HomeMy WebLinkAboutAgenda - Mail Packet - 5/17/2016 - Council Finance And Audit Committee Agenda - May 16, 2016Council Finance Committee & URA Finance Committee
Agenda Planning Calendar 2016
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May 16 TOPIC TIME WHO
CFC
Mental Health & Substance Use 30 min C. Plock
Science & Cultural Facilities District 30 min L. Hatchadorian
Revenue Diversification Recommendations 30 min T. Smith
Vine / Lemay / BNSF project 15 min D. Klingner
T. Kemp
URA URA Board 15 min J. Birks
June 1 TOPIC TIME WHO
CFC
Resourcing Police Services in a Growing Community 45 min Chief Hutto
Downtown Parking 30 min K. Ravenschlag
2015 Year End Fund Balances 30 min T. Storin
Wastewater Bond Refinancing 15 min J. Voss
URA
June 20
Hourly Positions to Classified 25 min J. Miller
Career Progression & Compensation 20 min J. Heckman
Utility Long Term Financial Plans – Rates and Debt Alternatives for CIPs 25 min L. Smith
Street Oversizing Fees 20 min D. Klingner
Capital Expansion Fee - Revision 20 min T. Smith
URA
July 18
2015 Audit Review 20 min K. Smith
2015 Year End Financial Summary 30 min T. Storin
Benefits - Historical Forecast Accuracy & Possible Plan Changes 30 min K. Hess
T. Storin
Colorado Care Ballot Initiative 20 min R. Shannon
URA
Future Council Finance Committee Topics:
CAP Financing Strategies
Parking Garage Financing
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
May 16, 2016
9:30 – 11:15 am
CIC Room – City Hall
Approval of the Minutes from the April, 18 2016 meeting
1. Mental Health & Substance Use 30 minutes C. Plock
2. Science & Cultural Facilities District 30 minutes L. Hatchadorian
3. Revenue Diversification Recommendations 30 minutes T. Smith
4. Vine / Lemay / BNSF project 15 minutes D. Klingner
T. Kemp
UOTHER BUSINESSU:
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
04/18/16
9:30 – 11:30 a.m.
CIC Room
Council Attendees: Mayor Wade Troxell, Gerry Horak
Staff: Darin Atteberry, Mike Beckstead, John Duvall, Tiana Smith, Travis Storin, Claire
Turney, Jeff Mihelich, Andres Gavaldon, Lance Smith, John Voss, Chris Parton,
Kevin Gertig, Chris Donegon, Lisa Rosintoski, Lawrence Pollack
Others: Mike Freeman (Innosphere), Dale Adamy
Absent: Ross Cunniff
Meeting started at 9:30 am
UAPPROVAL OF MINUTES
Gerry Horak made a motion to approve the March 22, 2016 Council Finance Committee minutes.
Mayor Wade Troxell made a second to the motion. The minutes were approved unanimously.
A. URMI – BUSINESS & REFINANCING UPDATE
Mike Freeman presented an update on Innosphere operations. Purpose: attract new companies, help
them grow and then support them. Main technology areas focused on: Health, Energy & Advanced
Materials & Software & Hardware. From 2009-2015, 52 new companies graduated their program and
created 1409 jobs in the local area. The 3 month onboarding program helps companies identify their
risk factors, cash flow issues, competition, their market, etc.
Update Item 1: In 2103, they took over Clean Launch program in Golden. In 2104 they opened an
office in Denver.
They are working on diversifying their funding in Fort Collins and Denver.
Update Item 2: In 2016/2017 they expect to complete a building refinance. The URA/City of Fort
Collins debt is set to be refinanced by Dec 2016. The outstanding debt amount is approx. $2.5M. The
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City currently has a $5.3M loan, with the refinancing, the City will get $2.5M in 2017-18 budget from
Innosphere and then the remainder will be paid back by using TIF through the URA.
Update Item 3: Revenue Diversification
2013- Implemented higher client fees
2014- Fundraising focus in Denver
2015- Developed corporate partner program
2015- Launched early exit program (taking a transaction fee or equity from select companies in the
program)
Wade Troxell question: Who is currently on the board now? Mike Freeman answered: The board is
primarily made up of funders and community representatives. Gerry Horak question: Who determines
the board? Mike Freeman: the bylaws determine this, the board size is capped at 20 people.
Gerry Horak question: What is the bottom line? Mike Beckstead responded: RMI by itself is financially
healthy with balanced revenue and expenditures. The North College URA has sufficient cash flow to
repay the remaining $2.8M loan with the City.
Darin Atteberry question: How do we let the Council know about this good work? Wade Troxell
responded: other than the packet, not sure what else needs to be relayed. Gerry Horak also
responded: He recommends a highlight report be prepared and the Finance Committee can report on
RMI to the broader council during other business at a future council meeting.
B. UUTILITY CIP & LTFP REVIEW
Lance Smith presented information on the Utilities’ 2016 Capital Improvement Plans (CIP) for each of
the four Utility Enterprise Funds. This was an informational presentation that outlined the
methodology for developing the CIP, the major capital requirements over the next 10 years, the capital
expenditures by year compared with the recent average spending, how much revenue is available to
support capital needs and the impact on fund balance. A comparison of recent rate increases and
current rates of neighboring cities and next steps was also provided.
Next steps include updating the Long Term Financial Plan (LTFP) for each utility to include capital
expenditures and evaluate rate and debt issuance alternatives and impacts.
Assumptions that will be included in the LTFP include:
• 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:
o Previous 3 years have negative operating income
o Debt coverage ratio is less than 2.0
o Working Capital is forecasted to be below minimum required reserve within 5 years
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• Issue debt if:
o Capital expenses are forecasted to exceed available reserves over the next 5 years
Mike Beckstead comment: We have some unique challenges coming in order to figuring out how we
balance rate increases with customer satisfaction and the infrastructure needs.
Gerry Horak question: can there be a separate slide that compares the muni supplied utilities versus
one another and excludes those supplied by private companies? Lance Smith responded: We will add
that slide.
Gerry Horak question: Can another slide be added to address what the parameters are that we are
trying to meet/solve that leads to the assumptions? Lance Smith responded: we can add that slide.
Gerry Horak question: How has the Utilities Department done this future modelling previously? Lance
Smith responded: before the funds were treated as completely separate. They are now trying to look
at all Utilities as a whole. Kevin Gertig comment: We are also coordinating with all of the Utilities to
prioritize the improvements needed to stay below the goal of no more than a 5% annual rate increase.
Wade Troxell question: How much in the Fort Collins current rate structure is related to the climate
action plan? Any rate increase that comes, that might be stated as a reason for the cause. Whereas
the potential rates increase need is actually part of normal operating costs. Darin Atteberry comment:
we have a challenge to better communicate how the climate action plan is involved with the rate
increase and that it is not driving them. We need an explanation for critical business needs versus the
climate action plan needs. Mike Beckstead comment: We will develop a layering effect to rates from 1)
PRPA purchased power, 2) operational cost of service increases, 3) capital/infrastructure needs, and 4)
capital/infrastructure needs that support the climate action plan.
Gerry Horak questions: what are the drivers for the cost? Are there any choices for level of service?
What other options are we looking at instead of using a rate increase? Lance Smith responded: we will
address these questions before coming back to Council with the next phase of this process.
C. UCML TAX CODE DEFINITIONS
Tiana Smith presented information on a proposed update to the Tax Code definitions that will be
presented in early fall of 2016. The actual document will be presented in the future.
This is a state-wide effort to address inconsistencies of Tax Code definitions between cities across
Colorado. This has been a 2 year process working with the Colorado Municipal League (CML) and the
City of Fort Collins’ Attorneys that is culminating in the fall of 2016. Having consistency across the
State will help with comparisons between the Cities and will be less confusing for citizens and entities
across the State.
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Next steps:
• 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.
Wade Troxell comment: I appreciate that you are working with CML to keep that relationship.
D. UUMCLAIMED FINANCIAL ASSET: RECOMMENDED CODE MODIFICATIONS
John Voss, Lisa Rosintoski and John Duval presented a proposed changed to unclaimed and abandoned
intangible personal property. The existing code needs to be updated to meet current
needs/definitions. This addresses uncashed checks, credit balances unclaimed on Utility customer
accounts and unclaimed construction related deposit escrows.
Summary of steps:
1. After 1 year without being claimed, the property is presumed abandoned
2. Notices then distributed
a. Will be listed on City website
b. Letters written to last known address for amounts $125 & over
3. Claimants have 1 year to file proof of claim
4. If proof of claim not timely filed, the intangible property is forfeited to the City.
5. 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.
The proposed date for the first reading is May 17, 2016. This proposed date was approved by Wade
Troxell & Gerry Horak.
UOTHER BUSINESS:U
Mike Beckstead advised the Committee that there is a very full calendar over the next few months
given the number of topics maturing together. An additional meeting of the Committee may be
needed to allow timely review of all topics. Subsequent to this meeting, a separate meeting was
scheduled for June 1, 2016 at 7:00 am in the CIC room at City Hall.
