXECUTIVE SUMMARY
In late 2015, the City of Fort Collins was approached by Colorado Municipal League (CML) to
participate in a state-wide initiative aimed at creating a list of tax code definitions that are
expected to be adopted by municipalities across the State. The objective of this initiative is to
arrive at a list of definitions that is understandable and consistent for citizens and businesses that
cross taxing entities
The City of Fort Collins is participating in this initiative to meet the same objective listed above
on behalf of the citizens and businesses of Fort Collins. Staff in the Sales Tax Office and the City
Attorney’s Office have undergone two rounds of review of CML’s recommended definitions and
responded with feedback as to the proposed definitions’ impact to Fort Collins.
A finalized version of the definitions from CML based on the feedback from all participating
municipalities is expected in early summer. Staff will provide a finalized version of the
recommended list of definitions for the Tax Code to Council Finance in Q3 of 2016 and, upon
approval, bring the definitions to City Council for approval in Q4 of 2016.
GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED
The purpose of this item at Council Finance is for advanced notice of an update to Tax Code
definitions that will be presented in early fall of 2016. Additionally, Staff would like to answer
any questions that Council Finance may have and gather feedback about process and timeline.
BACKGROUND/DISCUSSION
Definitions to the Tax Code for the City were last updated in 1991 and many definitions as well
as the general nature of how business is conducted have changed since that time. This initiative
allows the City to update definitions consistent with the evolution of business. The City
Attorney’s office has served as close advisors in all reviews of the proposed definitions and will
continue to work with the Sales Tax team in bringing future definition changes to Council for its
consideration.
ATTACHMENTS
1. Tax Code Definitions Update CFC 4-18-16 Power Point
Tax Code Definitions- Info Only
1
OBJECTIVE:
Update Council Finance on Colorado Municipal
League’s (CML) state-wide effort to address
inconsistencies in municipalities tax code
definitions and the impact to the City of Fort
Collins. This is informational only at this point.
Tax Code Definitions- Info Only
CML-driven initiative
Working with cities across Colorado on adopting Tax Code
definitions with consistent language
2 year process culminating in fall of 2016
Creating recommended definitions
Gathering feedback from cities
Finalizing definitions for adoption
2
Definitions to the Fort Collins Tax Code
Haven’t Been Updated Since 1991
Impacts to Fort Collins
Definitions help establish what we tax and how
Consistency in definitions across the state for easier comparisons
between communities
Less confusing for citizens and entities that cross municipalities
Opportunity for Fort Collins
Update Code
Fix some long-outdated language
3
Important To Be Consistent with Other
Home Rule Cities In Colorado
What’s the City’s Position?
4
Definitions the City will retain that have special applicability to Fort
Collins Tax Code
City Manager, Exempt Organization License, Local Exchange
Company, Medical Supplies, Purchaser
Definitions the City will not adopt:
School- Fort Collins prefers the State’s definitions
Storage- recommended changes are confusing, difficult to enforce
Definitions that aren’t pertinent to tax code, i.e. airline company
Next Steps
5
Fort Collins has provided 2 rounds of feedback to CML
Waiting to see finalized version of tax code definitions
City Attorney’s Office will be reviewing new definitions for any legal
issues
New definitions will be brought to Council Finance in Q3 timeframe
and upon approval to Council in Q4 for adoption
COUNCIL FINANCE COMMITTEE
AGENDA ITEM SUMMARY
Staff: John Voss, Controller
Lisa Rosintoski, Utility Customer Connections Manager
Date: April 18, 2016
SUBJECT FOR DISCUSSION: Unclaimed and Abandoned Intangible Personal Property
EXECUTIVE SUMMARY: State law requires local governments to have formal procedures
in place in order to assume ownership of unclaimed and abandoned intangible personal property.
Alternatively, the City would have to turn the property over to the State of Colorado. Existing
City Code Section 23-130 has provided these formal procedures but they are in need of updating.
GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED
1. Additional information needed?
2. Changes to the proposed Code language?
3. Is the prosed Code language ready for first reading May 17?
BACKGROUND/DISCUSSION: The City holds three types of unclaimed intangible personal
properties: uncashed checks, credit balances on utility customer accounts, and unclaimed
construction related deposit escrows. Average annual amounts that go unclaimed are about
$100,000 from nearly 1,200 customers and checks. Unclaimed construction deposit escrows are
uncommon.
The proposed new process is summarized as follows:
• After 1 year without the owner claiming the property, the property is presumed
abandoned
• Notices then distributed
o All abandoned properties will be listed on city website fcgov.com
o Letters written to last known address of owner for amounts $125 or more
• Claimants have 1 year to file proof of claim
• If proof of claim not timely filed, the intangible personal property is forfeited to the City
Upon the forfeiture of the property the fund holding the assets retain them for purposes of that
fund, except for utility funds. Forfeited property held by the utility funds will be transferred to
the Payment Assistance Program.
ATTACHMENTS
• PowerPoint Slides
• Proposed new Code
• Existing Code section 23-130
1
Unclaimed and Abandoned Intangible Personal Property
John Voss, Lisa Rosintoski
4-18-16
Why are new Code provisions required?
• State law requires local governments to have formal procedures in
place in order to assume ownership of unclaimed and abandoned
intangible personal property
• Alternatively, the City would have to turn the property over to the
State of Colorado
• Existing City Code Section 23-130 has provided these formal
procedures but they are in need of updating
2
Related but separate projects
• Abandoned tangible personal property
• unique challenges warranted a separate project team
• new procedures will be significantly different from those now in
Code Section 23-130
• Utility Payment Assistance Program
• part of a broader Low Income Assistance Program
• work session in May
3
Unclaimed Intangible Personal
Property applicable to City
• Uncashed checks
• average per year: 180 payments for about $60,000
• Credit balances on Utility customer accounts
• average per year: 946 customers for about $43,000
• Unclaimed construction related deposit escrows
• (rare and few)
4
Summary of Steps
• After 1 year without the owner claiming the property, the property is
presumed abandoned
• Notices then distributed
• All abandoned properties will be listed on city website fcgov.com
• Letters written to last known address of owner for amounts $125 or
more, or email if known
• Claimants have 1 year to file proof of claim
• If proof of claim not timely filed, the intangible personal property is
forfeited to the City
5
Use of Forfeited Intangible Assets
• Forfeited property will be retained by the fund holding the assets
• available to the fund, except for Utility funds
• subject to City Council appropriation
• Forfeited property held by Utility Funds will be transferred to the
Payment Assistance Program
• this includes all types – checks, credit balances and escrows
• subject to City Council appropriation
6
Forfeited Intangible Assets in Utility Funds
will be used for Payment Assistance Program
7
Changes or additional information needed?
Ready for first reading May 17?
Next Steps
8
April 13, 2016 Draft
1
City Code Chapter 23, Article IV, Division 4
Intangible Personal Property
Sec. 23-131 Applicability.
This Division shall only be applicable to property the City acquires in the ordinary course of the
City’s operations, but shall not include property seized or otherwise acquired by the City in
connection with a criminal investigation conducted by City law enforcement officials.
Sec. 23-132 Definitions.
The following words, terms and phrases when used in this Division shall have the meaning given
to them in this Section, unless the context requires otherwise:
City shall mean the City of Fort Collins, Colorado, and all of its administrative offices, including,
without limitation, all of its service areas, utilities, departments, and divisions.
Financial Officer shall mean the City’s Financial Officer or such person’s designee.
Last-known address shall mean the most recent address in the City’s records sufficient for the
delivery of mail to the owner.
Owner shall mean the person whose name appears on the City’s records as the person entitled to
property held, issued, or owing by the City or such other person that may be known to the
Financial Officer as potentially entitled to ownership of such property. A person is considered
potentially entitled to ownership of such property if the person was the depositor in the case of a
deposit; a creditor, claimant, or payee in the case of other intangible property; is the finder of lost
property given to the City; or demonstrates any other legal or equitable interest in the property.
