HomeMy WebLinkAboutAgenda - Mail Packet - 10/4/2016 - Council Finance & Audit Committee Agenda September 30, 2016Council Finance Committee & URA Finance Committee
Agenda Planning Calendar 2016
RVSD 09/21 mnb
Sep 30
Utility Rate Structures 45 min L. Smith
Clean-Up Ordinance 10 min L. Pollack
URA
Oct 17
Capital Expansion Fees/Street CEF/Code Cost Stack 60 min T. Smith
M. Backer
Sales Tax Code Updates 30 min T. Smith
Sales Tax on L&P Pilots 10 min T. Smith
Foundation Creation 20 min N. Johnson
URA
Nov 21
Natural Areas – Financial Review 45 min J. Stokes
Broadband Alternatives Financial Review 45 min A. Gavaldon
Financial Policy Updates 15 min J. Voss
URA
Dec 19
Future Utility Debt Requirements – Water & Stormwater 45 min L. Smith
Revenue Diversification Outreach Update 30 min T. Smith
Xcel Franchise Agreement 30 min A. Gavaldon
URA
Future Council Finance Committee Topics:
Parking Garage Financing – QII 2017
Strategy Map Metrics Review – QI 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 - Additional Meeting
September 30, 2016
7:30 - 8:30 am
CIC Room - City Hall
1. Utility Rate Structure 45 minutes L. Smith
2. Annual Adjustment Ordinance 10 minutes R. Rogers
UOTHER BUSINESS
WORK SESSION
AGENDA ITEM SUMMARY TEMPLATE
Staff: Lance Smith, Utilities Strategic Financial Director
SUBJECT FOR DISCUSSION – Residential Electric Rate Structure
UEXECUTIVE SUMMARY
The purpose of this agenda item is to provide the Council Finance Committee with an overview of current
electric rate structure methodologies and trends. The considerable interest in potential changes to our
existing rate structures, particularly in the electric monthly charges, led staff to engage a utility rate
consultant to provide an outside perspective and additional expertise on how the utility industry is
addressing the current changes in the industry. This presentation is focused on the electric utility but
many of the principles and considerations in designing rates are applicable to the water and wastewater
utilities as well. The presentation and subsequent discussion will serve to provide the City Council and
staff with some common footing for subsequent presentations and discussions.
Dawn Lund is a Vice President at Utility Financial Solutions (UFS). UFS is utilized by Platte River Power
Authority and the City of Loveland for rate analysis, and has worked with Fort Collins Utilities in the past.
Dawn and Mark Beauchamp, President of UFS, provide the annual rate making training that is provided
through the American Public Power Authority (APPA) and are recognized authorities in rate design and
current rate trends in the electric industry.
The presentation to begin the discussion will focus on the following:
• Current industry rate trends
• Current weaknesses of residential rate structures
• Distributed generation issues and rate structures
• Rates that promote financial stability
• Pros and cons of alternative rate structures
• Determining the role of a monthly customer charge
UGENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED
1. Does the Council Finance Committee have specific direction on residential electric rate structures
that staff should explore beyond the current Time of Use pilot?
2. Does the Council Finance Committee have direction for the rate structures in place in any of the
utilities?
UBACKGROUND/DISCUSSION
The update to the Utilities Capital Improvement Plans in 2016 and the two prior discussions with the
Council Finance Committee in April and June of 2016 have provided a long range perspective on the
infrastructure needs of each utility. This long range planning will require rate adjustments in order to
provide the necessary revenues for such improvements beginning in the 2017-18 Budget cycle. With any
rate increase it is necessary to consider the impacts such an increase will have on the utility and the
community. The Rate Ordinances are scheduled for First reading on November 1, 2016 and will include
a thorough explanation of why the specific rate increases are being proposed for City Council
consideration.
Considerable interest has been expressed by the City Council and community to consider alternative rate
structures. Staff continues to do the due diligence necessary before presenting any alternative rate
structures to the City Council. Specific recent considerations related to residential electric rates include:
1. Time of Use Pilot (TOU) – A year-long pilot study is concluding at the end of September that was
designed to determine if a rate structure which charges more during the few hours each day that
energy is most in demand and less during the remainder of the day. Results from this study and
the customer survey will be presented at the January 24, 2017 Council Work Session.
2. Electric Vehicles (EV) – The current rate structure does not provide an incentive to promote EV
adoption in our community. There have been requests for consideration of an “EV rate.” This is
a variation on the TOU rate structure. As the charging technology develops the trend has been to
faster charging which requires significantly more electric capacity throughout the distribution
system.
3. Distributed Storage – As battery technology evolves it may be possible to reduce the anticipated
increase in distribution infrastructure and to reduce demand charges for energy during peak
periods. A pilot study is being proposed in the 2017-18 City Manager’s Recommended Budget to
explore how this may be optimized in our community. While the study is focused on utility owned
battery storage, consumer owned storage is certainly possible and how to compensate those
customers for the use of their storage will become an industry concern in the near future.