Meeting Adjourned at 10:50 am
COUNCIL FINANCE COMMITTEE
AGENDA ITEM SUMMARY
Staff/Presenters:
Presenter on Study Findings:
Carol Plock, Executive Director, Health District of Northern Larimer County
Presenter on Next Steps:
Laurie Stolen, Director, Alternative Sentencing Department,
Larimer County Criminal Justice Services
Date: May 16, 2016
SUBJECT FOR DISCUSSION
Recommendations for the Development of Critical Behavioral Health Services
in Larimer County
EXECUTIVE SUMMARY
The Community Mental Health and Substance Abuse Partnership of Larimer County recently
commissioned a study to quantify the gaps in treatment for mental health and substance use
disorders locally. The study identified major gaps in critical behavioral health services, offering
recommendations in what services are most needed, at what levels, and for what cost. Because
these gaps have a significant impact on local citizens and their families, government, health, and
social services, this is an educational presentation to share the findings.
GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED
As an educational presentation, presenters are interested in the Committee’s reaction and
questions, as well as thoughts about the potential of the City to eventually endorse the concept of
expansion of critical mental health and substance use disorder services locally.
BACKGROUND/DISCUSSION
The lack of critical behavioral health services has a direct impact on major City of Fort Collins
concerns, including the lack of needed depth and continuum of mental health and substance use
disorder treatment, and the resulting impact on police services, the criminal justice system,
poverty, homelessness, businesses and the new Street Outreach Project, and Support Services for
those living in Permanent Supportive Housing. Changes in treatment services are anticipated to
have significant impact on health, quality of life, and societal and services costs.
ATTACHMENTS (Critical Behavioral Health Services)
Powerpoint
Attachment 1: PowerPoint Presentation
Handouts
Attachment 2: Summary of Recommendations in Infographic Form
Attachment 3: At-A-Glance Visual of Existing and Recommended Behavioral Health Capacity
Attachment 4: List of Services to be Provided with Estimated Amounts
Attachment 5: Highlights of Quality Cost Effectiveness and Effectiveness of Treatment Studies
Attachment 6: Executive Summary of Report: Recommendations for the Development of
Critical Behavioral Health Services in Larimer County
Recommendations for
the Development of
Community Mental Health
and Substance Abuse
Partnership of Larimer County
Critical Behavioral
Health Services
In Larimer County
May 16, 2016
Roles
▪ Community Mental Health & Substance Abuse Partnership
of Larimer County
▪ Health District of Northern Larimer County
▪ Larimer County
▪ City of Fort Collins and other Partners
Families, individuals,
health and human services providers,
the criminal justice system,
schools, and more
In our community’s ability to adequately address
mental health and substance use disorders
Consistently
report
major gaps
The Issue
“ The service I need to connect him to
does not exist in this community.
What do you expect me to do??? ”
- Care Coordinator
Like other illnesses,
mental illness and
substance use disorders
Can be disabling, even life-threatening
Can be chronic and relapsing
Affect families and work places too
Are treatable
(early ID and access to treatment are critical)
It’s Not a Small Problem
Major
Health Burden
Leading Cause of
Disability in US
Impacts Thousands in
Larimer County
44,300 Mental Illness (MI)
(10,000 w/serious MI)
31,200 Substance Use
Disorders (SUDs)
(Numbers may overlap; many have
co-occurring MI and SUD)
Disability & early death
Medical Costs
Lost productivity
Unemployment/Poverty
Criminal Justice
Impact on Family
Costs are High
The
Process of
Developing
Recommendations
Identify the behavioral health
services most needed in our
community.
Determine the level of need
Analyze potential costs,
revenues, remaining need
Create recommendations for
development of critical services
Key Finding
Confirmed: the local
continuum of behavioral
health treatment and
support services is
not sufficient to meet
the need
Larimer County Jail High Utilizers (4 bookings in 1 year in LC Jail):
Costs of Crisis and Treatment Services
Annual Expenditures (2013)
TOTAL: $1,708,424
Crisis Services Treatment Services
TOTAL: $ 239,159
…Rethink
Everything…
New 24/7 Behavioral Health
Services Center
• Acute Treatment Unit (ATU)
Acute mental illness stabilization when
hospitalization not required
12 beds / 990 admissions
• Withdrawal Management
(f/k/a detox)
Medically monitored
12 beds / 820 admissions
• Short Intensive Residential (SIR)
For substance use disorder treatment
11 beds / 300 admissions
• Thorough Assessments
Professionals skilled in both MI and SUD
Connection to appropriate community
service
7,600 assessments
• Client Assistance
Help paying for transportation,
medications, co-pays, and deductibles
1,600 clients
Services Needed: Facility
In the community…
Encourage Others to Expand Provide
90 day for Substance Use Disorders
52 beds, 190 admissions
• Increase Intensive Outpatient
& Outpatient Services
• 24/7 Certified Addictions
Counselors
• Client Assistance with Costs
When living in Permanent Supportive Housing
• Long-term Low Intensity Residential
• For Those with Complex Needs
Care Coordination (250 people)
Support Services (100 people)
…….……….
………………………..
Summary, Increased Capacity for Critical Services
Estimate: Up to 4,700 individuals served, some duplicated
Capacity Total Utilization
Assessments 7,655
Focused Client Services (people) 1,970
Client Assistance 1,620
Care Coordination 250
Support Services, PSH 100
Admissions (admissions) 2,304
Acute Treatment Unit 986
Withdrawal Management 822
Short-term Intensive Residential 305
Low-Intensity Residential 191
TOTAL 11,929
Estimated Costs
OPERATING
Personnel $ 8.6 million
Client Assistance $ 2.4
Other $ 4.8
TOTAL: $15.8 million
Less Revenues $ 4.0
Needed Annual Funding: $ 11.8 million
Facility: 51,000 square feet, $20.4 million
Leveraging Change: One Example
Additional Capacity
to be Encouraged by Existing Providers (Payers Exist)
Total
Needed
Approximate
Existing
Expansion
To Be
Encouraged
Estimated
Need for
Client
Assistance
(budgeted, prior
slide)
Intensive
Outpatient
(SUD)
1,090
240
850
220
Outpatient
(SUD)
3,800
1,600
2,200
780
SUD: Substance Use Disorder Treatment
Treatment Works:
Effectiveness Compared to Other Serious Chronic Diseases
National Institutes of Health, 2012
Outcomes
Value of the Investment
Immeasurable
Save lives!
Maintain and restore health, healthy families, workplaces
Target $$ to effective treatment
Proven Outcomes in Study after Study
Avoided use of health care system
- Health Care Costs: ED, hospital, ambulance, primary care
- Mental health care
Avoided crime; lowered recidivism
- Criminal justice system: law enforcement, prosecution, incarceration, etc.
- Victim losses: bodily and emotional harm, property theft/damage
Increased chances of employment; contributing taxes
Significant increases in years of healthy life lived
A Sound Investment
Studies Consistently Show Significant Economic Impact
• Every dollar spent on addiction treatment programs yields a return
of between $4 and $7 in reduced health, crime, and criminal justice
costs, and impaired work (NIH, 2012) [= $40M return locally]
• CA state treatment system: on average, substance abuse
treatment cost $1,583 and is associated with a monetary benefit to
society of $11,487 (>7:1 ratio) – mostly due to reduced costs of
crime and increased employment earnings.
• Louisiana: each $1 for alcohol and drug abuse treatment will
reduce future expenditures on criminal justice, medical care, and
public assistance by approximately $3.83.
• Kaiser (CA): matched control group; those in substance use
treatment had 35% less inpatient cost, 39% less ER cost, 26% lower
total medical cost.
Partners:
SummitStone Health Partners
FC Housing Authority
Health District
92% reduction in inpatient psychiatric treatment days
84% reduction in Emergency
Department visits
78% reduction in transports by
ambulance
62% reduction in arrests
75% reduction in medical hospitalizations
75% reduction in inpatient
detox or inpatient
substance abuse treatment
A Local Example: Reductions in Service Utilization and Related Cost Offsets
Community Dual Disorder Treatment Program, Larimer County
From Evaluation of First Four Years of Program
$174,027 total net cost offsets
over four years (including
reduced services usage and
total program costs)
Key Linkages to Major City Concerns
Social Sustainability Goals (SS Gaps Analysis, 2014)
• Residents are able to rapidly access and receive the depth of treatment needed for mental
health, physical health and substance abuse needs.
• High quality health care is delivered across the continuum of care: therapy, outpatient care,
inpatient care, residential treatment for addictions, mental health care.
Intertwined with…
Police services, criminal justice system
Poverty
Housing, Support Services for Permanent Supportive Housing
Businesses, Homelessness, Street Outreach Project
“Like every other health condition, we need to
be sure we have adequate services available
right here in our community so that we can
give our families, friends and co-workers
a fighting chance at recovery.”
Anne Hudgens, Partnership Chair
Attachment #1
Summary of Recommendations
in Infographic Form
Services Needed: Filling Our Greatest Gaps
New 24/7 Behavioral Health Services Center
• Acute Treatment Unit (ATU)
Acute mental illness stabilization when
hospitalization not required
12 beds / 990 admissions
• Withdrawal Management (f/k/a detox)
Medically monitored
12 beds / 820 admissions
• Short Intensive Residential (SIR)
For substance use disorder treatment
11 beds / 300 admissions
• Thorough Assessments
Professionals skilled in both MI and SUD
Connection to appropriate community service
7,600 assessments
• Client Assistance
Help paying for transportation, medications,
co-pays, and deductibles
1,600 clients
What Would It Take?
