HomeMy WebLinkAboutAgenda - Mail Packet - 8/16/2016 - Council Finance Committee & Ura Finance Committee Agenda - August 15, 2016Council Finance Committee & URA Finance Committee
Agenda Planning Calendar 2016
RVSD 08/04 mnb
Aug 15
Capital Expansion Fee Update 30 min T. Smith
Energy Efficiency Financing – Off Balance Sheet 30 min J. Voss
J. Phelan
2017/18 Budget Strategic Issues 60 min M. Beckstead
L. Pollack
URA
Sep 19
Utility Rate Structures 40 min L. Smith
Sales Tax on L&P Pilots 10 min T. Smith
Natural Areas – Financial Review 40 min J. Stokes
Building Cost Stack 30 min L. Kadrich
M. Beckstead
URA
Oct 17
Revenue Diversification Outreach Update 30 min T. Smith
Sales Tax Code Updates 30 min T. Smith
Capital Expansion Fees – Recommendation & Public Engagement 20 min T. Smith
Foundation Creation 20 min N. Johnson
URA
Nov 21
GERP Funding Assumptions 20 min J. Voss
URA
Future Council Finance Committee Topics:
Parking Garage Financing – QII 2017
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
August 15, 2016
9:30 - 11:30 am
CIC Room - City Hall
Approval of the Minutes from the July 18, 2016 meeting
1. Capital Expansion Fee Update 30 minutes T. Smith
2. Energy Efficiency Financing - Off Balance Sheet 30 minutes J. Voss
J. Phelan
3. 2017/18 Budget Strategic Issues 60 minutes M. Beckstead
L. Pollack
UOTHER BUSINESS
• Bond Financing Update
• Public Annual Financial Report (PAFR)
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
07/18/16
9:30 - 11:30 am
CIC Room
Council Attendees: Mayor Wade Troxell, Gerry Horak, Ross Cunniff (arrived at 10 am)
Staff: Darin Atteberry, Jeff Mihelich, Mike Beckstead, Travis Storin, Kelly DiMartino,
Jamie Heckman, Lynn Sanchez, John Duval, Andres Gavaldon, Carolyn Koontz
Others: Kevin Smith, RSM, Brian Wilkerson, Revolution Advisors (HR)
Kristi Hess, HR Consultant OMNI Employment Management Services,
Rich Shannon and Katy Kohnen from ColoradoCare, Kevin Jones, Chamber of
Commerce and Dale Adamy
Meeting started at 9:43 am.
UAPPROVAL OF MINUTES
Mayor Troxell made a motion to approve the June 20, 2016 Council Finance Committee minutes.
Gerry Horak made a second to the motion. The minutes were approved unanimously.
A. U2015 Audit Review
Travis Storin, Accounting Director
Kevin Smith, Assurance Partner, RSM US LLP
EXECUTIVE SUMMARY
RSM will be presenting the Report to the City Council. This report covers the audit of the basic financial
statements and compliance of the City of Fort Collins for year-end December 31, 2015.
GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED
Staff seeks input on areas of priority or concern, other than those established in this Report to the City
Council, for matters of recordkeeping and/or the City’s internal control environment.
Otherwise there are no specific questions to be answered as this is a 2015 year-end report.
BACKGROUND/DISCUSSION
Every year the City is required to be audited in compliance with Government Auditing Standards. RSM
finalized its financial statement audit and compliance report on June 14, 2016 and the firm is required
to report the results of the audit to those charged with governance.
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There were no findings identified related to Federal Grants in the Compliance Report. Financial
misstatements identified by the auditors that were deemed immaterial for adjustment and control
deficiencies identified by the auditors can be found in the Report to the City Council, Exhibit A. Staff
will provide a written response to the audit findings and misstatements at a future Council Finance
Committee meeting.
UReport to City CouncilU - Formal communication document - Purpose of the audit is to give an opinion
on the financial statements. Clean opinion was issued.
Note: There was one major new accounting standard change this year involving new pension
standards reporting. GERP has been added to the reporting and is reflected as a $14m liability.
At the end of the Report to City Council document - Controlled Deficiency letter which outlines
areas for improvement;
1) Cash Reconciliations - there were some minor unreconciled items at the end of the year to
be resolved.
2) Reconciliation of Federal Transit Administration (FTA) grant expenditures - must be
reported in a timely manner.
UCompliance ReportU - Results of Federal Compliance audit - 2 programs tested this year;
1) Federal Highway Admin Grants - no findings
2) Smart Grid Program - no findings
Mike Beckstead commented; our grant program has two components. In the 15-16 budget Council
funded a grants process position (to help find grants) and Nalo Johnson fills that role. In addition we
have a grants compliance person who then monitors compliance before the grant application is
submitted to ensure we can meet all the requirements and obligations and to complete all necessary
filing and forms.
Mayor Wade Troxell asked staff to pull together some information on the grant program - pre and
post award to include; 1) what we are soliciting 2) number of proposals and plot that over time, how
much and how many and to what agencies.
Darin Atteberry added; some of the feedback we have received over the years is what got us thinking
about grant compliance and how we needed to do that in a different way. We have made this an area
of focus for constant improvement and we plan to keep it separate and very intentional. Nalo is
working as a grant seeker. She helps find opportunities and also helps with writing the grants as
needed. Mayor Wade Troxell and Darin Atteberry would like to see metrics that show that there is
success there as the council conversation was very intentional about leveraging non-traditional funds
(includes state and federal).
Mike Beckstead added; every 3 years FTA comes in and does a deep dive review into purchasing and
operations. We have had two reviews in a row with almost a perfect score. Gerry Paul had a big hand
in that - I don’t have any concerns based on the last two audits.
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Mayor Wade Troxell asked; should these 2 letters go to council for acceptance?
Gerry Horak agreed that this should go to Council to be accepted.
Next Step: Staff will bring forward to Council on resolution.
B. Compensation Philosophy & Market Pricing
Kelly DiMartino, Assistant City Manager
Jamie Heckman, HR Business & Technology Manager and Consultant
Brian Wilkerson, Revolution Advisors (HR Consulting Partner)
EXECUTIVE SUMMARY
In 2014, the City of Fort Collins utilized a competitive bid process and contracted with Revolution
Advisors to complete a Compensation and Career Progression Study. This study analyzed current
compensation policies and programs, including how the City defines “market,” the job analysis
system, and the current performance-based pay methodology. The Study identified opportunities
for improvement to build a high-performing culture, improve employee engagement, increase
clarity and efficiency, and enhance employee development and career options.
In partnership with Revolution Advisors and based on their expertise, the City is recommending
changes to the methodology used to determine the Pay Plan.
GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED
The purpose is to inform Councilmembers of the recommendations prior to market pricing and
implementation.
Data that is driving recommendations;
Colorado currently has low unemployment at 3.9% (5.3% national) Fort Collins at 3.6%
Home prices in Fort Collins rising twice as high as the national average
Turnover rates have increased 81% since 2013 (small portion from retirement)
Ross Cunniff asked; do we track the number of job declines and the reason?
Kelly DiMartino responded; we will bring more detailed information about outcomes when we come
back to Council in the fall. We are working on tracking the decline data in a more structured way than
we have in the past.
Ross Cunniff requested that they correlate the decline rate and turnover rate and see where the
intersections are and to add granularity such as job classification and title.
Kelly DiMartino responded; we actually have that data through workforce metrics.
Darin Atteberry added; it is very important to have the data for Council - historical turnover rates used
to be in the 4% range and then to 6% to 9% and then to 11% - churn in our workforce drives costs.
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Ross Cunniff added; it would be helpful to see turnover rate compared to comparable industry
segments.
Brian Wilkerson responded; we can bring in more data as requested.
Where is Fort Collins getting people for particular specific positions?
Common dimensions - pulling from public or private, here or nationally
This was done in the Finance area as a pilot.
Brian Wilkerson added that they would like to add one additional survey resource which is a broader,
national benchmark. The cost to get the additional data sources; if we provide our data as part of the
salary survey the cost is $4,500 or if we don’t participate the cost goes up to $10k.
Mike Beckstead commented; it is difficult to move through the range quickly because we have to work
within our 2-2.5% salary pool. We were a pilot for this in Finance. We standardized job descriptions
around Financial Analyst I, II and Senior and Accountant I, II and Senior. When we go to out into the
marketplace, we are now advertising with the job descriptions and title that the market recognizes and
understands and as a result the caliber of people who come in to the interview process has increased.
Jamie Heckman commented; we are in the process of continuing the job mapping - aligning job
descriptions and titles to the market as we did with the pilot in the Finance organization. In the fall we
will do the market pricing and analysis and that is an input to the pay plan that is brought to Council in
December.
Darin Atteberry commented; Council’s role is the adoption of the pay plan and adoption of the budget.
The implementation has traditionally been left to city staff. We are showing you how we plan on
administering it. Council has approved funding for work to improve the HR systems which is being
done in phases.
Ross Cunniff asked; what salary surveys do we participate in currently?
Brian Wilkerson responded; Mountain States is the primary and one other survey that is focused
primarily on Municipal governments.
Ross Cunniff asked; I would like the same kind of report after the pay plan is rolled out
and pay adjustments are made as we received last year. It is important to make sure that an accurate
story is told especially as things are changing.
Darin Atteberry commented; we are improving the process so it is very clear. We will not only give you
the budget recommendation as it compares to total, we will also calculate average increase. You will
have all of that information.
Gerry Horak added; how are our peer cities doing this and can we participate with them?
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The information needed at a policy level is;
Salaries last year
Salaries this year
Delta /percentage difference
Next Step: Additional detail data to be provided.
C. Benefits - Historical Forecast Accuracy & Possible Plan Changes
Kristi Hess, Senior HR Consultant & Colorado Market Director OMNI Employment Mgt. Services
Travis Storin, Accounting Director
EXECUTIVE SUMMARY
The purpose of this discussion is to answer the question ‘what does market mean’ along with how the
City defines its overall benefits strategy to support a competitive, cost-effective, total rewards strategy.
The City’s philosophy is to provide a benefit plan that is market-based, financially sound and supports
the City’s recruitment and retention goals. Staff and benefits consultants monitor and evaluate:
1. Plan design and premium cost share
2. Market benefit surveys
3. Overall plan costs, and
4. Healthcare costs and trends.
The City selects surveys that provide comparable data as it relates to type of organization, size of
organization and organization’s geographic location.
Based on a review of current market data, priorities for 2017 include: managing rising benefit plan
costs through a stronger partnership with its external benefit consultants, update/redesign benefit
plan design, and employee education and communication campaigns.
GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED
What questions does CFC have about the included historical benefit costing information and the City’s
plan to continue managing rising healthcare costs?
Following up from previous conversation in March
Look at current city benefit landscape
What does market mean? Plan Design, Out of Pocket maximums, Premiums, Employer / Employee cost
share data
Survey Sources
1. Mountain States pushed out release to September (does survey every 2 years)
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2. Mercer - just released their latest statistics in June
3. New relationship with HUB Int’l. - opportunity to increase reporting capabilities, custom survey
that brings in more municipalities, peer cities in Colorado, state of Colorado - like to like
comparison
Opportunities;
• Look at ‘Employee Only’ contribution level (30% below market)
• Plan Benchmarking and Design comparison (deductible, out of pocket, copays)
• Prescription drug costs have been very high over the last few years
• Standalone ERs - claims get flagged as ER services and costs go up sometimes by 10x
Ross Cunniff asked; are we providing our employee information so they know they are empowered to
reject out of network services?
Kristi Hess responded; education is key. We want to make sure our employees know that as a
consumer they can state that they will not pay for any out of network services.
Travis Storin
Premium side - employee responsibility
• As a self-funded plan - claims are claims -
• We are subject to our own claim experience - we accept more volatility – think this the right
strategy for the city for the size that we are
• 2012 - 2015 we were sitting on a fund balance of $12m. We then had a deliberate draining of
the balance due to the excess liquidity of the fund.
Rate increases that are passed through to the employee level
Employee contribution planned increases are 10.5% in 2017 and 10% in 2018
Disparity between core and advantage plan differences which have now been rolled together into a
single plan
Pharmaceutical industry dynamics are the #1 driver of increase in cost. New blockbuster, brand name
drugs cause volatility. An example; Sovaldi - Hepatitis C drug with an approximate cost of $1k per pill.
We are getting hit from both ends as we also currently have a lag in the drugs that are coming off of
patent which would bring costs down.
Provisions with self-funding - stop loss - protections as far as the city liability
Paying the first $225k in claims then stop loss comes in and picks up after that.
2016 is looking good so far. The Price Waterhouse Coopers healthcare marketplace trend analysis
predicts that we will normalize in 2017 and 2018 around a 6.5% cost increase.
City Care
• Implemented in January 2015 - we continue to monitor the ROI
• Encourage folks to utilize City Care - behavior change and education
• Shift to focus on health coaching and preventative care
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• Utilization continues to climb
Affordable Care Act
• 138 employees became eligible / 120 enrolled with a cost of $1.6m
• 63 bus drivers converted from hourly to classified last year and most enrolled
• Starting to normalize - (12 new this year - 6 enrolled)
Future Opportunities and Focus
• RFP Medical Carrier Review for 2017 Plan Year (UMR is the 3P
rd
P party administrator)
• Ongoing promotion for utilization of City Care
• Looking closely at that plan design including; copays, deductibles, coinsurance and out of
pocket responsibility - shift costs to employees and utilizers of the plan
• Fully integrated pharmacy benefit management system - we have a pharmacy partner but not a
manager to help monitor the drugs that are available on the plan
Kelly DiMartino commented; we are trying to get at the reasons of why people join the city and why
they leave. HUB has the ability to build a custom survey which will be very helpful.
Current enrollment;
• 640 Employee only
• 491 Employee + family
Mike Beckstead summarized;
1) How can we make sure we are accurately sharing premiums?
2) How can we look at plan design?
Should a spouse be able to come on our plan if they have coverage with their employer?
Should deductibles and or out of pocket be different?
3) Comparative data - really good data to have for these discussions
Kristi Hess added; the other component is City Care. HUB will provide the reporting and analysis to
facilitate shifting and removing costs.
Next Step: Provide more detailed information – HUB information will be very helpful.
D. Colorado Care Ballot Initiative
Rich Shannon, Volunteer
EXECUTIVE SUMMARY
Representatives from ColoradoCare will be providing a brief presentation on Amendment 69, the
proposal to create a single non-profit health coverage entity for Colorado. The question is on the Nov.
8, 2016 state wide ballot. It is described as a Medicare- for- all model of health coverage.
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The presentation will describe the benefits they see for the City, both financially (up to $8.5 million in
savings per year, see attached) and from a management/organizational health perspective. They will
also touch on the extended benefit they believe ColoradoCare will provide in terms of a healthier and
better functioning community. ColoradoCare is asking the City Council to publically endorse
Amendment 69.
GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED
Information sharing at Council’s request. ColoradoCare is asking the City Council to publically endorse
Amendment 69.
Amendment 69 (ColoradoCare) is on the ballot
Same logic that applies to Medicare - why can’t that work for folks under age 65?
Benefits for Employers
Potential city cost savings of $8.5m per year
Employees pay 3.33 % of the salary - Employers pay 6.67% of salary
Predictable health care costs - year to year
Gets employer out of healthcare role
Benefits for Employers /Employees
Everyone is covered
Part time and full time
Creating a healthcare system (not a policy)
Mental health treated on par with physical health
Greater flexibility and mobility (can I work less than full time and still have benefits?)
Removes 59% of costs in worker’s compensation (medical portion)
We spend too much money to get average results - 27% of every health care dollar is wasted
To get to the heart of what is driving costs – need to make sure that the financial incentives are all
pointed in the same direction
• 80% of the cost is incurred by 20% of the population - we need to get people in to see doctors
earlier – curb high end costs - catch problems and diagnose early (wellness model) - high
deductibles are motivating families to avoid going to the doctor
Accountable - locally elected board
Non-partisan election
7 districts - (defined by population)
3 members each district
Transparent - prices are negotiated and published
Serves members not stockholders (private /for profit their board is accountable to investors)
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Mike Beckstead commented; we need more information regarding plan design and coverage and how
that compares to current coverage offered City staff. Without that information, it’s difficult to
compare programs and focusing on the dollars saved only is only a part of the discussion.
Ross Cunniff commented; there seem to be winners and losers at the individual level - young families
seem to be winners and higher income, older middle age population have some concerns.
Rich Shannon responded; best way is to do the math is over a lifetime;
80% will pay less
20% will pay more
Darin Atteberry commented; I have learned a lot in the two meetings. Council is not typically inclined
to make statements for items not on municipal ballot. If I hear a council member saying put it on the
agenda as a discussion item we would do that. You may want to talk with council members individually
and see if there is support to do something.
Ross Cunniff added; you will most likely see a position of neutrality from the council on this issue.
If the Legislative Review committee could come to a consensus that would be a good starting point.
Next Step; Rich to talk individually with members of the Legislative Review committee and Council
members.
Meeting adjourned at 11:39 am
COUNCIL FINANCE COMMITTEE
AGENDA ITEM SUMMARY
Staff: Tiana Smith, Revenue and Project Manager
Date: August 15, 2016
SUBJECT FOR DISCUSSION Capital Expansion Fee 2016 Study Update
EXECUTIVE SUMMARY
In the spring of 2016, staff initiated a comprehensive review of the Capital Improvement
Expansion Fees that were first implemented in 1996 and then updated in 2013. The goal of the
review was to ensure that the methodology implemented was still appropriate and also to update
inputs to the fee structure to reflect the current level of service. To assist with the review,
Finance staff contracted with Duncan Associates, a nationally recognized firm that specializes in
impact fees.
GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED
1) Does Council Finance Committee have any comments or questions related to the draft
study?
2) Should staff use construction costs or insured values for assessing building values that
impact the fire, police and general government capital expansion fees, or a blend of the
two?
BACKGROUND/DISCUSSION
Capital Improvement Expansion fees are used to require new developments to pay a
proportionate share of infrastructure costs. The method of calculating the fees that the City of
Fort Collins has used since 1996 is referred to as incremental expansion. This method works in
the following manner:
• New development pays a fee based on current infrastructure costs – they essentially “buy
in” to the current system.
• The revenues from the fees are then used to build new infrastructure to serve the new
development and/or the increase in population that follows the development.
The City’s Capital Improvement Expansion fees were originally prepared and adopted in 1996
and then updated in 2013. Direction was given to staff to update the fees every 3-5 years.
The fees included in the study are:
• Neighborhood Parks
• Community Parks
• Fire
• Police
• General Government
In 2013, the fees for police, fire and general government for commercial and industrial land use
types were phased in over a 3-year period and updated annually for inflation according to the
Denver-Boulder-Greeley Consumer Price Index and Denver Region Construction Cost Index.
For residential land use types, the fees were updated in 2013 and have been updated annually for
inflation according to the Denver-Boulder-Greeley Consumer Price Index and Denver Region
Construction Cost Index.
Staff worked with the Duncan Associates to review the methodology and update the fees. The
outcome of the study retains the basic methodology of incremental expansion and updates inputs
from 2013 to reflect current asset info. The fees have all been updated based on today’s current
level of service and cost which factors in current capital assets for all fees.
In addition to the updates to current Level of Service, the study also provides two options for
calculating fire, police and general government fees; one option which uses insured values to
determine building values and a second option which uses construction costs to determine
building values.
Staff is looking to Council Finance for direction on which option to use in the calculation of the
fees or a blend of both options as well as additional feedback on the
ATTACHMENTS
1. 2016 Capital Expansion Fee Study Update PowerPoint
2. Draft 2016 Capital Expansion Fee Study
2016 Capital Expansion Fee Study Update
8/15/16
Council Finance Committee
1
Capital Expansion Fees
Today we are seeking feedback on the recommendations of the 2016
study including:
• Should we use estimated current construction costs or insured
values for assessing building values or a blend of the two?
• Does Council have further questions/concerns about proposed fees?
2
Capital Expansion Fee Study Update
3
• Background
• Methodology
• Definitions
• Fee Overview
• Fees by type
• Peer Cities
• Conclusions
Background
4
• Requires new developments to pay a proportionate share of
infrastructure costs.
• Updated annually according to the Denver-Boulder-Greeley Consumer
Price Index and Engineering News Report Construction Cost Index for
Denver Region
• Fees included: Neighborhood Parks, Community Parks, Fire, Police,
General Government Facilities
Contracted with Duncan Associates in 2016 to
Analyze Methodology, Update Fees
Consumer Price Index (CPI) vs
Construction Cost Index (CCI)
5
Despite Perceived Rising Construction Costs In Front Range
Recent CPI and CCI Indices Don’t Indicate Cost Inflation
*Source for CPI =
Bureau of Labor
Statistics, Denver-
Boulder-Greeley
Source for CCI =
Engineering News
Record, Denver
Methodology
Incremental Expansion:
• Used this methodology since 1996
• As community grows, capital facilities and equipment will
need to be expanded proportional to growth
• Impact fees cannot exceed the cost to maintain existing level
of service
• Not tied to a master plan, allows for greater flexibility to meet
changing needs and priorities
6
Retained Incremental Approach;
Current fees cannot pay for deficiencies or future growth
Methodology
Peer Cities
7
Peer Cities Currently All Have Same Methodology,
Other Than Roads and Utilities
Updates/Changes in 2016
8
• Continued use of functional population for Police, Fire & Gen Gov’t
• Updated all formula inputs including current asset info
• Updated land value to accurately account for value differences
• Evaluating two options for Gen Gov’t, Fire and Police: estimated
construction costs or insured building values
Definitions
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• Level of Service (LOS): Ratio of the replacement cost of existing
facilities to existing service units
• Service Unit: A common or standardized measure of the demand for the
type of facility
• Functional Population: The number of people present at a land use
expressed in full time equivalents –used for fire, police and general
government
• Equivalent Dwelling Unit (EDU): The ratio of the average household size of
a dwelling type to the average household size of the typical single-family
detached unit –used for parks
Functional Population &
Equivalent Dwelling Unit Comparison
10
Both Functional Population and
Equivalent Dwelling Units (EDUs) Increased Since ‘13
Fees Overview:
Why Are Fees Changing?
Police
No New Assets
Functional Population
= Fees
Fire
New assets
Functional Population
= Fees
11
Simple calculation: If Numerator Increases, Fees Go UP
If Denominator Increases, Fees Go DOWN
Community Parks Neighbor. Parks
Land + Cost of Twin Silos No new assets
EDUs EDUs
= Fees =Fees
General Government
Additional Assets added + Land
Functional Population
= Fees
Fees Overview
Insured Values
12
Fees Overview
Cost of Construction Values
13
Parks Capital Expansion Fees
14
Average Cost Per Acre for Comm Parks Increased
Equivalent Dwelling Units Increased Slightly
Fire Assets
15
Not
included
in 2012
*Station #8-
new asset
Other added
stations-
outside GMA,
but service % of
call volume in
Fort Collins
Fire Capital Improvement Fees
16
Fire Assets Value Increased
Functional Population Increased
Police Capital Improvement Fees
17
No Change to Asset Values
Functional Population Increased
General Govt Capital Expansion Fees
18
Not
included
in 2012
Facilities That Can Be Included in Calculations Are Those
Designed, Intended and Used
To Provide General Government Services
General Govt Capital Improvement Fees
19
Asset Values Increased With Added Facilities, Land Value
Functional Population Increased Slightly
Peer Cities: Comparative Fees
Fort Collins Projected vs Peer Current
20
Despite Fee Changes, Fort Collins Still Competitive
Amongst Peer Cities In All Land Uses But Office/Retail
Conclusions
21
• Fees changes appear to be in line with what would be expected
given updates
• Cadence should be deliberate; timing should be 3-5 years based on
various factors
• Outreach and buy-in from impacted departments
Next Steps
• Continue to refine Construction Cost values
• Outreach August through September
• Boards: Economic Advisory Commission, Parks and Rec, Building
Review Board, Affordable Housing Board
• Public: Chamber LLAC, Board of Realtors
• Back to CFC in October- Outreach feedback/Fee Refinements
• Council Adoption in November
• Jan 1, 2017 implementation
22
Capital Expansion Fees
Today we are seeking feedback on the recommendations of the 2016
study including:
• Should we use construction costs or insured values for assessing
building values or a blend of the two?
• Does Council have further questions/concerns about proposed fees?
23
Backup
24
Background:
Functional Population
• Demand for public safety tends to be proportional to presence of
people at particular site
• FTE Analogy: full time equivalent people present at site of a land
use
• Residential:
Avg HH size X % of time @ home
• Non-residential:
Formula includes trip generation, avg vehicle occupancy, avg # hours spent by
visitors at a land use
25
Police Fee:
General Government Fee:
Formulas
Parks Fees:
• Neighborhood Parks Used:
• Radiant (2013), Waters Way (2012), Registry (2012)
• Community Parks Used:
• Southeast (2016), Spring Canyon (2006), Fossil
Creek (2003)
26
Fire Fee:
Simple calculation: If Numerator Increases, Fees Go UP
If Denominator Increases, Fees Go DOWN
Capital Expansion Fee Study
for the City of Fort Collins, Colorado
prepared by
August 2016
Public Review Draft
Table of Contents
EXECUTIVE SUMMARY ................................................................................................................ 1
Background....................................................................................................................................... 1
Methodology .................................................................................................................................... 1
Change in Fees ................................................................................................................................. 2
Comparative Fees ............................................................................................................................ 4
METHODOLOGY ............................................................................................................................ 7
Analysis and Recommendations .................................................................................................... 7
Legal Framework ............................................................................................................................. 8
Colorado Statutes ........................................................................................................................ 8
Case Law Requirements ............................................................................................................. 9
Alternative Methodologies ........................................................................................................... 10
Standards-Based ........................................................................................................................ 10
Plan-Based .................................................................................................................................. 11
Summary ......................................................................................................................................... 12
PARKS ................................................................................................................................................ 13
Service Units ................................................................................................................................... 13
Cost per Service Unit .................................................................................................................... 14
Net Cost per Service Unit ............................................................................................................ 15
Potential Fees ................................................................................................................................. 16
FIRE .................................................................................................................................................... 18
Service Units ................................................................................................................................... 18
Cost per Service Unit .................................................................................................................... 18
Net Cost per Service Unit ............................................................................................................ 20
Potential Fees ................................................................................................................................. 21
POLICE .............................................................................................................................................. 22
Service Units ................................................................................................................................... 22
Cost per Service Unit .................................................................................................................... 22
Net Cost per Service Unit ............................................................................................................ 23
Potential Fees ................................................................................................................................. 24
GENERAL GOVERNMENT ....................................................................................................... 25
Service Units ................................................................................................................................... 25
Cost per Service Unit .................................................................................................................... 25
Net Cost per Service Unit ............................................................................................................ 26
Potential Fees ................................................................................................................................. 27
APPENDIX A: HOUSING DATA ............................................................................................. 28
Existing Housing Units by Type ................................................................................................. 28
Average Household Size by Housing Type ............................................................................... 28
Average Household Size by Unit Size ........................................................................................ 30
APPENDIX B: FUNCTIONAL POPULATION ...................................................................... 32
Residential Functional Population .............................................................................................. 32
Nonresidential Functional Population ....................................................................................... 33
Total Functional Population ........................................................................................................ 34
APPENDIX C: COMPARATIVE FEE SURVEY ..................................................................... 35
Prepared by Duncan Associates
Clancy Mullen, Principal, Project Manager
17409 Rush Pea Circle, Austin, Texas 78738
(512) 423-0480, clancy@duncanassociates.com
List of Tables
Table 1. Current and Updated Capital Expansion Fees – Insured Values ................................. 2
Table 2. Current and Updated Capital Expansion Fees – Construction Costs ......................... 3
Table 3. Comparative Fees per Single-Family Detached Unit ..................................................... 5
Table 4. Comparative Fees per Multi-Family Unit ........................................................................ 5
Table 5. Comparative Fees per 1,000 sq. ft. of Retail .................................................................... 5
Table 6. Comparative Fees per 1,000 sq. ft. of General Office ................................................... 6
Table 7. Comparative Fees per 1,000 sq. ft. of Light Industrial .................................................. 6
Table 8. Methodologies Used by Selected Colorado Jurisdictions .............................................. 8
Table 9. Park Service Unit Multipliers ........................................................................................... 13
Table 10. Park Service Units, 2016 ................................................................................................. 13
Table 11. Existing Park Acres ......................................................................................................... 14
Table 12. Neighborhood Park Development Cost per Acre...................................................... 14
Table 13. Community Park Development Cost per Acre ........................................................... 14
Table 14. Park Land Cost per Acre ................................................................................................ 15
Table 15. Park Cost per Service Unit ............................................................................................. 15
Table 16. Potential Park Capital Expansion Fees ........................................................................ 16
Table 17. Comparative Park Capital Expansion Fees ................................................................. 17
Table 18. Existing Fire Stations ...................................................................................................... 19
Table 19. City Share of Call Volume .............................................................................................. 19
Table 20. Existing Fire Cost per Service Unit .............................................................................. 20
Table 21. Potential Fire Capital Expansion Fees ......................................................................... 21
Table 22. Comparative Fire Fees .................................................................................................... 21
Table 23. Police Building and Land Cost ...................................................................................... 22
Table 24. Police Cost per Service Unit .......................................................................................... 23
Table 25. Police Debt Credit ........................................................................................................... 23
Table 26. Police Net Cost per Service Unit .................................................................................. 24
Table 27. Potential Police Capital Expansion Fees ...................................................................... 24
Table 28. Comparative Police Fees ................................................................................................ 24
Table 29. Existing General Government Facilities ...................................................................... 25
Table 30. General Government Cost per Service Unit ............................................................... 26
Table 31. General Government Debt Credit ................................................................................ 26
Table 32. General Government Net Cost per Service Unit ....................................................... 26
Table 33. Potential General Government Capital Expansion Fees ........................................... 27
Table 34. Comparative General Government Fees ..................................................................... 27
Table 35. Dwelling Unit Distribution by Housing Type, 2000-Current ................................... 28
Table 36. Dwelling Units by Housing Type, Fort Collins, 2016 ................................................ 28
Table 37. Average Household Size, 2000 and 2010 ..................................................................... 29
Table 38. Average Household Size by Housing Type, 2000 ...................................................... 29
Table 39. Average Household Size by Housing Type, Current ................................................. 29
Table 40. Change in Average Household Size by Type, 2000-Current ..................................... 29
Table 41. Average Household Size by Housing Type, 2016 ...................................................... 30
Table 42. Average Household Size by Dwelling Unit Size, Western U.S., 2013 ..................... 30
Table 43. Functional Population per Unit for Residential Uses ................................................ 33
Table 44. Functional Population per Unit for Nonresidential Uses ......................................... 34
Table 45. Existing Functional Population ..................................................................................... 34
Table 46. Current Fees, City of Fort Collins................................................................................. 35
Table 47. Current Fees, City of Loveland ..................................................................................... 35
Table 48. Current Fees, City of Greeley ........................................................................................ 36
Table 49. Current Fees, City of Longmont ................................................................................... 36
Table 50. Current Fees, City of Boulder ........................................................................................ 36
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Fort Collins, Colorado 1 August 10, 2016
EXECUTIVE SUMMARY
This study provides the analysis required to update the City’s capital expansion fees for neighborhood
parks, community parks, and fire, police and general government facilities. The City’s capital
expansion fees are impact fees that assess new developments for the proportionate share of the cost
of new capital facilities required to serve them at the same level of service provided to existing
developments.
Background
The City’s capital expansion fees were originally adopted in June 1996, based on a study prepared by
City staff.1 The fees have been updated periodically to account for inflation, but the first update of
the study did not occur until 2013.2 This is the second update of the impact fee study for the capital
expansion fees.
Methodology
This update includes an evaluation of alternative methodologies that could be used. The analysis is
provided in the Methodology chapter, and includes a review of legal requirements and alternative
approaches.
The methodology employed in the 1996 and 2013 studies is known as “standards-based” (also called
“incremental expansion”). The standards-based methodology bases the fees on the existing level of
service. The concept behind the standards-based methodology is simple: as a community grows,
capital facilities and equipment will need to be expanded proportional to the growth. The existing
level of service, whether measured directly in terms of cost per service unit or indirectly in terms of
an intervening variable, such as acres of parkland, is assumed to be adequate to serve existing
development, but with little or no excess capacity to serve growth.3
Impact fees cannot exceed the cost to maintain the existing level of service. The “standards-based”
methodology meets that requirement by basing the fees on the existing level of service. Plan-based
methodologies generally will not result in higher fees. The standards-based methodology also has the
advantage of not being tied to a master plan and allowing greater flexibility to meet changing needs
and priorities. The recommendation is to retain the standards-based approach in this update.
Two alternative fees schedules are calculated in this update for fire, police and general government.
One bases the replacement cost of buildings on insured values, the other on estimated construction
costs. This study also calculates potential residential fees by housing type (e.g., flat rate per unit for
1 City of Fort Collins, Capital Expansion Cost Study, May 21, 1996.
2 Duncan Associates, Capital Expansion Fee Study for the City of Fort Collins, Colorado, June 2013.
3 The exceptions are that the new police station is estimated to have about 20% excess capacity to serve future
development, and the new Fire Station #4 is estimated to have some excess capacity.
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single-family detached and multi-family), in case the City is interested in this optional assessment
method.
Change in Fees
Current and updated capital expansion fees are shown in Table 1 for the alternative of basing building
replacement costs on insured values. Under this scenario, the updated fees are lower than current fees
for neighborhood parks and police, and higher for community parks, fire, and general government.
Total updated capital expansion fees are 6% to 18% higher than current fees. Alternative residential
fees by housing type are calculated in this report, but are not shown here.
Table 1. Current and Updated Capital Expansion Fees – Insured Values
N'hood Comm. Gen.