4. Rate Affordability - Rate increases are not desired by anyone but the financial burden is
particularly acute in lower income households. The current rate structure, while intended to
promote energy conservation by charging more than the marginal cost to those residences that
exceed the community average in energy use, may add to this burden by charging customers
living in inefficient housing more than the cost to provide service to them.
5. Net Metering – With the deployment of the advanced metering infrastructure it became possible
to do a monthly reconciliation for those residential accounts that have distributed solar
generation. Adoption of distributed solar generation is an ongoing objective of the electric utility
but it also poses a financial risk to the utility. The current fixed charge is not adequate to cover
the fixed costs of providing electric service to residential customers. Some utilities have mitigated
this risk by increasing their fixed charges or by having a higher fixed charge for Net Metering
customers.
Utility rate design involves balancing a number of potentially competing objectives. Understanding these
objectives and the balancing act rate design entails is crucial before changes are made to the existing
rate structure. These objectives include:
1. Full cost recovery – any rate structure needs to provide adequate revenues to meet anticipated
expenses
2. Fairness or Equity – each rate class should cover the cost of serving that rate class whenever
possible; intra-class subsidies will occur to some extent but inter-class subsidies should be
avoided
3. Revenue stability and predictability – confidence in anticipated revenues is necessary for major
capital investment; weather and other unanticipated events can significantly affect revenues
4. Rate stability and predictability – economic development and community support for the utility
require that rate adjustments are predictable
5. Simplicity – utility rates should provide an effective, understandable price signal to customers
6. Feasible – any rate structure needs to be administrable by the utility
7. Defendable – rates must meet legal restrictions
Utility rates will be discussed with City Council on several agendas in the coming months as shown in the
table below.
Conclusion
UFS will provide an opportunity for the CFC to discuss any rate structure ideas with an outside industry
expert. Through this discussion and the subsequent agenda items an explanation of the need for the rate
increases being proposed for 2017 will be provided to the City Council.
Agenda Item Forum Date Purpose
Electric Rate Trends
Council Finance
Committee
9/19/2016
To provide some background information
to the CFC on current trends
Raw Water Requirements
and Cash-in-lieu
City Council Work Session 10/25/2016
To update the raw water requirements
and the associated cash-in-lieu of water
rights
2017 Rate Ordinances
City Council Regular
Meeting
11/1/2016
To gain support and direction on the
increases being proposed for 2017
Electric Capacity Fees City Council Work Session 1/10/2017
To present a new methodology for
calculating electric development
charges
Dawn Lund
Vice-President
Utility Financial Solutions
dlund@ufsweb.com
1
Introduction
Cost of Service
Rate Components
Rate Design
◦ Rate Structures
◦ Design Challenges
Rate Strategies
2
3
• International consulting firm providing cost of
service and financial plans and services to
utilities across the country, Canada, Guam
and the Caribbean
• Instructors for cost of service and financial
planning for APPA, speakers for organizations
across the country, including AWWA.
5
Cost of service is:
◦ A method to equitably allocate the revenue
requirements of the utility among the
various customer classes of service
◦ What revenues should I recoup from whom
and how should I do it?
Ensure rates recover costs to provide service to
customers (Revenue Requirements)
◦ Including depreciation and rate of return
Defines optimal rate structure
◦ Customer Charge
◦ kWh Charge
◦ Demand Charge
◦ Power Cost Adjustment
Reduce cross -subsidization between classes 6
7
Demand
Related
Energy
Related
Customer
Related
Residential
Rate
Industrial
Rate
Residential
Commercial
Industrial
Residential
Commercial
Industrial
Residential
Commercial
Industrial
FUNCTIONALIZATION CLASSIFICATION ALLOCATION
Commercial
Total Expenses
Production
Transmission
Distribution
Customer
Note: Demand costs may be subcategorized between
coincident peak and non-coincident peak demand
RR
The cost to operate and maintain the distribution
infrastructure
Customers are served at different voltage levels:
◦ Sub transmission – Customer avoids all the distribution system infrastructure
◦ Primary Voltage – Customer owns transformer and service drop
◦ Secondary Voltage – Uses all the infrastructure of the distribution system
Distribution infrastructure is built to meet customer’s non-
coincident peak demands
These costs do not vary with usage:
◦ Meter operation, maintenance and replacement
costs
◦ Meter reading
◦ Billing Costs
◦ Customer Service
◦ Portion of Distribution System (35-50%)
Consists of a fixed customer charge and variable
charges which can include:
◦ Energy
◦ Demand
◦ Coincident peak
◦ Fuel cost adjustments
Rates may vary by time of day or season
These costs do not vary with usage:
◦ Meter operation, maintenance and replacement
costs
◦ Meter reading
◦ Billing Costs
◦ Customer Service
◦ Portion of Distribution System (35-50%)
Cost based residential customer charges:
◦ Typical Municipal System - $10+
◦ Rural Utilities - $15+
Density of the service territory can affect the
monthly customer charges
• Increasing customer charges helps stabilize revenues
• Stable revenues improve the utility’s financial strength which is
considered in bond ratings
• Low income not the same as low use
• At most utilities, low income customers tend to be higher than
average users. A higher customer charge may benefit low
income depending on housing mix.