Encourage Others to Expand Provide
Facility Cost: $20.4 Million
90 day for Substance Use Disorders
52 beds, 190 admissions
• Increase Intensive Outpatient &
Outpatient Services
• 24/7 Certified Addictions Counselors
• Client Assistance with Costs (above)
When living in Permanent Supportive Housing
In the Community
• Long-term Low Intensity Residential
51,000 square feet
Annual Cost: $11.8 Million
(after revenues)
Value
Save lives and families
Increase self-sufficiency
A wise economic investment
Reduce poverty and homelessness
Reduce unnecessary use of:
Reduces health care and criminal justice costs
Increases productivity
Emergency Departments
Hospitals
Ambulance
Health Care
Police
Courts
Jails
Change
Nothing
and
Nothing
Changes
For more information on the report and recommendations,
contact: Lin Wilder lwilder@healthdistrict.org 5/4/16
• For Those with Complex Needs
Care Coordination (250 people)
Support Services (100 people)
Development of Critical Behavioral Health Services in Larimer County: Recommendations
Study and recommendations from NIATx, February 2016 • Requested by the Mental Health and Substance Abuse Partnership of Larimer County
Commissioned by the Health District of Northern Larimer County • Funded by the Health District, SummitStone Health Partners and Larimer County
The Issue
Behavioral Health Disorders, which include mental illness
and substance use disorder, are serious health
conditions. Much like diabetes or heart disease, they can
be chronic, disabling and even life-threatening.
“Like every other health condition, we
need to be sure we have adequate
services available right here in our
community so that we can give our
families, friends and co-workers a
fighting chance at recovery.”
Anne Hudgens, Partnership Chair
Since the effective treatment of mental health and substance use disorders, like other serious
health conditions, requires specialized care, fill gaps in care with high-quality specialized
treatment options. Include a 24/7 Behavioral Health Services Center providing thorough
assessments, connections to existing services, and short-term live-in treatment for: acute mental
health problems, withdrawal management from substances (f/k/a Detox), and intensive substance
use disorder treatment. Significantly expand effectiveness of these and other community services
by providing client assistance to help pay for transportation, medications, and cost of care;
providing special care coordination and services for more people who have complex needs; and
helping to create longer-term residential treatment for those with more severe substance use
disorders. Encourage expansion of skilled outpatient and intensive outpatient services.
Key Recommendation
The Impacts of Behavioral Health Disorders in Larimer County are:
Key Finding
Although it has
many quality
services,
Larimer County
does NOT have the
range of services
and facilities
to meet the needs
of thousands
of residents who
need treatment
for mental illness
and substance use
disorder
44,300
31,200
with substance
use disorder
(10,000 with
significant mental
illness)
with mental illness
Some people with both conditions
Acuity varies
HUMAN
• Impacts on Individual
and family
• Unemployment/
poverty
• Early death
FINANCIAL
• Lost productivity
Attachment #2
At-A-Glance Visual of Existing
and Recommended Behavioral
Health Capacity
Attachment #3
List of Services to be Provided
with Estimated Amounts
Recommendations for Critical Behavioral Health Services in Larimer County
List: Estimates of Services to be Provided
April 2016
Paid for With Projected Budget, in 24/7 Behavioral Services Facility:
1) Thorough Assessments: 7,600 assessments
Clinically strong, evidence-based, assess both mental illness and substance use disorder
Provided by psychiatrists, licensed therapists, CACs with differential diagnosis expertise
Connections to appropriate community service
2) Acute Treatment Unit: 12 Beds, 990 admissions, average length of stay (LOS) 5 days
Acute mental illness stabilization when hospitalization not required; more than crisis stabilization
center but less than inpatient hospitalization
3) Medically Monitored Withdrawal Management (formerly known as “detox”):
12 beds, 820 admissions, average LOS 5 days
Includes adequate medical staff to be able to administer person’s personal meds, meds for initial
withdrawal if needed, and start medication-assisted treatment for opioid withdrawal
4) Short Term Intensive Residential (SIR): 11 beds, 300 admissions, average LOS 12 days
Short term intensive treatment for substance use disorder
5) Client Assistance For Treatment Costs: Assist 1,600 individuals
Flexible funding to assist with medications, transportation, deductibles/co-pays, etc.
Paid for With Projected Budget, in the COMMUNITY:
6) Moderately Intensive to Intensive Care Coordination: 250 caseload
Provides higher level care coordination for those with most complex needs, more significant behavioral
health disorders (expands existing community model)
7) Supportive Services for those in Permanent Supportive Housing: 100 caseload
Provides behavioral supportive services for those whose level of functional impairment are appropriate
for permanent supportive housing
Partially Supported With Projected Budget, in the COMMUNITY:
8) 24/7 Certified Addictions Counselors (CACs) (only) for Long Term Low Intensity Residential Care (LIR):
52 beds, 190 admissions, average LOS 90 days
While other organizations would provide the LIR, projected funding would cover the cost of CACs 24/7
9) Client Assistance Funds (see above) to provide limited help with Intensive Outpatient (IOP) and
Outpatient (OP) Services. IOP: average LOS 30 visits; 1089 admissions total capacity needed.
OP: average LOS 10 visits; 3800 admissions total capacity needed.
The project would encourage existing providers to expand IOP and OP services for substance use
disorders. While insurance is anticipated to pay for most of the cost of IOP and OP, some of the client
assistance funds, above, are anticipated to be needed to assist with deductibles/copays for IOP and OP
services for substance use disorders.
Attachment #4
Highlights of Quality Cost
Effectiveness and Effectiveness
of Treatment Studies
Treatment is Cost Effective, and Benefits are Spread Between Many Different Pockets
Compiled by Henrick Harwood, Deputy Executive Director/Director of Research & Program Applications
National Association of State Alcohol & Drug Abuse Directors (NASADAD)
May 2016
The National Institutes of Health (NIH) concludes that substantial research shows for every $1 spent on substance
use disorder (SUD) treatment there are about $4 to $7 in economic benefits.
(National Institute for Health. (2012). Principles of Drug Addiction and Treatment: A research-based guide/third edition).
The same report concludes that economic costs of substance abuse (illicit drug, alcohol and tobacco) are about $600
billion per year, or nearly $2,000 per person in the US. The economic cost of mental disorders is cited by the National
Institute on Mental Illness at over $300 billion per year, or almost $1,000 per person in the US. Extrapolating that
amount to Larimer County, the estimated economic costs of both substance use disorders and mental illness locally
are about $900 million.
The cost per person with SUD or a mental disorder is literally tens of thousands of dollars per year, depending on
their diagnosis, severity, age, and treatment status.
These costs come in many forms, affect many institutions, and permeate society and communities:
• The Person Impacted by the Disorder: Nearly half of costs fall on the nearly 50 million experiencing mental
disorders (estimated 44,000 locally) and over 20 million (estimated 31,000 locally) with SUD disorders - in
terms of impaired workplace and household productivity, lost jobs and derailed careers.
• Workplaces and Governments: Impact of Lost Productivity and Disability
o Workplaces are significantly harmed when workers develop mental or SUD disorders (days out, days less
productive, turnover).
o Lost productivity and disability has a significant impact on tax payers - through lost tax revenues and
social assistance payments.
• Families (spouses, children) of those with mental disorders and SUD also bear unfathomable impacts, often
have their own health and emotional problems and require assistance from communities (health, housing,
food, school supports, etc.).
• Health Care System (payers and providers): About a third of mental illness costs and 10 percent of SUD costs
are for treatment (hospital care, doctors, therapists, medicines).
o Most of these costs are paid through public and private insurance, although states and communities pay a
significant share, as well as families.
• Criminal Justice System: Tragically, un/undertreated mental disorders and SUD is associated with a great deal
of disruption and harm in the broader community through public disturbances, status offenses, violence (actual
as well as threatened), theft/burglary and system crime.
o These impact police, jails, prisons, courts, prosecutors, probation and parole, across local, state and
federal authorities. Victim loss can also include property theft or damage and bodily and mental health
harm.
RICE, D.P.; Kelman, S.; Miller, L.S.; and Dunmeyer, S. The Economic Costs of Alcohol and Drug Abuse and Mental Illness: 1985. Rockville,
MD: National Institute on Drug Abuse, 1990.
Harwood, H, Fountain, D. and Livermore, G. The Economic Costs of Alcohol and Drug Abuse in the United States – 1992. Rockville, MD:
National Institute on Drug Abuse, 1998.
A great many quality studies have been performed to estimate the costs of the disorders and the subsequent cost-
offsets of treatment. Cost offset or cost benefit studies measure the economic return from investment in treatment
and/or prevention. While studies vary in which impacts and costs they consider, they consistently yield both large
aggregate costs and sizeable estimates of benefits from treatment services. The diverse and diffuse nature of the
impacts and the costs, however, means that no single agency or institution captures all of the economic benefits.
The economic rewards are spread throughout the community (family, workplace, local organizations and
governments), and on to the state and federal levels.