Person shall mean an individual, business association, state or other government, governmental
subdivision or agency, public corporation, public authority, estate, trust, two or more persons
having a joint or common interest, or any other legal or commercial entity.
Property shall mean all moneys, checks, drafts, deposits, account credits, overpayments, unused
advance payments, refunds, rebates, uncollected remittances, and any other intangible personal
property.
Utilities shall mean the City’s electric, water, wastewater, stormwater, and any other utilities
established under the City’s Charter or Code.
April 13, 2016 Draft
2
Sec. 23-133 Property presumed abandoned.
(a) Except as provided by paragraph (b) of this Section, all property, less any offsets authorized
in Section 23-136, that is held, issued, or owing in the ordinary course of the City’s operations
and has remained unclaimed by the owner for more than one year after it became owing,
payable, or distributable is presumed abandoned.
(b) Any unused utility deposit, unused advance payment paid to and held by utilities for utility
services to be furnished, and any other unused customer account credit owing by the utilities,
less any offsets authorized in Section 23-136, that remains unclaimed by the owner for more than
one year after termination of the utility service to which the deposit, advance payment, or
account credit pertains is presumed abandoned.
(c) Property is owing, payable, or distributable for the purposes of this Division notwithstanding
the owner’s failure to make demand or to present to the City any instrument or document
required to receive payment from the City.
Sec. 23-134 Notice of abandoned property.
(a) When the Financial Officer determines that property is presumed abandoned under Section
23-133, the Financial Officer shall cause the following notices to be provided regarding that
property:
(1) There shall be posted on the City’s website and easily accessible for public
inspection, an alphabetical list of the names of the owners of abandoned property with a
general description of the abandoned property corresponding to each name and this
posting for the property shall remain on the City’s website until the property is disposed
of pursuant to this Division; and
(2) There shall be sent by first-class mail to the last-known addresses of the owners a
written notice advising them of the property the City holds that is presumed abandoned
under this Division. However, a notice need not be mailed to an owner if the value of the
property is less than one hundred twenty-five dollars. In addition, if the City has in its
records an email address for the owner, the notice shall be emailed to that address
regardless of the value of the property.
(b) The notices required in paragraph (a) of this Section shall include the following additional
information:
(1) a statement that information concerning the property may be obtained by any person
possessing an interest in the property by sending or making an inquiry to the Financial
Officer at a stated mailing address, email address, and telephone number, each
established by the Financial Officer for responding to such inquiries;
April 13, 2016 Draft
3
(2) a statement that any person claiming an interest in the property must timely file a
proof of claim with the Financial Officer as required in Section 23-135 and a statement of
the final date by which it will be considered timely filed under Section 23-135; and
(3) the proof of claim form required to be filed under Section 23-135.
Sec. 23-135 Filing proof of claim and Financial Officer’s decision.
(a) A person claiming an interest as an owner of any property presumed abandoned under this
Division shall file with the Financial Officer a proof of claim on a form prescribed by the
Financial Officer. That form must be filed with the Financial Officer not more than one year
after the later of: (i) the date of the initial posting of the notice on the City’s website, and (ii) the
date of the mailing of the written notice, as both are required under Section 23-134. If helpful to
identify the claimant as the owner of the abandoned proper or if needed for tax purposes, the
Financial Officer may require the claimant to include on the proof of claim form his or her social
security number or its federal employer identification number, whichever is applicable. The
social security number or federal employer identification number shall be kept confidential by
the City to the full extent permitted by law.
(b) The Financial Officer shall consider each claim and give written notice within 90 days after
the filing of the claim to the claimant if the claim is denied in whole or part or if the Financial
Officer intends to seek a judicial determination as provide in paragraph (d) of this Section. The
notice may be given by sending it by first-class mail to the mailing address and to the email
address stated in the proof of claim by the claimant as the addresses to which such notice is to be
sent. No notice of denial need be sent to claimant if the proof of claim fails to state mailing and
email addresses to which such notice is to be sent to the claimant.