Land Use Type Unit Park Park Fire Police Gov't Total
Updated Fees
Resid., up to 700 sf Dwelling $1,106 $1,311 $375 $111 $351 $3,254
Resid., 701-1,200 sf Dwelling $1,480 $1,755 $507 $150 $473 $4,365
Resid., 1,201-1,700 sf Dwelling $1,616 $1,916 $551 $163 $516 $4,762
Resid., 1,701-2,200 sf Dwelling $1,633 $1,936 $561 $166 $524 $4,820
Resid., over 2,200 sf Dwelling $1,820 $2,158 $624 $184 $583 $5,369
Commercial 1,000 sf $0 $0 $473 $140 $887 $1,500
Industrial 1,000 sf $0 $0 $110 $33 $209 $352
Current Fees
Resid., up to 700 sf Dwelling $1,262 $1,069 $272 $137 $321 $3,061
Resid., 701-1,200 sf Dwelling $1,619 $1,373 $346 $173 $410 $3,921
Resid., 1,201-1,700 sf Dwelling $1,788 $1,516 $384 $192 $452 $4,332
Resid., 1,701-2,200 sf Dwelling $1,863 $1,580 $399 $200 $473 $4,515
Resid., over 2,200 sf Dwelling $1,996 $1,692 $427 $214 $507 $4,836
Commercial 1,000 sf $0 $0 $329 $165 $780 $1,274
Industrial 1,000 sf $0 $0 $78 $40 $183 $301
Change
Resid., up to 700 sf Dwelling -$156 $242 $103 -$26 $30 $193
Resid., 701-1,200 sf Dwelling -$139 $382 $161 -$23 $63 $444
Resid., 1,201-1,700 sf Dwelling -$172 $400 $167 -$29 $64 $430
Resid., 1,701-2,200 sf Dwelling -$230 $356 $162 -$34 $51 $305
Resid., over 2,200 sf Dwelling -$176 $466 $197 -$30 $76 $533
Commercial 1,000 sf $0 $0 $144 -$25 $107 $226
Industrial 1,000 sf $0 $0 $32 -$7 $26 $51
Percent Change
Resid., up to 700 sf Dwelling -12% 23% 38% -19% 9% 6%
Resid., 701-1,200 sf Dwelling -9% 28% 47% -13% 15% 11%
Resid., 1,201-1,700 sf Dwelling -10% 26% 43% -15% 14% 10%
Resid., 1,701-2,200 sf Dwelling -12% 23% 41% -17% 11% 7%
Resid., over 2,200 sf Dwelling -9% 28% 46% -14% 15% 11%
Commercial 1,000 sf n/a n/a 44% -15% 14% 18%
Industrial/Warehouse 1,000 sf n/a n/a 41% -18% 14% 17%
Source: Current fees from City of Fort Collins website on March 18, 2016; updated fees from Table 16
(parks), Table 21 (fire), Table 27 (police) and Table 33 (general government).
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Table 2 shows current and updated capital expansion fees for the alternative of basing building
replacement costs on estimated current construction costs. Under this scenario, the updated fees are
lower than current fees for neighborhood parks, and higher for the other four facility types. Total
updated capital expansion fees are 22% to 28% higher residential uses, and about 86% higher for
nonresidential. Alternative residential fees by housing type are also calculated in this report, but are
not shown here.
Table 2. Current and Updated Capital Expansion Fees – Construction Costs
N'hood Comm. Gen.
Land Use Type Unit Park Park Fire Police Gov't Total
Updated Fees
Resid., up to 700 sf Dwelling $1,106 $1,311 $502 $236 $574 $3,729
Resid., 701-1,200 sf Dwelling $1,480 $1,755 $679 $319 $774 $5,007
Resid., 1,201-1,700 sf Dwelling $1,616 $1,916 $739 $347 $845 $5,463
Resid., 1,701-2,200 sf Dwelling $1,633 $1,936 $751 $352 $858 $5,530
Resid., over 2,200 sf Dwelling $1,820 $2,158 $836 $392 $955 $6,161
Commercial 1,000 sf $0 $0 $633 $297 $1,451 $2,381
Industrial 1,000 sf $0 $0 $148 $69 $342 $559
Current Fees
Resid., up to 700 sf Dwelling $1,262 $1,069 $272 $137 $321 $3,061
Resid., 701-1,200 sf Dwelling $1,619 $1,373 $346 $173 $410 $3,921
Resid., 1,201-1,700 sf Dwelling $1,788 $1,516 $384 $192 $452 $4,332
Resid., 1,701-2,200 sf Dwelling $1,863 $1,580 $399 $200 $473 $4,515
Resid., over 2,200 sf Dwelling $1,996 $1,692 $427 $214 $507 $4,836
Commercial 1,000 sf $0 $0 $329 $165 $780 $1,274
Industrial 1,000 sf $0 $0 $78 $40 $183 $301
Change
Resid., up to 700 sf Dwelling -$156 $242 $230 $99 $253 $668
Resid., 701-1,200 sf Dwelling -$139 $382 $333 $146 $364 $1,086
Resid., 1,201-1,700 sf Dwelling -$172 $400 $355 $155 $393 $1,131
Resid., 1,701-2,200 sf Dwelling -$230 $356 $352 $152 $385 $1,015
Resid., over 2,200 sf Dwelling -$176 $466 $409 $178 $448 $1,325
Commercial 1,000 sf $0 $0 $304 $132 $671 $1,107
Industrial 1,000 sf $0 $0 $70 $29 $159 $258
Percent Change
Resid., up to 700 sf Dwelling -12% 23% 85% 72% 79% 22%
Resid., 701-1,200 sf Dwelling -9% 28% 96% 84% 89% 28%
Resid., 1,201-1,700 sf Dwelling -10% 26% 92% 81% 87% 26%
Resid., 1,701-2,200 sf Dwelling -12% 23% 88% 76% 81% 22%
Resid., over 2,200 sf Dwelling -9% 28% 96% 83% 88% 27%
Commercial 1,000 sf n/a n/a 92% 80% 86% 87%
Industrial/Warehouse 1,000 sf n/a n/a 90% 73% 87% 86%
The changes in the total capacity expansion fee (sum of parks, fire, police and general government)
by land use category are illustrated in Figure 1. While the percentage increases for nonresidential fees
are large, the actual amounts of the fee increases are modest, because nonresidential fees per 1,000
square feet are quite low compared to residential fees for similar-sized units (e.g., 701-1,200 square
feet).
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Figure 1. Change in Total Fee by Land Use
Note: residential fees are per dwelling unit, nonresidential fees are per 1,000 sq. ft.
Comparative Fees
The City’s current and updated fees are compared with current fees charged by four peer cities in the
tables below. The survey includes all impact fees or similar charges, including capital expansion fees,
plant investment fees, development excise taxes and fees in lieu of land dedication, with the exception
of electrical connection fees, which would not be assessed by cities served by a private electrical utility
company. The highlighted subtotal in each table represents the sum of the types of fees addressed in
this study. The final column represents all development fees designed to recover municipal capital
costs.
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For single-family homes, the subtotal of fees addressed by this study for Fort Collins are in line with
those charged by the other cities. Total single-family fees for Fort Collins are lower than all four
comparison cities.
Table 3. Comparative Fees per Single-Family Detached Unit
Gen.
Jurisdiction Park Fire Police Gov't Subtotal Other Total
Fort Collins (current) $3,443 $399 $200 $473 $4,515 $13,527 $18,042
Fort Collins (updated-insured value) $3,569 $561 $166 $524 $4,820 $13,527 $18,347
Fort Collins (updated-constr. cost) $3,569 $751 $352 $858 $5,530 $13,527 $19,057
Loveland $6,562 $895 $881 $1,092 $9,430 $19,441 $28,871
Greeley $3,224 $845 $122 $0 $4,191 $20,298 $24,489
Longmont $5,333 $0 $0 $1,121 $6,454 $17,028 $23,482
Boulder $4,483 $220 $310 $452 $5,465 $31,091 $36,556
Source: See Appendix C.
For multi-family, the subtotal of fees addressed by this study for Fort Collins are also reasonably
similar to those charged by the other cities. Total multi-family fees in Fort Collins are lower than in
three of the four comparison cities.
Table 4. Comparative Fees per Multi-Family Unit
Gen.
Jurisdiction Park Fire Police Gov't Subtotal Other Total
Fort Collins (current) $2,992 $346 $173 $410 $3,921 $7,905 $11,826
Fort Collins (updated-insured value) $3,235 $507 $150 $473 $4,365 $7,905 $12,270
Fort Collins (updated-constr. cost) $3,235 $679 $319 $774 $5,007 $7,905 $12,912
Loveland $4,560 $622 $613 $759 $6,554 $7,150 $13,704
Greeley $2,419 $409 $92 $0 $2,920 $10,829 $13,749
Longmont $2,616 $0 $0 $1,121 $3,737 $2,525 $6,262
Boulder $3,537 $297 $256 $370 $4,460 $18,582 $23,042
Source: See Appendix C.
Comparative fees for three nonresidential land use types (retail, office and industrial) are summarized
in the following three tables. The City’s total fees for retail are comparable to Loveland, lower than
Boulder and higher than Greeley and Longmont.
Table 5. Comparative Fees per 1,000 sq. ft. of Retail
Gen.
Jurisdiction Park Fire Police Gov't Subtotal Other Total
Fort Collins (current) $0 $329 $165 $780 $1,274 $14,693 $15,967
Fort Collins (updated-insured value) $0 $473 $140 $887 $1,500 $14,693 $16,193
Fort Collins (updated-constr. cost) $0 $633 $297 $1,451 $2,381 $14,693 $17,074
Loveland $0 $300 $390 $420 $1,110 $14,857 $15,967
Greeley $0 $667 $149 $0 $816 $6,547 $7,363
Longmont $0 $0 $0 $401 $401 $7,041 $7,442
Boulder $0 $400 $500 $150 $1,050 $20,178 $21,228
Source: See Appendix C.
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Fort Collin’s total fees for office are higher than those of the other cities other than Boulder.
Table 6. Comparative Fees per 1,000 sq. ft. of General Office
Gen.
Jurisdiction Park Fire Police Gov't Subtotal Other Total
Fort Collins (current) $0 $329 $165 $780 $1,274 $14,693 $15,967
Fort Collins (updated-insured value) $0 $473 $140 $887 $1,500 $14,693 $16,193
Fort Collins (updated-constr. cost) $0 $633 $297 $1,451 $2,381 $14,693 $17,074
Loveland $0 $300 $390 $420 $1,110 $6,945 $8,055
Greeley $0 $313 $70 $0 $383 $6,216 $6,599
Longmont $0 $0 $0 $401 $401 $7,041 $7,442
Boulder $0 $610 $170 $210 $990 $18,323 $19,313
Source: See Appendix C.
Total fees for industrial are similar to the those charged by three of the comparison cities, but
Boulder’s fee is considerably higher.
Table 7. Comparative Fees per 1,000 sq. ft. of Light Industrial
Gen.
Jurisdiction Park Fire Police Gov't Subtotal Other Total
Fort Collins (current) $0 $78 $40 $183 $301 $6,074 $6,375
Fort Collins (updated-insured value) $0 $110 $33 $209 $352 $6,074 $6,426
Fort Collins (updated-constr. cost) $0 $148 $69 $342 $559 $6,074 $6,633
Loveland $0 $30 $50 $60 $140 $5,669 $5,809
Greeley $0 $124 $28 $0 $152 $3,726 $3,878
Longmont $0 $0 $0 $401 $401 $5,335 $5,736
Boulder $0 $80 $60 $120 $260 $19,968 $20,228
Source: See Appendix C.
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METHODOLOGY
The City of Fort Collins’ Capital Expansion Fees were originally adopted in 1996, and were updated
for the first time in 2013. The 2013 study used the same “standards-based” methodology employed
in the original study. The City has expressed concern that impact fees based on this methodology will
not generate sufficient funds to construct needed capital improvements, such as the build-out of the
parks system or a planned new city hall, and would like to know if an alternative, “plan-based”
approach would generate more revenue for planned improvements.
The City’s Capital Expansion Fees are a form of impact fee. This chapter describes the legal
framework for impact fees, describes the alternative methodologies that can be used in the current
update, and recommends an approach for this project. For the ease of the reader, we start with the
analysis and recommendation, followed by the legal framework and alternative methodology
discussions.
Analysis and Recommendations
A fundamental requirement of any impact fee methodology is that it does not charge new development
for a higher level of service (LOS) than what is currently being provided to existing development.
Basing the fees on a higher LOS creates existing deficiencies with respect to that LOS. As cited below,
Colorado statutes require that: “No impact fee or other similar development charge shall be imposed
to remedy any deficiency in capital facilities that exists without regard to the proposed development.”
The “standards-based” methodology meets this requirement, because it bases the fees on the existing
LOS. In the 2013 study, for example, the existing LOS was quantified as the replacement value of
existing capital improvements per service unit (e.g., per person).
An alternative “plan-based” methodology would also need to meet this requirement. For example,
assume that the facility master plan on which the study is based is a build-out plan, and that population
is the service unit. It would not be sufficient to simply divide future planned costs by anticipated new
population to determine the fee per person. Some of the future improvements may be needed today,
even if there were to be no future growth. Consequently, an analysis would need to be done to ensure
that all of the planned improvement cost is attributable to future development, and will not raise the
LOS for existing development.
To provide a more specific example of the required LOS analysis, consider a park fee. The LOS for
parks is often quantified in terms of acres per 1,000 residents. Suppose the City currently provides a
LOS of 5 acres of park land per 1,000 people, but the build-out plan would provide 10 acres per 1,000.
Impact fees could not be used to require new development to pay all remaining future project costs,
because many of those improvements are needed today to provide the desired LOS to existing
development. In other words, they are existing deficiencies which by State law cannot be funded with
impact fees.
Methodology
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For the types of facilities addressed in this study, the standards-based methodology is almost
universally used. The types of methodologies used by a number of Colorado jurisdictions are
summarized in Table 8 below. While plan-based methodologies are used for roads, water, wastewater
and stormwater fees, none of the jurisdictions surveyed use a plan-based methodology for parks,
libraries, fire, police or general government fees.
Table 8. Methodologies Used by Selected Colorado Jurisdictions
Storm Park/ Gen.
Jurisdiction Roads Water Sewer Water Trail Library Fire Police Gov't
Fort Collins Plan Standard Standard Standard Standard n/a Standard Standard Standard
Loveland Plan Standard Standard Plan Standard Standard Standard Standard Standard
Greeley Standard Standard Standard Mix Standard n/a Standard Standard n/a
Windsor Standard Standard Standard Plan Unknown n/a n/a n/a n/a
Weld Co. Standard n/a n/a Standard n/a n/a n/a n/a Standard
Larimer Co. Standard n/a n/a n/a n/a n/a n/a n/a n/a
Longmont Plan Standard Standard n/a Standard n/a n/a n/a n/a
Thornton n/a Standard Standard n/a n/a n/a n/a n/a n/a
Boulder Mix Standard Standard Standard Standard Standard Standard Standard Standard
Broomfield n/a Plan Plan n/a n/a n/a n/a n/a n/a
Source: Duncan Associates, Impact Fee Study for Greeley, Colorado, December 2014, Table 6.
In sum, impact fees cannot exceed the cost to maintain the existing level of service. The “standards-
based” methodology meets that requirement by basing the fees on the existing level of service. Plan-
based methodologies generally will not result in higher fees. The standards-based methodology also
has the advantage of not being tied to a master plan and allowing greater flexibility to meet changing
needs and priorities. Our recommendation is to retain the standards-based approach in this update.
Legal Framework
Impact fee methodology must comply with certain legal principles. Impact fees were pioneered by
local governments in the absence of explicit state enabling legislation. Impact fees were originally
defended as an exercise of local government's broad “police power” to protect the health, safety and
welfare of the community. The courts gradually developed guidelines for constitutionally valid impact
fees, based on a “rational nexus” that must exist between the regulatory fee or exaction and the activity
that is being regulated. The guiding principles developed in case law were subsequently incorporated
into state impact fee enabling acts, at least to some degree. Some state acts have just borrowed
terminology from case law, while others elaborate on the guidelines more explicitly.
Colorado Statutes
In Colorado, the state legislature has adopted explicit impact fee enabling legislation, which is codified
in Sec. 29-20-104.5, Colorado Revised Statutes. Key provisions of this section include the following:
(1) “A local government shall quantify the reasonable impacts of proposed development on existing
capital facilities and establish the impact fee or development charge at a level no greater than necessary
to defray such impacts directly related to proposed development.” (§ 29-20-104.5(2))
Methodology
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(2) “No impact fee or other similar development charge shall be imposed to remedy any deficiency in
capital facilities that exists without regard to the proposed development.” (§ 29-20-104.5(2))
(3) “Any schedule of impact fees or other similar development charges adopted by a local government
pursuant to this section shall include provisions to ensure that no individual landowner is required to
provide any site specific dedication or improvement to meet the same need for capital facilities for
which the impact fee or other similar development charge is imposed.” (§ 29-20-104.5(3))
(4) Impact fees may be charged for capital facilities that have “an estimated useful life of five years or
longer.” (§ 29-20-104.5(4)(b))
(5) Cities “may waive an impact fee or other similar development charge on the development of low-
or moderate- income housing or affordable employee housing.” (§ 29-20-104.5(5))
(6) “Nothing in this section shall be construed to prohibit a local government from deferring collection
of an impact fee or other similar development charge until the issuance of a building permit or
certificate of occupancy.” (§ 29-20-104.5(6))
Additional accounting requirements are imposed pursuant to Sec. 29-1-803, which requires that impact
fees be deposited in “an interest-bearing account which clearly identifies the category, account, or
fund of capital expenditure for which such charge was imposed. Each such category, account, or fund
shall be accounted for separately. … Any interest or other income earned on moneys deposited in said
interest-bearing account shall be credited to the account.”
Finally, Sec. 22-54-102(3)(a) prohibits school impact fees: “Nothing in this article shall be construed
to prohibit local governments from cooperating with school districts through intergovernmental
agreements to fund, construct, maintain, or manage capital construction projects or other facilities …,
as long as funding for such projects is provided solely from a source of local government revenue that
is otherwise authorized by law except impact fees or other similar development charges or fees.”
Case Law Requirements
In addition to statutory provisions, national impact fee case law also governs impact fees. One of the
key principles enunciated by the courts is that impact fees should only charge new developments for
the capital costs that they actually impose on the community. Almost all of the state enabling acts
contain words or phrases that acknowledge this principle. Colorado’s act uses the phrase “impacts
directly related to the proposed development.”
Another principle of case law is that impact fees should not charge new development for a higher
level of service than is provided to existing development. If the fees are based on a higher level of
service than is provided to existing development in the community, other funding must be identified
to remedy the existing deficiencies. This principle is expressed colloquially in the saying, “impact fees
should not be used to pay for the sins of the past.” On this point, Colorado’s act states that “No
impact fee or other similar development charge shall be imposed to remedy any deficiency in capital
facilities that exists without regard to the proposed development.”