Findings and Citations from Selected Studies
National Institutes of Health:
“According to several conservative estimates, every dollar spent on addiction treatment programs yields a return of
between $4 and $7 in reduced health, crime, criminal justice costs, and impaired work”.
National Institute on Drug Abuse. Principles of Drug Addiction Treatment: A Research-Based Guide (Third Edition), National Institute of
Health, 2012.
Kaiser Permanente Northern California analyzed the average medical costs during 18 months pre- and post-
substance use (SU) treatment and found that the SU treatment group had a 35% reduction in inpatient cost, 39%
reduction in ER cost, and a 26% reduction in total medical cost, compared with a matched control group.
Weisner C, Mertens J, Parthasarathy S, et al. Integrating primary medical care with addiction treatment: A randomized controlled trial.
Journal of the American Medical Association, 2001; 286: 1715-1723.
In another study, Kaiser also found that family members of patients with substance use disorders (SUD) had high
healthcare costs and were more likely to be diagnosed with a number of medical conditions than family members of
similar persons without a substance use condition. For families of SUD patients who were abstinent at one-year after
treatment began, the healthcare costs of family members were no longer higher than other Kaiser members.
Ray GT, Mertens JR, Weisner C. The excess medical cost and health problems of family members of persons diagnosed with alcohol or drug
problems. Medical Care. February 2007. Vol. 45 Issue 2.
California Department of Drug & Alcohol Programs:
In a study of the state treatment system a team at UCLA found that, on average, substance abuse treatment costs
$1,583 and is associated with a monetary benefit to society of $11,487, representing a greater than 7:1 ratio of
benefits to costs. These benefits were primarily because of reduced costs of crime and increased employment
earnings.
“California Treatment Outcome Project,” Ettner, Huang, Evans et al. for the California Department of Drug and Alcohol Programs, the
Center for Substance Abuses Treatment, and the Robert Wood Johnson Foundation ), 2008.
Washington (state) studied 557 indigent clients with substance use disorder (SUD) and estimated that those that
received substance abuse treatment had Medicaid expenses $4,500 less than similar untreated individuals, which
compared favorably to the $2,300 TX cost. Savings were consistent across the five years.
Luchansky, B. & Longhi, D., 1997. Cost Savings in Medicaid Medical Expenses: An Outcome of Publicly Funded Chemical Dependency
Treatment in Washington State. Washington State Department of Social and Health Services.
Washington (state) studied SSI enrollees in need of substance abuse treatment. 50% got treatment. Those treated
achieved: lower medical costs of $311/month; and reduced: arrests of 16%, convictions of 15%, felony convictions of
34%.
Estee S, Nordlund D. Washington State Supplemental Security Income (SSI) cost offset pilot project: 2002 progress report. Washington State
DSHS, Research and Data Analysis Division, Olympia, WA. February 2003.
Washington (state) analyzed the impact of $21 million treatment expansions in FYs 2005-07. Realized savings in
Medicaid alone were $17.8 million.
David Mancuso, PhD, Daniel J. Nordlund, PhD, et al. DASA Treatment Expansion: April 2008 Update. WASHINGTON STATE Department of
Social and Health Services
Washington (state) estimated that it will save $2.58 in criminal justice system and victim costs for every dollar spent
on treatment.
Mancuso, David. Providing chemical dependency treatment to low-income adults results in significant public safety benefits. Washington
State Department of Social and Health Services Research and Data Analysis Division, February 2009.
South Dakota: Before treatment (based on more than 1,000 persons followed 12 months after treatment), the cost
of treatment ($1,382) was significantly less than the benefits ($11,653), resulting in a very favorable cost-benefit
ratio. The cost benefit in this study was $8.43 for every dollar invested. The cost benefit results presented here are
similar (although somewhat higher -- $8.43 compared to $7.00) to those reported elsewhere.
“Substance Abuse Treatment Produces Savings in South Dakota,” Gary Leonardson, Mountain Plains Research, for Division of Alcohol and
Drug Abuse State of South Dakota , Dec, 2005. http://dhs.sd.gov/ada/Publications/SDImpactTreatment3.pdf
Oregon: A cohort of treatment completers produced cost savings of $83,147,187 for the two and a half years
following treatment. The cost for treating all adults in 1991–92 was $14,879,128. ♦ Thus, every tax dollar spent on
treatment produced $5.60 in avoided costs to the taxpayer.
“Societal Outcomes and Cost Savings of Drug and Alcohol Treatment in the State of Oregon”. Finigan, M. for Office of Alcohol and Drug
Abuse Programs, Oregon Department of Human Resource, 1996.
Louisiana: “We conclude that for each dollar the state puts into alcohol and drug abuse treatment programs, it will
reduce future expenditures on criminal justice, medical care, and public assistance by approximately $3.83.”
“Potential Cost Savings to the State of Louisiana from the Expansion of Substance Abuse Treatment Programs,” Report Prepared by Loren
Scott & Associates, Inc. for Louisiana Department of Health and Hospitals Office for Addictive Disorders, 2003.
Kentucky: The reductions in self-reported arrests for Kentucky clients, combined with cost estimates for their crimes
and increased earnings and tax revenues, suggest a cost benefit for Kentucky taxpayers estimated at a ratio of 4.98 to
1. In other words, Kentucky saved $4.98 for every dollar spent on treatment.
“Kentucky Substance Abuse Treatment Outcome Study FY 2006 Follow-Up Findings,” Robert Walker, Allison Mateyoke-Scrivner, Jennifer
Cole, TK Logan, Erin Stevenson, Carl Leukefeld, Tom Jackson. Center on Drug Abuse Research, U. Kentucky, JUNE 2008
.http://cdar.uky.edu/ktos/downloads/report/Section%20Four.pdf
Systemic Review of Acute Residential Mental Health Services:
One paper reviewed 26 studies on Acute Residential Mental Health Services, and concluded they provide treatment
outcomes equivalent to those of inpatient units, with users reporting high satisfaction. Acute residential services
offer a cost-effective alternative to inpatient services.
Kerry A. Thomas, et al. Clinical and Cost-Effectiveness of Acute and Subacute Residential Mental Health Services: A Systematic Review Kerry
A. Thomas, et al. Psychiatric Services, Nov. 2013.
Major Conclusions on the Effectiveness of Treatments for Mental Disorders
Compiled by Henrick Harwood, Deputy Executive Director/Director of Research & Program Applications
National Association of State Alcohol & Drug Abuse Directory
May 2016
President Bush said "... Americans must understand and send this message: mental disability is not a scandal - it is an
illness. And like physical illness, it is treatable, especially when the treatment comes early."
New Freedom Commission on Mental Health, Achieving the Promise: Transforming Mental Health Care in America. Final Report. DHHS Pub.
No. SMA-03-3832. Rockville, MD: 2003.
“ . . . a variety of treatments of well-documented efficacy exist for the array of clearly defined mental and behavioral
disorders that occur across the life span . . .”
• “A range of efficacious psychosocial and pharmacologic treatments exists for many mental disorders in
children, including attention deficit/hyperactive disorder, depression, and the disruptive disorders.”
• Concerning adult anxiety, depression and schizophrenia, “Research has contributed to our ability to
recognize, diagnose, and treat each of these conditions effectively in terms of symptom control and behavior
management. Medication and other therapies can be independent, combined, or sequenced depending on
the individual’s diagnosis and personal preference.”
• “There are effective interventions for most mental disorders experienced by older persons (for example,
depression and anxiety), and many mental health problems, such as bereavement.”
U.S. Department of Health and Human Services. Mental Health: A Report of the Surgeon General. Rockville, MD: U.S. Department of Health
and Human Services, Substance Abuse and Mental Health Services Administration, Center for Mental Health Services, National Institutes of
Health, National Institute of Mental Health, 1999.
Following on the New Freedom Commission and Surgeon General’s Report, the Milbank Memorial Fund
commissioned a study to examine and summarize the effectiveness of key mental disorder treatments. The report
found:
• Aggregated results of placebo-controlled clinical trials show that for adults with schizophrenia “patients on
placebo had an aggregated relapse rate of 70 percent, compared with only 23 percent for those on
antipsychotic medication. The figure also shows that the projected annual relapse rates with these
medications in usual practice are in the range of 40 to 50 percent.” “A number of psychosocial treatments, in
combination with appropriate pharmacotherapy, have been found to provide benefits in the form of
reducing symptoms and relapse.”
• For major depression, meta-analysis showed that fifty percent of those receiving medications improved,
versus 32 percent of those given placebo.
• Multisystemic therapy (MST) is designed for youth with severe emotional disorders (such as conduct
disorder). “Studies consistently indicate that MST reduces long-term rates of re-arrest by 25 to 70 percent
and long-term rates of days in out-of-home placements by 47 to 64 percent; reduces psychiatric symptoms
and substance abuse; and improves mainstream school attendance, family relations, and consumer
satisfaction.”
Anthony F. Lehman, Howard H. Goldman, Lisa B. Dixon, and Rachel Churchill, 2004. Evidence-Based Mental Health Treatments and
Services: Examples to Inform Public Policy. Milbank Memorial Fund, New York, New York.