(c) If the claim is allowed by the Financial Officer, the City shall pay over or deliver to the
claimant the property, but less any offsets authorized in Section 23-136. The Financial Officer
may condition such delivery to the claimant by requiring the claimant to provide the City with
such signed written releases and indemnification agreements that the Financial Officer
determines is reasonably necessary to protect the City from future claims of other persons
claiming ownership to the property.
(d) If the Financial Officer receives more than one conflicting claim to any property or if the
Financial Officer determines, after consultation with the City Attorney, that it is in the City’s
best interest to seek a judicial determination concerning any claim, the City Attorney is
authorized to seek that judicial determination by filing an action in either Larimer County
District Court or in the Fort Collins Municipal Court.
(e) A claimant aggrieved by a decision of the Financial Officer or whose claim has not been
acted upon by the Financial Officer within 90 days after the person’s filing of a proof of claim
under this Section, may bring an action in Larimer County District Court or in Fort Collins
Municipal Court to establish the claim, naming the City as a defendant. The action must be
April 13, 2016 Draft
4
brought within 180 days after the Financial Officer’s decision or within one year after the
person’s filing of the proof of claim if the Financial Officer has failed to act on it.
Sec. 23-136 City offsets and interest.
The Financial Officer may offset from any monetary amount owed and paid to a claimant under
Section 23-135 any fees, charges, taxes, fines, penalties, interest, costs, and any other amounts
owed to the City by the claimant under any contract with the City, under this Code, or under any
other law. The City shall have no obligation to pay to the owner and the owner shall have no
right to receive any interest on any property paid or distributed to the owner pursuant to this
Division.
Sec. 23-137 Forfeiture, use and sale of abandoned property.
(a) If a proof of claim for property presumed abandoned under Section 23-133, and for which
the notices required by Section 23-134 have been provided, is not timely filed with the Financial
Officer as required by Section 23-135(a), the property shall be deemed forfeited to the City and
ownership and title to that property shall vest in the City. Such forfeiture and vesting of
ownership and title shall occur as of the day immediately following the last day for the filing a
proof of claim under Section 23-135(a). In such event, the City may retain the property for its
own use or sale the property as provided in paragraphs (c) and (d) of this Section.
(b) When a proof of claim has been timely filed under Section 23-135 and the Financial Officer
has either not timely issued a decision concerning the claim or issued a decision denying the
claim in whole or part, the claimant’s failure to file an action in Larimer County District Court or
Fort Collins Municipal Court within the applicable time period required in Section 23-135(e) in
order to establish that claim, the property shall be deemed forfeited to the City and ownership
and title to that property shall vest in the City. Such forfeiture and vesting of ownership and title
shall occur as of the day immediately following the claimant’s last day for filing a judicial action
to establish the claim not acted on or denied by the Financial Officer under Section 25-135(e). In
such event, the City may retain the property for its own use or sale as provided in paragraphs (c)
and (d) of this Section.
(c) If the forfeited property is money or property easily converted to cash, the City may retain
and use these monies for the purposes authorized for the City fund within which these monies are
deposited and accounted for or for any other purpose authorized by City Council, unless the
forfeited property was being held by any of the utilities. The funds from utilities-held property
shall be deposited in the account of the Utilities Payment Assistance Program established in
Code Section 26-722 and used for the purposes authorized in that section.