For each strategic objective and rate design
under review, the Governing Board needs to
understand the positives and negatives to
make informed decisions and to reduce the
chances of an unexpected result
Flat Rate Structures – Easy to understand
and administer
Declining Block Rate Structures – Can
create the most revenue stability
Inclining Block Rate Structures –
◦ Usually a 25% rate differential in blocks for
customers to respond
Distributed Energy Resources
17
Declining block rates
◦ Create more financial stability for the utility
◦ Recover fixed customer charges quickly
Declining block rates also
◦ Do not generally reflect marginal costs of power
production
◦ Do not promote energy conservation
◦ Reduce the savings to customers who
implemented energy efficiency programs
◦ Do not address social concern over impact on low
use customers
Many inclining block rate structures shifted
too much of the fixed cost recovery into
latter blocks adversely impacting utility
financial statements
◦ Cannot cost justify large rate block differentials
◦ Large differential may result in under-recovery
of costs if customers respond
Many utilities are modifying or flattening the
rate steps
20
Coincident Peak
Demand
Winter Summer
On Peak Off Peak On Peak Off Peak
Energy
Winter Summer
T-O-U On Peak Off Peak On Peak Off Peak
Differentiated
Non-Time
Differentiated
Seasonal
Differentiated
• Seasonal
– Winter
– Summer
• Time of Use (TOU)
– On peak
– Off peak
21
For Time of Day or Seasonal Periods
◦ The number of periods should be feasible to
administer
◦ Hours and months having similar costs should be
combined into groups
◦ The periods chosen should be broad enough to
allow for shift in loads
22
15.00
25.00
35.00
45.00
55.00
65.00
75.00
85.00
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Average Usage by Season and Hour (MWh's)
S W INTER2 INTER4
Winter ON-PEAK : 8am-9pm
Summer ON-PEAK : 12pm-8pm
23
Advantages
◦ More closely tracks costs
◦ Gives price signals brackets
Disadvantages
◦ Metering
◦ Require more customer attention
◦ Cost differential between time periods may not be large
enough to off-set administration/billing costs
24
Advantages
◦ Generally tracks production or purchased power supply
costs
◦ Improved price signal
◦ Generally simple to administer
Disadvantages
◦ Budget Billing option hides price signal
Correct during rate changes
Revenue neutral rate adjustment when increases
are not required
◦ Customer charge increased
◦ Energy charge decreased
Set a plan to move in increments over time
Look at impact by usage and dollar
27
Current Rates Proposed 2014 Rates Cost of Service Rates
Monthly Customer Charge: Monthly Customer Charge: Monthly Customer Charge:
All Customers $ 6.80 All Customers $ 16.83 All Customers $ 16.83
Energy Charge: Energy Charge: Energy Charge:
Winter Block 1 (0 - 1000 kWh) $ 0.0744 Winter Block 1 (0 - 1000 kWh) $ 0.0685 Winter $ 0.0750
Winter Block 2 (1001 - Excess kWh) $ 0.0700 Winter Block 2 (1000 - Excess kWh) $ 0.0685 Summer $ 0.0890
Summer Block 1 (0 - 1000 kWh) $ 0.0744 Summer Block 1 (0 - 1000 kWh) $ 0.0800
Summer Block 2 (1001 - Excess kWh) $ 0.0700 Summer Block 2 (1000 - Excess kWh) $ 0.0800
Fuel Adjustment(PCA) (0 - 0 kWh) $ 0.01862 Fuel Adjustment(PCA) (0 - 0 kWh) $ -
Revenues from Current Rates $ 4,597,848 Revenues from Proposed Rates $ 4,598,664 COS Revenues $ 4,915,075
Model Proof to Financial Statements 0.23% Percentage Change from Current 0.02%
-15%
-10%
-5%
0%
5%
10%
15%
300 450 600 750 900 1050 1200 1350 1500
Percent Change
Customer Bill Impacts for Residential - In Proposed 2014 Rates
Monthly Billed kWh's or Load Factor
29
Current Rates Proposed 2014 Rates Cost of Service Rates
Monthly Customer Charge: Monthly Customer Charge: Monthly Customer Charge:
All Customers $ 6.80 All Customers $ 8.30 All Customers $ 16.83
Energy Charge: Energy Charge: Energy Charge:
Winter Block 1 (0 - 1000 kWh) $ 0.0744 Winter Block 1 (0 - 1000 kWh) $ 0.0880 Winter $ 0.0750
Winter Block 2 (1001 - Excess kWh) $ 0.0700 Winter Block 2 (1000 - Excess kWh) $ 0.0880 Summer $ 0.0890
Summer Block 1 (0 - 1000 kWh) $ 0.0744 Summer Block 1 (0 - 1000 kWh) $ 0.0930
Summer Block 2 (1001 - Excess kWh) $ 0.0700 Summer Block 2 (1000 - Excess kWh) $ 0.0930
Fuel Adjustment(PCA) (0 - 0 kWh) $ 0.01862 Fuel Adjustment(PCA) (0 - 0 kWh) $ -
Revenues from Current Rates $ 4,597,848 Revenues from Proposed Rates $ 4,598,313 COS Revenues $ 4,915,075
Model Proof to Financial Statements 0.23% Percentage Change from Current 0.01%
-5%
-3%
-1%
1%
3%
5%
300 450 600 750 900 1050 1200 1350 1500
Percent Change
Customer Bill Impacts for Residential - In Proposed 2014 Rates
Monthly Billed kWh's or Load Factor
Whenever subsidies occur, it will cause problems in the
future.