Methodology
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A corollary principle is that new development should not have to pay more than its proportionate
share when multiple sources of payment are considered. This principle is often expressed informally
as “new development should not be charged twice for the same facilities.” Virtually all of the state
enabling acts require construction credits for developments that make in-kind contributions, such as
the dedication of property or construction of improvements. The reduction of impact fees on a case-
by-case basis for a particular development to account for such contributions is known as a
“construction credit.” All but four of the 28 state acts explicitly require that developers be given
reimbursements or credits for in-kind contributions for the same type of capital facility costs covered
by the impact fee. Colorado’s act words this principle as follows: “Any schedule of impact fees or
other similar development charges adopted by a local government pursuant to this section shall include
provisions to ensure that no individual landowner is required to provide any site specific dedication
or improvement to meet the same need for capital facilities for which the impact fee or other similar
development charge is imposed.”
In addition to in-kind contributions, other sources of potential double-payment could include future
property taxes that will be generated by the new development and used to pay debt service on existing
facilities, or sales tax revenues earmarked to remedy existing deficiencies in facilities serving existing
development. Since there is no way to charge new development a lower property or sales tax rate than
existing development, the solution is to reduce the impact fees by an amount equivalent to the future
payments. Such a reduction is referred to as a “revenue credit.” A majority of the state enabling acts
explicitly require consideration of revenue credits, although Colorado’s does not. Nevertheless, this
principle should be adhered to in the development of impact fees in Colorado.
Alternative Methodologies
A wide range of methodologies have been developed to calculate impact fees, consistent with the legal
requirements and guidelines described in the previous section. Despite variations, there are two
primary types of methodologies, which can be referred to as “standards-based” and “plan-based.”
Standards-based methodologies use a system-wide level of service standard, such as the system-wide
ratio of road capacity to demand, the number of park acres per 1,000 residents, or the existing capital
investment per service unit. Plan-based methodologies are generally based on modeling and
geographically-specific level of service standards (e.g., “all road segments and intersections shall
function at LOS D or better”), and rely on a facility master plan to create the nexus between the cost
of planned improvements and the projected growth over a defined time period. In general, the
standards-based approach provides greater flexibility in expenditures (a plan-based approach requires
a master plan update when planned projects change). The two approaches are described in more detail
below.
Standards-Based
The “standards-based” methodology uses a generalized level-of-service standard to determine the
costs to accommodate new development. This approach does not require that there be a master plan,
or even a list of specific planned projects that will funded with the impact fees.
Most often, the standards-based approach uses the actual level of service (LOS) that exists at the time
the study is prepared. This LOS standard can be expressed in terms of a physical ratio (e.g., park acres
per 1,000 population), or in dollar terms (e.g., park cost per person). When based on the existing LOS,
Methodology
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City of Fort Collins, Colorado 11 August 10, 2016
this approach is sometimes referred to as “incremental expansion.” The basic assumption is that, as
the community grows, it will be necessary to expand capital facilities proportional to growth. Basing
the fees on the existing LOS assumes that there is little or no excess capacity in existing facilities to
accommodate future growth.
However, a standards-based methodology can also be based on a LOS that is lower or higher than the
current existing LOS. When there is a significant amount of excess capacity, a lower-than-existing
LOS may be used. This is most often the case with roads, water and wastewater facilities. However, it
can also be a consideration for parks, trails, fire and police facilities, particularly if the impact fee study
follows a recent major expansion of those types of facilities.
Plan-Based
In contrast to standards-based methodologies, which rely on generalized, system-wide LOS standards,
plan-based methodologies rely on a specific list of planned improvements. A plan-based methodology
basically divides the cost of planned improvements over a fixed time period by the anticipated growth
in service units over the same time period. The least defensible of these approaches are those based
on a Capital Improvements Plan, because there is not necessarily any strong correlation between short-
term planned improvement costs and long-term costs to accommodate new development. Much more
defensible are those based on a long-range master plan or build-out plan.
As discussed above, plan-based methodologies seldom account for the cost of existing excess capacity.
Instead, they focus solely on future costs to be incurred, and generally exclude any future costs to
retire debt on existing capacity.
Regardless of the methodology used, an impact fee calculation must comply with the legal principles
established by impact fee case law, as described earlier. The most fundamental principle is that impact
fees should only charge new development for the costs attributable to growth, and should not charge
for the correction of existing capacity deficiencies. In addition, the fees should be proportional to the
impact of the development. Finally, new development should not be required to pay twice for the
same improvements through other taxes and fees.
Plan-based approaches are not exempt from the fundamental requirement that the fees do not exceed
the existing level of service. For example, a transportation fee based on a master plan that determines
the cost maintain LOS D on all roadways over the next 20 years should identify any existing road-
ways that currently function at a LOS worse than D and develop a funding plan to remedy the
deficiencies. Because new development will generally contribute toward whatever funding source is
used for this purpose, it is usually necessary to calculate a revenue credit that accounts for such
contribution. Many impact fee studies that use the plan-based approach omit this critical component.
Plan-based methodologies can result in higher fees if a long-range master plan shows that the
geographic distribution of future development will result in higher costs than the current average cost
required to serve existing development. This is more likely to be the case with road impact fees than
it is for the type of facilities addressed in this update. For parks, fire, police and general government
facilities, the plan-based approach is seldom used and would be unlikely to result in higher fees, even
if the City had the necessary long-range master plans.
Methodology
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Summary
To reiterate, impact fees cannot exceed the cost to maintain the existing level of service. The
“standards-based” methodology meets that requirement by basing the fees on the existing level of
service. Plan-based methodologies generally will not result in higher fees. The standards-based
methodology also has the advantage of not being tied to a master plan and allowing greater flexibility
to meet changing needs and priorities. Retaining the standards-based approach is recommended for
this update.
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Fort Collins, Colorado 13 August 10, 2016
PARKS
The City provides a number of public park facilities for the benefit of residents. This section calculates
updated community and neighborhood park capital expansion fees.
Service Units
The demand for City park facilities is generated by people. However, it is preferable to base the service
unit on housing units, since the number of housing units can be more easily determined than the
number of people, which is affected by highly variable occupancy rates. The proposed service unit
for the park impact fee update is an equivalent dwelling unit or EDU. An EDU represents the average
number of people living in a single-family detached dwelling unit. The average single-family home is
by definition one park service unit. The number of service units associated with other types and sizes
of dwelling units is determined by dividing average household size of that housing type by the average
household size of a single-family unit. The resulting service unit multipliers are presented in Table 9.
Table 9. Park Service Unit Multipliers
Average Single-Family EDUs/
Housing Type Unit HH Size Avg. HH Size Unit
Single-Family Detached Dwelling 2.75 2.75 1.00
Multi-Family Dwelling 1.93 2.75 0.70
Residential, up to 700 sq. ft. Dwelling 1.78 2.75 0.65
Residential, 701-1,200 sq. ft. Dwelling 2.40 2.75 0.87
Residential, 1,201-1,700 sq. ft. Dwelling 2.61 2.75 0.95
Residential, 1,701-2,200 sq. ft. Dwelling 2.65 2.75 0.96
Residential, over 2,200 sq. ft. Dwelling 2.95 2.75 1.07
Source: Average household size from Table 41 and Table 42 in Appendix A; EDUs/unit is average
household size divided by single-family average household size.
The existing number of service units can be determined by multiplying the estimated number of
housing units by the service unit multipliers for each housing type and summing. Existing service
units (EDUs) in the City of Fort Collins are calculated in Table 10.
Table 10. Park Service Units, 2016
Existing EDUs/ Existing
Housing Type Unit Units Unit EDUs
Single-Family Detached Dwelling 38,022 1.00 38,022
Multi-Family Dwelling 28,372 0.70 19,860
Total 57,882
Source: Existing units from Table 36 in Appendix A; EDUs per unit from Table 9.
Parks
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Cost per Service Unit
The City of Fort Collins provides a variety of parks and recreation facilities for it residents. The
existing acreages by type of park are summarized in Table 11.
Table 11. Existing Park Acres
Park and Recreation Facility Type Acres
Developed Community Park Acres 511
Developed Neighborhood Park Acres 341
Developed Pocket Park Acres 14
Total Developed Park Acres 866
Undeveloped Parks/Natural Features 156
Total Park Acres 1,022
Source: City of Fort Collins Park Planning, February 11, 2016.
The cost per acre to develop a neighborhood park is based on development costs for the three most
recent neighborhood parks. The original costs are adjusted for construction cost inflation. As shown
in Table 12, the development of the three most recent neighborhood parks averaged $237,390 per
acre.
Table 12. Neighborhood Park Development Cost per Acre
Original Inflation Current Cost/
Park/Year of Construction Cost Factor Cost Acres Acre
Radiant Park/2013 $2,233,820 1.005 $2,244,989 10.00 $224,499
Waters Way Park/2012 $1,888,364 1.008 $1,903,471 8.80 $216,304
Registry Park/2012 $1,725,000 1.008 $1,738,800 6.00 $289,800
Weighted Average $5,847,184 $5,887,260 24.80 $237,390
Source: City of Fort Collins Finance Department, August 10, 2016; inflation factor.is ratio of July 2015
Engineering News-Record Construction Cost Index for Denver to July 2012 and 2013 indices.
The cost per acre to develop a community park is estimated based on the weighted average
development cost for the last three community parks. Southeast Community Park is based on 2016
bid estimates, while the older park costs are adjusted for inflation. The average development cost for
the last three community parks is $176,256 per acre, as shown in Table 13.
Table 13. Community Park Development Cost per Acre
Original Inflation Current Cost/
Park/Year of Construction Cost Factor Cost Acres Acre
SE Community Park/2016* $16,183,624 1.000 $16,183,624 52.6 $307,673
Spring Canyon Park/2006 $12,544,000 1.267 $15,893,248 103.0 $154,303
Fossil Creek Park/2003 $9,138,941 1.410 $12,885,907 99.5 $129,507
Weighted Average $37,866,565 $44,962,779 255.1 $176,256
Source: City of Fort Collins Finance Department, August 10, 2016; inflation factor.is ratio of July 2015
Engineering News-Record Construction Cost Index for Denver to July 2006 and December 2003 indices.
Parks
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The cost of future park land is estimated based on the value of $30,000 per acre from the 2013 study,
adjusted by the increase in the average home price over the last three years. The result is an estimated
land acquisition cost of $40,000 per acre, as shown in Table 14.
Table 14. Park Land Cost per Acre
2013 Park Land Cost/Acre $30,000
x Ratio of 2016/2013 Average Home Price 1.35
2016 Park Land Cost/Acre $40,000
Source: City of Fort Collins Parks Department, March 23, 2016.
The existing level of service can be expressed in terms of the current cost per service unit, as shown
in Table 15. The total cost represents the capital expenditure that would be required to acquire the
amount of existing park land and to develop that land for parks at today’s prices. The total cost is
divided by the existing number of service units to determine the cost per service unit to provide the
same level of service to future residents.
Table 15. Park Cost per Service Unit
Neighborhood/ Community
Pocket Parks Parks
Developed Acres 355.00 511.00
x Development Cost per Acre $237,390 $176,256
Existing Park Facility Cost $84,273,450 $90,066,816
Total Acres 355.00 667.00
x Land Cost per Acre $40,000 $40,000
Existing Park Land Cost $14,200,000 $26,680,000
Total Existing Park Cost $98,473,450 $116,746,816
÷ Existing EDUs 57,882 57,882
Park Cost per EDU $1,701 $2,017
Source: Developed and total acres from Table 11; development costs per acre
from Table 12 (neighborhood parks) and Table 13 (community parks); land cost
per acre from Table 14; existing EDUs from Table 10.
Net Cost per Service Unit
Impact fees should be reduced in order to account for other types of revenues that will be generated
by new development and used to fund capacity-expanding improvements of the same type as those
to be funded by the impact fees. Cases in which such a credit is warranted include funding of existing
deficiencies and outstanding debt payments on existing facilities. Since the fees are based on the
existing level of service, there are no deficiencies. The City has no outstanding debt on past park
improvements. The City has not received any State or Federal grants for neighborhood or community
parks during the last five years. Consequently, no credits against the park impact fee are required
based on these criteria, and the net cost per service unit is the same as the cost per service unit
calculated above.
Parks
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Potential Fees
The maximum neighborhood and community park capital expansion fees that may be adopted by the
City based on this study are determined by multiplying the number of service units generated by a
dwelling unit by the net cost per service unit. The resulting fee schedules are presented in Table 16.
Two options are shown: fees by housing type (single-family and multi-family) and fees by unit size.
Table 16. Potential Park Capital Expansion Fees
EDUs/ Net Cost/ Net Cost/
Land Use Type Unit per Unit EDU Unit
Neighborhood Parks
Single-Family Detached Dwelling 1.00 $1,701 $1,701
Multi-Family Dwelling 0.70 $1,701 $1,191
Residential, up to 700 sq. ft. Dwelling 0.65 $1,701 $1,106
Residential, 701-1,200 sq. ft. Dwelling 0.87 $1,701 $1,480
Residential, 1,201-1,700 sq. ft. Dwelling 0.95 $1,701 $1,616
Residential, 1,701-2,200 sq. ft. Dwelling 0.96 $1,701 $1,633
Residential, over 2,200 sq. ft. Dwelling 1.07 $1,701 $1,820
Community Parks
Single-Family Detached Dwelling 1.00 $2,017 $2,017
Multi-Family Dwelling 0.70 $2,017 $1,412
Residential, up to 700 sq. ft. Dwelling 0.65 $2,017 $1,311
Residential, 701-1,200 sq. ft. Dwelling 0.87 $2,017 $1,755
Residential, 1,201-1,700 sq. ft. Dwelling 0.95 $2,017 $1,916
Residential, 1,701-2,200 sq. ft. Dwelling 0.96 $2,017 $1,936
Residential, over 2,200 sq. ft. Dwelling 1.07 $2,017 $2,158
Source: EDUs per unit from Table 9; net cost per EDU is cost per EDU from Table 15.
Parks
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The updated park fees by unit size are compared to current fees in Table 17. The updated
neighborhood park fees are lower and community park fees are higher. Total park fees (sum of
neighborhood and community park fees) are somewhat higher than current fees.
Table 17. Comparative Park Capital Expansion Fees
Current Fee Updated Fee Fee Change Percent
Land Use Type Unit per Unit per Unit per Unit Change
Neighborhood Parks
Residential, up to 700 sq. ft. Dwelling $1,262 $1,106 -$156 -12%
Residential, 701-1,200 sq. ft. Dwelling $1,619 $1,480 -$139 -9%
Residential, 1,201-1,700 sq. ft. Dwelling $1,788 $1,616 -$172 -10%
Residential, 1,701-2,200 sq. ft. Dwelling $1,863 $1,633 -$230 -12%
Residential, over 2,200 sq. ft. Dwelling $1,996 $1,820 -$176 -9%
Community Parks
Residential, up to 700 sq. ft. Dwelling $1,069 $1,311 $242 23%
Residential, 701-1,200 sq. ft. Dwelling $1,373 $1,755 $382 28%
Residential, 1,201-1,700 sq. ft. Dwelling $1,516 $1,916 $400 26%
Residential, 1,701-2,200 sq. ft. Dwelling $1,580 $1,936 $356 23%
Residential, over 2,200 sq. ft. Dwelling $1,692 $2,158 $466 28%
Total Parks
Residential, up to 700 sq. ft. Dwelling $2,331 $2,417 $86 4%
Residential, 701-1,200 sq. ft. Dwelling $2,992 $3,235 $243 8%
Residential, 1,201-1,700 sq. ft. Dwelling $3,304 $3,532 $228 7%
Residential, 1,701-2,200 sq. ft. Dwelling $3,443 $3,569 $126 4%
Residential, over 2,200 sq. ft. Dwelling $3,688 $3,978 $290 8%
Source: Current fees from Table 1; updated fees from Table 16.
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FIRE
Fire protection and rescue service is provided in Fort Collins by the Poudre Fire Authority pursuant
to an intergovernmental agreement. The fee is based on the total replacement cost of the Authority’s
fire stations, apparatus, and administrative and training facilities, and the City’s share of total fire calls.
The City collects the fees from new development in the city limits and provides the funds to the Fire
Authority to be used for capacity-expanding improvements serving the city. This section calculates
updated fire capital expansion fees.
Service Units
The two most common methodologies used in calculating public safety (fire and police) service units
and impact fees are the “calls-for-service” approach and the “functional population” approach. The
1996 and 2013 studies used the functional population approach, and this update retains this
methodology. This approach is a generally-accepted methodology for both fire and police impact fee
types, and is based on the observation that demand for public safety facilities tends to be proportional
to the presence of people. This approach generates service unit multipliers that are similar to those
based on call data, but are more stable over time.4 The service unit is functional population. The
description of the functional population methodology, the calculation of the service unit multipliers
and the determination of existing fire and police service units are presented in Appendix B. Because
fire rescue service is provided around-the-clock, 24-hour functional population is used as the service
unit.
Cost per Service Unit
The cost per service unit to provide fire protection to new development is based on the current level
of service provided to existing development. The level of service is quantified as the ratio of the
replacement cost of existing fire capital facilities serving Fort Collins to existing fire service units in
Fort Collins.
The total replacement cost of all of the Poudre Fire Authority’s land, buildings and structures is
summarized in Table 18. Two alternatives for building values are shown: current insured value or
estimated construction cost. Either would be a reasonable basis for estimating building replacement
value, with insured values being more conservative.