(d) If the forfeited property is not money or property easily converted to cash, the Financial
Officer shall sell the property to the highest bidder at a public sale or sell by using a regulated
market or exchange, using the method that in the judgment of the Financial Officer is most
April 13, 2016 Draft
5
favorable to the City for the property. The Financial Officer may decline the highest bid and
reoffer the property for sale if in the judgment of the Financial Officer the bid is insufficient. If
in the judgment of the Financial Officer the probable cost of sale exceeds the value of the
property, it need not be offered for sale. If the property is to be sold at a public sale rather than
through a regulated market or exchange, that sale must be preceded by a single publication of
notice, at least three weeks before sale, in a newspaper of general circulation in the county where
the property is to be sold. The proceeds from the sale of property under this paragraph (d) may
be used by the City for any purpose authorized by City Council, unless the property sold was
being held by any of the utilities. The proceeds from the sale of utilities-held property shall be
deposited in the account of the Utilities Payment Assistance Program established in Code
Section 26-722 and used for the purposes authorized in that section.
(e) The purchaser of property at any sale conducted by the Financial Officer under this Section
takes the property free of all claims of any and all owners of the property and of all persons
claiming through or under them. The Financial Officer shall execute all documents necessary to
complete the transfer of ownership of the property to the purchaser.
Page 1
Sec. 23-130. - Disposition of lost, abandoned or other unclaimed property.
Except as otherwise specifically provided for by law or ordinance, any property seized or otherwise obtained by the City
and not sold or destroyed as perishable, hazardous or illegal property and which property has not been claimed by or
surrendered to the rightful owner may be disposed of in the following manner:
(1) All such property must first be retained for a period of no less than thirty (30) days from the date that possession
was acquired by the City;
(2) After the expiration of such period of time and as soon thereafter as is practicable, the Purchasing Agent must
cause to be published once in a newspaper of general circulation in the City, or advertise via electronic media, a
general description of the articles of property to be disposed of, which notice must contain the following
information:
a. That a detailed list of each and all articles of such property is available and may be obtained from
Purchasing, including the address and the hours during which such list may be obtained;
b. That if such property is not claimed by the rightful owner within ten (10) calendar days from the date of the
publication, such property will become the property of the City to be disposed of by public auction or
otherwise, and if by public auction provide the date, place and location of any such public auction.
(3) If within ten (10) days from the publication of the notice, no claim for such property described in the notice shall
have been made by the rightful owner, such property shall become the property of the City and shall be
disposed of in the following manner:
a. Any property which was delivered to the City, the possession or use of which is not illegal or dangerous,
may be returned to the person who delivered the same to the City. The City shall thereupon relinquish any
claim of ownership to such property and shall thereafter be relieved of any liability to the original owner of
such property or any other person.
b. Any other such property may, in the discretion of the Purchasing Agent, be retained and used by the City in
the administration of City affairs or for use in City or community events or programs, so long as the use and
distribution of such property is in accordance with the Purchasing Agent's established policies and
guidelines approved by the City Manager.
c. All other property shall be sold at public auction, including an auction via electronic media in the manner
and upon the terms described in the above notice, with the proceeds of any such sale or sales to be paid to
the Financial Officer to be placed in the general fund of the City after deducting the cost of storage,
advertising and selling.
d. Any unclaimed property which is of little or no marketable value may be destroyed.
(4) Notwithstanding any of the foregoing provisions to the contrary, the disposition of firearms or other weapons
shall be governed by the following additional provisions:
a. Firearms and other weapons shall be disposed of at the sole discretion of the Chief of Police, who may:
1. Authorize sale or destruction; or
2. Authorize retention for the purpose of training members of Police Services in the safe handling and
operation of those weapons. Any firearm so retained shall be rendered inoperable.
b. Sales of firearms shall be restricted to licensed dealers or licensed collectors (licensed under the Federal
Gun Control Act of 1988).
(Code 1972, § 88-2; Ord. No. 140, 1986, § 88-12(C), 10-21-86; Ord. No. 102, 1989, § 2, 8-1-89; Ord. No. 130,
2002, § 7, 9-17-02; Ord. No. 018-2007, § 4, 2-6-07; Ord. No. 151, § 2, 1-15-08; Ord. No. 026, 2008, § 9, 3-18-
08)
Operations
on Available
Capital
Review &
Approval of
Prioritization
Budget Offers