◦ Customer relied on the price signal to install the solar
◦ At some point the subsidy will need to be removed
Billing and Metering Options (Depend on metering and
billing capabilities) for avoided cost recovery
Comparison with Utility that Purchases Power Supply
PV unit installation – 5kW
Midwest PV Unit – 2013 data
PV production – 725 kWh
Customers Peak Distribution Demand – Before PV –
5.16 kW; after PV 3.59 kW
Customer Peak to System Demands – Before PV 2.11
Net metering with additional charge for distribution
recovery
◦ Difference between what is taken off and what is pushed onto the
distribution system is billed. (e.g. 1,000 taken, 600 pushed, 400 billed)
◦ Additional charge for distribution under recovery
◦ Can be negatively viewed by customer, “why am I paying more?’
Buy all sell all (two meters)
◦ Difference between what a household consumed and what was pushed
back onto the distribution system is billed. (e.g. 1,000 taken, 600
pushed, 800 produced - solar metered separately)
◦ House used 1,200 (1,000+800-600)
◦ Billed retail at 1,200; credited avoided cost at 800
Net Billing
◦ Charge for what is taken off of the system and credit for what was
pushed back. (e.g. 1,000 taken, 600 pushed
◦ Billed retail at 1 000 and avoided cost credit at 600
Small periodic increases to keep up with inflation
◦ 0-5% - inflationary
◦ 5-9% - a few large industrials
◦ Double digits = complaints
Phase in large increases over time
When possible, implement Increases in the transition month
=Transparent
Survey of local rates (positive and negative)
Structure apple to apples?
Dawn Lund
Vice-President
Utility Financial Solutions
231-218-9664
September 19, 2016 Page 1
COUNCIL FINANCE COMMITTEE
AGENDA ITEM SUMMARY
Staff: Mike Beckstead and Lawrence Pollack
Date: September 19, 2016
SUBJECT FOR DISCUSSION
First Reading of Ordinances No. , 2016, Appropriating Prior Year Reserves and Unanticipated Revenue
in Various City Funds and Authorizing the Transfer of Appropriated Amounts between Funds or Projects.
EXECUTIVE SUMMARY
The purpose of this Annual Budget Adjustment Ordinance is to combine dedicated and unanticipated
revenues or reserves that need to be appropriated before the end of the year to cover the related
expenses that were not anticipated and, therefore, not included in the 2016 annual budget appropriation.
The unanticipated revenue is primarily from fees, charges, rents, contributions and grants that have been
paid to City departments to offset specific expenses.
GENERAL DIRECTION SOUGHT
What questions do Council Finance Committee members have about the specific items included in the
Annual Budget Adjustment Ordinance?
BACKGROUND/DISCUSSION
This Ordinance appropriates prior year reserves and unanticipated revenue in various City funds, and
authorizes the transfer of appropriated amounts between funds. The City Charter permits the City
Council to provide, by ordinance, for payment of any expense from prior year reserves. The Charter also
permits the City Council to appropriate unanticipated revenue received as a result of rate or fee increases
or new revenue sources. Additionally, it authorizes the City Council to transfer any unexpended
appropriated amounts from one fund to another upon recommendation of the City Manager, provided that
the purpose for which the transferred funds are to be expended remains unchanged; the purpose for
which they were initially appropriated no longer exists; or the proposed transfer is from a fund or capital
project account in which the amount appropriated exceeds the amount needed to accomplish the purpose
specified in the appropriation ordinance.
If these appropriations are not approved, the City will have to reduce expenditures even though revenue
and reimbursements have been received to cover those expenditures.
The table below is a summary of the expenses in each fund that make up the increase in requested
appropriations. Also included are intra-fund transfers which do not increase total appropriations, but per
the City Charter require City Council approval to make the transfer. A table with the specific use of prior
year reserves appears at the end of the AIS.
September 19, 2016 Page 2
A. GENERAL FUND
1. Fort Collins Police Services (FCPS) has received revenue from various sources which are being
requested for appropriation to cover the related expenditures. A listing of these items follows:
a. $7,000 – In 2016 Police received a grant award from the Internet Crimes Against Children from
the U.S. Department of Justice, Office of Juvenile and Delinquency Prevention. The funding was
used to offset some of the costs of programs to develop effective responses to technology-
facilitated child sexual exploitation and Internet crimes against children.
b. $4,940 – 2016 Seatbelt Grant - In 2016, Fort Collins Police received a grant from the Colorado
Department of Transportation for Seatbelt Enforcement. The grant paid for officers to work
overtime to conduct enforcement activities.
c. $12,036 – 2016 High Visibility DUI Grant – In 2016, Fort Collins Police received grant funds from
the Colorado Department of Transportation to pay for overtime for DUI enforcement during
specific holiday time periods.