Attachment #5
Executive Summary of Report:
Recommendations for the
Development of Critical
Behavioral Health Services in
Larimer County
Recommendations for the
Development of Critical
Behavioral Health Services
in Larimer County
Executive Summary
Community Mental Health and Substance Abuse
Partnership of Larimer County
An Unincorporated Non-Profit Association
February 23, 2016
REVISED 3/31/2016
1
Community Mental Health and Substance Abuse
Partnership of Larimer County
An Unincorporated Non-Profit Association
Executive Summary
Recommendations for the Development of Critical Behavioral Health
Services in Larimer County
February 23, 2016
Introduction
While many quality behavioral health treatment and support services are being provided in
Larimer County, the current continuum of services being offered is not sufficient to meet the
needs of the many people who have mental illnesses and/or substance use disorders. As a result,
these people often simply can’t get the level of care that they need to address their illness.
Awareness of the gaps in behavioral health services has been growing over time to the point that
several major community organizations have mentioned the need for an improved behavioral
healthcare system in their strategic planning, including Larimer County, the City of Fort Collins,
and the Health District of Northern Larimer County. The Community Mental Health and
Substance Abuse Partnership of Larimer County, a collaborative effort between over twenty
organizations, consumer and family advocates, and treatment and service providers, established
creating a plan for the expansion of critical behavioral health services as its highest priority in
2015. This document is the result of this priority area and the work of a sub-group of Partnership
Members known as the “Plan Guidance Team” and is intended to inform the planning process.
To aid in data collection, analysis and development of recommendations, the Partnership
engaged the services of the NIATx group, a multidisciplinary team of consultants with a unique
blend of expertise in public policy, agency management, and systems engineering that has
worked with 1000+ treatment providers and 50+ state and county governments.
The purpose of this document is to help citizens and service providers understand existing
challenges, garner commitment to making changes and improvements, and stimulate significant
development and expansion of critical behavioral health services in Larimer County. The
ultimate goal is to guarantee Larimer County’s capacity to meet the growing behavioral health
needs of its citizens. This document seeks to accomplish the following:
1. Delineate what is needed for a more complete continuum of care capable of providing
adequate levels of affordable care for those with behavioral health needs (focusing on the
best evidence, high quality, and access to care), understand what actually exists in our
community, and determine the gaps.
2. Determine a cost estimate for filling the gaps, potential revenue sources, and the
remaining need for funding.
2
The Need
Behavioral health disorders, including mental illness and substance use disorders are serious,
chronic health issues that can be potentially life-threatening, similar to other chronic health
disorders such as diabetes and heart disease. These disorders of the brain are common and can
affect anyone at any age or socioeconomic status. It is estimated that there are approximately
44,300 adults who have mental illness and 31,000 who are dependent on alcohol or drugs living
in Larimer County, although many have both disorders and the impact of the disorders varies.
Behavioral health disorders are treatable and treatment effectiveness is improving. However, the
majority of those with these disorders never receive the treatment they need to help restore their
functioning. Though these conditions are treatable health disorders, consumers and families
regularly report great difficulty in getting access to the recommended range of services – a
situation that is quite different than access to care for other chronic illnesses such as heart disease
and diabetes.
Lack of treatment is particularly true for those with substance use disorders (thus this study
focused heavily on estimating unmet need for these disorders). NIATx estimated that of the
approximately 31,000 people meeting the criteria for needing treatment for substance use
disorders, only 2,800 people actually receive that care each year in Larimer County, leaving over
28,000 people needing, but not receiving, treatment annually. Of those 28,000, it is estimated
that approximately 1,400 actually want or would seek treatment but do not receive that treatment.
Providing an improved continuum of care for the 4,200 people needing and seeking treatment
(2,800 who currently seek treatment and an additional 1,400 who need but don’t receive that
treatment) is critical to their recovery.
When people with behavioral health disorders do not receive appropriate, timely, or adequate
treatment the result is often greater suffering from symptoms, poor quality of life, reduced ability
to function and use of more intensive and higher cost levels of treatment. People with behavioral
health disorders are also at risk for unstable employment, poverty, chronic health conditions,
early death, and suicide. Many people who don’t get the right treatment enter a cycle of repeated
use of the highest cost services in our community such as emergency departments, law
enforcement or criminal justice, including jail.
While many quality services are being provided here, the key finding of this investigation is that Larimer
County does not have a continuum of behavioral health treatment and support services that is sufficient
to meet the needs of the many people with mental illnesses and/or substance use disorders. As a result,
these people often simply can’t get the level of care that they need to address their illness.
Recommended Solutions to Meet the Need
Specifically, this planning process recommended that four key levels of care and a range of support services be
added or expanded in order to provide adequate standards of care in Larimer County.
A full complement of Withdrawal Management (Drug/Alcohol Detoxification) services
Residential Treatment for Substance Use Disorders (SUDs)
Acute Treatment Unit (ATU) for just-under-hospitalization level of care
Intensive Outpatient Treatment Services (IOP)
Support Services (moderately intensive to intensive care coordination, medications, and support services
for those living in Permanent Supportive Housing, assessment, and client assistance funds).
The study also recommended that many of these services be provided in a 24-7 Services Center providing a
new state-of-the-art model of care and enabling more seamless transitions between levels of care. Part of the
new model would include a more thorough, formal, patient-centered assessment process in order to better
guide transitions into and between the levels of care.
3
Specific recommendations to create and support adequate services in each of these areas include:
1. Expand treatment capacity to accommodate the estimated need for services for up to 4,700
adults. This includes an estimated 2,800 people currently receiving some level of treatment,
plus an additional 1,400 adults estimated to need and seek treatment in Larimer County but
who are currently unable to receive that treatment, plus an allowance of 500 people for
anticipated growth. The total annual utilization of all services included in the recommended
model is estimated at approximately 12,000 admissions (defined broadly).
2. Create a more complete continuum of care and the ability to place patients into
appropriate levels of care based on assessment and re-assessment. Provide most
services in one facility, with specific services supported and provided in the community.
3. Create a medically monitored Withdrawal Management Center (Drug/Alcohol
Detoxification) in Larimer County with 12 beds and the capacity for up to 822 ASAM
level 3.7 admissions in order to support detoxification from alcohol or drugs and transition
individuals into treatment. Two additional levels of withdrawal management services would
be available in the community (but are not included in the funding recommendations
included in this document): Ambulatory (ASAM level 2.0) managed on an outpatient basis,
and Intensive Inpatient (ASAM level 4.0) provided in a hospital setting.
4. Create or support several levels of residential care to support up to 500 short-term and
long-term supported residential admissions as follows:
Create Short-Term Intensive Residential Treatment (IRT) designed to provide a safe
therapeutic environment where clinical services and medications are available to treat
patients who are medically stable and withdrawn from substances. Capacity: 11 beds,
average length of stay (ALOS) of 12 days, and 305 admissions.
Support Low Intensity Residential (LIR) services designed to build and reinforce a
stable routine in a safe and supportive context for residents who lack a stable living
environment. Capacity: 52 beds (in the community, not part of facility), ALOS of 90 days,
and 190 admissions.
Encourage the development of independent, voluntary sober housing, like “Oxford
Houses” in the community to provide safe and supportive living environments for those
who choose and can pay for this type of residence. No external financing is
recommended for this type of housing.
5. Encourage the development of community capacity for Intensive Outpatient Services
(IOP) for individuals who require a more structured substance use disorder outpatient
treatment experience than traditional outpatient treatment. Capacity: 1,089 IOP admissions,
an average of 30 visits per admission, and an average daily census of 50. (Note: Since health
insurance is likely to cover these services, the only amount included in the budget
recommendations in this document is client assistance for up to 218 uninsured or
underinsured individuals.)
4
6. Encourage the development of community capacity for Outpatient (OP) Substance Use
Disorder Treatment to provide up to 3,800 admissions, with 30 FTE providing 10 sessions
per admission for people who can benefit from outpatient treatment. (Note: Since health
insurance is likely to cover these services, the only amount included in budget
recommendations is client assistance for up to 780 uninsured or underinsured people.)
7. Create an Acute Treatment Unit in Larimer County to provide short-term crisis
stabilization for individuals whose symptoms and treatment can be managed in non-hospital
settings. Capacity: 12 beds, ALOS of five days and capacity to provide up to 986 admissions.
8. Provide specific behavioral health support services to include:
Moderately intensive to intensive care coordination for up to 250 clients
Client assistance fund to help cover needs such as transportation, co-pays (including IOP
and OP), medications, and personal emergencies for up to an estimated 1,620 clients
Approximately 7,650 patient-centered, intensive assessments to ensure placement in
appropriate levels of care
Support services in Permanent Supportive Housing for up to 100 clients with chronic
health conditions who lack family/social supports, and are disconnected from
employment and other community functions. (Housing to be provided by other sources.)
Financial Resources Needed to Provide These Services
After NIATx completed a preliminary report with a first round of cost, revenue and facilities
estimations, local experts in behavioral health, budgeting and facilities amended these figures to
represent local circumstances and input. The annual costs to provide these services have been
estimated at $15.77 million. Available revenues from client fees and insurance are estimated at
approximately $4 million. The remaining need for funding is estimated at $11.77 million.