4 See Clancy Mullen, Fire and Police Demand Multipliers: Calls-for-Service versus Functional Population, proceedings of the National
Impact Fee Roundtable, Arlington, VA, October 5, 2006 http://growthandinfrastructure.org/proceedings/
2006_proceedings/fire%20police%20multipliers.pdf
Fire
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Table 18. Existing Fire Stations
Building Land Insured Est. Constr.
Facility Address Acres Sq. Feet Value Value Cost
Fire Station #1 505 Peterson 0.54 8,516 $352,836 $2,534,191 $3,236,080
Fire Station #2 415 S. Bryan 0.31 4,376 $94,390 $865,364 $1,662,880
Fire Station #3 2000 Mathews 0.55 6,500 $167,466 $842,524 $2,470,000
Fire Station #4 1945 W. Drake 3.54 15,380 $741,714 $2,944,213 $5,844,400
Fire Station #5 4615 Hogan 1.18 8,773 $513,494 $2,069,440 $3,333,740
Fire Station #6 2511 Donella Ct. 1.70 11,267 $233,264 $2,277,078 $4,281,460
Fire Station #7 2817 N. Overalnd Trail 0.50 5,160 $152,242 $1,281,059 $1,331,280
Fire Station #8 4100 S. Main 0.20 15,449 $27,443 $5,797,819 $5,870,620
Fire Station #9 4903 Shoreline Dr. 1.90 4,670 $578,520 $782,502 $1,204,860
Fire Station #10 2067 Vermont 0.62 9,830 $330,838 $2,004,177 $3,735,400
Fire Station #11 16248 N. C.R. 25E n/a 1,200 n/a $128,915 $309,600
Fire Station #12 321 E. Country Club Rd. 1.09 9,800 $379,368 $2,041,626 $3,724,000
Fire Station #14 2109 Westchase Rd. 0.89 10,800 $348,528 $1,770,401 $4,104,000
Administration 102 Remington 0.60 8,375 $653,400 $2,817,971 $3,182,500
Training Center 3400 W. Vine 4.00 10,888 $548,856 $2,054,545 $3,266,400
Offices 3400 W. Vine n/a 10,134 n/a $1,144,091 $730,278
Fire Tower 3400 W. Vine n/a 3,152 n/a $592,551 $606,748
Burn Building 3400 W. Vine n/a 9,256 n/a $425,559 $383,906
Total 17.62 153,526 $5,122,359 $32,374,026 $49,278,152
Alternative Building Values
Source: City of Fort Collins Finance Department, August 9, 2016; construction costs from City of Fort Collins, August 8, 2016
(construction cost of stations 7, 9 and 10 based on $257/sq. ft., which is cost of new station in Timnath).
The portion of the total net replacement value of the Poudre Fire Authority’s land, capital facilities
and equipment is based on the City’s share of the Authority’s total annual call volume. In 2015, 84%
of the Authority’s calls for fire service originated within the City of Fort Collins, as shown in Table
19.
Table 19. City Share of Call Volume
Call Location 2015 Calls Percentage
City of Fort Collins 16,044 84.0%
Other 3,056 16.0%
Total for Poudre Fire Authority 19,100 100.0%
Source: Poudre Fire Authority, February 11, 2016.
Fire
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The Poudre Fire Authority’s fire stations, land, administrative buildings and capital equipment serving
existing development in Fort Collins have a total estimated net replacement cost of $49.6 or $66.5
million, depending on whether buildings are valued at insured value or estimated current construction
cost, as summarized in Table 20. The Poudre Fire Authority issued debt to finance its newest fire
station in the city (Fire Station #4, which was completed in 2011) and is using the capital expansion
fees to retire the debt. The amount of the outstanding principal on the debt represents capacity to
serve future development, and this amount is excluded from the fee calculation. Multiplying the net
replacement cost by the City’s share of total calls yields the net cost attributable to Fort Collins.
Dividing the net cost of existing capital facilities and equipment attributable to Fort Collins by the
City’s existing functional population results in a net cost of $315 or $422 per service unit, depending
on whether insured values or estimated construction costs are used for the replacement value of
buildings.
Table 20. Existing Fire Cost per Service Unit
Insur. Value Constr. Cost
Fire Facility Building Replacement Cost $32,374,026 $49,278,152
Fire Facility Land Cost $5,122,359 $5,122,359
Fire Vehicle Replacement Cost $14,126,633 $14,126,633
Total Replacement Cost $51,623,018 $68,527,144
– Outstanding Station 4 Lease Purchase Payments -$2,043,237 -$2,043,237
Net Replacement Cost $49,579,781 $66,483,907
x City Share of Fire District Calls 84.0% 84.0%
Net Replacement Cost Attributable to City $41,647,016 $55,846,482
÷ Existing Functional Population (24-Hour) 157,626 157,626
Net Cost per Functional Population $315 $422
Alternative Building Values
Source: Building cost and land value from Table 18; vehicle replacement cost and outstanding
capital lease from Poudre Fire Authority, March 24, 2016; City share of calls from Table 19; existing
24-hour functional population from Table 45.
Net Cost per Service Unit
Impact fees should be reduced in order to account for other types of revenue that will be generated
by new development and used to fund capacity-expanding improvements of the same type as those
to be funded by the impact fees. Cases in which such a credit is warranted include funding of existing
deficiencies and outstanding debt payments on existing facilities.
Because the fees have been based on the existing level of service, there are no deficiencies. While
there is some debt on existing facilities, as noted above, this debt has been excluded from the value of
the facilities used in determining the existing level of service, and the Poudre Fire Authority can
continue to use the updated capital expansion fees to retire the debt on Fire Station 4.
Fire
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Potential Fees
The maximum fire capital expansion fees that may be adopted by the City based on this study are
determined by multiplying the number of service units generated by a unit of development by the net
cost per service unit. The resulting fee schedule is presented in Table 21. Two alternative fee
schedules are calculated: one using the District’s insured values of buildings, and the other using
estimated construction costs. In addition, two residential fee options are shown: fees by housing type
(single-family and multi-family) and fees by unit size.
Table 21. Potential Fire Capital Expansion Fees
Func. Pop.
Land Use Type Unit per Unit Insured Constr. Insured Constr.
Single-Family Detached Dwelling 1.84 $315 $422 $580 $776
Multi-Family Dwelling 1.29 $315 $422 $406 $544
Residential, up to 700 sq. ft. Dwelling 1.19 $315 $422 $375 $502
Residential, 701-1,200 sq. ft. Dwelling 1.61 $315 $422 $507 $679
Residential, 1,201-1,700 sq. ft. Dwelling 1.75 $315 $422 $551 $739
Residential, 1,701-2,200 sq. ft. Dwelling 1.78 $315 $422 $561 $751
Residential, over 2,200 sq. ft. Dwelling 1.98 $315 $422 $624 $836
Commercial 1,000 sq. ft. 1.50 $315 $422 $473 $633
Industrial/Warehouse 1,000 sq. ft. 0.35 $315 $422 $110 $148
Net Cost/Func. Pop. Net Cost/Unit
Source: Functional population (24-hour) per unit from Table 43 and Table 45 in Appendix B; net cost per functional
population from Table 20.
Table 22 compares the current fire fees with the updated fire fees (using the residential option of fees
by housing type). The updated fees are higher than current fees under both of the two alternatives
for estimating the replacement cost of existing buildings, but the increase is much greater using
estimated current construction costs, versus using the Authority’s insured values.
Table 22. Comparative Fire Fees
Current Fee
Land Use Type Unit per Unit Insured Constr. Insured Constr.
Residential, up to 700 sq. ft. Dwelling $272 $375 $502 38% 85%
Residential, 701-1,200 sq. ft. Dwelling $346 $507 $679 47% 96%
Residential, 1,201-1,700 sq. ft. Dwelling $384 $551 $739 43% 92%
Residential, 1,701-2,200 sq. ft. Dwelling $399 $561 $751 41% 88%
Residential, over 2,200 sq. ft. Dwelling $427 $624 $836 46% 96%
Commercial 1,000 sq. ft. $329 $473 $633 44% 92%
Industrial/Warehouse 1,000 sq. ft. $78 $110 $148 41% 90%
Updated Fee/Unit Percent Change
Source: Current fees from Table 1; updated fees from Table 21.
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POLICE
The City of Fort Collins Police Department provides police protection throughout the city. This
section calculates updated police capital expansion fees.
Service Units
The two most common methodologies used in calculating public safety (fire and police) service units
and impact fees are the “calls-for-service” approach and the “functional population” approach. The
1996 and 2013 studies used the functional population approach, and this update retains this
methodology. This approach is a generally-accepted methodology for both fire and police impact fee
types, and is based on the observation that demand for public safety facilities tends to be proportional
to the presence of people. This approach generates service unit multipliers that are similar to those
based on call data, but are more stable over time. The service unit is functional population. The
description of the functional population methodology, the calculation of the service unit multipliers
and the determination of existing fire and police service units are presented in Appendix B. The
appendix calculates both 24-hour and daytime functional population. Because police services are
provided around-the-clock, 24-hour functional population is used as the service unit.
Cost per Service Unit
The cost per service unit to provide police protection to new development is based on the existing
level of service provided to existing development. The level of service is quantified as the ratio of the
replacement cost of existing police capital facilities to existing police service units. The estimated
replacement values of existing police buildings and land are shown in Table 23. Two alternatives for
building values are shown: current insured value and estimated construction cost. Either would be a
reasonable basis for estimating building replacement value, with insured values being more
conservative.
Table 23. Police Building and Land Cost
Land Building
Facility Address Acres Value Sq. Feet Insur. Value Constr. Cost
Police Headquarters 2221 S Timberline 7.53 $1,967,779 98,878 $20,548,500 $39,551,200
Indoor Shooting Range 2554 Midpoint 0.80 $109,771 7,580 $608,361 $2,274,000
Total 8.33 $2,077,550 106,458 $21,156,861 $41,825,200
Alternative Building Values
Source: City of Fort Collins, July 27, 2016 and August 8, 2016.
The City’s recently-completed new police station was built with some excess capacity to serve future
growth. According to the City, approximately 20% of the building represents excess capacity.
Consequently, only 80% of the cost will be included in determining the current level of service (cost
per service unit) for existing development. Including vehicles and equipment, the portion of the City’s
existing police facilities serving existing development has a total estimated replacement cost of $33.7
million if insured values are used for buildings, or $50.3 million if construction costs are used, as
summarized in Table 24. Dividing the cost of existing capital facilities and equipment serving existing
Police
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City of Fort Collins, Colorado 23 August 10, 2016
development by existing service units results in a cost of $214 per functional population if insured
values are used to estimate building replacement cost, or $319 if estimated construction costs are used.
Table 24. Police Cost per Service Unit
Insur. Value Constr. Cost
Police Building Cost (80%) $16,925,489 $33,460,160
Police Land Value (80%) $1,662,040 $1,662,040
Telephone/Electronic Equipment Value $6,245,310 $6,245,310
Police Vehicle Replacement Value $8,909,679 $8,909,679
Total Police Facility/Equipment Value $33,742,518 $50,277,189
÷ Existing Functional Population (24-Hour) 157,626 157,626
Police Cost per Functional Population $214 $319
Alternative Building Values
Source: Building and land costs are 80% of total replacement values from Table 23;
vehicle replacement value from fixed asset listings and telephone and electronic data
processing equipment cost from insured values from City of Fort Collins, February 11,
2016; existing functional population from Table 45.
Net Cost per Service Unit
Impact fees should be reduced in order to account for other types of revenues that will be generated
by new development and used to fund capacity-expanding improvements of the same type as those
to be funded by the impact fees. Cases in which such an offset is warranted include funding of existing
deficiencies and outstanding debt payments on existing facilities. Since the updated fees are based on
the existing level of service, there are no existing deficiencies.
The City has some outstanding debt on the police station, as well as outstanding capital lease payments
on some vehicles. A relatively simple way to calculate a credit for outstanding debt is to divide the
debt by the number of existing service units. This places new development on an equal footing with
existing development in terms of the proportion of their costs that are funded through debt. Since
20% of the new police station represents excess capacity available to serve, only 80% of the debt is
eligible for credit. The other 20% of the debt represents the cost of facilities that will serve future
development, and this portion of the debt service could be retired with police capital expansion fees.
As shown in Table 25, the police debt credit is $121 per functional population.
Table 25. Police Debt Credit
Outstanding Debt on Police Station (80%) $16,165,374
Outstanding Vehicle Capital Lease Payments $2,847,269
Total Police Facility Debt $19,012,643
÷ Existing Functional Population (24-Hour) 157,626
Police Debt Credit per Functional Population $121
Source: Outstanding debt and capital lease payments from City of Fort Collins,
February 25, 2016; existing functional population from Table 45 in Appendix B.
The credit for outstanding debt is subtracted from the cost per service unit to determine the net cost
per service unit (see Table 26 below). The net cost per service unit is $93 if insured values are used to
approximate building replacement costs, and $198 if estimated construction costs are used.
Police
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City of Fort Collins, Colorado 24 August 10, 2016
Table 26. Police Net Cost per Service Unit
Insur. Value Constr. Cost
Police Cost per Functional Population $214 $319
– Police Debt Credit per Functional Population -$121 -$121
Net Police Cost per Functional Population $93 $198
Alternative Building Values
Source: Cost per functional population from Table 24; debt credit from Table 25.
Potential Fees
The maximum police capital expansion fees that may be adopted by the City based on this study are
the product of the number of service units generated by a unit of development and the net cost per
service unit calculated above. The resulting fee schedule is presented in Table 27. Two alternative fee
schedules are calculated: one using the District’s insured values of buildings, and the other using
estimated construction costs. In addition, two residential fee options are shown: fees by housing type
(single-family and multi-family) and fees by unit size.
Table 27. Potential Police Capital Expansion Fees
Func. Pop.
Land Use Type Unit per Unit Insured Constr. Insured Constr.
Single-Family Detached Dwelling 1.84 $93 $198 $171 $364
Multi-Family Dwelling 1.29 $93 $198 $120 $255
Residential, up to 700 sq. ft. Dwelling 1.19 $93 $198 $111 $236
Residential, 701-1,200 sq. ft. Dwelling 1.61 $93 $198 $150 $319
Residential, 1,201-1,700 sq. ft. Dwelling 1.75 $93 $198 $163 $347
Residential, 1,701-2,200 sq. ft. Dwelling 1.78 $93 $198 $166 $352
Residential, over 2,200 sq. ft. Dwelling 1.98 $93 $198 $184 $392
Commercial 1,000 sq. ft. 1.50 $93 $198 $140 $297
Industrial/Warehouse 1,000 sq. ft. 0.35 $93 $198 $33 $69
Net Cost/Func. Pop. Net Cost/Unit
Source: Functional population (24-hour) per unit from Table 43 and Table 45 in Appendix B; net cost from Table 26.
Table 28 compares the current police fees with the updated fees (using the residential option of fees
by housing type). The updated fees are lower than current fees if insured values are used as the basis
for building replacement cost, and higher if construction costs are used.
Table 28. Comparative Police Fees
Current Fee
Land Use Type Unit per Unit Insured Constr. Insured Constr.
Residential, up to 700 sq. ft. Dwelling $137 $111 $236 -19% 72%
Residential, 701-1,200 sq. ft. Dwelling $173 $150 $319 -13% 84%
Residential, 1,201-1,700 sq. ft. Dwelling $192 $163 $347 -15% 81%
Residential, 1,701-2,200 sq. ft. Dwelling $200 $166 $352 -17% 76%
Residential, over 2,200 sq. ft. Dwelling $214 $184 $392 -14% 83%
Commercial 1,000 sq. ft. $165 $140 $297 -15% 80%
Industrial/Warehouse 1,000 sq. ft. $40 $33 $69 -18% 73%
Updated Fee/Unit Percent Change
Source: Current fees from Table 1; updated fees from Table 27.
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GENERAL GOVERNMENT
The City provides a number of administrative facilities that will need to be expanded as the community
grows. To ensure that new development pays its fair share of the cost of these facilities, the City
charges a general government capital expansion fee. This section calculates updated general
government capital expansion fees.
Service Units
One of the most common methodologies used in calculating general government impact fees is the
“functional population” approach. This allocates the cost of growth to different types of new
development based on the presence of people at the site of the land use. The description of the
functional population methodology, the calculation of the service unit multipliers and the
determination of existing general government service units are presented in Appendix B. Because
many general government facilities do not provide service around-the-clock, daytime functional
population is used, rather than the 24-hour function population used for fire and police.
Cost per Service Unit
The City’s existing general government facilities and estimated replacement costs are summarized in
Table 29. Two alternatives for building values are shown: current insured value and estimated
construction cost. Either would be a reasonable basis for estimating building replacement value, with
insured values being more conservative.
Table 29. Existing General Government Facilities
Land Building
Facility Address Acres Value Sq. Feet Insur. Value Constr. Cost
City Hall 300 Laporte Ave 2.00 $56,164 31,553 $9,640,744 $12,621,200
OPS Service Facility 300 Laporte Bldg B n/a n/a 26,564 $4,548,056 $5,976,900
Main Administration Bldg. 281 N. College 0.75 $21,061 37,603 $7,717,672 $15,041,200
City Office Building 215 N. Mason 2.00 $56,164 71,500 $10,760,318 $28,600,000
Streets Office/Storage 625 Ninth St 11.72 $329,120 51,300 $5,528,072 $12,825,000
Storage Building 518 N. Loomis 1.20 $156,816 10,050 $906,513 $2,261,250
Offices 321 Maple n/a n/a 1,954 $313,341 $439,650
Traffic Control 626 Linden 3.20 $3,484,800 9,500 $2,836,581 $3,800,000
Total 20.87 $4,104,125 240,024 $42,251,297 $81,565,200
Alternative Building Values
Source: City of Fort Collins, August 8, 2016.
