HomeMy WebLinkAboutAgenda - Mail Packet - 10/16/2018 - Council Finance & Audit Committee Agenda - October 15, 2018Finance Administration
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AGENDA
Council Finance & Audit Committee
October 15, 2018
10:00 am - noon
CIC Room - City Hall
Approval of Minutes from the September 17P
th
P Council Finance Committee meeting.
1. Utility Rate Increases 30 minutes L. Smith
2. Infrastructure Financing 20 minutes B. Dunn
Other Business:
State Amendment 73 Revenue Impact
Council Finance Committee
Agenda Planning Calendar 2018
RVSD 10/03/18
Oct 15th
Utility Rate Increases 30 min L. Smith
Infrastructure Financing 20 min B. Dunn
Nov 19th
Airport Lease Review 20 min J. Licon
GERP Review 15 min B. Dunn
Financial Management Policy Review 30 min J. Voss
Internet Sales Tax – Work Plan 20 min J. Poznanovic
State Amendment 73 – Revenue Impact 20 min M. Beckstead
Dec 17th
Metro District Policy Updates 30 min J. Birks
Jan 28th
Future Council Finance Committee Topics:
• Revenue Contingency Plan Review
Finance Administration
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2nd Floor
PO Box 580
Fort Collins, CO 80522
970.221.6788
970.221.6782 - fax
fcgov.com
Finance Committee Meeting Minutes
09/17/2018
10 am - noon
CIC Room - City Hall
Council Attendees: Mayor Wade Troxell, Ross Cunniff, Ken Summers (via phone)
Staff: Darin Atteberry, Kelly DiMartino, Jeff Mihelich, Mike Beckstead, Wendy Williams, John
Duval, Ginny Sawyer, Laurie Kadrich, Noelle Currell, Tim Kemp, Kyle Lambrecht, Jennifer
Poznanovic, Lawrence Pollack, Tyler Marr, Katie Ricketts, Andres Gavaldon, Zack Mozer,
Lance Smith
Others: Fee Working Group members; Diane Cohn, Will Flowers, Linda Stanley, Ragan Adams,
Rebecca Hill, Doug Braden and Moira Bright.
Dale Adamy, R1ST.org, Kevin Jones, Chamber of Commerce, Rusty McDaniel, Asst.
Larimer County Engineer, Traci Shambo, Larimer County Development Review Manager
____________________________________________________________________________________
Meeting called to order at 10:06 am
Approval of Minutes from the August 20P
th
P Council Finance Committee Meeting and the Special Council Finance
Committee Meeting on September 5P
th
P. Ross Cunniff move for approval of minutes from both meetings. Mayor
Troxell seconded the motions. Minutes were approved unanimously.
A. Fee Review - Fee Team Report - Total Impact
Jennifer Poznanovic, Revenue & Project Manager
SUBJECT FOR DISCUSSION
Impact Fee Working Group Findings & Recommendations
EXECUTIVE SUMMARY
Since the fall of October 2016, staff has worked to coordinate the process for updating all new development
related fees that require Council approval. The 2017 CEFs and TCEFs full fee proposals showed significant
increases from the previously approved fees. Due to the concern in the development and building community
around impact fee changes, Council asked for a fee working group to be created to foster a better understanding
of impact fees prior to discussing further fee updates.
The fee working group meetings commenced in August of 2017, comprised of a balanced group of stakeholders
– City staff, business-oriented individuals, citizens and a Council liaison. The group met 14 times, and the topics
covered included: detailed review of fee methodologies, inputs, calculations, City revenue sources, alternative
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revenue sources, academic economic research on impact fees, a third-party impact fee audit review and impact
fee comparisons to other communities.
Below is a summary of the key findings from the Fee Working Group position paper:
• Bringing impact fees together for review and formation of the fee working group has been beneficial to
better understand the full impact of Council approved impact fees for new development.
• The group acknowledges overall sound methodologies, calculations and inputs.
• The third-party fee audit revealed that the City manages impact fee expenditures very well. how the City
spends and collects impact fees is sound.
• Regarding economic data, the group agrees that amenities paid for through impact fees add to property
value, but views differ as to what extent they impact demand and supply. Academic research showed
that home price increases in growing areas are mainly demand driven.
• The group agreed that impact fees are complicated and difficult to communicate across the community.
They recommend better messaging to stakeholders and the general public.
• In the 2017 study, park impact fees increased more than other impact fees due to increases in the costs
of land, water and construction. These fees are the only category where impact fees pay for 100
percent of what is built.
• The group acknowledges the need to identify new revenue sources for park refresh and maintenance.
• If council approves lower fees than the staff recommendation, alternative revenue sources will be
needed. If Council goes this direction, it will be for the community to decide what alternatives to pursue.
GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED
Next Steps:
• November 13P
th
P: Council Work Session
• December 4P
th
P & 18P
th
P: Ordinance readings
• 2019: Utility Fees, Development Fees & Step III for CEFs
Feedback & Questions from Council Finance Committee
BACKGROUND/DISCUSSION
• Impact Fee Working Group Position Paper
• 3P
rd
P Party Impact Fee Audit
Discussion / Next Steps:
Mike Beckstead; team validated that our fees are so complex - hard to convey details in a meaningful way in a
20 minute presentation. Challenge of what we are still faced with is how to communicate this to the
community.
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Question came out of discussion was -how we use the fees and expenditures
Through detail analysis we agreed that $130K was misapplied due to a misunderstanding – they thought park
impact fees could be used to put new things in existing parks.
Ross Cunniff; we talked about that at a Council meeting.
Darin Atteberry; really important - we did discuss it but it requires more context. Mike, can you take a few
minutes and provide some background.
Mike Beckstead; This was a combination of the Building Board and Board of Realtors - they received a grant of
$25K and hired a company out of Phoenix to do the audit review. They asked for 5 years of revenue coming into
capital expansion and funds coming out - peer review / audit of the way we calculate, collect and spend fees -
they looked at 5 years of data which included approximately $54M in total – they spent quite a bit of time with
it and we provided written responses to each of their concerns. Code says it ok to use fees for overhead costs in
parks planning but there was a philosophy that they would prefer that not to be -they did acknowledge that is
the way code is written so that is an acceptable way to use fees. With that summary, we provided the report
back to the Board of Realtors and the Building Board – they reviewed and agreed that it should be shared in this
report and publicly. It was a very appropriate and very meaningful action which very strongly validates the
integrity of our systems.
Ross Cunniff; best practice going forward - fee collections - we did find .25% and now we can take action to
rectify that - keep everything above board
Darin Atteberry; how do we fold in an outside review similar to what was done here? I see this as good news
and it should be shared. Thanks to all of the team members doing this on a daily basis.
As Ross said - we move forward with this lesson learned - to have some sort of review like this every x number of
years
Mike Beckstead; we will figure out how to integrate that into the schedule that Jennifer discussed earlier –
maybe after the next cycle of fee inputs in 2021 -
Mayor Troxell; how specialty is this type of audit? Could this be part of our regular fiscal audit?
Mike Beckstead; we could look into that.
Mike Beckstead; the economic data looks at communities that allow amenities to be built - amenities are part
of what creates the flywheel of desire and value in a community - without these it becomes a less attractive
community so the multiplier esp on higher value homes – the value of fee adds to value of property to a greater
degree - this is the Policy choice of Council in terms how we pay for these – it clearly adds to the price of the
home too - it has a multiplier effect that is positive .
Mike Beckstead; as the team turned over a bit - Will and Doug stepped in and they shared
that they were hearing from their organizations that we were raising fees because we were on the low end of
the scale in the lower quadrant – somehow all of the work we did to show we were competitive was
misinterpreted and somehow got lost in that discussion.
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Ross Cunniff; one nuance – you could look at design of our parks and look at the implications on on-going
maintenance and refresh - change the master design - go back into the fee calculation
Mike Beckstead; we had a conversation a few years ago about a park maintenance fee - $1 per month per
resident which would help fund maintenance - set it aside – we did talk about a park maintenance fee and a
trail maintenance fee – those discussions - we may want to come back and have a conversation- do we want to
have a dedicated funding stream.
Back up slide below illustrates when impact fees are locked in – this addresses Ross Cunniff’s earlier request for
analysis - Permits - October timeframe - fees change - permit applications – active applications – rolling kind of
number
Ross Cunniff; we have to either build $600K less of amenities or have less in General Fund (time = money)
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Data has to back that up - more people in larger homes – 2015 census data would give us a higher slope on that
line - When we update CES again in 20 -21 that is something we would be looking at - expanding those
categories
Ross Cunniff; I read through the report – the duration of time that a house is supposed to be affordable - tie the
waiver to a better outcome – from a 20 - to 40-50 year horizon.
Mike Beckstead; there is a commission working on that - we will share this data with the Affordable Housing
Taskforce.
Mike Beckstead; The period of notification that fees are changing - we have been having this dialog for the last
2 ½ years – Council said let’s do this in steps - our communication with the community – there has been a 2 year
dialog going on so that notification has been occurring from our perspective – one of the feedbacks we are
going to hear from the community - to allow for more time to get ready for fee changes – that will be Council’s
call but that is what we are hearing in our outreach as feedback.
Mayor Troxell; fee stacking - is there some comparative analysis of overall fee stacking against other jurisdictions
Mike Beckstead; we didn’t bring it with us but we have been using that data - we look at how our fees and fee
stacking compare to other Front Range communities; Timnath, Wellington, Loveland and Fort Collins.
Ross Cunniff; using insurance industry standard saves community $$, productivity loss, yes, this adds to the fee
stack but we think impact on health and safety-
Mayor Troxell; it puts us in the lower half of the fee stack – looking at building, utility and capital
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Mike Beckstead; with this update we would be right in the middle – we don’t have cost of code included in this
comparison because we don’t know what their cost of code is. We looked at our cost of code over time –
median home prices – has been right in the 10% range
Ross Cunniff; I would like to add my thanks to the committee members and the staff who participated – I think it
ended up being a much more involved task than we thought it would be
Mayor Troxell; I add my thanks - this is an excellent piece of work with a lot of complexity - illustrates the kinds
of questions that were being asked by many over a long time are now answerable.
B. Partnership Fee Update – Regional Road Fee & School PILOs Update
Ginny Sawyer, Senior Project Manager
Kyle Lambrecht, Civil Engineer III
Tim Kemp, Interim Capital Projects Manager
EXECUTIVE SUMMARY
The purpose of this item is to present and discuss updates to the Larimer County Regional Road and School
District fees. These fees are considered “partnership” fees; fees collected by the City of Fort Collins on behalf of
Larimer County and the Poudre and Thompson School Districts, respectively.
The County has made fee adjustments to the Regional Road Fee which will need to be considered by the City
Council. Currently, adoption of the Regional Road Fee is aligned with the City’s Capital Expansion Fees which are
considered annually in December.
The School District agreements are set to expire on December 31, 2018. Staff from the City and each District
have been working on minor revisions to the Intergovernmental Agreements which will come before Council for
consideration, before the end of 2018.
GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED
1. Does the Council Finance Committee have any additional questions regarding the fees or the timing of
the updates?
BACKGROUND/DISCUSSION
URegional Road Fee
In 2000, the City and Larimer County entered into an Intergovernmental Agreement (IGA) authorizing the City to
collect a Regional Road Fee on behalf of Larimer County. The fee is collected at the time a building permit is
issued. The Regional Road Fee helps generate revenue for road improvements on regionally significant
roadways that are necessitated by new development. The fees are only used on capacity related improvements
that are of mutual benefit to both the City and Larimer County.
Since 2000, the City and Larimer County have partnered to design and construct several projects along regionally
significant roadways; including improvements to Taft Hill Road, Shields Street, and the Shields Street/Vine Drive
intersection. City and County staff continue to plan for future improvements, recognizing opportunities for
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additional improvements along regionally significant corridors. Since 2000, $6,023,061 in regional road fees has
been collected.
The Larimer County Land Use Code specifies that its Regional Road Fees must be updated annually to reflect
changes in road construction costs during the previous year. The updated fees typically become effective on the
first day of July. Unless a fee study recommends otherwise, the standard fee adjustment methodology is based
on a two-year moving average calculated from the Colorado Construction Cost Index data compiled by the
Colorado Department of Transportation. The most recent Regional Road Fee schedule formally adopted by the
City of Fort Collins was the 2015 fee schedule.
In April 2018, the County completed a study recommending changes to the program’s fee calculation
methodology, including:
• Basing transportation capital expansion fees for residential developments on dwelling size as opposed to
dwelling type.
• Revising the fee methodology to use Vehicle Miles Travelled (VMT) as the basis for determining impact,
instead of trips generated. This change more accurately ties the fee to demand on the transportation
system.
The use of vehicle miles traveled to determine impacts to a municipality’s transportation network is considered
a best management practice by the infrastructure financing strategies industry. This methodology shift results
in a new fee schedule for the Regional Road Fees:
Development Type 2018 Regional
Road Fee
2015 Regional
Road Fee
Increase or
Decrease
Percent
Change
Residential (per dwelling) by Finished Square Foot of Living Space
900 or less $163 $211 ($48) (23%)
901 to 1300 $228 $211 $17 8%
1301 to 1800 $275 $302 ($27) (9%)
1801 to 2400 $322 $302 $20 7%
2401 to 3000 $361 $302 $59 20%
3001 to 3600 $393 $302 $91 30%
3601 or more $420 $302 $118 39%
Non-Residential (per 1000 Square Feet of Floor Area)
Industrial $100 $257 ($157) (61%)
Commercial $422 $837 ($415) (50%)
Office & Other Services $248 $432 ($184) (43%)
In general, regional road fees for single family detached homes will increase while regional road fees for non-
residential developments will decrease. The revised Regional Road fees were adopted by Larimer County in July
2018.