Projected Overall Operating Budget
Personnel $8.58 million
Client Assistance $2.40 million
Operational (operational costs,
maintenance, equipment, contracted
services, etc.)
$4.79 million
TOTAL: $15.77 million
Less Revenues $ 4.00 million
Needed Annual Funding: $11.77 million
Facilities Needed and Associated Costs
Estimates for facility space and costs are currently estimated based on providing most services in
one facility. Based on current estimates, a 51,000 square foot facility would be required to
provide these services. The total facility and land costs are estimated at $20.42 million. Facility
costs have not been estimated for Low Intensity Residential services.
5
Benefits and Value to the Community
There is ample evidence to demonstrate significant value and benefits of behavioral health
disorder treatment. Patients and families benefit from increased health, well-being and ability to
function in their family, work, community and society (similar benefits as those seen for
managing symptoms of diabetes or hypertension). Communities realize reductions in related
costs. Additionally, the National Institute of Health estimates that every dollar spent on addiction
treatment yields a return of between $4 and $7 in reduced drug-related crime, criminal justice
costs, and theft. When healthcare related savings are included, total savings can exceed costs by
a ratio of 12 to 1.
Summary, Estimated Increased Capacity for Critical Services
To Be Developed Under Proposed Budget
Capacity Utilization
Assessments 7,655 assessments
Acute Treatment Unit (ATU) 12 beds 986 admissions
Withdrawal Management (medically monitored detox) 12 beds 822 admissions
Short-term Intensive Residential Treatment (IRT) 11 beds 305 admissions
Low-intensity Residential (LIR) (funding for staff, not facility; beds to
be outside of facility)
52 beds 191 admissions
Client Assistance (transportation, medication, co-pays, etc.)
Includes client assistance for IOP and OP for un- & under-insured
1,620 clients
Care Coordination (moderately intensive to intensive) 250 clients
Support Services (for those in Permanent Supportive Housing (PSH)) 100 clients
TOTAL 11,929
Additional Substance Use Disorder Treatment Capacity Needed and to Be Encouraged
(Insurance Coverage Available)
Intensive Outpatient (IOP)
Treatment
1,089 (capacity needed; 220 clients included in client assistance, above)
Outpatient (OP) 3,800 (capacity needed; 780 clients included in client assistance, above)
TOTAL 4,889
For more information contact:
Lin Wilder
Community Mental Health and Substance Abuse Partnership of Larimer County
lwilder@healthdistrict.org
COUNCIL FINANCE COMMITTEE
AGENDA ITEM SUMMARY
Staff: SCFD Citizen Committeee
Lisa Hatchadoorian, Ann Turnquist, Susan Ison
Date: May 16, 2016
SUBJECT FOR DISCUSSION
Proposed Science and Cultural Facilities District ballot measure, November 2016
EXECUTIVE SUMMARY (a brief paragraph or two that succinctly summarizes important
points that are covered in more detail in the body of the AIS.)
A citizen committee has been working for the past year to develop a proposal to place a sales and
use tax measure on the November 2016 ballot to create a Science and Cultural Facilities District
in Larimer County. The tax measure would be for a 1/10P
th
P cent tax for ten years.
Several portions of the City of Fort Collins would benefit from funding through Larimer SCFD,
including Gardens on Spring Creek, Lincoln Center, and the Museum of Discovery. Under the
proposed formula for distribution of funds from the SCFD, funding recipients could receive up to
an additional 20-25% of their operating budget
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.)
Finance Committee briefing. No action or direction 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.)
Larimer SCFD would benefit a wide range of non-profit organizations throughout Larimer
County. Benefiting organizations would are defined in state enabling legislation and include the
following:
A scientific facility is a non-profit organization (or agency of local government) with the
primary purpose of enlightening and entertaining the public through the production,
presentation, exhibition, advancement, or preservation of natural history or natural
sciences including earth, life, or physical sciences
A cultural facility is a non-profit organization (or agency of local government) with the
primary purpose of enlightening and entertaining the public through the production,
presentation, exhibition, advancement, or preservation of visual arts, performing arts, or
cultural history
The estimated 2017 Tax revenues for the Larimer SCFD is estimated to be $6.6 million. As
many as 110 science and cultural services entities could benefit from the program, providing a
sustainable funding source for programing and community services.
Some of the benefits that the Denver SCFD has provided in the metro area include
• Enhanced community economic development
• Enables more programs, exhibits and activities for the community
• Increases jobs – both within the eligible organizations and in support of activities
• Increases attendance on an annual basis – both from within and outside the county
• Grows donations to science and cultural organizations
The citizen committee looks forward to discussing the proposal with the Finance Committee and
providing a perspective on the potential benefits to the City, the community and Larimer County
as a whole.
ATTACHMENTS (numbered Attachment 1, 2, 3,…)
Larimer County
Scientific and Cultural Facilities District
SCFD Citizen Committee
Ann Turnquist
Lisa Hatchadoorian
Susan Ison
May 2016
What is a Scientific and Cultural
Facilities District?
Colorado Statute
A special district statutorily authorized in 1987 to be used to fund
local and regional scientific and cultural organizations
2
Goals
The goals of the SCFD are to:
• Maintain investment in the area’s scientific and
cultural treasures
• Continue to provide high-quality programs to
children, families and residents
• Enhance access to culture and education for all
residents, especially underserved audiences
• Strengthen tourism and economic impact derived
from the cultural programming and exhibits
3
Legislative Definition
A non-profit organization (or agency of local government) with the primary purpose of
enlightening and entertaining the public through the production, presentation, exhibition,
advancement, or preservation of natural history or natural sciences including earth, life,
or physical sciences
A scientific facility is…
A cultural facility is…
A non-profit organization (or agency of local government)
with the primary purpose of enlightening and entertaining
the public through the production, presentation, exhibition,
advancement, or preservation of visual arts, performing
arts, or cultural history
The organizations must have their principal office within the district, conduct the majority of its activities in the state and principally
benefit district residents. Educational organizations, libraries and the media cannot be cultural facilities 4
What entities in Larimer County
would benefit?
• Science Facilities
• Museum of Discovery
• Gardens on Spring Creek
• Cultural Facilities
• Open Stage Theatre
• Fort Collins Museum of Art
• Lincoln Center
• Canyon Concert Ballet
• Bas Bleu Theater
• Rialto Theater
• Loveland Museum
5
Funding through a Voter Approved
Sales and Use Tax
• The proposed Larimer SCFD tax is
0.1% (1 cent on a $10 purchase)
• Sunsets in 10 years (by state law)
• Tax revenues are collected and
administered by the state and remitted
to the SCFD on a monthly basis
6
The Larimer SCFD Opportunity
• Estimated 2017 Tax Revenues for Larimer District
$6.6 million
• Economic Development is a priority for Larimer County
Denver SCFD increased Economic Development
substantially
• Increased funding to eligible organizations through the SCFD
Enables more programs, exhibits and activities for our community
Increases jobs – both within the eligible organizations and in support
of activities
Increases attendance on an annual basis – both from within and
outside the county
Grows donations to science and cultural organizations
• 110 Potential Organizations – many ways to enhance our lives
7
Cost to Citizens: 0.1% Sales Tax
Average per capita tax collection estimated at
$20 annually in 2017
Less than two movie tickets each year!
8
Funding Uses
Funding:
• Must be used to assist qualifying scientific and
cultural facilities within the district for:
General Operations
Expanded Programming
Enhanced Marketing and Outreach
Serving the Underserved
• It may not be used for capital construction,
endowment, or payment of debt principal or interest.
• Proceeds are to be distributed in accordance with any
formula or criteria contained in the ballot measure.
9
Funding Uses: Larimer County
Sustainability Fund:
• All eligible organizations, regardless of size, receive a
predetermined percentage of their qualifying
revenue; not to exceed 25% of the agency revenue
Innovation Fund:
• Awards based on competitive grants addressing new
audiences, innovation, collaboration and regional
initiatives
10
Benefits in Larimer County
• To enhance science, culture, nature and arts offerings to citizens of our region
Cultural Resources address basic needs & skills, especially for youth
• To build on the economic impacts of the arts in Northern Colorado
Cultural & Scientific activities become educational tools
• To support Northern Colorado as a cultural, recreational and intellectual destination
Cultural Resources build unity and complement economic initiatives
• To support a place where talented people want to live
Quality of Life improvements attract knowledge workers
• To build on the success of the Denver Model
Proven Success, both Economic and Quality of Life
11
The Denver SCFD Experience
• Creation of Denver District
SCFD created by voters in 1988 (4,500 square miles / seven metro counties)
Voters approved extending the tax in 1994 and 2004 (sunsets in 2018 but Denver
is planning to reauthorize in 2016)
• Economic Growth*
Denver metro arts, cultural and scientific organizations generated $1.85 billion in
total economic activity
District distribution of $47.36 million to 280 eligible organizations
These organizations represent 10,205 jobs / $150.7 million in personnel expenses
14.2 million people attended these venues (4.2 million students)
17% increase in visitors from outside Colorado / spending increased by 14%
*CO Business Committee for the Arts 2014 Study of Metro Denver Culture – http://CBCA.org 12
COUNCIL FINANCE COMMITTEE
AGENDA ITEM SUMMARY
Staff: Tiana Smith, Revenue and Project Manager
Date: May 18, 2016
SUBJECT FOR DISCUSSION Revenue Diversification Update
EXECUTIVE SUMMARY (a brief paragraph or two that succinctly summarizes important
points that are covered in more detail in the body of the AIS.)