d. $7,788 – 2016 Law Enforcement Assistance Funds (LEAF) DUI Grant - In 2016, Fort Collins
Police received grant funds from the Colorado Department of Transportation to pay for overtime
for DUI enforcement.
e. $500 – 2016 Victim Assistance and Law Enforcement (VALE) Grant - In 2016, Fort Collins Police
received grant funds from the Colorado Division of Criminal Justice, Department of Public Safety
for a scholarship for travel expenses for victims’ advocates.
f. $192,226 – Police Overtime and Straight Time Reimbursement - In 2016, Police Services
received reimbursement from various entities for overtime expenses including: CSU football
traffic control, Tour De Fat, Brew Fest and New West Fest. Additionally, in 2016 FCPS partnered
with Larimer County to staff events at The Ranch.
g. $370,616 - Larimer County Share of CRISP Maintenance Costs - The IGA between The City of
Fort Collins and Larimer County states that Larimer County will pay for 50% of the annual
maintenance agreement for the Tiburon/CAD system. In prior years, the city only expensed half
the contract cost, as that was the net expense to the City. Starting with 2015, the City recognized
Funding Unanticipated
Revenue
Prior Year
Reserves
Transfers
between
Funds
TOTAL
General Fund $1,194,410 $2,093,657 $0 $3,288,067
Sales & Use Tax Fund 0 2,137,074 0 2,137,074
Capital Projects Fund 121,591 0 0 121,591
Cemetery Fund 5,000 0 0 5,000
Conservation Trust Fund 220,000 0 0 220,000
Equipment Fund 123,200 0 0 123,200
Natural Areas Fund 20,000 0 1,068,537 1,088,537
Neighborhood Parkland Fund 92,458 0 0 92,458
Perpetual Care Fund 0 0 5,000 5,000
Storm Drainage Fund 19,556 0 0 19,556
Transit Services Fund 69,000 0 0 69,000
Transportation Fund 725,000 0 0 725,000
Transportation Fund (Snow Removal) 0 875,000 0 875,000
Water Fund 390,491 0 0 390,491
GRAND TOTAL $2,980,706 $5,105,731 $1,073,537 $9,159,974
September 19, 2016 Page 3
the full expense for the contract, as well as the revenue from the county. This change was made
after the adoption of the 2016 budget, therefore additional appropriation is requested to allow the
City to pay the full amount.
h. $153,347 – Insurance Claim Proceeds - The FCPS received unanticipated revenue from
insurance claims for three damaged vehicles.
FROM: Unanticipated Revenue (Internet Crimes Against Children Grant) $7,000
FROM: Unanticipated Revenue (2016 Seatbelt Grant) $4,940
FROM: Unanticipated Revenue (2016 High Visibility DUI Grant) $12,036
FROM: Unanticipated Revenue (2016 LEAF DUI Grant) $7,788
FROM: Unanticipated Revenue (2016 VALE Grant) $500
FROM: Unanticipated Revenue (Miscellaneous Revenue) $562,842
FROM: Unanticipated Revenue (Insurance Proceeds) $153,347
FOR: Internet Crimes Against Children Grant $7,000
FOR: Seatbelt Grant $4,940
FOR: High Visibility DUI Grant $12,036
FOR: LEAF DUI Grant $7,788
FOR: VALE Grant $500
FOR: Police Services $192,226
FOR: Tiburon/CAD system $370,616
FOR: Police Vehicle Purchases $153,347
2. Operation Services is requesting funds for:
a. $36,125 – Energy Management - Funds were received as a lighting rebate from Platte River
Power Authority and will be used for lighting upgrade projects this year.
b. $200,000 - Building Repair and Maintenance (BRM) Additional Revenue and Expense -
Unanticipated revenue from work that was not planned in non-general fund departments.
FROM: Unanticipated Revenue (PRPA Grant) $36,125
FROM: Unanticipated Revenue (BRM) $200,000
FOR: Lighting Upgrade Projects $36,125
FOR: Building Repair and Maintenance $200,000
3. This request is to appropriate $699,126 to cover the payment of 2014 Manufacturing Equipment
Use Tax rebates (MUTR) made in 2016 and $1,380,231 to cover the payment of 2015 MUTR made in
2016. In accordance with Chapter 25, Article II, Division 5, Manufacturing Equipment Use Tax Rebates
were paid out in July 2016 for the 2014 rebate program and will be paid out for the 2015 rebate program
later in 2016. The rebate program was established to encourage investment in new manufacturing
equipment by local firms. Vendors have until December 31st of the following year to file for the rebate.
This item appropriates the use tax funds to cover the payment of the rebates.
FROM: Prior Year Reserves (Manufacturing Use Tax Rebate) $2,079,357
FOR: Manufacturing Use Tax Rebates $2,079,357
4. This request appropriates insurance reimbursements for Parks infrastructure damaged by others
during 2016 ($15,497) and the donation for the 4th of July celebration at City Park ($23,000).