Under the City Code, changes in the County fee schedule do not take effect in the City until the City Council
approves a new fee schedule. Currently, consideration for adoption of the partnership fees is aligned with
consideration for adoption of the City’s Capital Expansion Fees. City Capital Expansion Fees are considered for
adoption annually in December. The County is aware of this adoption schedule.
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USchool District Fees
In 1998, the City of Fort Collins and Thompson and Poudre School Districts entered into Intergovernmental
Agreements (IGAs) regarding land dedication for new developments, including a provision for fees-in-lieu of land
dedication.
Fees are based on a number of factors including school site size, student population projections, enrollment
capacities of each type of school (elementary, junior high and high schools), and the cost of developed land
within the school district. Site sizes and enrollment capacities are set by School District policy.
Both IGAs were set to expire in April 2018. City Council and each School Board adopted resolutions to extend the
agreements through December 31, 2018.
Staff have been working with each entity to review and update the IGAs. Currently no fee changes are
scheduled. The last Poudre School District fee review and change was in 2013. The last Thompson School district
fee review and change was in 2006.
Collections since 2000 are as follows:
Poudre School District Thompson School District
Paid Paid
Document Type PV Document Type PV
Row Labels
Sum of Actual
Amount Row Labels
Sum of Actual
Amount
2000 684,858 2000 47,810
2001 799,629 2001 82,104
2002 964,309 2002 184,386
2003 993,659 2003 292,402
2004 582,358 2004 163,948
2005 658,100 2005 150,284
2006 639,925 2006 4,782
2007 532,629 2007 5,571
2008 663,989 2008 55,891
2009 256,217 2009 51,728
2010 335,649 2010 35,393
2011 703,448 2011 21,780
2012 753,304 2012 164,714
2013 1,526,988 2013 107,540
2014 1,554,501 2014 70,786
2015 1,378,632 2015 21,537
2016 1,530,257 2016 5,688
2017 1,642,226 2017 21,780
2018 875,020 2018 5,445
Grand Total 17,075,697 Grand Total 1,493,571
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Discussion / Next Steps;
Mayor Troxell; County assumptions are probably different
Kyle Lambrecht; They use different factors / trip lengths
Mayor Troxell; APP - does that come out of this fee?
Ross Cunniff; my understanding if that APP comes out of the total cost
Mike Beckstead; my guess is $11m - 1% irrespective of funding source - Federal Projects can’t do APP and I am not
sure this is excluded
Ross Cunniff; Do you have a methodology on how you assess? Do we take into account the regional people using
this in addition to residents?
Tim Kemp; Rusty McDaniel and Traci Shambo are here from the County staff - How we are assessing how much
of the regional road fees go to projects. We are trying to accumulate as much as we can and put it to each project
- not based on a set methodology. Can we match a grant? How much is the County putting in?
Ross Cunniff; some are well outside the city limits - not used as much by city residents – my suspicion is that it
varies by project – the amount that we spend city versus regional -The future project of Horsetooth and Taft Hill
– very strongly city resident driven vs. Shields/Willox /287 - destinations outside city limits. Thinking ahead to
really big projects like Vine / Lemay overpass – we aren’t actually capturing the cost - we don’t have a mechanism
– the cost of the new regional buildout
Darin Atteberry; these capital projects are primarily -they are not typically expanded in the city limit
Vine / Lemay - lots of trips destined outside the city limits -Vine /Lemay is not part of the calculation
For regional - Point is a really good one – these facilities are heavily used by residents living inside and out of the
city limits / GMA. We should think about a more systematic approach to how we calculate these.
Each one of these projects is unique - a big sticky - I think it is important to have our normal methodology
documented – what is our starting point? so it is not a customized one off - having some sort of documentation
of what our process is – first and foremost, outside grants, state grants. We go through this process –
understanding the uniqueness of projects but this really should be standard operating policies round how we do
this
Ross Cunniff; we are not even coming close to recognizing the cost of the GMA - even with this fee structure
Darin Atteberry; includes this build out number – no different than the conversation about this is only their water
utility now – it is about water across the GMA – this isn’t only about the impact to the General Fund it is making
sure the facilities are being built to provide for future growth - that our vocabulary includes this
Mayor Troxell asked about comparables -who do we benchmark against - the other jurisdictions are considering
a broad impact fee - my understanding is - when you look at our stack – there has to be an * on part of it - we
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have been arguing this philosophy since this was put in place by Council – from a regional policy standpoint, It
doesn’t make sense that this isn’t occurring in other communities as well. Important to share that message back
That other jurisdictions don’t have these – results in less efficiency region wide.
Ross Cunniff; beyond efficiency - fairness is the driver
Darin Atteberry; if not this, what other mechanism is being used?
Mayor Troxell; GMA - it is a complete streets framework
Kyle Lambrecht; I can’t speak to County but I know with the City we do look at complete streets basing our costs
on complete. Regional roads - impact fees can only be used for capacity improvements including vehicles and
multimodal.
Tim Kemp; with the majority of these projects we did add bike lanes, curbs and gutters, sidewalks and intersection
improvements.
Ross Cunniff; would 287 sidewalks have been eligible?
Tim Kemp; that is on the CDOT right-of-way so we didn’t participate in that - city and county fee collection that
we share - City transportation capital expansion fee is adding to that project
Mayor Troxell; Do you mean wider street with paint or grade separated for bike lanes?
Tim Kemp; to date it has been a wider street with paint
Mayor Troxell; looking at Mulberry Street - grade separated - how do we go forward with a safer system?
What do we mean by complete streets? Where we are going with bike infrastructure?
Denver example in the RiNo District - a wider sidewalk up - marked with green - more of a bike / pedestrian realm
instead of bike / car. How do we get to that sort of thinking?
Tim Kemp; only a difference in terminology - we call them protected bike facilities - with our current standards –
our revised plans - example - Suniga between College and Blondel has a protected bike lane - peds and bikes are
up on sidewalks - we will continue to look at it with the County.
Mike Beckstead; hearing some follow up on documentation of methodology and how we share costs
School District PILO Fee Update
Ginny Sawyer, Senior Project Manager
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Ginny Sawyer hasn’t heard from either district that they are ready - Thompson schools within the GMA - Coyote
Ridge - Developers can dedicate land or payment in lieu of - we are working on the new IGAs and will be bringing
them forward before the end of the year.
Response to question from Councilmember Ross Cunniff regarding the full fee schedule for school district PILO
fees was provided by Ginny Sawyer on September 25P
th
P and is included below;
Poudre School District Impact Fee (per dwelling unit)
Single Family Detached or 2 – 4 attached dwelling units $ 1,710.00
5 or more attached dwelling units $ 855.00
Thompson School District Impact Fee (per dwelling unit)
Single Family Detached or 2 – 4 attached dwelling units $ 1,382.00
5 or more attached dwelling units $ 946.00
Mayor Troxell; the data from Thompson (schools in the GMA) goes back to 2006 - Do you see equity between the
two school districts going forward?
Ginny Sawyer; we contact them regularly to request updated information but have not received to date. There is
limited development in the GMA areas that are part of Thompson. The schools districts are both equally stretched
to have this sort of thing rise to the surface and get it done. We just picked per dwelling as an example. Each
district has to vote - you have to get the state legislature to weigh as well.
C. Year End Adjustment Ordinance (used to be called Clean Up Ordinance)
Lawrence Pollack Budget Director
SUBJECT FOR DISCUSSION
First Reading of Ordinance No, 2018, Appropriating Unanticipated Revenue and Prior Year Reserves in Various
City Funds.
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EXECUTIVE SUMMARY
The purpose of this Annual 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 2018 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 AND SPECIFIC QUESTIONS TO BE ANSWERED
• What questions or feedback does the Council Finance Committee have on the 2018 Annual Adjustment
Ordinance?
• Does the Council Finance Committee support moving forward with bringing the 2018 Annual Adjustment
Ordinance to the full City Council?
BACKGROUND/DISCUSSION
This Ordinance appropriates unanticipated revenue and prior year reserves in various City funds and authorizes
the transfer of appropriated amounts between funds and/or projects. The City Charter permits the City Council
to appropriate unanticipated revenue received as a result of rate or fee increases or new revenue sources, such
as grants and reimbursements. The City Charter also permits the City Council to provide, by ordinance, for
payment of any expense from prior year reserves. 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 transfers between funds and/or projects which do not increase net
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.
Funding Unanticipated
Revenue
Prior Year
Reserves
Transfers
between
Funds
TOTAL
General Fund $590,612 $1,263,154 $0 $1,853,766
Benefits Fund 426,000 0 0 426,000
Capital Projects Fund 37,838 0 0 37,838
Equipment Fund 1,682,645 0 0 1,682,645
GID #1 Fund 0 60,000 0 60,000
GID #15 (Skyview) Fund 0 30,000 0 30,000
Natural Areas Fund 51,472 0 0 51,472
Transportation Fund 38,850 841,038 0 879,888
Water Fund 15,540 45,000 0 60,540
GRAND TOTAL $2,842,957 $2,239,192 $0 $5,082,149
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A. GENERAL FUND
1. The City received one metropolitan district application for its review and consideration. As per City
policy, one application was accompanied by a non-refundable application fee of $2,000 and a deposit of
$10,000 and three applications were accompanied by a non-refundable application fee of $2,000 and a
deposit of $5,000 to be utilized for the reimbursement of staff, legal and consultant expenses.
FROM: Unanticipated Revenue (application fees) $33,000
FOR: Reimbursement of staff, legal and consultant expenses $33,000
2. 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) $4,102
FOR: Radon Test Kits $4,102
3. This request is intended to cover expenses related to land bank property maintenance needs for 2018.
As expenses vary from year-to-year, funding is requested annually mid-year to cover these costs.
Expenses for 2018 include general maintenance of properties, raw water and sewer expenses, electricity
and other as applicable.
FROM: Prior Year Reserves (Land Bank reserve) $21,000
FOR: Land Bank Expenses $21,000
4. The Parks department received a donation for the 4P
th
P of July Fireworks at City Park and unanticipated
donation for the Forestry Division for trees. This request appropriates those donations.
FROM: Unanticipated Revenue (donations) $30,424
FOR: 4P
th
P of July Celebration $25,000
FOR: Tree Purchases $5,424
5. The Community and Public Involvement Office (CPIO) has received additional franchise fees from
Comcast after a mid-franchise financial audit of Comcast per Section 3.6 of the agreement between The
City and Comcast. This revenue has been received and equipment will be purchased this year.
FROM: Unanticipated Revenue (audit recovery) $28,000
FOR: Fort Collins Public Media equipment & technology $28,000
6. The City is engaging Corona Insights to conduct a research study focused on the current housing market,
neighborhood quality, and the impacts of the occupancy ordinance and received additional funding of
$10,525 from the Fort Collins Board of Realtors to fund the study.
FROM: Unanticipated Revenue (donation) $10,525
FOR: Occupancy Study $10,525
7. As required by law, Chief Judge Lane appointed defense counsel to represent certain defendants on
traffic and non-traffic misdemeanor cases at the expense of the City. She has appointed defense counsel
to 151 cases from January through the end of July 2018. The fee paid by the City for such representation
is billed at the rate of $75/hour up to a maximum of $1,675 per case if the case does not go to trial, or
$2,480 if the case goes to trial. The Court's original budget for these services was $44,060, which has
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been exceeded to-date. The number of appointments being made has increased significantly due to a
change in state law that occurred after our budget offers for 2017-2018 had been submitted. The
Municipal Court is requesting the use of reserves of $32,000 to meet the anticipated cost increase for
this required service.
FROM: Prior Year Reserves (General Fund) $32,000
FOR: Court-Appointed Defense Counsel costs $32,000
8. On March 6, 2018, Resolutions 2018-021/022 authorized Chief Judge Lane to hire and appoint
Temporary Judges to hear civil case(s) filed into Municipal Court. No additional funding for personnel
costs was appropriated for the Court's budget at that time. On April 3, 2018, a civil case with multiple
parties was filed into Municipal Court. Chief Judge Lane appointed a Temporary Judge to hear this case.
The case is complex with 31 individual filings to date and may not be completed until Fall 2018. This
request covers the estimated personnel costs associated with Judge Hamilton-Feldman hearing this case
through completion.
FROM: Prior Year Reserves (General Fund) $5,000
FOR: Personnel Costs for Temporary Judges to Hear Civil Cases $5,000
9. Fort Collins Police Services (FCPS) has received revenue from various sources and is also requesting the use
of reserves, to be appropriated to cover the related expenditures. A listing of these items follows:
a. $36,934 – 2018 Beat Auto Theft Through Law Enforcement (BATTLE) Grant - In 2018 Police Services was
awarded a Beat Auto Theft Through Law Enforcement (BATTLE) grant from the State to pay for officers
to work overtime to conduct enforcement activities.
b. $5,000 – 2018 Click It or Ticket (aka Seatbelt) Grant - In 2018 Police Services was awarded a Click it or
Ticket grant from the Colorado Department of Transportation to pay for officers to work overtime to
conduct enforcement activities.
c. $600,000 – Police Collective Bargaining Unit Costs - Since the 2018 Collective Bargaining Unit costs are
established after the 2018 budget was put in place, this adjustment requests additional funding to cover
some of the additional costs agreed in the Collective Bargaining Agreement.
d. $160,241 - As a part of the movement of the Northern Colorado Drug Task Force to Larimer County, who
is now the fiscal agent, this appropriation would allow the department to send the State Asset Forfeiture
reserve fund balance to Larimer County.
e. $11,818 – 2018 High Visibility Impaired Driving Enforcement (HVE) Grant – In 2018 Police Services was
awarded a High Visibility Impaired Driving Enforcement grant from the Colorado Department of
Transportation to pay for overtime for DUI enforcement during specific holiday time periods.
f. $33,552 – 2018 Edward Byrne Memorial Justice Assistance Grant (JAG) Grant - In 2018 Police Services
was awarded a Justice Assistance Grant (JAG) grant from the Department of Justice to help offset some
of the overtime costs for officers who work at the Northern Colorado Drug Task Force. These funds are
not shared with our partners and are exclusive to the City of Fort Collins, as City of Loveland and Larimer
County have received their own respective grant awards.