The existing level of service (cost per service unit) is determined by dividing the replacement cost of
existing facilities by the existing service units being served by those facilities. As shown in Table 30,
the cost per service unit for general government facilities is $432 per functional population if insured
values are used to estimate building replacement cost, or $683 if estimated construction costs are used.
General Government
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Table 30. General Government Cost per Service Unit
Insur. Value Constr. Cost
Building Replacement Value $42,251,297 $81,565,200
Land Value $4,104,125 $4,104,125
Electronic Data Processing Equpment Value $8,861,429 $8,861,429
Streets Vehicle/Equipment Value $12,459,578 $12,459,578
Total Replacement Cost $67,676,429 $106,990,332
÷ Existing Functional Population (Daytime) 156,636 156,636
Cost per Functional Population $432 $683
Alternative Building Values
Source: Building and land replacement costs from Table 29; EDP equipment value from
insured values; streets vehicle-equipment value is sum of original costs from City fixed asset
listings, February 17, 2016; existing functional population from Table 45 in Appendix B.
Net Cost per Service Unit
Impact fees should be reduced in order to account for other types of revenues that will be generated
by new development and used to fund capacity-expanding improvements of the same type as those
to be funded by the impact fees. Cases in which such an offset is warranted include funding of existing
deficiencies and outstanding debt payments on existing facilities. Since the updated fees are based on
the existing level of service, there are no existing deficiencies.
The City has some outstanding debt on general government facilities. A relatively simple way to
calculate a credit for outstanding debt is to divide the debt by the number of existing service units.
This places new development on an equal footing with existing development in terms of the
proportion of their costs that are funded through debt. As shown in Table 31, the debt credit is $38
per functional population.
Table 31. General Government Debt Credit
2012 COPS - Streets Salt Storage $1,055,000
Capital Lease - Rolling Stock, Heavy Equipment $4,944,079
Outstanding General Government Debt $5,999,079
÷ Existing Functional Population (Daytime) 156,636
Debt Credit per Functional Population $38
Source: Outstanding debt principal from City of Fort Collins, February 25,
2016; existing functional population from Table 45 in Appendix B.
The credit for outstanding debt is subtracted from the cost per service unit to determine the net cost
per service unit, as shown in Table 32.
Table 32. General Government Net Cost per Service Unit
Insur. Value Constr. Cost
Cost per Functional Population $432 $683
– Debt Credit per Functional Population -$38 -$38
Net Cost per Functional Population $394 $645
Alternative Building Values
Source: Cost per functional population from Table 24; debt credit from Table 25.
General Government
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Potential Fees
The maximum general government capital expansion fees that may be adopted by the City based on
this study are determined by multiplying the number of service units generated by a unit of
development by the net cost per service unit calculated above. The resulting fee schedule is presented
in Table 33. Two alternative fee schedules are calculated: one using the District’s insured values of
buildings, and the other using estimated construction costs. In addition, two residential fee options
are shown: fees by housing type (single-family and multi-family) and fees by unit size.
Table 33. Potential General Government Capital Expansion Fees
Func. Pop.
Land Use Type Unit per Unit Insured Constr. Insured Constr.
Single-Family Detached Dwelling 1.38 $394 $645 $544 $890
Multi-Family Dwelling 0.97 $394 $645 $382 $626
Residential, up to 700 sq. ft. Dwelling 0.89 $394 $645 $351 $574
Residential, 701-1,200 sq. ft. Dwelling 1.20 $394 $645 $473 $774
Residential, 1,201-1,700 sq. ft. Dwelling 1.31 $394 $645 $516 $845
Residential, 1,701-2,200 sq. ft. Dwelling 1.33 $394 $645 $524 $858
Residential, over 2,200 sq. ft. Dwelling 1.48 $394 $645 $583 $955
Commercial 1,000 sq. ft. 2.25 $394 $645 $887 $1,451
Industrial/Warehouse 1,000 sq. ft. 0.53 $394 $645 $209 $342
Net Cost/Func. Pop. Net Cost/Unit
Source: Functional population (daytime) per unit from Table 43 and Table 45 in Appendix B; net cost per functional
population from Table 32.
Table 34 compares the current general government capital expansion fees with the updated fees (using
the residential fee option by unit size). The updated fees are lower than current fees if insured values
are used as the basis for building replacement cost, and higher if construction costs are used.
Table 34. Comparative General Government Fees
Current Fee
Land Use Type Unit per Unit Insured Constr. Insured Constr.
Residential, up to 700 sq. ft. Dwelling $321 $351 $574 9% 79%
Residential, 701-1,200 sq. ft. Dwelling $410 $473 $774 15% 89%
Residential, 1,201-1,700 sq. ft. Dwelling $452 $516 $845 14% 87%
Residential, 1,701-2,200 sq. ft. Dwelling $473 $524 $858 11% 81%
Residential, over 2,200 sq. ft. Dwelling $507 $583 $955 15% 88%
Commercial 1,000 sq. ft. $780 $887 $1,451 14% 86%
Industrial/Warehouse 1,000 sq. ft. $183 $209 $342 14% 87%
Updated Fee/Unit Percent Change
Source: Current fees from Table 1; updated fees from Table 33.
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APPENDIX A: HOUSING DATA
Existing Housing Units by Type
The mix of housing units by type in Fort Collins cam be estimated based on the distribution of units
from sample data collected by the U.S. Census Bureau. These data indicate that there has been little
change in the distribution of units by housing type since 2000, as summarized in Table 35.
Table 35. Dwelling Unit Distribution by Housing Type, 2000-Current
Housing Type 2000 Current 2000 Current
Single-Family Detached 26,706 33,488 55.9% 56.3%
Single-Family Attached 3,613 5,260 7.6% 8.8%
Multi-Family 16,163 19,179 33.8% 32.2%
Mobile Home 1,284 1,591 2.7% 2.7%
Total 47,766 59,518 100.0% 100.0%
Single-Family Detached/Mobile Home 27,990 35,079 58.6% 58.9%
Multi-Family/Single-Family Attached 19,776 24,439 41.4% 41.1%
Total Units % of Total Units
Source: 2000 units from 2000 US Census SF3 1-in-6 sample data; most current data from 5% sample
data from US Census, American Community Survey, collected in 2009-2014 (all data from US Census
American FactFinder website).
The current number of dwelling units in Fort Collins by housing type is estimated based on the total
number of units enumerated in the 2010 census, the current distribution of units from the previous
table, and the number of building permits issued by the City over the last six years, as shown in Table
36.
Table 36. Dwelling Units by Housing Type, Fort Collins, 2016
Housing Est. 2010 2010-2015 Est. 2016
Housing Type Share Units Permits Units
Single-Family Detached/MH 58.9% 35,636 2,386 38,022
Multi-Family/SF Attached 41.1% 24,867 3,505 28,372
Total 100.0% 60,503 5,891 66,394
Source: Housing shares from Table 35; 2010 total units from 2010 Census, 2010 units by housing
type estimated based on housing share; 2010-2015 permits are number of permits issued by City
in 2010 through 2015 calendar years from City of Fort Collins, February 16, 2016.
Average Household Size by Housing Type
A key input into impact fee analysis is the average number of people residing in different types of
dwelling units. This statistic, known as average household size, is the ratio of household population
to households (households are the same as occupied dwelling units).
The most reliable data on average household size comes from the decennial census counts. However,
these 100%-count data are only available for all housing units, with no distinction by housing type.
Overall, the trend between the 2000 and 2010 census was one of a slight decline in overall average
household size, as can be seen in Table 37.
Appendix A: Housing Data
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Table 37. Average Household Size, 2000 and 2010
Total Occupied Household Average
Housing Type Units Units Population HH Size
All Housing Types, 2000 47,755 45,882 112,597 2.45
All Housing Types, 2010 60,503 57,829 136,901 2.37
Source: 2000 and 2010 US Census for Fort Collins, CO, SF1 (100% counts).
The 2000 Census included a robust 1-in-6 sample (about 17%) of housing units that included
information on housing type. The 2000 Census data on average household size in Fort Collins is
summarized in Table 38. Average household sizes for various combinations of housing types are
shown in the last three rows.
Table 38. Average Household Size by Housing Type, 2000
Total Occupied Household Average
Housing Type Units Units Population HH Size
Single-Family Detached 26,706 25,941 73,943 2.85
Single-Family Attached 3,613 3,464 7,031 2.03
Multi-Family 16,163 15,190 28,522 1.88
Mobile Home 1,284 1,233 2,880 2.34
Total 47,766 45,828 112,376 2.45
Single-Family Detached/Att./MH 31,603 30,638 83,854 2.74
Multi-Family/Single-Family Att. 19,776 18,654 35,553 1.91
Single-Family Detached//MH 27,990 27,174 76,823 2.83
Source: 2000 U.S. Census for Fort Collins, C), SF-3 data (1-in-6 sample data).
Unfortunately, in 2010 the Census Bureau has discontinued providing robust sample data as part of
the decennial census, and instead collects annual data from 1% samples, which has been aggregated
into a 5% sample for the 2009-2014 period. These data are based on a much smaller sample than the
2000 census, and also collapse single-family detached and attached housing into the same category.
They are shown in Table 39.
Table 39. Average Household Size by Housing Type, Current
Total Occupied Household Average
Housing Type Units Units Population HH Size
Single-Family Detached/Att./MH 40,339 39,088 103,953 2.66
Multi-Family 19,179 18,058 34,864 1.93
Total 59,518 57,146 138,817 2.43
Source: US Census Bureau, 2009-2014 American Community Survey data (5% sample) for Fort
Collins, CO from American FactFinder website.
The changes in average household sizes by housing type from the 2000 Census to the most current
sample data indicate that single-family units have experienced a small reduction in household size,
while multi-family units have seen an even smaller increase, as shown in Table 40.
Table 40. Change in Average Household Size by Type, 2000-Current
Percent
Housing Type 2000 Current Change
Single-Family, Detached/Attached/MH 2.74 2.66 -2.92%
Multi-Family 1.91 1.93 1.05%
Total 2.45 2.43 -0.82%
Average HH Size
Source: 2000 data from Table 38; current data from Table 39.
Appendix A: Housing Data
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Average household sizes by housing type from the 2000 Census are adjusted by the percentage change
from the previous table to estimate current average occupancies, shown in Table 41.
Table 41. Average Household Size by Housing Type, 2016
2000 Percent Estimated
Housing Type AHHS Change AHHS 2016
Single-Family Detached/Mobile Home 2.83 -2.92% 2.75
Multi-Family/Single-Family Attached 1.91 1.05% 1.93
Source: 2000 average household size from Table 38; percent change from Table 40.
Average Household Size by Unit Size
In the 2013 study, average household size by dwelling unit size was estimated using regional data from
the American Housing Survey, sponsored by the U.S. Department of Housing and Urban
Development and conducted by the U.S. Census Bureau. The most recent survey, completed in 2013,
was not available at the time of the 2013 study. This survey provides data on the number of residents
and the square footage of a sample of individual housing units. The data from the Western Census
Region, which includes Colorado, was used. Average household sizes by dwelling unit size from the
western U.S. were converted to Equivalent Dwelling Units (EDUs), with one EDU representing the
average number of persons residing in an occupied single-family detached unit. These EDU
multipliers were then multiplied by the average household size of a single-family unit in Fort Collins
to estimate local average household sizes by dwelling unit size, as summarized in Table 42.
Table 42. Average Household Size by Dwelling Unit Size, Western U.S., 2013
-/2013-ahs-metropolitan-puf-microdata.html Ft. Collins
House- Avg. EDUs/ Avg. HH
Housing Type/Size Sample HH Pop. Holds HH Size Unit Size
0-700 sf 1,374 5,132,892 2,757,716 1.86 0.648 1.78
701-1,200 sf 3,011 18,273,825 7,314,554 2.50 0.871 2.40
1,201-1,700 sf 2,205 15,442,616 5,670,694 2.72 0.948 2.61
1,701-2,200 sf 1,559 11,070,145 3,996,864 2.77 0.965 2.65
2,200 sf + 1,881 15,170,463 4,923,946 3.08 1.073 2.95
All Units 10,030 65,089,942 24,663,774 n/a n/a n/a
All Single-Family Det. 5,986 44,650,330 15,539,758 2.87 1.000 2.75
American Housing Survey, 2013
Source: U.S. Department of Housing and Urban Development, American Housing Survey, 2013, Western
Census Region; Fort Collins average household size by unit size based on average household size for a single-
family detached unit in Fort Collins from Table 41 and EDUs/unit from the American Housing Survey.
The updated average household sizes confirm the tendency of larger units to have more residents, as
illustrated in Figure 2. The smallest size units, and units in the 1,701-2,200 range, experienced small
decreases in average household size compared to the 2013 study.
Appendix A: Housing Data
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Figure 2. Average Household Size by Unit Size, 2013 and 2016
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APPENDIX B: FUNCTIONAL POPULATION
A common methodology used in calculating public safety (fire and police) and general government
service units and impact fees is the “functional population” approach. This approach is a generally-
accepted methodology for these impact fee types and is based on the observation that demand for
public safety and general government facilities tends to be proportional to the presence of people at a
particular site.
Functional population is analogous to the concept of “full-time equivalent” employees. It represents
the number of “full-time equivalent” people present at the site of a land use, and it is used for the
purpose of determining the impact of a particular development on the need for facilities. For
residential development, functional population is simply average household size times the percent of
time people spend at home. For nonresidential development, functional population is based on a
formula that factors trip generation rates, average vehicle occupancy and average number of hours
spent by visitors at a land use.
Two types of functional population are used in impact fee analysis: “24-hour” functional population
and “daytime” functional population. 24-hour functional population is most appropriate for services,
like fire and police protection, that operate on a 24-hour per day basis. Daytime functional population
is more appropriate for general government facilities, which do not operate around the clock.
Residential Functional Population
For residential land uses, the impact of a dwelling unit on the need for capital facilities is generally
proportional to the number of persons residing in the dwelling unit. This can be measured for
different housing types in terms of either average household size (average number of persons per
occupied dwelling unit) or persons per unit (average number of persons per dwelling unit, including
vacant as well as occupied units). In this analysis, average household size is used to develop the
functional population multipliers, as it avoids the need to make assumptions about occupancy rates.
Determining residential functional population multipliers is considerably simpler than the
nonresidential component. It is estimated that people, on average, spend 16 hours, or 67 percent, of
each 24-hour weekday at their place of residence and the other 33 percent away from home. For
daytime functional population, a 16-hour day is used, and it is estimated that people spend half of the
16-hour day at home. The functional population per unit for residential uses is shown in Table 43.
Appendix B: Functional Population
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Table 43. Functional Population per Unit for Residential Uses
Average
Housing Type Unit HH Size 24-Hour Daytime 24-Hour Daytime
Single-Family Detached Dwelling 2.75 0.67 0.50 1.84 1.38
Multi-Family Dwelling 1.93 0.67 0.50 1.29 0.97
Residential, up to 700 sq. ft. Dwelling 1.78 0.67 0.50 1.19 0.89
Residential, 701-1,200 sq. ft. Dwelling 2.40 0.67 0.50 1.61 1.20
Residential, 1,201-1,700 sq. ft. Dwelling 2.61 0.67 0.50 1.75 1.31
Residential, 1,701-2,200 sq. ft. Dwelling 2.65 0.67 0.50 1.78 1.33
Residential, over 2,200 sq. ft. Dwelling 2.95 0.67 0.50 1.98 1.48
Occupancy Func. Pop. Per Unit
Source: Average household size from Table 41 (housing type) and Table 42 (unit size).
Nonresidential Functional Population
The functional population methodology for nonresidential land uses is based on trip generation and
employee density data. Functional population per 1,000 square feet is derived by dividing the total
number of hours spent by employees and visitors during a week day by 24 hours (16 hours for daytime
functional population). Employees are estimated to spend 8 hours per day at their place of
employment, and visitors are estimated to spend one hour per visit. The formulas used to derive the
nonresidential functional population estimates are summarized in Figure 3.
Figure 3. Nonresidential Functional Population Formulas
24-HR FUNCPOP/UNIT = (employee hours/1000 sf + visitor hours/1000 sf) ÷ 24 hours/day
Where:
Employee hours/1000 sf = employees/1000 sf x 8 hours/day
Visitor hours/1000 sf = visitors/1000 sf x 1 hour/visit
Visitors/1000 sf = weekday ADT/1000 sf x avg. vehicle occupancy – employees/1000 sf
Weekday ADT/1000 sf = one-way avg. daily trips (total trip ends ÷ 2)
DAYTIME FUNCPOP/UNIT = (employee hours/1000 sf + visitor hours/1000 sf) ÷ 16 hours/day
Where:
Employee hours/1000 sf = employees/1000 sf x 8 hours/day
Visitor hours/1000 sf = visitors/1000 sf x 1 hour/visit
Visitors/1000 sf = weekday ADT/1000 sf x avg. vehicle occupancy – employees/1000 sf
Weekday ADT/1000 sf = one-way avg. daily trips (total trip ends ÷ 2)
Appendix B: Functional Population
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Using this formula and information on trip generation rates, vehicle occupancy rates, and employee
density, nonresidential functional population estimates per 1,000 square feet of gross floor area are
calculated in Table 44.