The purpose of this item is to provide an update to the Council Finance Committee of the
ongoing Revenue Diversification project and the research done on the 4 alternatives staff was
directed to pursue in November of 2015. Since 2012, staff has continued to analyze and consider
various facets of diversification which have been presented to City Council in phases. This item
summarizes the research done on a tax on services, a transportation utility fee, an occupation tax
or fee and the Xcel franchise fee and the impact on reducing Keep Fort Collins Great (KFCG)
funding these alternatives would have.
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.)
Of the 4 alternatives presented, which alternative(s) should be pursued?
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 receives 51%-54% of its revenue from sales and use tax. Sales and use tax can be a
volatile source or revenue during times of economic downturn. The issue of how to strike a
balance of adequate revenue to fund current levels of service without an overreliance on sales
and use tax is an ongoing issue.
In 2012, staff embarked on an ongoing project to assess the City’s revenue. Phases of the project
have included the following initiatives:
• Analyze City’s revenue base and compare it to benchmark jurisdictions
• Evaluate diversification options
• Update Revenue Policy to include revenue principles for decision making
• Analyze a Street Maintenance and Park Maintenance Fee
• Complete comprehensive fee comparison study
In November of 2015, staff was directed by Council Finance to pursue researching a tax on
services, a transportation utility fee, an occupation tax or fee and the Xcel franchise fee and how
additional revenue from these alternatives may reduce the amount of Keep Fort Collins Great
funding needing to be renewed in 2020.
The presentation will outline each alternative’s pros and cons, the level of revenue estimated to
be generated, legal implications if applicable, and the reduction to KFCG.
The information presented has been updated to current revenue figures. The presentation is
intended to provide and update for the Council Finance Committee the information that has been
gathered and ask for direction on which of the 4 alternatives to continue to pursue and begin
public outreach.
ATTACHMENTS
Revenue Diversification CFC 5-18-16 PowerPoint
Revenue Diversification
5/18/16
Council Finance Committee
1
Revenue Diversification
“Not putting all your eggs in one basket”
Revenue – the total income produced by a given source
Diversity – the condition of having or being composed of differing
elements
There is merit in the notion that states and local governments
should balance their tax systems through reliance on the "three-
legged stool“**
** Source – National Conference of State Legislatures (NCLS)
2
Goal – Reduce Dependency on Sales Tax Revenue by
Creating Alternate Sources of Revenue
Sales & Use Tax
$135M
54%
Intergovt’al,
$45.7M
18%
Charges for
Services
$32.6M
13%
Property Tax
$20M
8%
Other Misc.
$4.2M
2%
Licenses/
Permits,
3,924,409
Other Taxes
$4.3M
2%
Fines &
Forfeitures
$2.8M
Investment
$2.6M
1%
Fort Collins Governmental Revenue
3
Sales & Use Tax Percent of Total Generally Around 50%...
2015
Intergovt’l includes:
• Revenue from other
governments
• Grants
• Shared Revenues
• Entitlements
Sales & Use
Tax
$129M
51%
Intergovt’al
$49.7M
19%
Charges for
Services
$37.6M
15%
Property Tax
$19.2M
7%
Other Misc.
$5.2M
2%
Licenses/
Permits
$4.6
2%
Other Taxes
Prior Discussion Priorities
Priorities
• KFCG Renewal
• Transit Funding
• Vine/Lemay Railroad Crossing
• Other
Timeline
2017-2018
4
Objective: Explore Alternative Funding Strategies
That Can Reduce KFCG Tax
Options to Diversify
1. Tax on services
2. Transportation utility fee
3. Occupation tax or fee
4. Xcel Franchise Fee
5
4 Alternatives Researched Based On
Feedback In November 2015
Alternatives Considered
Voter
Approval?
Reduce
KFCG?
Potentially
Potentially
Likely, but Potentially
not required
Required if tax,
Likely but not
required if fee
Types of Services That Could Be Taxed
Laundry/Dry Cleaning
• Linen
• Alterations
Health/Fitness/Entertainment
• Exercise
• Sports Facility
• Bowling
• Martial Arts
• Movie Theatres
Personal Care
• Hair Care
• Exercise
• Nails
• Massage
Professional
• Counseling
• Legal
• CPA
• Photography
• Event planning
6
Services In Blue Generally Thought to be Less
Impactful on Lower Income*
Security
Sound
Warranty Services
Computer Program Services
Meals
Landscaping
Funeral
Animal Care
*Source: “Expanding Sales Taxation of Services,” Michael Mazerov, Center for Budget and
Policy Priorities, 2009
Tax on Services Estimates*
7
$4.2M Reduces KFCG to 0.70%
Service Category
Estimated Tax
Generated @ 3.85%
Animal Care (grooming/training, etc) $ 193,717
Laundry/Dry Cleaning $ 218,042
Hair Care $ 884,204
Personal Care (massage, spa services, tanning, weight loss, nail) $ 1,346,419
Bowling/Sports Facilities $ 162,038
Exercise (fitness membership, martial arts) $ 1,395,310
$ 4,199,730
*Extremely difficult to estimate, due to accuracy of net taxable sales reported.
Solution to Accuracy of Estimation
8
If tax on services is approved by voters, propose a 1 year lag before
reducing KFCG tax rate, in order to better quantify the revenue
generated and the KFCG rate adjustment
Removes Risk of a Loss/Gain in Revenue
Tax on Services Peer Cities
9
Fort Collins
• Lodging
• Telecom
• Pay Television
• Gas and
Electric
Longmont
• Fabrication
• Telecom
• Freight
Thornton
• Lodging
• Telecom
• Pay Television
• Gas, electric
• Recreation
• Linen
• Security
• Sound
• Bowling
• Laser tag, mini
golf
• Laundry
Lakewood
• Linen services;
• Telecom
• Pay television
• Gas, electric
and steam
services
• Security
• Sound
• Warranty
services
• Computer
software
• Movie Theatres
• Liquor
Establishments
Boulder
• Meals
• Telecom
• Labor
• Gas, electricity
steam and heat
• Fabrication
• Computer
software
Tax on Services
Pros and Cons
10
Taxing Services Reduces Volatility of Sales Tax Collections As
Durable Goods Are First To Decline in Economic Downturn*
Pros
Less distinction between
consumption of goods and
consumption of services*
Less regressive by taxing
service purchases made
primarily by the affluent*
Cons
Difficult to actually estimate revenue
and tax rate reduction
Voters may not approve
If KFCG is reduced, there is risk
that we may not receive estimated
revenue from taxing services
*Source: “Expanding Sales Taxation of Services,” Michael Mazerov, Center for Budget and Policy Priorities, 2009
Transportation Utility Fee- $10M
11
KFCG reduced to 0.53%
If Churches, Schools and Govt Exempt, Net Revenue is $8.6M
General Fund May Be Required to Make Up Shortfall of $1.4M
$10M
KFCG reduced by .32%
$10M
KFCG reduced by .32%
Use Monthly Fee Yearly Fee Lot Size in
Acres Use Monthly Fee Yearly Fee
Lot Size in
Acres
Industrial High Traffic Retail
Manufacturing $ 292 $ 3,503 5.4 Fast Food $ 1,193 $ 14,321 1.8
Manufacturing $ 3,784 $ 45,408 70 Bank $ 796 $ 9,547 1.2
Retail Convenience Store $ 530 $ 6,365 0.8
Drug Store $ 556 $ 6,670 2.1 Grocery Store $ 3,912 $ 46,940 5.9
Old Town Restaurant $ 53 $ 635 0.2 Commercial
Old Town Shop $ 32 $ 381 0.12 Law Office $ 16 $ 188 0.25
Large Retail $ 2,620 $ 31,443 9.9 Motel $ 88 $ 1,055 1.4
Institutional Total Annual Fee Cost Per Residential Unit: $ 4 $ 50
Church (large lot) $ 314 $ 3,766 5
Church (small lot) $ 31 $ 377 0.5
Elementary School $ 339 $ 4,068 5.4
High School $ 753 $ 9,040 12
Total Annual Fee Cost Per Residential Unit: $ 4 $ 50
Transportation Utility Fee
Pros and Cons
12
Fee Based on # of Trips Generated By Particular Land Use
Most Likely Will Go To Voter Approval
Pros
Low impacts to individual residents
($25-$50/yr)
Revenue can be scaled based on
desired revenue
Cons
Big impacts to high traffic
businesses
Tax
• Requires voter approval due to
TABOR
• Can be used for any public
purpose authorized by Council
• Can be broadly imposed on a
large number of taxpayers
Fee
• Does not require voter approval
• Must be used to defray the cost
of a particular government
service and be related to the cost
of that services
• Can only be imposed on those
who are likely to benefit from the
service funded with the fee
Occupation Tax/Fee- Legal Implications
13
While a Tax Has TABOR Implications
It Can Then Be More Broadly Used and Imposed
Occupation Tax- Peer Cities
Aurora
• $2/month- employee
• $2/month- employer
Denver
• $5.75/month-employee
• $4.00/month- employer
14
2 Peer Cities with this Occupation Tax
Both Employer and Employee Share In The Cost
Occupation Tax
Business/Employer Impact
15
$10M reduces KFCG to 0.53%
Source: City of Fort Collins Demographics Data from 2012
1. To generate $10M
• $3.86/month fee required
• $4.54/month fee required
(w/ exemptions)
2. The fee can be paid by the
employee or the employer or
shared
3. The impact of this to
businesses is illustrated in the
table to the right
With Exempt Orgs
(99,750 employees)
Without Exempt Orgs
(84,750 employees)
Average Cost Per Bi-Monthly Check $ 3.86 $ 4.54
Annual Cost Per Employee $ 100 $ 118
Annual Impact to 25 employees $ 2,506 $ 2,950
Annual Impact to 100 employees $ 10,025 $ 11,799
Annual Impact to 500 employees $ 50,125 $ 58,997
Annual Impact to 1000 employees $ 100,251 $ 117,994
$10M
Occupational Privilege Tax or Fee
Pros and Cons
Pros
Can be a fee or a tax based on
desired administration
All employees pay for the
services they use while in Fort
Collins
Revenue is scalable if passed
as a fee
Cons
Perception of penalizing
Fort Collins employers
If tax, the revenue amount
becomes fixed
If fee, the revenue
generated is earmarked
16
Fee Based on # of “Heads”
Can Be Paid by Employee, Employer Or Both
Xcel Franchise Fee Increase
Work In Progress
17
• Current Xcel Agreement - $450K annual revenue
• Franchise Fee Agreement
• Creating a red line version of the Master Agreement which will
incorporate our City stakeholder inputs by June 1
• Sit down with Xcel in early June and determine how far apart
we are and next steps.