15
g. $75,687 – Sale of Police records and other miscellaneous revenue - FCPS received revenue from the sale
of Police reports along with other miscellaneous revenue.
h. $308,744 – Police Overtime Reimbursement - Police Services helps schedule security and traffic control
for large events. Since these events are staffed by officers outside of their normal duties, officers are
paid overtime. The organizations that request officer presence are billed for the costs of the officers'
overtime. 2018 activities included CSU football games, Tour de Fat, Brew Fest, New West Fest and other
events. Additionally, FCPS partners with Larimer County to staff events at The Ranch.
i. $2,500 - Shop with a Cop Grant - The program pairs volunteers from regional emergency services with
local children whose families are facing severe financial difficulties and limited/no housing. Children
selected by the McKinney Foundation (through the Poudre School District), are given gift cards to
purchase gifts for their immediate family members. Emergency personnel shop with them, building
bonds and providing assistance.
UTOTAL APPROPRIATION
FROM: Unanticipated Revenue (2018 BATTLE Grant) $36,934
FROM: Unanticipated Revenue (2018 Click it or Ticket Grant) $5,000
FROM: Prior Year Reserves (Police Collective Bargaining Unit Costs) $600,000
FROM: Prior Year Reserves (Northern Colorado Drug Task Force) $160,241
FROM: Unanticipated Revenue (HVE Grant) $11,818
FROM: Unanticipated Revenue (JAG Grant) $33,552
FROM: Unanticipated Revenue (Miscellaneous) $75,687
FROM: Unanticipated Revenue (Overtime Reimbursement) $308,744
FROM: Unanticipated Revenue (Shop with a Cop Grant) $2,500
FOR: 2018 BATTLE Grant $36,934
FOR: 2018 Click it or Ticket Grant $5,000
FOR: Transfer of reserve funding to Larimer County $160,241
FOR: 2018 HVE Grant $11,818
FOR: 2018 JAG Grant $33,552
FOR: Police Services $984,431
FOR: Shop with a Cop Grant $2,500
10. This grant was awarded from the Colorado Restorative Justice Coordinating Council to update and
translate all Restorative Justice documents from English to Spanish, and to provide a three-part training
in equity and inclusion for all Restorative Justice/Mediation staff and volunteers.
FROM: Unanticipated Revenue (grant) $10,326
FOR: Restorative Justice/Mediation expenses $10,326
11. This request is to appropriate $444,913 to cover the payment of 2017 Manufacturing Equipment Use
Tax rebates (MUTR) made in 2018. In accordance with Chapter 25, Article II, Division 5, Manufacturing
Equipment Use Tax Rebates were paid out in July 2018. 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) $444,913
16
FOR: Manufacturing Use Tax Rebates $444,913
B. BENEFITS FUND
1. The Human Resources department was awarded a Worksite Wellness grant from Tri-County Health
Department to fund fitness testing equipment for an employee fitness testing program.
FROM: Unanticipated Revenue (grant) $1,000
FOR: Fitness testing equipment for an employee fitness testing program $1,000
2. This appropriation request is to fund unanticipated expenditures for the City's 2018 Stop Loss Insurance
plan. In 2016 and a portion of 2017, the City experienced excessive high-dollar medical claims that
resulted in 40% cost increases to its Stop Loss insurance plan for 2017 and 2018. The City was able to
absorb the cost increase in 2017 from pharmaceutical savings and a favorable medical claims
performance year.
Through July 2018, medical claims performance is on par with budget and is projected to come in under budget
by year-end to once again help absorb the Stop Loss cost overage. However, medical claims activity in 3rd and
4th quarters has historically been very volatile. This request of $425,000 from unanticipated revenues in the
Benefits Fund will aid in covering 2018 Stop Loss insurance plan costs in the event that any underspend from
medical claims cannot fully absorb the Stop Loss overage.
FROM: Unanticipated Revenue (premium fees) $425,000
FOR: Stop Loss insurance plan $425,000
C. CAPITAL PROJECTS FUND
1. As a part of recent development on North College, repayment funds were received from the developer
for their local street obligation for the improvements that were completed by the City. Generally, these
funds go back into the nearest capital project on the same corridor. The funds are necessary to
complete the North College Pedestrian Connection Project.
FROM: Unanticipated Revenue (contributions in aid) $10,444
FOR: North College Pedestrian Connection Project $10,444
2. The Gardens on Spring Creek seeks to appropriate unanticipated donations designated for capital
construction of the Visitor's Center expansion and garden expansion projects.
FROM: Unanticipated Revenue (donations) $27,394
FOR: Gardens on Spring Creek Capital Project $27,394
D. EQUIPMENT FUND
1. This revenue is from the Alt Fuels Colorado ($145,600) and Charge ahead ($11,394) grant programs
administered by the State Energy Office and the Regional Air Quality Council. Alt Fuels Colorado
provides 80% reimbursement on the incremental cost of Natural Gas vehicles, while the Charge ahead
provides infrastructure for vehicle charging stations.
FROM: Unanticipated Revenue (grants) $156,994
FOR: Vehicle charging stations $156,994
2. These funds are from rebates from energy efficiency lighting projects at various City Facilities from Fort
17
Collins Utilities and Platte River Power Authority. This revenue will be used for additional energy
efficiency and solar projects in 2018.
FROM: Unanticipated Revenue (rebates) $25,651
FOR: Energy efficiency and solar projects $25,651
3. These funds represent the insurance proceeds from the July 2018 Hail Storm that damaged 370 City
Fleet vehicles. The repairs are all expected to be completed this year.
FROM: Unanticipated Revenue (insurance proceeds) $1,500,000
FOR: City Fleet vehicles $1,500,000
E. GENERAL IMPROVEMENT DISTRICT #1 FUND
1. The Downtown GID has $25,000 allocated to sidewalk improvements annually to cover areas of sidewalk
that may need to be removed/repaired or replaced. This year the brick sidewalk in front of the Opera
Galleria was identified as a sidewalk in need of repair. Due to the length of the repair needed,
additional budget is required to fully repair/replace the sidewalk.
FROM: Prior Year Reserves (GID #1) $60,000
FOR: Opera Galleria sidewalk repair $60,000
F. GENERAL IMPROVEMENT DISTRICT #15 (SKYVIEW) FUND
1. The Skyview GID will be getting asphalt work done in 2019 per the current Street Maintenance Program
schedule. Historically, work has been completed to upgrade sidewalks one year in advance of asphalt to
not create a "backup" in the repair/replacement process (laying asphalt goes much faster than concrete
repairs and when done in the same year, the asphalt crews end up being stalled by the concrete work
being done in front of them). This request is to complete the concrete work in the Skyview South GID in
2018 prior to asphalt work in 2019.
FROM: Prior Year Reserves (GID #15) $30,000
FOR: Concrete work in the Skyview South GID $30,000
G. NATURAL AREAS FUND
1. This grant from Colorado Health Foundation supports the Outdoor Club, a collaboration with City of Fort
Collins Natural Areas, the Fort Collins Boys & Girls Club, and CSU School of Social Work to connect low
income children and their families to natural areas. The funds are for transportation, outdoor gear,
stipends for partner agencies to offer activities, teacher training, and activity supplies.
FROM: Unanticipated Revenue (grant) $51,472
FOR: Programs to connect low income children and their $51,472
families to natural areas
H. TRANSPORTATION SERVICES FUND
1. The 2018 snow budget has nearly been consumed. The total annual budget is $1.4M and YTD spending
is $1.3M. Extremely cold temperatures require more deicer material to keep the roads safe, which
drives up the cost of snow operations significantly. Ice cutting can be required due to the weather
pattern where daytime thawing and nighttime freezing caused ice dams, ice potholes, and build-up in
18
gutters causing drain blockages. Additional funding of $800,000 is requested to provide snow removal
services during the winter months from October through December 2018.
FROM: Prior Year Reserves (Transportation Fund) $800,000
FOR: Snow & Ice Removal $800,000
2. FC Bikes received funding from the following sources: People for Bikes Big Jump Mini Grant ($25,000);
Bike Share Membership and User Revenue ($41,038); and, Open Streets sponsorship and vendor fees
($13,850). Funding from the People for Bikes grant will be used to develop concept designs and
implement a temporary demonstration project along City Park Ave. Funding from Bike Share
Membership and User fees will be used to support the City's ongoing Bike Share sponsorship contract.
Open Streets sponsorship dollars and vendor fees will be used to supplement 2018 Open Streets event
costs.
FROM: Unanticipated Revenue (grant) $38,850
FROM: Prior Year Reserves (grant deposited in 2017) $41,038
FOR: FC Bike Share Program $79,888
I. WATER FUND
1. The Water Supply Vulnerability Study was funded with $250,000 in 2017 and $100,000 in 2018 to study
future water supply uncertainties related to climate changes, supply disruptions, and changes in
demand. The Water Resources Division solicited our regional water supply partners to join us in the
Study. Northern Water Conservancy District, who manages the Colorado-Big Thompson Project, agreed
to partner with us and bring an additional $45,000 (after the $350,000 had been approved through the
BFO process) to help fund the study. Utilities has received these additional dollars and this Adjustment
Request is to appropriate the $45,000 to the Water Supply Vulnerability Study. $40,000 was received in
2017 and $5,000 will be received by end of year 2018. It is being requested to take all $45,000 out of
reserves since the $5,000 for 2018 has not been received.
FROM: Prior Year Reserves (Water Fund) $45,000
FOR: Water Supply Vulnerability Study $45,000
2. Fort Collins Utilities was recently awarded a Public Education and Outreach Grant in the amount of
$15,540 from the Colorado Water Conservation Board to address water efficiency in the commercial,
institutional, and industrial (CII) sector. CII efforts require granular site-specific knowledge on top of
traditional billing data analysis, including information about the facility’s operations, occupancy, end
uses, building age and more. With this grant Fort Collins Utilities will collaborate with industry expert
Michelle Maddaus, from Maddaus Water Management, to provide a hands-on technical training to Fort
Collins as well 15 other water utilities across the front range. With this focused training, participants will
gain skills to identify and address efficiency opportunities and strategies in the commercial sector that
will save utility customers water and money, while contributing to the State’s larger water goals.
FROM: Unanticipated Revenue (grant) $15,540
FOR: Water Efficiency training $15,540
FINANCIAL / ECONOMIC IMPACTS
This Ordinance increases total City 2018 appropriations by $5,082,149. Of that amount, this Ordinance
increases General Fund 2018 appropriations by $1,853,766 including use of $1,263,154 in prior year reserves.
Funding for the total City appropriations is $2,842,957 from unanticipated revenue and $2,239,192 from prior
year reserves.
19
The following is a summary of the items requesting prior year reserves:
Discussion / Next Steps:
Ross Cunniff; I do support bringing this forward to the full Council. Brings up some other questions - regarding
hail damage – this includes vehicle oriented but did we have any building damage?
Lawrence Pollack; I imagine that Operations Services will be providing a full comprehensive analysis / assessment
of city impact and will include building roofs as well.
Ross Cunniff; it feels like we have been seeing an increase in hail damage to roofs – makes me think about the
regulatory environment of roofing and what could be done to improve the durability of roofing materials - quality
life - Impact to our wasteshed with all of the asphalt (fiberglass) roofing shingles coming off and not being recycled
- being trashed.
Darin Atteberry; the end point would be to see how many roofing permits have been pulled in the last 5 years due
to hail damage
Mayor Troxell; different grades of roofing - 50 year shingles - more durability
Ross Cunniff; roofing - impact on several of our goals - maybe some incentive or waiver on the Wasteshed side
and lighter colored roofs / less energy use. What role, if any does the city have to play?
Darin Atteberry; Also, how did the solar shingles fare during some of the hail storms?
Lawrence Pollack; forgot about one walk on item that was brought to my attention after these materials were put
forward - PFA requested use of their reserves from KFCG dedicated to them - sometime they are included in the
next budget cycle but due to the timing, offers had already finalized clearly called so they are just requesting that
use. In the AIS going to full Council, we will make sure that this is fully called out.
Ross Cunniff; I would like some of the rationale explained in the AIS as well.
Item # Fund Use Amount
A3 General Land Bank Property Maintenance $21,000
A7 General Municipal Court-Court-Appointed Defense Counsel 32,000
A8 General Municipal Court-Temporary Judges 5,000
A9c General Police Collective Bargaining Unit Additional Costs 600,000
A9d General Movement of Funds Associated with the Northern Colorado
Drug Task Force
160,241
A11 General Manufacturing Equipment Use Tax Rebates 444,913
E1 GID #1 Opera Galleria Sidewalk Improvement 60,000
F1 GID #15 Skyview South GID Sidewalks 30,000
H1 Transportation Snow Removal 800,000
H2 Transportation FC Bikes - Grants and Bike Share Revenue 41,038
I1 Water Water Supply Vulnerability Study 45,000
Total Use of Prior Year Reserves: $2,239,192
20
Lawrence Pollack; we can get and include that information.