FROM: Unanticipated Revenue $38,497
FOR: Parks 4P
th
P of July celebration expense $23,000
FOR: Repair and/or replacement of damaged infrastructure expense $15,497
September 19, 2016 Page 4
5. The Gardens on Spring Creek requests appropriations of unanticipated revenues from increased
program activity such as the Spring Plant Sale and Youth Summer Camps, and increased donations due
to the popularity of the Gardens. Appropriations are needed for the additional cost of expanded programs
including staffing, supplies, credit card fees, etc.
FROM: Unanticipated Revenue $52,000
FOR: Gardens on Spring Creek Programs and Operations $52,000
6. Environmental Services sells radon test kits at cost as part of its program to reduce lung cancer
risk from in-home radon exposure. This appropriation would use test kit sales revenue for the purpose of
restocking radon test kits.
FROM: Unanticipated Revenue (from radon kit sales) $5,942
FOR: Radon Test Kits $5,942
7. This request is intended to cover expenses related to land bank property maintenance needs for
2016. As expenses vary from year-to-year, funding is requested annually mid-year to cover these costs.
Expenses for 2016 include general maintenance of properties, raw water and sewer expenses, and
electricity.
FROM: Prior Year Reserves (Land Bank Reserve) $14,300
FOR: Land Bank Expenses $14,300
8. The Fort Collins Convention and Visitors Bureau (FCCVB) has been awarded an $87,764 grant
from the Colorado Welcome Center through the State of Colorado. These funds will be disbursed by the
State of Colorado and directed through the City of Fort Collins, pursuant to State of Colorado
requirements, then paid to the FCCVB. The grant period will run from July 1, 2016 through June 30,
2017.
FROM: Unanticipated Revenue (grant) $87,764
FOR: Fort Collins Convention and Visitors Bureau $87,764
9. The City received two separate metropolitan district applications for its review and consideration.
As per City policy, each application was accompanied by a non-refundable application fee of $2,000 and
a deposit of $10,000 to be utilized for the reimbursement of staff, legal and consultant expenses. In order
for the funds to be used as such they must be appropriated by City Council.
FROM: Unanticipated Revenue $24,000
FOR: Fort Collins Convention and Visitors Bureau $24,000
10. The Multicultural Community Retreat in 2016 will be hosted by the City of Fort Collins Social
Sustainability Department, Colorado State University, Front Range Community College, Fort Collins
Community Action Network (FCCAN), Poudre School District, Diversity Solutions Group, and community
members. The City collected participant revenue for the retreat, which will partially offset event
expenses.
FROM: Unanticipated Revenue $1,590
FOR: Multicultural Community Retreat Expense $1,590
September 19, 2016 Page 5
B. SALES AND USE TAX FUND
1. The sales and use tax revenue received in 2015 was higher than projected and existing
appropriations were not adequate to make the full transfer from the Sales and Use Tax Fund to the
Capital Projects Fund for the one quarter cent Building on Basics tax, and to the Natural Areas Fund for
the one quarter cent Natural Areas tax. Adjustments to other funds are not needed because the tax
revenues are recorded directly into those funds. This item appropriates additional funds in the amount of
$2,137,074 from prior year reserves for transfer from the Sales and Use Tax Fund to the Capital Projects
Fund for the Building on Basics tax of $1,068,537, and for transfer to the Natural Areas Fund for the
Natural Areas tax of $1,068,537.
FROM: Prior Year Reserves (Sales & Use Tax Fund) $2,137,074
FOR: Transfer to Capital Projects Fund - Building on Basics $1,068,537
FOR: Transfer to Natural Areas Fund $1,068,537
C. CAPITAL PROJECTS FUND
1. As part of the Lincoln Avenue Improvements Project, additional funds have been received from
two developers, Fort Collins Brewery and Buckingham Place 2nd filing, lots 1 & 2, as payment to
construct the local street improvements for Lincoln Avenue adjacent to Fort Collins Brewery and
Buckingham Place 2nd filing, lots 1 & 2.
FROM: Unanticipated Revenue (Contributions in Aid) $101,057
FOR: Construction of local street improvements for Lincoln Ave. $101,057
adjacent to Fort Collins Brewery and Buckingham Place 2nd filing, lots 1 & 2.
2. As part of the North College Avenue Improvements Project, additional funds have been received
from the property owner at 920 N. College Ave., as payment to construct the local street improvements
for North College Avenue adjacent to 920 N. College Ave.
FROM: Unanticipated Revenue (Contributions in Aid) $20,266
FOR: Construction of local street improvements for the North College Avenue $20,266
adjacent to 920 N. College Ave.
D. CEMETERY FUND
1. This request appropriates an increase in the transfer of Perpetual Care interest earnings to the
Cemetery Fund due to interest earnings being slightly higher than anticipated in 2016. Perpetual Care
interest earnings are transferred to the Cemetery Fund for cemetery maintenance.
FROM: Unanticipated Revenue (transfer from another fund) $5,000
FOR: Cemetery Maintenance Expense $5,000
E. CONSERVATION TRUST FUND
1. Additional 2016 lottery proceed revenue in the Conservation Trust Fund would be used for the
construction of the Fossil Creek Trail segment between College and Shields. The project includes a
tunnel under the BNSF railroad, several pedestrian bridges, and a trail segment that will provide a key
connection between the Fossil Creek Trail at Cathy Fromme Prairie and the Mason Trail.