Table 44. Functional Population per Unit for Nonresidential Uses
Trip Persons/ Employee/ Visitors/
Land Use Unit Rate Trip Unit Unit 24-Hour Daytime
Retail 1,000 sq. ft. 21.35 1.96 1.02 40.83 2.04 3.06
Office 1,000 sq. ft. 5.52 1.24 2.31 4.53 0.96 1.44
Industrial 1,000 sq. ft. 3.42 1.24 1.05 3.19 0.48 0.72
Warehouse 1,000 sq. ft. 1.78 1.24 0.43 1.78 0.22 0.33
Func. Pop. Per Unit
Source: Trip rates based on one-half of average daily trip rate from ITE, Trip Generation, 9th ed., 2012 (retail based on
shopping center, office based on general office, industrial based on industrial park); persons/trip is average vehicle
occupancy from Federal Highway Administration, Nationwide Household Travel Survey, 2009; employees/unit from
U.S. Department of Energy, Commercial Buildings Energy Consumption Survey, 2003; visitors/unit is trips times
persons/trip minus employees/unit; functional population/unit calculated based on formula from Figure 3.
Total Functional Population
The total functional population of Fort Collins is determined by multiplying the number of existing
units of development by the functional population per unit, as shown in Table 45.
Table 45. Existing Functional Population
Existing
Land Use Unit Units 24-Hour Daytime 24-Hour Daytime
Single-Family Detached Dwelling 38,022 1.84 1.38 69,960 52,470
Multi-Family Dwelling 28,372 1.29 0.97 36,600 27,521
Commercial/Institutional 1,000 sq. ft. 31,891 1.50 2.25 47,837 71,755
Industrial/Warehouse 1,000 sq. ft. 9,226 0.35 0.53 3,229 4,890
Total Functional Population 157,626 156,636
Func. Pop./Unit Total Func. Pop.
Source: Existing dwelling units from Table 36; existing nonresidential building square footage from Larimer County
Assessor’s Office, February 16, 2016; functional population per unit from Table 43 and Table 44 (commercial/
institutional is average of retail and office; industrial/warehouse is average of industrial and warehouse).
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Fort Collins, Colorado 35 August 10, 2016
APPENDIX C: COMPARATIVE FEE SURVEY
This section presents the results of a survey of impact fees charged by four Colorado cities that Fort
Collins considers to be “peer” cities. The comparison cities are Loveland, Greeley, Longmont and
Boulder. The survey includes all impact fees or similar charges, including capital expansion fees, plant
investment fees, development excise taxes and fees in lieu of land dedication. Connection fees for
electrical power were excluded, because these charges would not be counted for cities served by private
electric utilities.
Fees were surveyed for five land use types. The following assumptions were used for the various land
uses.
Single-family detached: 2,000 square foot, 3-bedroom unit; 8,000 square foot lot
Multi-family: 1,000 square foot, 2-bedroom unit; 12 units per acre; five 2” domestic water
meters and two 2” irrigation meters to serve a 240-unit apartment complex
Shopping center: 100,000 square foot center; floor-area ratio of 0.15; one 3” water meter
General office: 100,000 square foot center; floor-area ratio of 0.25; one 3” water meter
Light industrial: 100,000 square foot building; floor-area ratio of 0.15; one 3” water meter
Table 46. Current Fees, City of Fort Collins
Gen. Storm
Land Use Type Unit Park Fire Police Gov't Roads Water Sewer Water School Total
Single-Family Det. Dwelling $3,443 $399 $200 $473 $3,414 $3,558 $3,500 $1,509 $1,546 $18,042
Multi-Family Dwelling $2,992 $346 $173 $410 $2,373 $1,411 $2,520 $685 $916 $11,826
Shopping Center 1,000 sq. ft. $0 $329 $165 $780 $11,096 $1,291 $1,048 $1,258 $0 $15,967
Office, General 1,000 sq. ft. $0 $329 $165 $780 $4,088 $1,291 $1,048 $755 $0 $8,456
Light Industrial 1,000 sq. ft. $0 $78 $40 $183 $2,477 $1,291 $1,048 $1,258 $0 $6,375
Notes: School fee is fee in lieu of land dedication (average for the two school districts)
Source: City of Fort Collins website; roads includes Larimer County regional transportation fee from http://larimer.org/building/2015-
TCEF-Calculation-and-Schedule-Form.pdf.
Table 47. Current Fees, City of Loveland
Parks/ Gen. Storm Lib./
Land Use Type Unit Trails Fire Police Gov't Roads Water Sewer Water Cult. School Total
Single-Family Det. Dwelling $6,562 $895 $881 $1,092 $2,519 $7,000 $6,700 $505 $1,335 $1,382 $28,871
Multi-Family Dwelling $4,560 $622 $613 $759 $1,760 $1,609 $1,540 $367 $928 $946 $13,704
Shopping Center 1,000 sq. ft. $0 $300 $390 $420 $7,730 $1,569 $1,502 $673 $0 $0 $12,584
Office, General 1,000 sq. ft. $0 $300 $390 $420 $3,470 $1,569 $1,502 $404 $0 $0 $8,055
Light Industrial 1,000 sq. ft. $0 $30 $50 $60 $1,840 $1,569 $1,502 $758 $0 $0 $5,809
Notes: Water fee includes water plant investment fee and raw water development fee; school fee in lieu of dedication
Source: Communication with Alan Krcmarik, Executive Financial Advisor, April 18, 2016.
Appendix C: Comparative Fee Survey
Capital Expansion Fee Study Public Review Draft duncan|associates
City of Fort Collins, Colorado 36 August 10, 2016
Table 48. Current Fees, City of Greeley
Waste-
Land Use Unit Park Trails Fire Police Roads Drain Water Water Total
Single-Family Det. Dwelling $2,832 $392 $845 $122 $3,793 $355 $11,000 $5,150 $20,298
Multi-Family Dwelling $2,124 $295 $409 $92 $2,499 $255 $5,500 $2,575 $10,829
Retail 1,000 sq. ft. $0 $0 $667 $149 $5,021 $457 $1,282 $603 $7,363
Office 1,000 sq. ft. $0 $0 $313 $70 $4,440 $274 $1,282 $603 $6,599
Industrial 1,000 sq. ft. $0 $0 $124 $28 $1,536 $457 $1,282 $603 $3,878
Source: City of Greeley, Development Impact Fee Schedule, effective March 1, 2016; Water and Sewer Plant Investment
Fees, effective March 1, 2015.
Table 49. Current Fees, City of Longmont
Public Storm
Land Use Type Unit Parks Bldgs Roads Water Sewer Water Total
Single-Family Det. Dwelling $5,333 $1,121 $901 $10,940 $4,390 $797 $23,482
Multi-Family Dwelling $2,616 $1,121 $448 $998 $701 $378 $6,262
Commercial 1,000 sq. ft. $0 $401 $2,294 $3,393 $938 $416 $7,442
Office 1,000 sq. ft. $0 $401 $2,294 $3,393 $938 $416 $7,442
Industrial 1,000 sq. ft. $0 $401 $588 $3,393 $938 $416 $5,736
Source: City of Longmont, Permit and Licensing Fees (http://longmontcolorado.gov/departments/departments-a-
d/building-inspection/permit-and-licensing-fees).
Table 50. Current Fees, City of Boulder
Gen. Storm Hous-
Land Use Type Unit Park Lib. Fire Police Gov't Roads Water Sewer Water ing Total
Single-Family Det. Dwelling $4,483 $483 $220 $310 $452 $2,276 $16,807 $4,473 $6,592 $460 $30,608
Multi-Family Dwelling $3,537 $398 $297 $256 $370 $1,687 $9,224 $2,556 $4,487 $230 $18,184
Retail 1,000 sq. ft. $0 $0 $400 $500 $150 $2,480 $2,689 $716 $9,613 $5,730 $21,228
Office 1,000 sq. ft. $0 $0 $610 $170 $210 $2,480 $2,689 $716 $5,768 $7,660 $19,313
Light Industrial 1,000 sq. ft. $0 $0 $80 $60 $120 $2,480 $2,689 $716 $9,613 $4,730 $20,228
Notes: Park fee is parks and recreation impact fee and park land excise tax; general government is human services and municipal facilities
impact fees; housing is housing excise tax and nonresidential housing linkage fee
Source: City of Boulder, Planning and Development Services, 2016 Schedule of Fees, eff. Jan 4, 2016, updated Mar. 7, 2016.
Page 1 of 5
COUNCIL FINANCE COMMITTEE
AGENDA ITEM SUMMARY
STAFF
Mike Beckstead, Chief Financial Officer
John Voss, Controller
John Phelan, Resource Conservation Manager
DATE
August 15, 2016
SUBJECT FOR DISCUSSION
Third Party Financing for the Home Efficiency Loan Program
EXECUTIVE SUMMARY
The purpose of this item is to provide an update for transition planning of the capital funding for
the Home Efficiency Loan Program (HELP).
Over 75 loans have been completed to date, used primarily for home efficiency upgrades and
with a few solar and water projects. The energy loans, taken as a group, are estimated to be
saving 10% of the carbon emissions of these homes. This equates to 1.2 tons avoided per
household and 72 annual tons per year. The improvements are also providing utility bill savings,
comfort improvements and health and safety benefits.
The approved outstanding loan balance of $1.6M is expected to be met in the 4P
th
P quarter of 2016.
Staff is proposing to transition to a 3P
rd
P party loan model in partnership with Elevations Credit
Union as quickly as possible. After demonstrating the interest and demand for home efficiency
financing, the transition of the program to utilize 3P
rd
P party capital will allow for the scaling of the
efficiency programs in alignment with the Energy Policy and Climate Action Plan.
GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED
• Does Council have feedback regarding the proposed transition to provide capital funding
and program administration through Elevations Credit Union for the Home Efficiency
Loan Program?
Page 2 of 5
BACKGROUND/DISCUSSION
OBF Program History
The On-Bill Financing (OBF) pilot program (also known as the Home Efficiency Loan Program)
provides residential utility customers with low-cost financing for energy efficiency, solar
photovoltaic, and water conservation improvements to support the outcomes adopted in City of
Fort Collins policies and plans, such as the Climate Action Plan, Energy Policy and Water
Efficiency Plan. The OBF program was established by Ordinance 033-2012 which revised
language in Chapter 26 of the Municipal Code to enable Utilities to provide financing and on-bill
servicing of loans for energy efficiency, water efficiency and renewable energy projects.
The program is most succinctly described as a traditional loan program which is serviced by
Utilities on customer’s monthly bills. Customers qualify based on their bill payment history and
credit score, eligible projects are defined by Utilities incentive programs, and the loans are
secured via a UCC lien filing recorded with Larimer County. The OBF program was launched in
January 2013, and was reviewed by Council in August 2013, October 2014, January 2015 and
March 2016.
OBF capital comes from Light & Power and Water reserve funds, with the source being
determined by the project type. The funding is a “balance sheet transaction,” where the funds are
accounted for by moving from reserves to accounts receivable. As such, loan funding is not a
typical expenditure or a budget item. Council has authorized Utilities for a maximum outstanding
balance of $1,600,000 for the loan program.
Loan activity has continued at an accelerated rate through 2016 year to date (see chart and table
below). Based on a forecast from this recent activity, the outstanding loan limit is likely to be
met in the 4P
th
P quarter of 2016.
Home Efficiency Loan Program Activity Summary
Description Number Funds
Loans issued 93 ($873,937)
Approved but not
completed 45 ($552,435)
Repayments and paid off 17 $134,004
Maximum Balance
$1,600,000
Available Balance
$307,631
• For the 76 active loans, the average loan amount is $9,397 with an average term of 13.6
years.
• For all loans issued, the average FICO score was 739.
Page 3 of 5
Scalability and Funding Requirements
Meeting Energy Policy and Climate Action Plan goals is going to require unprecedented scale
for the efficiency upgrades of Fort Collins building stock. This, in turn, will facilitate needed
investment. Over the course of the next 15-25 years, there could be thousands of home efficiency
upgrades and renewable energy systems. Assuming three to four thousand homes invested
$10,000 (the average loan amount) over the next five years, this equates to $30-45M in
investment.
The current model of using Utilities reserve funds has reached the limits of its ability to seed
fund the on-bill financing loan program. While the Utilities may be able to borrow additional
funds and reloan to customers under the current model, this approach would in turn put limits on
potential borrowing for other Utilities capital needs.
After demonstrating the interest and demand for home efficiency financing, the transition of the
program to utilize 3P
rd
P party capital will allow for the scaling of the efficiency programs in
alignment with the Energy Policy and Climate Action Plan.
Proposed Partnership with Elevations Credit Union
Staff chartered a project team to research, identify and recommend options for consideration by
Council for future capital requirements for HELP and the On-Bill Finance programs. The team
was comprised of staff from Utilities Resource Conservation, Utilities Finance, City Finance,
Purchasing, the City Attorney’s Office and Sustainability Services. A request for proposals was
Page 4 of 5
issued in June and two responses were received. The team proceeded through scoring of the
proposals and interviewing the team for the top proposal.
Elevations Credit Union (ECU) provided a comprehensive proposal for provision of loan capital
and financial services. ECU manages a substantially similar program which services Denver and
Boulder counties as part of the Energysmart Program. The Fort Collins program will also be able
to participate in a shared loan loss reserve fund administered on behalf of the Colorado Energy
Office.
In the proposed model, ECU would provide customer qualification along with loan capital,
closing and servicing for all HELP loans. The table below summarizes the services as they are
provided today, and under the proposed model.
Roles/Responsibilities Current Proposed
Utilities Energy Smart
Partners
Utilities Elevations
Customer qualification * *
Project qualification * *
Loan closing * *
Loan servicing * option *
Recording * *
Tax information * *
Payoff * *
ECU is proposing to use the loan interest rate matrix from the Energysmart program. It is a
matrix of interest rates ranging from 2.75% to 9.125% based on credit score and loan term (see
below). Using the average credit score and term from active HELP loans would result in an
interest rate of 6.625% with the proposed model
Page 5 of 5
Current and Proposed HELP Characteristics
Attribute Utilities HELP Proposed Elevations Credit
Union
Interest
Rates
Allowable range from 2.5-
10% per proposed rate
ordinance
Current rate at 4.0%
2.75% to 9.125%
See table above
Customer
qualification
Minimum six months bill
payment history
Credit score minimum of 640
Credit score minimum of 580
Underwriting debt to income
ratio
Fees $25 for application, $150 for
closing, $11 for recording
$25 member fee
$25 application fee
$10-25 recording fee
Recording UCC filing recorded with
Larimer County
same
Loan term 5, 7, 10, 15, or 20 years
Selected by applicant
3, 5, 7, 10 or 15 years
Selected by applicant
Customer
eligibility
Residential single family and
townhome properties, small
business customers (by
owner), Rental properties (by
owner)
Same
Summary
Staff is proposing to establish a contractual agreement with Elevations Credit Union to partner
on the provision of loans in support of the HELP. The agreement will include roles and
responsibilities for the coordination of program processes between Elevations and Utilities,
including the qualification of efficiency projects by Utilities, marketing and outreach and
processes related to the loan loss reserve. The timeline of this effort is intended to provide for a
transition without a gap in available funding for the HELP.
No formal action is required of Council in order to make this transition. Staff proposes to keep
Council up to date with regular reporting.
ATTACHMENTS
Summary presentation: Third Party Financing for the Home Efficiency Loan Program
1
Council Finance Meeting, August 15, 2016
John Phelan, Resource Conservation Manager
John Voss, Controller
Third Party Financing for the Home Efficiency Loan Program
GENERAL DIRECTION SOUGHT AND
SPECIFIC QUESTIONS TO BE ANSWERED
• Does Council have feedback regarding the
proposed transition to provide capital
funding and program administration through
Elevations Credit Union for the Home
Efficiency Loan Program?
2
HELP Results to Date
3
Proposed 3rd Party Financing - WHY
4
• On-Bill Financing program established because private sector
loans were not generally available for efficiency upgrades
• Currently committed $1.6M in reserves and that will support
about 150 loans
• To achieve near term goals, targeting 3,000 – 4,000 homes for
efficiency upgrades
• This will require $30M-$45M of capital
• City is not in a position to capitalize $45M of loans
• HELP has proven market interest in efficiency project financing
• The HELP/OBF pilot program demonstrates how the City can
launch and prove a program works before outsourcing to a
third party
Proposed 3rd Party Financing - Roles
5
Roles &
Responsibilities
Current Proposed
Utilities Energy
Smart
Partners
Utilities Elevations
Customer
qualification
* *
Project
qualification
* *
Loan closing * *
Loan servicing * Option *
Recording * *
Tax information * *
Payoff * *
Proposed 3rd Party Financing - Details
6
Attribute Utilities HELP Proposed Elevations Credit Union
Interest Rates
Allowable range from 2.5-10% per proposed
rate ordinance
Current rate at 4.0%
2.75% to 9.125%
See table below
Customer
qualification
Minimum six months bill payment history
Credit score minimum of 640
Credit score minimum of 580
Underwriting debt to income ratio
Fees
$25 for application, $150 for closing, $11 for
recording
$25 member fee
$25 application fee
$10-25 recording fee
Recording UCC filing recorded with Larimer County same
Loan term
5, 7, 10, 15, or 20 years
Selected by applicant
3, 5, 7, 10 or 15 years
Selected by applicant
Customer eligibility
Residential single family and townhome
properties, small business customers (by
owner), Rental properties (by owner)
Same
Proposed 3rd Party Financing – Interest Rates
Elevations Credit Union: Interest Rate Table
7
Using the average
credit score and
term from active
HELP loans would
result in an interest
rate of 6.625% with
the proposed model
Proposed 3rd Party Financing – Loan Loss Reserve
Loan Loss Reserve
• Rates table dependent on loan loss reserve
• Existing program – Colorado Green Credit Reserve
• Capitalized from ARRA funds by the Colorado Energy Office
• Administered by Colorado Housing Finance Authority
• 15% of outstanding loan balance
• No impact on City/Utilities funds
• No recourse back to the City for loan losses
8
Proposed 3rd Party Financing
• What proposed structure “does do”
• Supports scaling of energy projects aligned with goals
• 15,000 homes at $10,000 each >> $150M in capital
• Releases future reserves and/or borrowing to meet capital
needs
• Transition to 3rd party capital after demonstrated success
• What proposed structure “does not do”
• Meet needs of all potential homeowners/customers for
efficiency upgrades (reaching underserved)
• Provide on-bill repayment
• Continue to look at programmatic and financial options for
meeting all customer segments over time
9
Timeline
Next steps
• Continue to manage the HELP program within the outstanding
balance limit of $1.6M
• Negotiate agreement with Elevations Credit Union to partner on the
provision of loans to support existing project types
• Manage these steps with a goal of avoiding a gap in financing
availability for customers
• In Collaboration with Elevations Credit Union, develop program
communication plan
10
GENERAL DIRECTION SOUGHT AND
SPECIFIC QUESTIONS TO BE ANSWERED
• Does Council have feedback regarding the
proposed transition to provide capital
funding and program administration through
Elevations Credit Union for the Home
Efficiency Loan Program?