Mayor Troxell; I am supportive of going forward
Ken Summers; on the roofing - there is probably something we could do for areas outside of an HOA
Within HOA boards we had some stringent requirements relative to roofing products to make sure they were
more hail resistant – maybe had the 50 year guarantee - We could look at how we apply that across the board -it
makes sense for waste diversion, insurance companies and homeowners.
Do we know in terms of anticipated reserves moving forward - do we have a handle on what we
anticipate that total to be?
Mike Beckstead; we ended the year with approximately $70M of reserves in the General Fund. We used about
$3.5M of that. In new Budget, $2.2M revenue contingency which is still in that number and it will be Council’s
choice if they want to use that. We have healthy and adequate reserves based on our policies.
Ken Summers; I concur with that - $3.5M figure was maybe factored into the 19-20 budget line item / BFO request.
Fee Discussion follow up
Ross Cunniff; for tomorrow night’s discussion – can we get relative to the fee discussion - Affordable housing
To quickly call – what other cities have for their requirements for affordable housing - I heard that might be some
HUD requirements around this as well
Darin Atteberry; to Jeff – may be dated but we should have that. If any updates, they can be provided.
Discovery Science Center;
at LPT meeting today, I responded briefly to the work we did around the Discovery Science Center - has financial
implications. Mike - can you give a quick update?
Mike Beckstead; I am not 100% landed but I think have a pretty good understanding and we have drafted a memo
regarding this topic to make sure I have my facts right. The agreement between the non-profit and the city that
governs the way we manage the museum has the City contributing $1.4M from BOB revenue to cover O&M costs
paid between 2009 – 2015. They didn’t use it in those years so it went into a fund and they have used it in the
budget. 2018 was the last year they were planning to use $159K of that.
In the agreement, it states that the city will fund specific operational personnel, facilities, upkeep, etc.
The non-profit gets the revenue from the gates and the gift shop which is used to fund programming.
History - when our museum was in the Carnegie Building - Facilities and Parks covered costs of building
maintenance, landscaping, grounds, snow removal, etc.
In 2013 first full year of operations at the current site, new expense – they were still maintaining the Carnegie
Building, they now had a new building
An agreement was reached – expectation we would transition that back into
21
The Museum didn’t pay for utilities in the Carnegie Building – An agreement was reached to bill the museum
From 2013 – 2016 - those costs at their peak were $130K have been transitioned back into operating
departments – as we became more energy efficient, the facility was able to pick up the cost of the utilities.
Same thing with custodial services, parks, landscaping
This has been a conversation going on since 2013 – now we are back to kind of the same place – the city’s
obligation to take care of bldg. and facility. This is consistent with the way we have handled this with other
organizations. The nuance here - with a partnership; does it and should it work exactly the same? That is the
dialog.
Ross Cunniff; do we have that written down somewhere because the belief on Council – was that the costs had
transitioned over to the no- profit. If we could get that agreement that would be helpful. Can we find out who
actually owns the building? Is it the non-profit or a partnership?
Mike Beckstead; we will find who owns the building.
Kelly DiMartino; I would add – the agreement talks about sharing operations but it is not explicit and detailed as
to how that will be divided. In part because our city maintenance staff is doing that work. When we started
transitioning - a portion of costs were transitioned to the non-profit partner or things that are going away as the
BOB dollars go away. It is not being fully absorbed into the city budget.
Ross Cunniff; thinking forward to our increased use of partnerships - learn from what we have done and try to
make it more explicit so the Council will know what decision they are making. We have believed on Council for
last 5 years has been that those costs were transitioning to the museum itself.
Mike Beckstead; I agree - if there is a desire for more specificity of how the costs are shared - that needs to be in
the agreement up front.
Darin Atteberry; that was one of our learnings – if there is shared O&M, we have a good handle on capital - in
reviewing this I think it is fair to both parties - it is a complicated agreement - the city hasn’t been taken for a
ride – the Museum has done their fair share and we have been involved in the governance process. We are
implementing what was envisioned. To be more clear, most of our 6-10 year O&M dollars are city projects and
are not usually with a partner - so we are normally talking about O&M for a facility that is all city owned.
To Ross’ question earlier re: regional impact fees – one of the big takeaways from this is that we are going to
have a framework, a conversation is had and expectations that will be very clear. We will be prepared to talk out
it in length and in the memo first.
Mike Beckstead; when the artifact storage came to Council for budget (think it was $300- $350K) we didn’t fund
it - ultimately the non-profit partner funded it through gate revenues. There has also been $300K projector
enhancement and computer equipment that they have funded. My take is there is pretty good partnership to
figure it out how to use the revenues that are available. Our funding is approximately $900K from the General
Fund.
Ross Cunniff; I think some of the upgrades were funded by capital campaigns.
22
Mike Beckstead; the agreement specifies that the annual operating plan is the place where these costs are
going. The Operating Plan is based on revenue they have. We are trying to take a broader view of the city’s -
including O&M, Gardens, what we build in the future and what sustainability actually means in those.
Meeting adjourned at 11:35 AM
COUNCIL FINANCE COMMITTEE
AGENDA ITEM SUMMARY
Staff: Blaine Dunn, Sr. Treasury Analyst
Date: October 15, 2018
SUBJECT FOR DISCUSSION
COPs Financing: I-25/Prospect Interchange & Police Training Facility
EXECUTIVE SUMMARY
City staff is seeking $25.3M in financing through Certificates of Participation (COPs) for a
January 2019 closing. These funds will be used for the City’s portion of the I-25 Prospect
interchange construction ($17.1M) and the City’s portion of the joint police training facility
construction ($8.17M).
GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED
Does Council Finance support proceeding to first reading on 12/4/18?
BACKGROUND/DISCUSSION
I-25/Prospect Interchange
The I-25/Prospect interchange is a joint project with CDOT. The total cost of the project is
$31M; $24M for the interchange and $7M for urban design. CDOT is paying $12M (half the
interchange cost) and the City, Timnath, and interchange property owners will fund the
additional $19M. Contributions from transportation capital expansion fees and rights of way
totaling $1.9M have already been made to the project. After these contributions the City will
borrow the remaining $17.1M.
Timnath and the interchange property owners will help support the $19M local cost. Overall the
City’s portion of the cost after contributions from Timnath and property owners is anticipated to
be $8.25M. The City is borrowing the remaining amount needed of $17.1M and will be paid
back over time by Timnath and the property owners for their portion.
Police Training Facility Joint Venture
The Police Training Facility is a joint venture with the City of Fort Collins and the City of
Loveland. The total cost of the facility will be $18.5M. Both cities have agreed to split the
constructions costs 50/50, making the City of Fort Collins’ portion of the project $9.25M. In the
2017/18 budget, Council appropriated $1.08M for this project from General Fund Reserves.
With this previous appropriation the City is seeking $8.17M in financing for the remainder of our
share of the construction costs.
Debt Structure
The City is seeking to borrow a total of $25.6M, $25.3M for the projects and $300k in closing
costs, with the COPs. The COPs will have a 20-year term and fixed interest rate. The City will
make semiannual payments starting in June 2019 with the last payment occurring in December
2038. The average annual debt service is $2,036,000.
ATTACHMENTS
Attachment 1 – PowerPoint
10-15-18
COPs Financing:
I-25/Prospect Interchange & Police Training Facility
Blaine Dunn, Sr. Treasury Analyst & Jim Manire, Hilltop Securities
I-25/Prospect Project Information
2
• Prospect/I-25 Interchange has
failing LOS at peak travel times
• Total Cost $31M ($24M + urban design)
• CDOT cost $12M (half interchange cost)
• City cost $19M
• Estimated savings of $7M if
constructed with I25 expansion
• Partnership with
• City of Fort Collins
• Town of Timnath
• Interchange property owners
Interchange Ownership & Development Plans
3
• NW Corner – 144.6 total acres, in PDP
• 276 apartments
• 27 single family homes
• Additional single family homes and
commercial development potential (Future)
• NE Corner – 110 total acres, in ODP
• Industrial/Employment
• Commercial
• Urban Estate
• SE Corner – 17 acres, in ODP
• Commercial
• SW Corner – 96 acres, owned CSURF
• No development plans in review
Intersection Cost & Cost Share
4
Proposed Cost Share Timnath 13%, Property Owners 43%, COFC 43%
• Total Cost $31M
• Includes $7M for Urban Design
• CDOT $12M - 50% of base design
• City/Property Owners/Timnath $19M
• FC = $8.25M
• Property Owners = $8.25M
• Timnath = $2.5M
• Current Estimate - Borrow $17.1M
• $19M less ROW & TCEF contribution
Total FC Property Timnath
Overpass Cost $ 19.00 $ 8.25 $ 8.25 $ 2.5
43% 43% 13%
Less ROW Value 0.50
TCEF 0.70 0.70
Debt Obligation $ 17.1 $ 7.55 $ 7.05 $ 2.5
% Share 44% 41% 15%
Borrow-Principle $ 17,100,000
Term 20
Interest* 3.67%
Payment Share* $1,236,066 $543,869 $ 506,787 $ 185,410
Partners Share Allocation ($ in millions)
*Market rates as of 10/10/18; subject to change
Police Training Facility Project Information
• Partnership with Loveland
• Total Cost $18.5M
• $9.25M from City of Fort Collins
• $1.08M Appropriated 2017
• $9.25M from City of Loveland
• Current Estimate – Borrow $8.2M
• Estimated completion date of
early 2020 and will include:
• 50 yd pistol range
• 1.4 mile driving track
• Classrooms for special training
5
Debt Issuance Process
6
• Issuance Options
• Negotiated Sale
• Private Placement
• Competitive Bid
• Process leading to Competitive Bid
• Leverage City’s Aaa credit rating
• Market appears to favor competitive bid
• Good collateral options for market
• Will take competitive bids from underwriters in early January
Competitive Bid Process Will Be Used to Select Underwriter
COP Collateral
• 215 N Mason Building
• Came off lease in June 2018
• Appraised value of $16.5M
• Civic Center Parking Garage
• Came off lease in June 2018
• Appraised value of $15.9M
• Other Properties Considered:
• Aztlan (available; $14.6M)
• Streets Facility (current debt paid in 2024; $14.3M)
• Police Headquarters (current debt paid 2026; $27M)
7
Selection Criteria – Minimal Deed Restrictions and Criticality of Service
Debt Structure
• 20 Year Term
• Fixed interest rate
• Semiannual payments starting in June 2019
• Last payment December 2038
• Borrowing
• Issue Costs* $ .3M
• Project Amounts 25.3M
• Total $ 25.6M
8
*estimate subject to change
Budget vs. Current Market
Budget
• 5.00% - Interest Rate
• Debt Service
• 2019 - $2,038,500
• 2020 - $2,035,000
• Max - $2,042,000
9
Current Market*
• 3.80% - Net Interest Cost
• Debt Service
• 2019 - $1,813,000
• 2020 - $1,817,000
• Max - $1,818,000
*Market rates as of 10/10/18; subject to change
Outstanding Debt
10
$64 $60 $55
$52 $48
$41 $37 $33
$29 $25 $29
$24
$45 $41
$98
$87
$106 $114
$104
$93
$82
$73
$63
$53 $42
$158
$152
$149
$10
$18
$0
$16
$13
$12
$28
$26
$24
$21
$19
$16
$14
$11
$0
$50
$100
$150
$200
$250
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Millions
Outstanding Debt with 2019 COPs
Governmental Proprietary Funds DDA/URA
*Debt service excludes capitalized interest for Broadband
1.6%
1.9% 1.8%
1.5% 1.4%
1.2% 1.0% 1.0% 1.0%
0.9% 0.8% 1.1%
1.2% 0.9%
4.2%
4.5% 4.4%
3.2% 3.2%
3.1%
3.1% 2.8%
2.6%
2.4% 2.2%
2.3%
1.3%
Key Upcoming Dates
• November 6 Rating agency call
• November 15 Rating results received
• December 4 COP Ordinance first reading
• December 18 COP Ordinance second reading
• December 27 Preliminary Official Statement posted to Internet
• January 8 Marketing of COPs
• January 17 Closing and delivery of proceeds
• End of January Payment to Loveland – subject to IGA
• April Payment to CDOT
11
Committee Feedback
12
Questions and Comments
13
Appendix
Police Training Facility Site Plan
14
Police Training Campus Master Plan
15
COUNCIL FINANCE COMMITTEE
AGENDA ITEM SUMMARY
Staff: Lance Smith, Utilities Strategic Finance Director
Date: October 15, 2018
SUBJECT FOR DISCUSSION
2019 Utility Rate Adjustments
EXECUTIVE SUMMARY
The revenue requirements to support the 2019-20 Biennial budget will require increasing
monthly charges for electric service by 5.0% and stormwater service by 2.0% in each of those
years.
The electric rate increase each year consists of two components. The first component of 1.4% is
necessary to offset the increase in wholesale energy prices. The second component of 3.6% is
needed to increase operating revenues sufficient to offset operating expenses so that reductions
in reserves stop and funds can be set aside for future capital improvements.
The stormwater increase is intended to raise operating revenues modestly to increase the debt
capacity of the Enterprise in anticipation of significant debt being needed to meet future capital
improvements necessary to complete the initial buildout of the stormwater infrastructure.
Similar, modest adjustments of less than 3% may be necessary over the coming decade
depending on the timing and scale of the necessary capital investments.
From a residential customer’s perspective the net increase to their 4 service utility bill is
expected to be $3.76 per month, or 2.2% more than they are paying in 2018.