FROM: Unanticipated Revenue $220,000
FOR: Trail Construction Expenses $220,000
September 19, 2016 Page 6
F. EQUIPMENT FUND
1. Appropriation of unanticipated grant revenue from the Regional Air Quality Council to purchase
compressed Natural Gas vehicles: two semi-tractors, one tandem dump truck, and two Utility Line trucks.
The total amount of grant funding is $123,200 with a 20% match covered by the departments’ existing
appropriations.
FROM: Unanticipated Revenue (grant) $123,200
FROM: CNG Vehicles $123,200
G. NATURAL AREAS FUND
1. The sales and use tax revenue received in 2015 was higher than projected and existing
appropriations were not adequate to make the full transfer from the Sales and Use Tax Fund to the
Natural Areas Fund for the one quarter cent Natural Areas tax. (See Sales & Use Tax Fund Item #1)
This item appropriates funds in the amount of $1,068,537 transferred from the Sales and Use Tax Fund
to the Natural Areas Fund for Land Conservation expenses.
FROM: Unanticipated Revenue (transfer from another fund) $1,068,537
FOR: Natural Areas Expenses $1,068,537
2. The City of Fort Collins Natural Areas Department has been awarded a grant of $10,000 from the
History Colorado State Historical Fund. This grant supports the research, analysis, and preparation of a
Historic Structure Assessment for Graves Camp near Graves Creek in the Soapstone Prairie Natural
Area. The findings of the report will guide future restoration work and will enable the Natural Areas
Department to seek additional funding to implement recommended improvements. This is a
reimbursement type grant; revenue will be received upon submission of the final report.
FROM: Unanticipated Revenue (grant) $10,000
FOR: Historic Structure Assessment for Graves Camp $10,000
3. Appropriation of funds from the Downtown Business Association and the Community Foundation
to support fundraising activities on behalf of the Poudre River Downtown Project, Phase I, kayak park.
Fundraising is complete.
FROM: Unanticipated Revenue $10,000
FOR: Poudre River Downtown Project, Phase I, kayak park $10,000
H. NEIGHBORHOOD PARKLAND FUND
1. This request appropriates miscellaneous revenue from contributions, donations and
intergovernmental funds received for Avery Park Improvements, Maple Hill Park and Side Hill Park.
FROM: Unanticipated Revenue (Transfer In) $92,458
FOR: Avery Park, Maple Hill Park and Side Hill Park Expenses $92,458
I. PERPETUAL CARE FUND
1. This request appropriates an increase in the transfer of Perpetual Care interest earnings to the
September 19, 2016 Page 7
Cemetery Fund due to interest earnings being higher than anticipated in 2016. Perpetual Care interest
earnings are transferred to the Cemetery Fund each for cemetery maintenance.
FROM: Unanticipated Revenue $5,000
FOR: Transfer to Cemetery Fund $5,000
J. STORM DRAINAGE FUND
1. The City of Fort Collins, the Colorado Department of Transportation (CDOT) and Woodward, Inc.
entered into a mutually beneficial agreement to jointly fund the consulting services necessary to prepare
and submit a Letter of Map Revision to the Federal Emergency Management Agency (FEMA) to revise
the Poudre River floodplain from Lincoln Avenue to Lemay Avenue. This floodplain revision will account
for and document floodplain impacts resulting from construction of the Woodward Business
Campus/Homestead Natural Area, the Mulberry (State Highway 14) Street Widening and Bridge
Replacement, the Lemay Pedestrian Trail/Bridge Re-alignment and the Lemay Avenue Overtopping
Mitigation Improvements. The City is contracting with the engineering consultant and CDOT is
reimbursing the City for CDOT’s share ($19,556) of the consulting and FEMA review fees which totals
$48,890.
FROM: Unanticipated Revenue (CDOT reimbursement) $19,556
FOR: Consulting and FEMA fees for Poudre River Floodplain $19,556
K. TRANSIT SERVICES FUND
1. Transfort has entered into an agreement with CSU to provide additional service for the Foothills
Campus Shuttle. This request will fund the first half of the 2016-2017 school year.
FROM: Unanticipated Revenue (CSU) $69,000
FOR: Foothills Campus Shuttle Bus Route Service $69,000
L. TRANSPORTATION SERVICES FUND
1. As part of the Fort Collins Bike Share Program, Kaiser Permanente committed to sponsoring the
program at $25,000 for one year, with the possibility of renewing for a second year. Kaiser Permanente is
directing its sponsorship to Zagster, Inc. (bike share service provider) through the City. This $25,000
contribution will support three bike share stations, 13 bikes and helmets.
FROM: Unanticipated Revenue (grant) $25,000
FOR: FC Bike Share Program $25,000
2. The Planning, Development and Transportation Work for Others is a self-supported program for
all “Work for Others” activities within Streets, Traffic and Engineering. Expenses are tracked and billed
out to other city departments, Poudre School District, CSU, CDOT, Larimer County, developers and other
public agencies. The original budget of $2,217,369 was an estimate based on scheduled projects.