More Information on Revenue and KFCG implications in Q3
Options and KFCG Impacts
1. Tax on services
2. Transportation utility fee
3. Occupational privilege tax
4. Xcel Franchise Fee
18
Revenue for Transportation Fee and Occupation Tax
Scalable Based on Desired Reduction in KFCG
Alternatives Considered Revenue
Generated
Reduce
KFCG?
.15%
.32%
TBD
$4.9M
$10M
$10M .32%
TBD
Public Outreach Plan
Upon direction from Council Finance….
Outreach Plan- June through August
Who:
Boards and commissions- Economic Advisory Council
Service trade groups that may be impacted, i.e. hair salons
Business associations, i.e. Chamber of Commerce, Small Business
Association, Small Business Development Center
What:
Education on alternatives
Impacts to various business sectors
Feedback on alternatives
19
Public Outreach Report Back to Council Finance in Q3
Council Finance Committee Direction
Discussion on further pursuit of alternatives
20
Backup
21
2014 Revenue* Comparison
Colorado Cities
22
Fort Collins Reliance on Sales Tax Increased with KFCG
*Source: Various City CAFRs (Comprehensive Annual Financial Report), 2015 data pending audit completions
Fort Collins Combined Sales Tax Rate is on the Low End
2014 Sales Tax Rate Comparison
Colorado Cities
23
**Jurisdictions with multiple tax rates due to special districts and/or located in multiple counties
2015- .05% increase in Larimer
for Jail and Human Society
COUNCIL FINANCE COMMITTEE
AGENDA ITEM SUMMARY
Staff: Tim Kemp – Civil Engineer III
Date: May 16, 2016
SUBJECT FOR DISCUSSION
Lemay Avenue realignment from Lincoln Avenue to Conifer Street; including the new
intersection of Lemay Avenue and Suniga Road, and a grade separated crossing of the
Burlington Northern Santa Fe (BNSF) Railway.
EXECUTIVE SUMMARY
The purpose of this item is to present and discuss potential construction funding scenarios for
this high priority transportation capital improvement project. Staff is currently working on the
preliminary design, right-of-way acquisition, grade separation analysis, and public outreach. The
expected construction cost range is $23 M - $27 M.
Our current funding partners are: BNSF, the City’s Transportation Capital Expansion Fee (Street
Oversizing), and Developer contributions for Local Street obligations; which totals
approximately $9 M in anticipated funding for the project. Using the high-end range of $27 M,
the current project shortfall is $14 M - $18 M.
GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED
Staff is seeking direction regarding potential funding sources to be included, or excluded, from
the Construction Financing Plan. The Construction Financing Plan will be developed over the
next several months and brought for further discussion at the August 23 Council Work Session.
Potential funding sources for the $14 M - $18 M funding gap are as follow:
• Budget Process Opportunities
o Budgeting for Outcomes (BFO) and Mid-Budget Funding Processes
o $2 M BFO has been submitted for the 2017 / 2018 budget cycle
o One Time Funds
• Evaluation of Federal Grants (Odds and Likelihood)
• New Taxes and Expanded Use of Fees / Reserves
o Expanded use of the Transportation Capital Expansion Fee (Street Oversizing)
o Using Reserves to “front” Local Street obligations
o New Sales tax options
5 year ¼ cent tax (± $40 M for multiple railroad projects)
1/10 cent dedicated, sun setting tax
o Special Improvement District
o “Trip Shed” Fee
Questions for the Council Finance Committee:
• Which of the above options should be carried forward for further analysis and included in
the Construction Financing Plan?
• Are there any other funding option recommendations that should be investigated?
BACKGROUND/DISCUSSION
Realigned Lemay Avenue has been on the City’s Master Street Plan since the 1980’s. This
project, along with the grade separation at the BNSF Railway, have been included in numerous
Planning efforts over the past few decades.
The construction of this project will alleviate existing deficiencies and provide a “key”
infrastructure asset for the future of the Mountain Vista area. More specifically, this project will:
• Improve quality of life, access, and neighborhood livability for Andersonville and Alta
Vista
• Reduce accidents and congestion by separating travel modes from BNSF Railway
switching operations
• Improve air quality by reducing emissions, whereby aligning with the goals of the
Climate Action Plan
• Provide additional roadway capacity and multi-modal connectivity for the northeast part
of the City
• Be a benefit to future housing and employment in the Mountain Vista area
ATTACHMENTS
Attachment #1 Power Point Presentation
1
Vine and Lemay – Council Finance Committee
Tim Kemp - Engineering
May 16, 2016
Problems We Will Solve
2
• Increasing Congestion
and Delay (Train and
Vehicle Traffic)
• Neighborhood Livability
and Access Issues
• Key Infrastructure Asset
Needed for the Future of
Mountain Vista Subarea
Current Status
3
• The 2016 Goal – Finalize
Recommended Design Alternative
and Construction Financing Plan
• Public Outreach, Neighborhood
Meetings, Community Engagement
• Preliminary Design and Right-of-Way
Acquisitions
Financial Picture
4
Project Funding
Current Appropriation
Trans. Capital Expansion Fee
BNSF Contribution
Local Street Obligation
Unfunded
$14 M -
$18 M $6.0 M
$1.5 M
$1.0 M
$0.5 M
Total Project Cost: $23 M - $27 M
Funding for Similar Projects
5
0
5
10
15
20
25
30
Vine and
Lemay
North
College
I-25 and
392
Lincoln
Avenue
Other Funding
Unfunded
Local Funding
Project Cost ($ M)
Other Funding:
State, Federal,
Transportation Capital
Expansion Fee (Street
Oversizing)
Potential Funding Sources
6
Traditional Methods to Fill $14 M - $18 M Gap
• Budget Process Opportunities
– BFO and Mid Budget Processes
– $2.0 M Offer Submitted for 2017 / 2018 Budget
• Evaluation of Federal Grants
– Have and Will Continue to Apply (Third Round of TIGER)
– Low Probability of Large Format Grant Opportunities
– Not on Regional, State or Federal Roadway System
Potential Funding Sources
7
Less Traditional Methods to Fill $14 M - $18 M Gap
– Expansion of Transportation Capital Expansion Fee
– Reserves to “front” Local Street obligations
– New Sales Tax Options
• 5-year 1/4 Cent or Dedicated, Sun Setting 1/10 Cent
– Special Improvement District
– “Trip Shed” Fee
Questions
8
• Which options should be carried forward for further
analysis and included in the Construction Financing Plan?
• Are there any other funding option recommendations that
should be investigated?
Finance Administration
215 N. Mason
2nd Floor
PO Box 580
Fort Collins, CO 80522
970.221.6788
970.221.6782 - fax
fcgov.com
AGENDA
URA Board
May 16, 2016
11:15 - 11:30 am
CIC Room – City Hall
1. URA Board Appointments 15 minutes J. Birks
$3.98M
2%
Investment
$2.9M
1%
Fines &
Forfeitures
$2.5M
1%
2014
Charges for
Services includes:
• Culture, Parks,
Rec
• General Govt
• Transportation
• Planning &
Development
• Public Safety
• Health care costs
• Law enforcement
• Criminal justice
• Disability
LARGE COSTLY PERSONAL
Many face
challenges in
finding care
Friends
Co-workers
Family
Nearly 90% of people view
physical and mental health as
equally important
American Foundation for Suicide Prevention
…….……….
……………………..