Utility 2018 2019 $ Change % Change
Electric $ 71.96 $ 75.41 $ 3.45 4.8%
Water $ 47.88 $ 47.88 $ - 0.0%
Wastewater $ 34.45 $ 34.45 $ - 0.0%
Stormwater $ 15.42 $ 15.73 $ 0.31 2.0%
Total Average Bill $ 169.71 $ 173.47 $ 3.76 2.2%
Average Residential Monthly Bill
Fort Collins Utilities
GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED
Does the Council Finance Committee support bringing the rate increases being proposed forward
for consideration by the Mayor and City Council?
BACKGROUND/DISCUSSION
The 2016 Strategic Financial Plan for each utility was presented to this Committee through 3
meetings. The rate strategy that was developed as part of the Strategic Financial Plans provides
for objective rate adjustments based on financial metrics. This strategy is included in the
financial modeling for the plan and serves as the basis of the rate projections presented to
Council since 2016.
Rate Strategy and Smoothing
The following criteria objectively determine when, why and how much rates should be adjusted
to maintain the financial health of each utility:
1. Adjust electric rates sufficient to meet Platte River Power Authority wholesale rate adjustments.
2. If the previous 3 years have averaged negative operating income, raise rates next year to the
lessor of 5% or the level sufficient to have offset the average operating loss.
3. If debt coverage is less than 2.0, increase rates the lessor of 5% and a level sufficient to raise the
debt coverage ratio to 2.1 the next year.
4. If the Available Reserve fund balance is projected to be negative at the end of any year, increase
rates the lessor of 5% and an amount sufficient to increase reserves to the minimum required
reserve.
5. Add up all of the previous criteria driven rate adjustments and take the lessor of 5% and the sum
as the recommended rate adjustment.
By limiting the annual increase to no more than 5.0% in any given utility, the average customer
should not see an increase in their utility bill by more than 5% in one year. This constraint
results in some smoothing of larger rate increases over 2 or more years. Moreover, because the
total utility bill is considered, adjustments in one utility may be less than needed in order to
smooth out the overall bill impact. In the 2017-18 Budget cycle, for example, water rates were
adjusted up 5.0% in each year while wastewater rates were increased 3.0% each year.
Here the necessary electric rate increase is being smoothed out over the next 3 years. Also,
because the water and wastewater rates are not being adjusted this budget cycle, it is being
proposed to adjust stormwater rates in anticipation of significant debt issuances in the next
decade.
Electric Rate Increase
The ten-year rate forecast presented to this Committee last November included 5.0% rate
increases in 2019 and 2020 followed by lesser increases in the subsequent years. That forecast
served as the basis for the 2017 Strategic Financial Plan for the Light & Power Enterprise Fund
and the subsequent revenue projections utilized in the development of the 2019-20 Budget cycle.
Looking at the operating income since 2007 shows that this Fund has utilized reserves to offset
operating losses. While this was an intentional draw down of reserves based on previous City
Council direction, over the last 3 Budgeting For Outcomes cycles (2013-2018) $41.7M has been
appropriated from Reserves. Some of these appropriations have been offset by unanticipated
revenues due to strong development. The Reserve balance has decreased from a peak in 2014 of
$56.5M to $31.6M at the end of 2017. In 2018, an additional $8.3M has been appropriated from
these Reserves for bond defeasance and capital investments. This is no longer sustainable so it is
necessary to increase operating income in the near term through these rate adjustments.
The 3.6% increases in 2019 and 2020 that generate additional revenue to remain within the
distribution utility of the City will result in positive operating income being generated for this
Enterprise.
($20,000,000)
$0
$20,000,000
$40,000,000
$60,000,000
$80,000,000
$100,000,000
$120,000,000
$140,000,000
$160,000,000
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Light & Power Fund Operating Income (2007-2017)
OPERATING INCOME
Total Operating Revenue
Total Operating Expenses
($20,000,000)
$0
$20,000,000
$40,000,000
$60,000,000
$80,000,000
$100,000,000
$120,000,000
$140,000,000
$160,000,000
$180,000,000
$200,000,000
2007 2009 2011 2013 2015 2017 2019 2021 2023 2025
Light & Power Fund Operating Income (2007-2026)
OPERATING INCOME
Total Operating Revenue
Total Operating Expenses
The table below summarizes the implementation of the rate strategy for the electric utility:
There is an extensive discussion of the financial planning that has occurred for this utility over
the past few years in the 2017 Strategic Financial Plan for Light and Power (see Attachment 2).
The attached one page budget summary for the Light and Power Enterprise Fund shows the
budget assuming this proposed 5.0% rate increase is adopted. Because reserves have been drawn
down already any reduction in the proposed 5.0% rate increase would need to be offset by a
corresponding amount in other offers or through anticipated underspend in 2018 which will flow
back to reserves at the end of the year.
The electric cost-of-service (COS) model is updated every two years, with updates occurring
over the summer of 2018. Only slight rate class adjustments are needed, with all classes within
1% or less of the average. The graph below shows the specific adjustments by rate class. These
year-to-year adjustments are driven by various factors, with the main driver being changes in
load factor calculations for individual rate classes, along with varying rate class customer growth
and changes in average total consumption per customer.
Criteria 2019 2020
1. PRPA wholesale energy costs 1.4% 1.4%
2. 3 yr ave. Operating Income < $0 5.0% 3.0%
3. Debt Coverage Ratio < 2.0 - -
4. Available Reserves less Capital Need < 0 - -
Sum of Above 6.4% 4.4%
5. Lesser of 5.0% or the sum of above * 5.0% 5.0%
* Because of the limit in 2019 being met the 2020 increase is higher
than it otherwise would have been.
Below is a chart showing the adjustments to rates that have been done since 2007 along with the
forecasted rate adjustments being proposed in this budget. The table below the chart shows the
rate adjustments that are anticipated to be necessary over the next 10 years to provide adequate
revenues to maintain the financial health as determined by the bond rating agencies criteria for
assessing new debt issuances.
0%
2%
4%
6%
8%
10%
12%
14%
16%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
% Rate Increase
Electric Monthly Rates
Purchased Power
Distribution System
Energy Services
Stormwater Rate Increase
The ten-year rate forecast presented to this Committee in February included rather modest rate
increases in 2019 and 2020 followed by even smaller increases in the subsequent years. That
forecast served as the basis for the revenue projections utilized in the development of the 2019-
20 Budget cycle.
Looking at the operating income of this utility shows a healthy operating margin. This criterium
is not expected to drive any rate increases over the next decade at least.
While staff has not completed prioritizing the latest iteration of the capital improvement plan for
this utility, given the very significant amount of capital investment required to fully buildout the
stormwater system throughout the whole community, there is expected to be a need to increase
the debt capacity of this utility. A modest adjustment is being proposed here to help with
smoothing any larger future increase that may be necessary as the capital improvements are
prioritized.
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
Rate Increase 3.45% 1.8% 5.0% 5.0% 2-3% 1-3% 1-3% 1-3% 1-3% 1-3% 1-3% 1-3%
Debt Issuance $M $20.0
$165M of capital work is expected to be needed between 2017 and 2026 in addition to the current capital appropriations.
$0
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
$14,000,000
$16,000,000
$18,000,000
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Stormwater Operating Income (2007-2017)
OPERATING INCOME
Total Operating Revenue
Total Operating Expenses
The 2% stormwater increase for 2019 is intended to raise operating revenues modestly to
increase the debt capacity of the Enterprise in anticipation of significant debt being needed to
meet these future capital needs. Similar, modest adjustments of less than 3% may be necessary
over the coming decade depending on the timing and scale of the necessary capital investments.
As shown below few rate adjustments have been made since 2007. The table below the chart
shows the rate adjustments that are anticipated to be necessary over the next 10 years to provide
adequate revenues to maintain the financial health as determined by the bond rating agencies
criteria for assessing new debt issuances.
Criteria 2019 2020
1. 3 yr ave. Operating Income < $0 - -
3. Debt Coverage Ratio < 2.0 - -
4. Available Reserves less Capital Need < 0 * 2.0% 2.0%
Sum of Above 2.0% 2.0%
5. Lesser of 5.0% or the sum of above 2.0% 2.0%
* This is an estimate in lieu of the capital improvement plan
being prioritized. It will be necessary to increase revenues
to support the significant capital needs for this utility
0%
2%
4%
6%
8%
10%
12%
14%
16%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
% Rate Increase
504 Stormwater Fund Rate Changes
ATTACHMENTS
Attachment 1 – PowerPoint presentation
Attachment 2 – 2017 Fort Collins Strategic Financial Plan for Light and Power
Attachment 3 – 2019-20 Budgeting For Outcome Enterprise Budget Summaries
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
Rate Increase 5% 0% 2.0% 2.0% 0-3% 0-3% 0-3% 0-3% 0-3% 0-3% 0-3% 0-3%
Debt Issuance $30-35M $25-30M $25-30M
*$272M of capital work is expected to be needed between 2019 and 2044.
$70M of stream restoration work has also been identified here.
1
2019 Proposed Utility Rates
Council Finance Committee
October 15, 2018
Purpose and Direction Sought
Objective:
• Provide an explanation for the 2019 rate increases being proposed for Electric and
Stormwater monthly services in the 2019-20 Budget For Outcomes process
Direction Sought:
• Does the Council Finance Committee support bringing the rate increases being
proposed forward for consideration by the Mayor and City Council?
2
2019 Rate Summary
3
UTILITY 2018 PROPOSED
INCREASE NOTES
ELECTRIC 5% Varies by rate class
WATER 0%
WASTEWATER 0%
STORMWATER 2% Same for all rate classes
Electric Rates
4
0%
2%
4%
6%
8%
10%
12%
14%
16%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
% Rate Increase
Electric Monthly Rates
Purchased Power
Distribution System
Energy Services
Electric Rate History
This 1.25% was intended for the distribution
system needs; CAP related enhancements
consumed this increase in the 2017-18 BFO cycle
Utility Strategic Financial Plans
Purpose: To maintain the financial health and resiliency of the utility Enterprise
Funds as determined by the bond rating agencies criteria for assessing new
debt issuances.
Strategic Objectives:
Economic Health 3.5 – Maintain utility systems, services, infrastructure and
predictable rates
Economic Health 3.6 – Invest in utility infrastructure aligned with community
development
6
Rate Strategy & Criteria
Rate Strategy:
• Meet revenue requirements through gradual, modest rate adjustments
• Smooth rates by limiting annual increases to 5.0% - considering the entire bill for all 4 utility services
Criteria:
• Adjust electric rates sufficient to meet Platte River Power Authority wholesale rate adjustments
• If the previous 3 years have averaged negative operating income, raise rates next year to the lessor of 5%
or the level sufficient to have offset the average operating loss
• If debt coverage is less than 2.0, increase rates the lessor of 5% and a level sufficient to raise the debt
coverage ratio to 2.1 the next year
• If the Available Reserve fund balance is projected to be negative at the end of any year, increase rates the
lessor of 5% and an amount sufficient to increase reserves to the minimum required reserve
• Add up all of the previous criteria driven rate adjustments and take the lessor of 5% and the sum as the
recommended rate adjustment
7
Light & Power Fund Operating Income
8
($20,000,000)
$0
$20,000,000
$40,000,000
$60,000,000
$80,000,000
$100,000,000
$120,000,000
$140,000,000
$160,000,000
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Light & Power Fund Operating Income (2007-2017)
OPERATING INCOME
Total Operating Revenue
Total Operating Expenses
Light & Power Fund CIP
9
$0
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
Annual Capital Investment
Light & Power Fund Capital Improvement Plan
New Capacity Fiber Optics Improvements Substation Improvements Operational Technology
Distribution System Improvements Annexations Service Area - wide
$0
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
Annual Capital Investment
Light & Power Fund Capital Improvement Plan
New Capacity Fiber Optics Improvements Substation Improvements Operational Technology
Distribution System Improvements Annexations Service Area - wide Historical Ave Capital 2007-16
$0
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
Annual Capital Investment
Light & Power Fund Capital Improvement Plan
New Capacity Fiber Optics Improvements
Substation Improvements Operational Technology
Distribution System Improvements Annexations
Service Area - wide Historical Ave Capital 2007-16
Previous CIP Estimated 2017-2026 Capital Investment
$0
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
Annual Capital Investment
Light & Power Fund Capital Improvement Plan
New Capacity Fiber Optics Improvements
Substation Improvements Operational Technology
Distribution System Improvements Annexations
Service Area - wide Historical Ave Capital 2007-16
Ave Capital Investment 2017-26 Previous CIP Estimated 2017-2026 Capital Investment
Financial Criteria for Rate Adjustments
10
Criteria 2019 2020
1. PRPA wholesale energy costs 1.4% 1.4%
2. 3 yr ave. Operating Income < $0 5.0% 3.0%
3. Debt Coverage Ratio < 2.0 - -
4. Available Reserves less Capital Need < 0 - -
Sum of Above 6.4% 4.4%
5. Lesser of 5.0% or the sum of above * 5.0% 5.0%
* Because of the limit in 2019 being met the 2020 increase is higher
than it otherwise would have been.
2019 Cost of Service
Light & Power 10 Year Rate Forecast
12
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
Rate Increase 3.45% 1.8% 5.0% 5.0% 2-3% 1-3% 1-3% 1-3% 1-3% 1-3% 1-3% 1-3%
Debt Issuance $M $20.0
$165M of capital work is expected to be needed between 2017 and 2026 in addition to the current capital appropriations.