11
COUNCIL FINANCE COMMITTEE
AGENDA ITEM SUMMARY
Staff: Mike Beckstead, Chief Financial Officer
Date: August 15, 2016
SUBJECT FOR DISCUSSION (a short title)
2017-18 Budget Strategic Issues
EXECUTIVE SUMMARY (a brief paragraph or two that succinctly summarizes important
points that are covered in more detail in the body of the AIS.)
Review of how metrics have been used in the Budgeting for Outcomes (BFO) process and
summarize recommended Offers that support key strategies and themes in the City Manager’s
Recommended 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.)
Information sharing and discussion
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.)
ATTACHMENTS (numbered Attachment 1, 2, 3,…)
Attachment #1 - Presentation
1
2017 / 2018 Budget Review
Council Finance Committee
Budget Review & Metrics
Budget Assumption
Results Review
Community
Dashboard
2
August September October November
15th
CFC Review
Metric Improvements
Strategic Themes
9th 13th
• Enviro Health
• Economic Health
• HPG
27th
• Safe
• Transportation
• Culture & Rec
11th
• Neighborhood & Social Health
• General Discussion
1st
1st Reading
15th
2nd Reading
Budget Outcome Reviews:
• Strategic Objectives for Each Outcome
• BFO Offers Mapped to Objectives
• Highlights Key Purchases & Not Purchased
Metrics – Used Within BFO Process
3
4
BFO Team Examples - Positive
Offer 3.22 Enhancement: Bicycle Safety and Promotion Programs - Transportation
Transportation Team reviewed Enhancement Offer 3.22. The team chose to fund this offer because
various resources/metrics demonstrated a consistent theme; following the recommendations of the
2014 Bicycle Master Plan increased ridership and improved safety.
• From 2014 to 2015 bicycle crashes were reduced by 20%.
• 2016 bicycle crashes are at its lowest since 2014.
• Percentage of bicycle commuters is on target.
• Percentage of K-12 who bike or walk to school is on target.
Offer 9.1 IT App Services - HPG
Metrics measured customer satisfaction and quality of services
Offer 57.5 Enhancement IT Network Engineer - HPG
Established a link between unfinished projects, hardware failures to metrics, and the need for an FTE.
Offer 13.2 and 13.10 – Safety, Security & Risk Management - HPG
Metrics demonstrated improvement in TRIR & DART and support continuation of funding
5
BFO Team Examples - Positive
Offer 75.7: Enhancement: Neighborhood Livability – Code Compliance
The metric based on voluntary code compliance showed a high overall compliance but with a seasonal
trend; warmer months above or at the desired compliance rate and colder months below. Based on this
information alone, it was not clear that additional compliance officers were needed. However, after meeting
with the sellers, the NLSH also asked Neighborhood Services to provide peer city information on the number
of inspectors per capita. The information provided stronger support for the offer and indicates that code
compliance is understaffed when compared to other cities in the Front Range.
Offer 83.1 Graffiti Abatement Program
The target for graffiti removal is 2 days. The data indicate response time is consistently been below 2 days
and reported as 1.18 days in the first quarter of 2016. Also the number of abatement issues has dropped
from a high of 471 in July of 2014 to 153 in March 2016. This information prompted the NLSH team to
discuss if this offer should be reduced but ultimately decided the value to the City was far greater than the
small savings that may come from a budget reduction.
6
Economic Health metrics include:
• NLSH 38. Poverty Rate
• ECON 5. Local Unemployment Rate
• ECON 4. Net Percent Change in Local Jobs
• ECON 38. Number of Primary Jobs retained/created through EHO activities.
These all seem like good metrics that support the overall objectives of Economic Health, but there was no
way for our team to tell (a) which of the offers had the greatest impact on the metrics, and (b) if some of these
metrics (unemployment rate, poverty rate) were overwhelmed by local/regional/national factors beyond the
scope of the City budget.
Environmental Health:
Your assessment reflected what the EH team did: pull up the Clearpoint metrics for on-going offers and look
to see how the operation was doing. We spoke face-to-face with many owners to help us understand their
challenges, successes, and priorities. We did not, however, spend any time trying to determine if the metric
was a good metric, or how the operation might change in order to improve performance on the metric. We
just didn’t have time.
BFO Team Examples – Need for Improvement
Strategic Spending Within
City Manager’s Recommended Budget
7
8
Citizen Survey and Police Staffing
Analysis
• Code Compliance Resources
• Neighborhood Improvement Funds
• Police Staffing Analysis & Resources
• Additional Staffing Muni Court
• Police Training Facility Design
• Expanded Use of Body Cameras & Taser
Program
Strategic Objectives:
• 1.7 Maintain and enhance attractive
neighborhoods through City services,
innovative enforcement techniques and
voluntary compliance with City codes and
regulations
• 5.1 Improve community involvement,
education and regional partnerships to make
our community safer and stronger
• 5.2 Enhance our Police Services capability to
foster public traust and create a safer
community
Neighborhood Livability & Public Safety
9
Neighborhood Livability & Public Safety
Out-
come
Offer
# Offer Description 2017 2018 FTE 2017 FTE 2018
26 NLSH 75.7 Enhancement - Code Compliance $ 379 $ 300 4 4
30 NLSH 27.6 Enhancement - Special Agency Resource Specialist $ 71 $ 73 1 1
32 NLSH 75.9 Enhancement - Neighborhood Improvement & Building Grant Fund 300 300
23 Safe 29.44 Enhancement - Police Technician - Records 77 80 1 1
24 Safe 29.29 Enhancement - Police Patrol for a Growing Community 682 1,232 5 9
25 Safe 37.2 Enhancement - Municipal Court Resources 98 94 2 2
28 Safe 29.43 Enhancement - Police Property & Evidence Storage 245
31 Safe 29.36 Enhancement - Police Training Facility Design 1,080
32 Safe 29.45 Enhancement - Police Services Technician 77 80 1 1
33 Safe 29.48 Enhancement - Police Property & Evidence Tech 75 74 1 1
34 Safe 29.16 Enhancement - Police body Camera & Taser Program 177 202
36 Safe 29.39 Enhancement - Police CAD & RMS Replacement 2,980
39 Safe 29.33 Enhancement - Police CID Detective 168 146 1 1
49 Safe 29.37 Enhancement - Police Range Safety Repairs 232
52 Safe 31.2 Enhancement - Police Campus West Facility Lease 75 75
$ 6,716 $ 2,656 16 20
Rank
10
$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
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
City Contribution to Police & PFA
Old IGA RAF + Cap 1 mil + KFCG) Actual Current IGA RAF + Cap 1mil + KFCG)
Orig Est Current IGA RAF + Cap 1mil + KFCG Police Budget w/ KFCG
Linear (Actual Current IGA RAF + Cap 1mil + KFCG)) Linear (Police Budget w/ KFCG)
Police & PFA Budgets History
11
• Support I-25 Expansion
• City Bridge Program
• Lincoln Ave. Pedestrian & Landscape
enhancements
• Safe Routes to Everywhere
• Pedestrian Sidewalk Improvements
• Intersection & Road Improvements
• Managing City Tree Canopy
Strategic Objectives:
• 6.1 Improve safety for all modes of travel
including vehicular, pedestrian and bicycle
• 6.5 Fill gaps for all modes of travel and
improve the current transportation
infrastructure while enhancing the aesthetic
environment
• 6.6 Develop long-term transportation plans
that improve local and regional transportation
networks
City Asset & Infrastructure
12
City Asset & Infrastructure
Out-
come
Offer
# Offer Description 2017 2018
21 C&R 71.1 CCIP - Poudre River Downtown Project $ 4,744
24 C&R 15.7 Enhancement - Rolland Moore Ball Field Lights 440 309
38 C&R 34.4 Enhancement - Forestry Crew Small Tree Pruning 623 301
45 C&R 34.5 Enhancement - Contractual Pruning Large Trees 188 190
41 C&R 56.5 Enhancement - Museum Dehumidification System 300
10 Trans 1.2 City Bridge Program 1,700 1,700
16 Trans 1.5 CCIP - Arterial Intersection Improvement 350 400
33 Trans 1.8 CCIP - Willow St District - Final Design 765
34 Trans 1.9 CCIP - Pourdre River Bridge to 1st Street Construction 2,811
35 Trans 1.7 CCIP - Pedestrian Sidewalk / ADA 1,000 1,100
39 Trans 60.1 Safe Routes to Everywhere 2,000 2,000
42 Trans 1.6 Enhancement - Lemay Reaslignment Design 1,000
43 Trans 1.21 Enhancement - City Bridge Program 65 309
44 Trans 1.18 Enhancement - City Bridge Program 534 290
48 Trans 1.4 Enhancement - Riverside Bridge at Spring Creek 1,300
49 Trans 1.1 Enhancement - Horsetooth & College Improvements 500 500
63 Trans 1.19 Enhancement - Lincoln Ave Enhanced Design 750
70 Trans 1.12 Enhancement - Suniga Road Improvement - College to Blondel 300 1,500
$ 10,260 $ 5,699
Rank
13
Capital Improvement Plan & Long
Term Financial Plan
• GIS based Asset Maps
• L&P System Improv and Feeder Systems
• Water Distribution Master Plan Projects
• Water Quality Lab
• Wastewater Dewatering
• Multiple Storm Water Improvements
• Spring & Mill Creek Restoration
Strategic Objectives:
• 3.7 sustain high water quality to support the
community and water-dependent businesses
• 3.8 Maintain electric utility systems, services,
infrastructure integrity and stable, competitive
rates.
• 4.9 Meet all regulatory requirement while
supporting programs that go beyond
compliance
Utility Asset & Infrastructure
14
Utility Asset & Infrastructure
Out-
come
Offer
# Offer Description 2017 2018
25 ECH 5.23 Enhancement - L&P Operational Tech - GIS based Asset Maps $ 2,580 $ 182
14 ECH 5.12 L&P System Improvement & Replacement 2,062 2,225
23 ECH 5.8 L&P New Feeder Capacity 4,615 1,287
39 ECH 5.27 L&P Corrosion Mitigation 150 175
46 ECH 5.25 L&P Stray Voltage Testing 250
11 EVH 6.6 Water- Distribution Master Plan Project 1,900 1,350
26 EVH 6.7 Water - Distribution Small Projects 1,000 1,110
46 EVH 6.16 Enhancement - Water Quality Lab Infrastructure 1,300 1,300
56 EVH 6.52 Enhancement - Wastewater Dewatering Improvement 2,135 2,135
59 Safe 8.16 Enhancement - Stormwater Poudre Revier Oxbow Levee 850
60 Safe 8.21 Enhancement - Stormwater NECCO Lemay to Redwood 1,600 1,700
61 Safe 8.19 Enhancement - Stormwater Magnolia St Outfall Phase I 300 1,200
63 Safe 8.9 Stormwater Collection System Replacement - Small Projects 1,400 1,500
64 Safe 8.15 Enhancement - Stormwater Buckingham & Lincoln Outrall 200
65 Safe 8.17 Enhancement - Stormwater Prospect & Colege Storm Sewer 750
66 Safe 8.2 Enhancement - Stormwater Mulberry & Riverside Storm Sewer 800
67 Safe 8.18 Enhancement - Stormwater Remington Street Storm Sewer 100 800
69 Safe 8.6 Stormwater Stream Rehabilitation Program 350 1,400
$ 24,359 $ 18,382
Rank
Utility Rate Assumptions
L&P – 3.2% for Energy Costs, 1.25% to Support Infrastructure
Water – 5% Each Year to Support Capital and Infrastructure
Wastewater – 3% Each Year to Support Infrastructure Improvements
Storm Water – 5% in 2017 to Support Spring & Mill Creek Restoration
15
Rate Changes:
Actual Actual Budget Budget
Utility 2015 2016 2017 2018
L&P 2.0% 2.0% 4.45% 3.2%
Water 0.0% 0.0% 5.0% 5.0%
Wastewater 3.0% 3.0% 3.0% 3.0%
Storm Water 0.0% 0.0% 5.0% 0.0%
2017 Average Rate Increase Across all Utilities – 4.6% or $7.49/mo
Utility Cost Comparison
Overall - Utility Costs in the Middle Compared with
Neighboring Communities
16
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
17
• Offers with Direct Impact:
• Energy Efficiency Programs
Residential & Business Rebates
Lighting & Appliance Rebates
• Renewable Energy
Residential and Comm. Incentives
Community Solar Garden
• Transportation Sector
Low Stress Bike
• Offers that Support the Goals:
• City Energy Project
• Alternative Fuel Lawn and Garden
Strategic Objectives:
• 4.1 Achieve Climate Action Plan goals by
reducing greenhouse gases
• 4.5 Work towards long term net zero energy
goals within the community and the City
organization using a systems approach
• 4.6 Work towards long term zero waste goals
within the community and the City organization
Energy Efficiency
18
Energy Efficiency
Out-
come
Offer
# Offer Description 2017 2018
Annual GHG
Reduction in
2020
4 Years
Societal
Savings
Invest per
GHG
Saved
47 ECH 5.26 Enhancement - Electric Distributed Batter Pilot Program $ 100 $ 100 ($ 000's)
5 EVH 6.65 L&P Energy Services 4,234 4,263
18 EVH 6.67 L&P Residential & Commercial Solar Rebates 500 500
19 EVH 6.68 L&P Core Renewable Energy 2,960 3,052
33 EVH 6.76 Enhancement - L&P Energy Services - Business Efficiency Rebates 950 950 13,262 $ 1,275 $ 20
37 EVH 6.8 Enhancement - L&P Community Shared Solar 250 250 1,060 139 65
59 EVH 26.17 Enhancement - City Energy Project Matching Funds 50 50
61 EVH 26.1 Enhancement - Electric Vehicle Readiness Roadmap 40
62 EVH 26.16 Enhancement - Alternative Fuel Lawn & Garden Equipment 50 50
63 EVH 6.79 Enhancement - Renewable Non-Residential Solar Rebates 500 500 3,245 446 82
67 EVH 6.78 Enhancement - Renewable Non-Residential Solar Power Purchase 73 282 1,656 554 58
68 EVH 26.8 Enhancement - Pilot Projects & Innovation Fund 382 53 Uncertain
71 EVH 26.7 Enhancement - Expanded Municipal Innovation Fund 50 50
38 Trans 3.7 Enhancement - Low Stress Bike Routes Design & Construciton - 210 1,871 uncertain 160
65 Trans 3.23 Enhancement - Travel Behavior Survey 100 50
$ 12,256 $ 12,378
= Enhancement Offers with Direct Impact on 2020 Goals
Rank
19
• Support of Homeless Initiatives
• Affordable Housing Capital
• Updates to City Plan, Transportation
Master Plan & Transit Plan
• Airport Strategic Plan Support
• Traffic Mitigation
• Bicycle Infrastructure
Strategic Objectives:
• 1.2 Leverage & improve collaboration with
other agencies to address homelessness,
poverty issues and other high priority human
service needs
• 1.4 Protect and preserve the City’s quality of
life and neighborhoods
• 6.6 Develop long-term transportation plans
that improve local and regional transportation
networks
Community Priorities
20
Community Priorities
Out-
come
Offer
# Offer Description 2017 2018
16 NLSH 27.1 Enhancement - Homeless Initiatives 250 250
19 NLSH 27.17 CCIP - Affordable Housing 250 250
30 NLSH 27.6 Enhancement - Special Agency Resource - Connecting Homelessness 71 73
16 ECH 78.5 Enhancement - City Plan & Transportation Plan Updates 532 550
32 ECH 78.7 Enhancement - Sign Code Amendments 60
36 ECH 78.1 Enhancement - Historic Preservation Ordinance Review 49
40 ECH 25.9 Enhancement - Northern Colorado Airport 92 92
42 ECH 25.6 Enhancement - Northern Colorado Airport Strategic Plan 83 65
69 EVH 89.1 Enhancement - River Health 267 393
23 Trans 63.1 Neigborhood Traffic Mitigation Program 150 150
32 Trans 3.4 CCIP - Bicycle Infrastructure 350 350
73 Trans 3.9 Enhancement - Protected Bike Lane Pilot Project 50 250
$ 4,221 $ 4,441
Rank
Budget Review & Metrics
Budget Assumption
Results Review
Community
Dashboard
21
August September October November
15th
CFC Review
Metrics Journey
Strategic Themes
9th 13th
• Enviro Health
• Economic Health
• HPG
27th
• Safe
• Transportation
• Culture & Rec
11th
• Neighborhood
• General Discussion
1st
1st Reading
15th
2nd Reading
Budget Outcome Reviews:
• Strategic Objectives for Each Outcome
• BFO Offers Mapped to Objectives
• Highlights Key Purchases & Not Purchased