Additional unanticipated projects were added in 2016. In addition, the Streets Department is anticipating
traffic control and patching projects for other departments similar to 2015. Additional appropriations of
$700,000 will be used to cover labor, material and equipment costs that will be recovered upon
completion of the various projects.
FROM: Unanticipated Revenue (WFO) $700,000
FOR: Traffic Construction $100,000
FOR: Streets WFO $600,000
September 19, 2016 Page 8
3. Due to the snow storms in January, February and March 2016, the 2016 snow budget has been
depleted. There were five storms and approximately 47" of snow in this timeframe which required
residential plowing for the first time since 2007. Extensive ice cutting was required because of the
weather pattern. Warmer days, bitter cold nights, and waves of snow every few days caused ice to build
up in gutters blocking drainage and causing ice dams and ice potholes. Clearing sidewalks and
pedestrian access ramps also significantly impacted the snow removal budget with an increase of 62%
from 2015. Downtown snow removal was performed five times requiring snow to be hauled off by
trucking contractors. Additional funding of $875,000 will be used to provide snow removal services
during the winter months of October through December 2016. This will cover labor, equipment and
materials.
FROM: Prior Year Reserves $875,000
FOR: Snow Removal $875,000
M. WATER FUND
1. Water received $390,491 of additional revenue from the Parks Department for the Rigden
Reservoir project that needs to be appropriated for Water Supply projects in 2016.
FROM: Unanticipated Revenue $390,491
FOR: for Water Supply Projects $390,491
FINANCIAL / ECONOMIC IMPACTS
This Ordinance increases total City 2016 appropriations by $9,159,974. Of that amount, this Ordinance
increases General Fund 2016 appropriations by $3,288,067 including use of $2,093,657 in prior year
reserves. Funding for the total City appropriations is $2,980,706 from unanticipated revenue, $5,105,731
from prior year reserves and $1,073,537 transferred from other funds.
The following is a summary of the items requesting prior year reserves:
ATTACHMENTS
Attachment #1 – Presentation to City Council Finance Committee
Item # Fund Use Amount
A3 General Manufacturing Equipment Use Tax Rebate $2,079,357
A7 General Land Bank Property Maintenance 14,300
B1 Sales & Use Tax Transfer of 2015 sales tax revenue for BOB & Natural
Areas
2,137,074
K4 Transportation Snow Removal 875,000
Total Use of Prior Year Reserves: $5,105,731
2016 Annual Adjustment Ordinance
Mike Beckstead - CFO
September 19, 2016
Attachment #1
2016 Annual Adjustment Ordinance
2
The recommended 2016 Annual Adjustment
Ordinance is intended to address:
• 2016 unanticipated revenues (e.g. grants)
• Appropriation of unassigned reserves to fund unanticipated
expenditures associated with approved 2016 appropriations
• Should be routine and non-controversial
• Items approved by the ordinance need to be spent within the
calendar year (i.e. by December 31, 2016)
3
City-wide Ordinance No. , 2016 increases total
City 2016 appropriations by $9,159,974
• This Ordinance increases General Fund 2016 appropriations by
$3,288,067 including the use of $2,093,657 in prior year reserves
• Funding for the total City appropriations is:
o $2,980,706 from additional revenue
o $5,105,731 from prior year reserves
o $1,073,537 transferred between funds
2016 Annual Adjustment Ordinance
2016 Annual Adjustment Ordinance
Offer Summary
4
Funding Unanticipated
Revenue
Prior Year
Reserves
Transfers
between
Funds
TOTAL
General Fund $1,194,410 $2,093,657 $0 $3,288,067
Sales & Use Tax Fund 0 2,137,074 0 2,137,074
Capital Projects Fund 121,591 0 0 121,591
Cemetery Fund 5,000 0 0 5,000
Conservation Trust Fund 220,000 0 0 220,000
Equipment Fund 123,200 0 0 123,200
Natural Areas Fund 20,000 0 1,068,537 1,088,537
Neighborhood Parkland Fund 92,458 0 0 92,458
Perpetual Care Fund 0 0 5,000 5,000
Storm Drainage Fund 19,556 0 0 19,556
Transit Services Fund 69,000 0 0 69,000
Transportation Fund 725,000 0 0 725,000
Transportation Fund (Snow Removal) 0 875,000 0 875,000
Water Fund 390,491 0 0 390,491
GRAND TOTAL $2,980,706 $5,105,731 $1,073,537 $9,159,974
5
2016 Annual Adjustment Ordinance
Larger Requested Amounts
General
Fund
Sales &
Use Tax
Fund
Transpor-
tation
Fund
Other TOTAL
Manufacturing Equipment Use Tax Rebate $2.1 $2.1
Sales & Use Tax Fund - BOB & Natural Areas
Transfer
2.1 2.1
Traffic Construction - additional revenue from
Work for Others (WFO)
0.7 0.7
Snow Removal 0.9 0.9
Sub-Total $2.1 $2.1 $1.6 $0.0 $5.8
All Other Recommended Items 1.2 - 0.0 2.1 3.4
$3.3 $2.1 $1.6 $2.1 $9.2
Offer
TOTAL
6
Questions
2016 Annual Adjustment Ordinance