Stormwater Rates
13
14
Stormwater Rate History
0%
2%
4%
6%
8%
10%
12%
14%
16%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
% Rate Increase
504 Stormwater Fund Rate Changes
Stormwater Fund Operating Income
15
$0
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
$14,000,000
$16,000,000
$18,000,000
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Stormwater Operating Income (2007-2017)
OPERATING INCOME
Total Operating Revenue
Total Operating Expenses
Stormwater Fund CIP
16
2017 Operating Revenue was $16.8M
$-
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
$14,000,000
$16,000,000
$18,000,000
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031
504 - Stormwater Fund Capital Investment
Stream Rehabilitation Small Capital
Major Capital Historical Ave Capital 2007-16
Ave Capital Investment 2019-2044 Previous Forecasted Ave Capital Investment 2017-31
Financial Criteria for Rate Adjustments
17
Criteria 2019 2020
1. 3 yr ave. Operating Income < $0 - -
3. Debt Coverage Ratio < 2.0 - -
4. Available Reserves less Capital Need < 0 * 2.0% 2.0%
Sum of Above 2.0% 2.0%
5. Lesser of 5.0% or the sum of above 2.0% 2.0%
* This is an estimate in lieu of the capital improvement plan
being prioritized. It will be necessary to increase revenues
to support the significant capital needs for this utility
Stormwater 10 Year Rate Forecast
18
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
Rate Increase 5% 0% 2.0% 2.0% 0-3% 0-3% 0-3% 0-3% 0-3% 0-3% 0-3% 0-3%
Debt Issuance $30-35M $25-30M $25-30M
*$272M of capital work is expected to be needed between 2019 and 2044.
$70M of stream restoration work has also been identified here.
Residential Bill Impact
19
Proposed 2019 Residential Average Bill
Utility 2018 2019 $ Change % Change
Electric $ 71.96 $ 75.41 $ 3.45 4.8%
Water $ 47.88 $ 47.88 $ - 0.0%
Wastewater $ 34.45 $ 34.45 $ - 0.0%
Stormwater $ 15.42 $ 15.73 $ 0.31 2.0%
Total Average Bill $ 169.71 $ 173.47 $ 3.76 2.2%
Average Residential Monthly Bill
Fort Collins Utilities
Purpose and Direction Sought
Objective:
• Provide an explanation for the 2019 rate increases being proposed for Electric and
Stormwater monthly services in the 2019-20 Budget For Outcomes process
Direction Sought:
• Does the Council Finance Committee support bringing the rate increases being
proposed forward for consideration by the Mayor and City Council?
21
22
23
$0
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
2019 2020
Light & Power 2019-20 BFO
General Fund Transfers CS&A Operations & Maintenance Capital Investments Energy Services / CAP Initiatives
City of Fort Collins Utility 2017 10-Year Strategic Financial Plan
1 of 36
2017 10-Year Strategic Financial Plan
City of Fort Collins Utilities
UTILITIES
City of Fort Collins Utility 2017 10-Year Strategic Financial Plan
2 of 36
Table of Contents
28T501 - Light & Power Enterprise Fund28T ................................................................................................ 3
28TExecutive Summary – Light & Power28T ........................................................................................... 3
28TFinancial Analysis28T .............................................................................................................................. 9
28TRevenue Analysis – Light & Power28T ........................................................................................... 9
28TExpenditure Analysis – Light & Power28T .................................................................................... 13
28TOperating Income Analysis – Light & Power28T ....................................................................... 20
28TCapital Expenditure Analysis – Light & Power28T .................................................................... 22
28TDebt Analysis – Light & Power28T ................................................................................................. 25
28TReserve Analysis – Light & Power28T ........................................................................................... 27
28TRate Analysis – Light & Power28T ................................................................................................. 28
28TFinancial Risk Assessment – Light & Power28T............................................................................... 31
City of Fort Collins Utility 2017 10-Year Strategic Financial Plan
3 of 36
501 - Light & Power Enterprise Fund
Executive Summary – Light & Power
The operating income for this Fund has been negative for 8 of the last 10 years. This was
initially an intentional effort to draw down Reserves but because of continued negative
operating income a rate increase was approved by City Council for 2017 as part of the
solution to address this ongoing shortfall. Given the limited growth available in operating
income through modest rate adjustments it will be necessary to tightly manage operating
expenses so as to limit their growth significantly over the next decade. Together these will
allow for the operational income to become positive in the near future and allow all currently
identified capital improvements to be made without issuing more debt before 2022.
Incremental capital investment is anticipated to be necessary for system renewal which is
expected to require issuance of $20M debt in 2023.
($20,000,000)
$0
$20,000,000
$40,000,000
$60,000,000
$80,000,000
$100,000,000
$120,000,000
$140,000,000
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Light & Power Fund Operating Income (2007-2016)
OPERATING INCOME
Total Operating Revenue
Total Operating Expenses
City of Fort Collins Utility 2017 10-Year Strategic Financial Plan
4 of 36
Light & Power revenues consist of monthly charges for services, development fees and other
minor fees (dark fiber leases, warehouse fees, etc.) and miscellaneous revenues (interest, asset
auctions, etc.). Approximately 65% of these revenues are passed directly through to Platte
River for generation and transmission charges and another 6% is transferred to the General
Fund as a payment in lieu of taxes. The remaining 29% of revenues consists of operating
revenue (22%) and non-operating revenue (7%) which is available to the Light & Power
Enterprise Fund for operational and capital expenses although, as a standing practice, non-
operating revenue should not be relied upon for operational expenses. Energy conservation
and renewable energy program expenses also need to be covered in the remaining 29%.
Because the portion of revenues and expenses associated with the generation and
transmission of the electricity through the PRPA system is not within the control of Fort Collins
Utilities these revenues and costs are considered to be offset without impacting the financial
health and resiliency of the distribution electric utility except in limiting the potential annual
rate adjustments.
Light & Power operating expenses are shown below in the categories consistent with the
monthly financial operating report. The two expense categories which are made to Platte
River Power Authority (PRPA) are not included so as to provide some relative scale for the
expenses that remain within the municipality. These categories are each discussed in the
operating expense section below. The direct operational costs are shown in purple,
community renewable and energy efficiency expenses in shades of green and the
administrative expenses in shades of grey. The payment in lieu of taxes is shown in yellow.
Depreciation is a non-budgetary expense. Total operating expenses have grown at an
$28,892,267
$8,953,335
$7,080,150
$89,100,574
$0
$25,000,000
$50,000,000
$75,000,000
$100,000,000
$125,000,000
$150,000,000
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Light & Power Fund Revenues (2007 - 2026)
Operating Revenues for Distribution Operations
Non-operating Revenues
PILOTs
Purchased Power "Pass Thru"
City of Fort Collins Utility 2017 10-Year Strategic Financial Plan
5 of 36
annual rate of 5.3% over the past decade. Without depreciation and PRPA expenses
considered, operating expenses have grown at an annual rate of 7.7% over the past decade.
This rate of annual growth is unsustainable and is assumed to be tightly managed in the
analysis and forecasts below.
Light & Power non-operating expenses are shown below. Non-operating expenses represent a
significant portion of the total expenses once PRPA’s expense is removed. Capital projects
represent specifically budgeted capital investments. System additions represent general
capital investments. It will be necessary to diligently plan for the growth on capital expenses
as well over the coming decade particularly in the first 5 years.
$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
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Light & Power Fund Operating Expenses (2007-2016)
less PRPA Expenses
Depreciation PILOTs
Purchase Power - Community Renewables Energy Services
Other Payments & Transfers Admin Services - General Fund
Admin Services - CS&A L&P Operations
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
$0
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
% Total Expenses
Light & Power Fund Non-Operating Expenses (2007-2016)
Capital Projects
System Additions
Debt Service
% Total Expenses
City of Fort Collins Utility 2017 10-Year Strategic Financial Plan
6 of 36
The current 10 Year CIP anticipates significantly more capital investment over the coming
decade than was seen in the previous decade. This increase is largely driven by new
capacity needs and the higher costs associated with directional boring to install such
capacity and anticipated annexations which require significant capital investment with no
associated development fee revenue.
The results of the financial modeling which applies the same objective strategies for raising
rates and issuing debt as the other utilities are presented below and discussed in more depth
in the relevant sections below.
Two consecutive 5.0% rate increases will be necessary in the 2019-20 budget cycle with more
modest rate increases being requested in the following years. It is not possible to smooth out
these two rate increase though as the capital spend needed in 2019-24 to meet capacity
constraints, service area wide projects and distribution system improvements will require
adequate revenues to be done and there will not be adequate reserves available to offset
the revenue shortfall otherwise.
$0
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
Annual Capital Investment
Light & Power Fund Capital Improvement Plan
New Capacity Fiber Optics Improvements
Substation Improvements Operational Technology
Distribution System Improvements Annexations
Service Area - wide Historical Ave Capital 2007-16
Ave Capital Investment 2017-26 Previous CIP Estimated 2017-2026 Capital Investment
City of Fort Collins Utility 2017 10-Year Strategic Financial Plan
7 of 36
Operating income is expected to turn positive beginning in 2019 with the proposed rate
increases before drifting down slightly after 2021 as ongoing wholesale energy increases will
be partially absorbed in the following years.
The available fund balance is expected to increase modestly as operating income becomes
positive through the necessary rate adjustments and operating expenses are limited in their
year over year growth. This increased Available Reserve balance will allow for more system
renewal investments to be made without significant rate increases in the future.
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
10.0%
2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025
Rate Increase
($5,000,000)
($2,500,000)
$0
$2,500,000
$5,000,000
$7,500,000
$10,000,000
$12,500,000
$15,000,000
2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025
Operating Income
City of Fort Collins Utility 2017 10-Year Strategic Financial Plan
8 of 36
Below is a graph showing the increase in outstanding debt with new debt issuances being
required in 2022 or 2023. By not issuing debt for electric infrastructure until 2023, the Net
Pledged Revenues of this Enterprise Fund will be adequate as revenues will be realized from
the broadband initiative before then.
The table below summarizes the expected rate increases and debt issuances over the coming
decade.
$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
2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025
Available Fund Balance
$0
$10,000,000
$20,000,000
$30,000,000
2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025
Outstanding Debt
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
Rate Increase 3.5% 1.8% 5.0% 4.9% 2-3% 0-2% 0-2% 1-3% 1-3% 0-2%
Debt Issuance $M $20.0
$165M of capital work is expected to be needed between 2017 and 2026 in addition to the current capital appropriations.
City of Fort Collins Utility 2017 10-Year Strategic Financial Plan
9 of 36
In order to achieve the operational objectives of this utility while standing up the broadband
line of business it will be necessary to generate positive operating income beginning in the
2019-20 budget cycle which will require 5.0% rate increases in both years along with
aggressive management of operating expenses. Through subsequent modest rate
adjustments and debt issuances, it is expected that the capital investments in the
infrastructure that have been identified can be made with the utility remaining in a financially
healthy position throughout the coming decade. Mitigation strategies should be developed
for the most significant financial risks identified in the risk assessment below.
Financial Analysis
Revenue Analysis – Light & Power
Operating revenues for this fund have grown substantially over the previous decade from
$82M in 2007 to $125M in 2016 while the amount of energy consumed by the community has
remained essentially flat over the same period. Overall growth has just outpaced energy
conservation efforts resulting in reduced energy use per customer but an overall 0.7% annual
increase in total energy consumed. Thus, the significant growth in operating revenues is
attributable primarily to rate increases that have occurred since 2006 and not growth in
consumption. This is consistent with industry trends as conservation, energy efficiency and
distributed generation have offset population and demand growth.
The table below shows the annual revenues by major categories for the past 5 years.
Residential revenues have been growing more slowly than commercial and industrial revenues
over the last 5 years although 2016 showed a larger growth in residential revenues than
commercial revenues. (The data here is not adjusted for weather so as to accurately
represent the revenues received.)
0
1,500,000,000
3,000,000,000
$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
$50,000,000
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Sales (kWh)
Sales ($)
Light & Power Fund Operating Revenues (2007-2016)
Energy Sold (kWh) Residential Commercial Industrial
City of Fort Collins Utility 2017 10-Year Strategic Financial Plan
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The table also shows that the non-lapsing revenues over this same period have come mostly
from development fees but do include revenue from the SmartGrid Investment Grant
associated with the deployment of the advanced metering infrastructure beginning in 2012. A
debt issuance of $16.5M was completed in 2010 as part of that infrastructure project, as well.
No more grant revenues are expected in the foreseeable future. Electric development fees
peaked in 2014 although strong growth returned in 2016. The volatility of development fees is
much greater than that of operating revenues requiring caution before relying on
development fee revenues for necessary capital improvements or forecasting revenues.
Looking at revenues on an annual percent change basis shows a longer term trend of 3-5%
annual growth since 2007 (without the grant revenue in 2010) with 2016 showing 6.63% growth
in revenues (see table below). Development fees accounted for $2M of the $8.5M increase in
revenues in 2016 while the 3.2% retail rate increase accounted for most of the rest. Again,
revenue growth is being driven by rate increases and those rates for monthly charges have
increased well above the rate of inflation (0-2%) over each time horizon. This trend is not
sustainable suggesting a more modest revenue growth should be planned for over the next
decade than the 4.28% annual growth seen over the last decade.
FUND:
501 - L&P Enterprise Fund
Year 2007 2012 2013 2014 2015 2016
Annual Demand (KWH in Millions) 1,484,986,657 1,508,734,757 1,500,215,061 1,475,103,134 1,519,377,396 1,547,458,755
Annual Rate Increase 0.00% 8.30% 4.33% 2.00% 1.90% 3.20%
Residential Elec Services $ 31,327,135 $ 42,568,738 $ 45,438,245 $ 44,005,676 $ 44,318,116 $ 47,200,924
Commercial Elec Services $ 26,849,951 $ 35,122,990 $ 36,512,545 $ 36,939,501 $ 39,063,732 $ 40,124,454
Industrial Charges for Services $ 18,746,178 $ 24,319,329 $ 25,953,824 $ 26,393,821 $ 27,041,360 $ 30,273,435
Green Energy Program $ 352,182 $ 474,671 $ 354,883 $ 314,025 $ 381,995 $ 394,028
PILOTs $ 4,636,733 $ 6,148,751 $ 6,498,191 $ 6,462,310 $ 6,644,988 $ 7,080,150
Operating Revenue $ 81,912,180 $ 108,634,479 $ 114,757,689 $ 114,115,333 $ 117,450,191 $ 125,072,991
Development Fees/PIFs/Contributions $ 2,677,647 $ 2,699,057 $ 5,063,377 $ 7,557,046 $ 4,435,452 $ 6,363,132
Other Misc $ 4,483,993 $ 2,341,982 $ 867,748 $ 2,306,476 $ 2,512,467 $ 2,538,337
Debt Issuances and Grant Revenues $ - $ 6,034,436 $ 8,575,083 $ 1,975,031 $ 1,296,471 $ 51,866
Non-Operating Revenue $ 7,161,640 $ 11,075,474 $ 14,506,208 $ 11,838,553 $ 8,244,390 $ 8,953,334
Total Revenues $ 89,073,820 $ 119,709,954 $ 129,263,897 $ 125,953,885 $ 125,694,581 $ 134,026,325
City of Fort Collins Utility 2017 10-Year Strategic Financial Plan
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The reasons this trend is not sustainable include some evidence of rate fatigue due to annual
rate increases, the City approaching build out particularly for commercial development, and
the community’s environmental objectives of reducing greenhouse gas emissions and energy
consumption. In particular, the City’s Climate Action Plan will put downward pressure on
operating revenue over the next decade by decreasing the amount of energy being
consumed by the community and upward pressure on operating expenses, and hence rates,
as more renewable energy is added to the wholesale portfolio. Additionally, the adoption of
a time of use rate structure for residential customers is expected to add to this downward
pressure on operating revenues at least as a one-time reduction of about 1%. Distributed
renewable generation resources will put downward pressure on operating income over the
next decade and upward pressure on operating expenses by increasing the amount of
energy being purchased from within the community at retail rates, as well.
Looking out over the next ten years through the long term financial model, revenues are
expected to continue trending upward though as residential development continues and
modest rate adjustments are necessary for Platte River to meet the Clean Power Plan
FUND:
501 - L&P Enterprise Fund
Year
10 Yr
Annualized
Trend
5 Yr
Annualized
Trend
3 Yr
Annualized
Trend
1 Yr
Annualized
Trend
Annual Demand (KWH in Millions) 0.70% 0.71% 1.04% 1.85%
Annual Rate Increase 3.84% 5.24% 3.82% 3.20%
Residential Elec Services 4.44% 3.48% 1.28% 6.50%
Commercial Elec Services 4.23% 4.48% 3.19% 2.72%
Industrial Charges for Services 5.15% 7.06% 5.27% 11.95%
Green Energy Program 3.42% -3.82% 3.55% 3.15%
PILOTs 4.54% 4.64% 2.90% 6.55%
Operating Revenue 4.54% 4.65% 2.91% 6.49%
Development Fees/PIFs/Contributions 3.67% 25.31% 7.91% 43.46%
Other Misc -3.00% -0.72% 43.02% 1.03%
Debt Issuances and Grant Revenues
Non-Operating Revenue -0.98% -14.86% 8.60%
Total Revenues 4.28% 4.21% 1.21% 6.63%
City of Fort Collins Utility 2017 10-Year Strategic Financial Plan
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objectives and the distribution system is renewed. This is shown in the graph below which
forecasts an annual growth of 3.16% in future operating revenue (solid green line) rather than
the 4.82% seen since 2007 (dotted line). The green area shows the range of revenues
considered in the stochastic analysis for the long term financial model.
Non-operating revenues are expected to remain within the range seen over the past decade
with modest inflation offsetting the impacts of redevelopment becoming more common
requiring less development fees than “green field” development and investment policies
remain conservative. The uncertainty over the next decade appears large due to the
volatility of the development fees. Any unanticipated grant revenue would positively impact
the financial health of the utility and as such is not modelled here. Again, the green area
shows the range of revenues considered in the long term financial model.
$0
$50,000,000
$100,000,000
$150,000,000
$200,000,000
$250,000,000
Annual Operating Revenue
Light & Power Fund Operating Revenues (2007 - 2026)
Operating Revenue
(3.16% per yr)
Assuming Historical Trend
(4.82% per yr)
$0
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
Annual Non-operating Revenue
Light & Power Fund Non-operating Revenues (2007 - 2026)
City of Fort Collins Utility 2017 10-Year Strategic Financial Plan
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Expenditure Analysis – Light & Power
Operating expenses in the Light & Power Fund have grown well above the rate of inflation
over the past decade. The most critical factor in the financial health of this Fund is to manage
operational expenses to grow no more than 2.5% annually. The additional system renewal
investments should help with this but significant attention will need to be given to operational
expenses within each Business Unit.
The table below shows operating and non-operating expenses by the major categories shown
on the Monthly Financial Operating Report (MOR).
Purchased Power – Tariff 1 - Increased purchase power costs are offset directly by increased
operating revenues through rate increases each year. The upward trend is driven mainly by
year over year wholesale rate increases by Platte River.
FUND:
501 - L&P Enterprise Fund
Year 2007 2012 2013 2014 2015 2016
Annual Demand (KWH in Millions) 1,484,986,657 1,508,734,757 1,500,215,061 1,475,103,134 1,519,377,396 1,547,458,755
OPERATING EXPENSES
Purchase Power -Tariff 1 $ 57,116,913 $ 74,508,389 $ 78,495,175 $ 78,272,066 $ 82,164,556 $ 87,276,576
Renewables PRPA $ 1,116,001 $ 1,444,835 $ 1,823,999 $ 1,824,904 $ 1,893,255 $ 1,823,998
Community Renewables $ - $ 330,034 $ 380,861 $ 401,315 $ 1,568,142 $ 1,539,429
L&P Operations $ 6,350,380 $ 7,537,528 $ 8,138,067 $ 8,449,628 $ 9,042,578 $ 10,385,756
Energy Services $ 1,444,376 $ 3,546,448 $ 4,533,038 $ 4,849,559 $ 4,968,461 $ 5,960,263
PILOTs $ 4,636,733 $ 6,148,751 $ 6,498,191 $ 6,462,310 $ 6,645,012 $ 7,080,150
Administrative Services
Admin Services - CS&A $ 4,324,672 $ 4,272,291 $ 4,683,584 $ 5,126,811 $ 5,268,453 $ 6,500,603
Admin Services - General Fund $ 942,198 $ 1,054,862 $ 1,162,454 $ 1,197,328 $ 1,473,975 $ 1,503,455
Other Payments & Transfers $ 403,540 $ 773,734 $ 952,770 $ 357,670 $ 612,833 $ 567,587
Subtotal Admin Services $ 5,670,410 $ 6,100,887 $ 6,798,808 $ 6,681,809 $ 7,355,261 $ 8,571,645
Depreciation $ 6,462,805 $ 7,739,320 $ 8,032,824 $ 8,332,877 $ 8,646,806 $ 9,126,391
Total Operating Expenses $ 82,797,617 $ 107,356,193 $ 114,700,963 $ 115,274,466 $ 122,284,072 $ 131,764,208
Operating Expenses less Purchased Powe $ 24,564,703 $ 31,402,969 $ 34,381,789 $ 35,177,496 $ 38,226,261 $ 42,663,634
Operating Expenses less Purchased
Power & Depreciation
$ 18,101,898 $ 23,663,649 $ 26,348,965 $ 26,844,620 $ 29,579,455 $ 33,537,243
Debt Service $ - $ 1,818,215 $ 1,973,529 $ 1,967,728 $ 1,966,728 $ 1,981,334
System Addition/Replacement $ 9,454,024 $ 8,814,033 $ 8,292,788 $ 10,086,577 $ 9,809,337 $ 12,200,187
Major Capital Expenses $ 376,895 $ 14,478,288 $ 10,141,499 $ 6,034,069 $ 5,111,226 $ 10,840,436
Total Non-operating Expenses $ 9,830,918 $ 25,110,536 $ 20,407,817 $ 18,088,374 $ 16,887,291 $ 25,021,957
Total Expenses $ 92,628,535 $ 132,466,729 $ 135,108,779 $ 133,362,841 $ 139,171,363 $ 156,786,166
City of Fort Collins Utility 2017 10-Year Strategic Financial Plan
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Renewables PRPA - A set amount of renewable energy (76,000 MWh is purchased each year
from Platte River) so any increase in this expense is due to a rate increase from Platte River.
The slight increase in 2015 was an inconsistency in how community renewables were
expensed. These costs increased 4.2% for 2017.
Community Renewables – This increase was driven primarily by the Solar Purchased Power
Program (SP3) which took advantage of a State program allowing for any renewable energy
purchased under certain conditions to count triple toward the Renewable Energy Standard.
This was accomplished through 20 year purchased power agreements at a fixed rate.
Ongoing adoption of distributed generation will continue to increase this expense through
customer rebates and similar purchased power agreements into the foreseeable future.
Community Renewables show an increased budget in 2017 which includes $0.8M in
Enhancements. These Enhancements are also in the 2018 budget although they are not
anticipated to be ongoing expenses after 2018.
L&P Operations – This is the only expense line that exceeded its budget in 2016. This
exceedance was driven by unbudgeted pay increases which are budgeted in 2017. While
other expense line items have grown at a faster rate than L&P Operations (see chart below),
this line item represents the largest and most direct expense that can be managed going
forward by Fort Collins Utilities.
Energy Services – As the chart below shows, this expense has grown considerably based on
Council direction. Further growth may be necessary to meet the CAP goals. An audit is being
done of the various programs encompassed in this line item in 2017 to assess the realized
results of each which may allow for more optimized investment. The 2017 Budget included a
1.25% rate increase for distribution operations to generate operating income. This 1.25%
increase is expected to generate $1.5M of additional operating revenue annually. However,
the 2017 budget also includes $1.6M of enhancements for Energy Services. Thus, it will not
increase operating income as intended. These enhancements are not expected to be
extended beyond the 2018 budget at this point. If they are extended, it will be necessary to
request an additional rate increase of at least 1.25% to increase operational revenues as
intended in 2017without being immediately offset by an additional operating expense.
The annual growth in these efforts has had an impact on retail rates. The annualized rate of
growth has resulted in a significant imbalance between the amount Fort Collins is spending on
these efforts compared to neighboring communities which is not consistent with a competitive
rates strategy.
City of Fort Collins Utility 2017 10-Year Strategic Financial Plan
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Payments in Lieu of Taxes (PILOTs) – This is a transfer to the General Fund set at 6% of operating
revenues. As such, any increase in this expense is directly offset by higher operating revenues.
Administrative Services – Administrative Services from the Customer Service and Administration
areas increased significantly in 2017 in part due to the need to address a reserve shortfall from
a non-budgeted benefits adjustments. This expense line (Admin Services – CS&A) is another
area that provides opportunity to limit expense growth over the coming decade.
Administrative Services from the General Fund increased 23% from 2014 to 2015 and then 2%
from 2015 to 2016. These are budgeted transfers so when actual expenses for the General
Fund are below the budgeted transfers there is no adjustment to the charge to the Utility
Funds - this is a practice that may be difficult to argue is defensible as not being a transfer of
Enterprise Funds to the General Fund. For 2017 a new Administrative Services model was
developed by the Budget Office which resulted in a significant reduction (23%) in these
charges for the L&P Fund in 2017 primarily due to no longer including the transfer itself in the
calculation of the transfer amount. Other payments and transfers increased due to the
centralization of Risk Management.
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
Fort Collins Loveland Longmont Colorado Springs
Renewable and Energy Service Expenses as a % of
2016 Distirbution O&M
$0
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
$7,000,000
$8,000,000
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Light & Power Renewable and Energy Efficiency Initiatives (2007-2016)
Purchase Power - Community Renewables
(54% annual increase since 2010)
Energy Services
(17% annual increase since 2007)
City of Fort Collins Utility 2017 10-Year Strategic Financial Plan
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In addition to the large annual increases in operating expense categories, the table above
also shows the significant increase in system additions and capital expenses (both are non-
operating expenses) in 2016 over 2015. This was due to increased infrastructure investment
being made in conduits and duct banks to serve anticipated load growth and to the
construction of 222 LaPorte and remodel of 700 Wood Street in 2016. The advanced metering
infrastructure project that began in 2012 is still listed as Work In Progress (WIP). As such, the
$34M investment is not being fully depreciated yet. Closing this project will allow more of this
investment to be depreciated. This will result in increased operating expense from
depreciation for the book life of that infrastructure.
Looking at the 2017 Budget compared to the 2016 actual spend provides some direction for
the near term challenge of managing operating expenses in this utility. Light & Power
Operations is highlighted due to the overspend in 2016 and the 5 year trend on these
expenses, making it a critical area of focus on cost management along with Admin Services –
CS&A. Investments continue in Community Renewables and Energy Services making the
combined 2017 budget of $8.5M almost comparable to the direct operating expense of the
Fund.
City of Fort Collins Utility 2017 10-Year Strategic Financial Plan
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Looking at annual growth rates for expense categories over the near and long term shows
some significant annual increases for most expenses. Again, it will be crucial to the financial
health of this Fund to limit growth in every line to less than 2.5% annually in the future.
FUND:
501 - L&P Enterprise Fund
Year 2016 2016 Budget
% of Budget
Spent
2017 Budget
2017 Budget
as % of 2016
Actuals
Annual Demand (KWH in Millions) 1,547,458,755
OPERATING EXPENSES
Purchase Power -Tariff 1 $ 87,276,576 $ 88,792,000 98% $ 87,300,000 100%
Renewables PRPA $ 1,823,998 $ 1,824,000 100% $ 1,900,000 104%
Community Renewables $ 1,539,429 $ 1,896,520 81% $ 2,382,500 155%
L&P Operations $ 10,385,756 $ 9,740,407 107% $ 10,187,223 98%
Energy Services $ 5,960,263 $ 7,103,451 84% $ 6,080,264 102%
PILOTs $ 7,080,150 $ 7,254,000 98% $ 7,170,000 101%
Administrative Services
Admin Services - CS&A $ 6,500,603 $ 6,500,603 100% $ 6,705,767 103%
Admin Services - General Fund $ 1,503,455 $ 1,503,455 100% $ 1,163,489 77%
Other Payments & Transfers $ 567,587 $ 642,068 88% $ 598,759 105%
Subtotal Admin Services $ 8,571,645 $ 8,646,126 99% $ 8,468,015 99%
Depreciation $ 9,126,391
Total Operating Expenses $ 131,764,208 $ 125,256,504 105% $ 123,488,002 94%
Operating Expenses less Purchased Powe $ 42,663,634 $ 34,640,504 123% $ 34,288,002 80%
Operating Expenses less Purchased
Power & Depreciation
$ 33,537,243 $ 34,640,504 97% $ 21,718,279 65%
Debt Service $ 1,981,334 $ 2,034,602 $ 2,059,113
System Addition/Replacement $ 12,200,187 $ 15,604,986 $ 5,666,141
Major Capital Expenses $ 10,840,436 $ 70,476 $ 14,415,407
Total Non-operating Expenses $ 25,021,957 $ 17,710,064 $ 22,140,661
Total Expenses $ 156,786,166 $ 142,966,568 $ 145,628,663
City of Fort Collins Utility 2017 10-Year Strategic Financial Plan
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The chart below shows the growth rates for the major operating expense categories and
system additions and replacements. The line graph shows that the purchased power costs
FUND:
501 - L&P Enterprise Fund
Year
10 Yr
Annualized
Trend
5 Yr
Annualized
Trend
3 Yr
Annualized
Trend
1 Yr
Annualized
Trend
Annual Demand (KWH in Millions) 0.70% 0.71% 0.23% 1.85%
OPERATING EXPENSES
Purchase Power -Tariff 1 4.64% 4.69% 3.31% 6.22%
Renewables PRPA 16.89% -0.05% 9.43% -3.66%
Community Renewables 39.28% 68.12% -1.83%
L&P Operations 7.73% 6.89% 6.26% 14.85%
Energy Services 16.32% 16.80% 11.89% 19.96%
PILOTs 4.61% 4.64% 2.62% 6.55%
Administrative Services
Admin Services - CS&A 4.50% 8.26% 7.24% 23.39%
Admin Services - General Fund 7.94% 7.98% 11.80% 2.00%
Other Payments & Transfers 4.03% 4.97% -7.48% -7.38%
Subtotal Admin Services 4.99% 7.97% 6.43% 16.54%
Depreciation 3.59% 4.05% 3.77% 5.55%
Total Operating Expenses 5.34% 5.53% 4.44% 7.75%
Operating Expenses less Purchased Powe 6.64% 7.70% 6.77% 11.61%
Operating Expenses less Purchased
Power & Depreciation
7.66% 8.84% 7.72% 13.38%
Debt Service 3.81% 2.65% 0.74%
System Addition/Replacement 6.70% 14.85% 3.63% 24.37%
Major Capital Expenses 20.11% 0.02% -29.32% 112.09%
Total Non-operating Expenses 11.92% 6.13% -12.39% 48.17%
Total Expenses 6.14% 5.63% 1.66% 12.66%
City of Fort Collins Utility 2017 10-Year Strategic Financial Plan
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while still above the inflation rate have increased at a slower rate than any category of the
distribution utility expenses.
The chart below shows the untenable trend in operating expenses. Inflation has been less
than 2% over the past decade for comparison.
Looking out over the next ten years through the long term financial model, expenses will need
to be tightly managed so as not to exceed the rate of inflation in total. This will be particularly
challenging as most of the operating revenue goes to purchased power expenses which are
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
10 Yr Annualized Trend 5 Yr Annualized Trend 3 Yr Annualized Trend
Light & Power Fund Annualized Increase in Operating Expenses
L&P Operations
Energy Services
Admin Services - CS&A
Admin Services - General Fund
System Addition/Replacement
Purchase Power -Tariff 1
0%
2%
4%
6%
8%
10%
12%
14%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Light & Power Fund Annual % Change in Operating Expenses
L&P Operations LESS Purchased Power
Purchased Power Tariff 1
City of Fort Collins Utility 2017 10-Year Strategic Financial Plan
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expected to grow above the rate of inflation – purchased power costs are assumed to
increase at 2.25% annually which is 0.5-1.5% above the anticipated rate of inflation of 1-2%.
The dotted black line in the chart shows the current trend on operating expenses. The solid
red line into the future assumes operating expenses other than purchased power and PILOTs
also grow at a rate of only 2.43% annually.
Operating Income Analysis – Light & Power
While operating revenues increased from $82M in 2007 to $125M in 2016, operating expenses
increased from $83M to $132M over the same period. This difference between the increases in
operating revenues and operating expenses has resulted in this utility having negative
operating income 8 of the last 10 years with 2016 being the largest operating loss over that
period at $6.0M. Only 2012 which saw an 8.3% rate increase and 2013 which saw an
additional 4.3% rate increase generated positive operating income. The graph below shows
the growing divergence between operating revenues and expenses. Given the limited
growth available in operating income it will be necessary to tightly manage operating
expenses so as to limit their growth significantly over the next decade. Constraining operating
expenses along with modest growth in operating revenues will allow this utility to generate
positive operating income which will provide the necessary capital for anticipated
infrastructure build out and renewal in the future. Again, it will be necessary to have 5.0% rate
increases in both 2019 and 2020 to realize this operating income.
$-
$50,000,000
$100,000,000
$150,000,000
$200,000,000
$250,000,000
Annual Operating Expenses
Light & Power Fund Operating Expenses (2007-2026)
Operating Expenses
(2.43% per yr)
Assuming Historical Trend
(5.34% per yr)
City of Fort Collins Utility 2017 10-Year Strategic Financial Plan
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By realizing a historically modest operating revenue growth of 3.2% over the coming decade
and most importantly limiting increases in operating expenses to no more than 2.4% in total
annually, it is expected that adequate operating income will be generated and the identified
capital work in the CIP can be fully funded without the need for additional debt to be issued
before 2023 when the broadband effort is expected to generate adequate revenue to
service that debt.
($20,000,000)
$0
$20,000,000
$40,000,000
$60,000,000
$80,000,000
$100,000,000
$120,000,000
$140,000,000
$160,000,000
$180,000,000
2007 2009 2011 2013 2015 2017 2019 2021 2023 2025
Light & Power Fund Operating Income (2007-2026)
OPERATING INCOME
Total Operating Revenue
Total Operating Expenses
($8,000,000)
($6,000,000)
($4,000,000)
($2,000,000)
$0
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
Annual Operating Income
Light & Power Operating Income (2007-2026)
City of Fort Collins Utility 2017 10-Year Strategic Financial Plan
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Capital Expenditure Analysis – Light & Power
The electric system is largely an underground distribution system that has been built over the
last 30-50 years. These underground assets have performed well over their useful life, allowing
the community to benefit from a very reliable electric system, but it is expected that significant
capital investment will need to be made in the coming decades to renew this aging
infrastructure. The need for asset lifecycle management strategies (from installation to
replacement) for all major electric assets will be an area of focus for Asset Management and
L&P Operations in the next few years so that the necessary investments are quantified and
adequate funding is available as needed in the future.
The current 10 Year CIP consists of $166M of identified capital investments which consists of
$103M of new capital needs for the anticipated growth in system demands over the decade
as well as $58M for system renewal investments and $5M for service area wide software
projects. Excluding the long term capital investment in the new administrative building of
$14M and the portion of the advanced metering infrastructure investment funded by grant
revenue of $16M the average annual historical capital investment has been $13.5M per year
from 2007 through 2016, or $5.3M more per year than is identified for the coming decade.
Annexations into the City limits typically result in this utility taking over service from a
neighboring utility. This requires compensating the neighboring utility for stranded assets and
sometimes for lost future revenue. Additionally, it involves reconfiguring and rebuilding the
existing infrastructure without any development fee to offset the capital investment. Thus,
annexations can be a significant expense for this utility. The Mulberry Annexation is the most
significant contributor to the Annexations category as this annexation is estimated to cost Light
& Power at least $15M to acquire and rebuild the infrastructure to meet standards. A
$0
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
Annual Capital Investment
Light & Power Fund Capital Improvement Plan
New Capacity Fiber Optics Improvements
Substation Improvements Operational Technology
Distribution System Improvements Annexations
Service Area - wide Historical Ave Capital 2007-16
Ave Capital Investment 2017-26 Previous CIP Estimated 2017-2026 Capital Investment
City of Fort Collins Utility 2017 10-Year Strategic Financial Plan
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deferment of this annexation by a few years would relieve some of the potential constraints on
this fund.
2017-18 Budget – Light & Power
The 2017-18 biennial budget included a 3.45% rate increase in 2017 and a 1.8% increase in
2018 as well as a drawdown of Available Reserves from $20.0M to $6.7M for the funding of
several capital improvements. This assumes that revenues and operating expenses will be at
the budgeted level. Based on historical trend analysis it is likely that revenues will exceed
budget and operating expenses other than purchased power expenses will be under budget.
Through October 2017, revenues are $3.7M over budget and operating expenses are $0.2M
under budget. The 2017-18 budgets reflects an annualized 0.2% decrease in Current Offers
over the 2016 budget which is less than the modeled 2.0% annual growth in operating
expenses to recognize the historical underspend. Hence the relatively low underspend year to
date in 2017 compared to the budget. The 2019-20 Budget will begin at this lower level and
assume no more than a 2.4% increase in operating expenses before consideration is given to
Enhancements.
The waterfall chart below summarizes the Council adopted 2017-18 budget for this utility.
$20.0
$6.7
$126.5 $3.1
$130.5 $3.1
$6.9 $4.4
$5.0
$3.4
($10.0)
$10.0
$30.0
$50.0
$70.0
$90.0
$110.0
$130.0
$150.0
$ Millions
501 L&P 2017-18 Budget
City of Fort Collins Utility 2017 10-Year Strategic Financial Plan
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A Budget Offer / Business Unit level history is provided below for additional consideration of
where opportunities and challenges may exist going forward.
BU 2013 Actual 2014 Actual
2015
Amended
Budget
2015 Actual
2016
Amended
Budget
2016 Actual 2017
Approved
2018
Approved
Offer: 5.1 Utilities: Light & Power - Payments and Transfers
10000000 - Payments & Transfers 15,248,470 15,090,964 17,556,273 16,188,056 17,934,728 17,660,398 17,907,664 18,493,708
Total Expenses for Offer 5.1 15,248,470 15,090,964 17,556,273 16,188,056 17,934,728 17,660,398 17,907,664 18,493,708
Offer: 5.2 Utilities: Light & Power - Operations
10100000 - Knowledge Transfer - L&P 22,059 20,882 50,000 0 50,000 49,941 10,000 10,000
12300000 - Admin & General Operations 893,624 903,406 825,225 718,989 920,196 9,949,918 896,071 915,815
12310000 - Telecommunications O&M 0 4,805 107,963 226,749 110,199 221,494 254,896 261,124
14000000 - Electric Field Services O&M 5,069,760 5,190,942 5,133,135 5,569,573 5,518,295 6,440,752 5,764,388 5,888,646
14100000 - Electric Systems Engr O&M 129,149 141,750 260,560 111,844 266,368 97,258 239,115 223,091
14200000 - Electric Standards Engr O&M 285,749 302,218 381,561 383,172 389,767 372,232 373,516 380,193
14210000 - Material Control - Standards 300,824 347,423 319,041 349,430 326,382 334,047 339,430 349,187
14230000 - Electric Meter O&M 391,212 434,042 377,057 445,442 385,657 459,427 433,449 435,701
14300000 - Elec. Systems Design Engr O&M 195,776 275,166 388,563 281,600 396,619 399,998 378,756 388,776
14310000 - Elec. Substations O&M 391,960 443,745 591,192 434,321 570,133 585,785 600,323 611,550
14320000 - Supervsiory Control Operations 480,013 406,130 598,477 467,547 610,704 363,190 557,279 567,683
Total Expenses for Offer 5.2 8,160,125 8,470,510 9,032,774 8,988,666 9,544,319 19,274,044 9,847,223 10,031,766
Offer: 5.5 Utilities: Light & Power - System Additions
15100000 - Replacement of Cable 860,908 297,538 507,247 556,108 496,500 970,929 0 0
15200000 - UG Equipment Upgrades 1,144,841 837,956 902,300 596,463 920,350 573,472 0 0
16080000 - Automated Dist & Load Control 31,087 42,318 100,000 30,439 100,000 10,630 0 0
16200000 - Streetlight Improvements 111,202 52,201 104,040 301,861 106,120 286,836 0 0
16300000 - Major Duct Banks & Circuits 578,775 1,421,514 1,310,265 2,066,024 6,168,807 4,944,662 0 0
16400000 - Meters & Related Devices 244,535 268,903 217,160 372,434 221,500 728,790 300,000 300,000
16410000 - Advanced Metering Infrastruct 57,071 106,092 0 14,126 0 4,093 100,000 100,000
16500000 - Telecommunications 69,664 29,221 60,000 8,248 60,000 2,964 60,000 60,000
16600000 - Services 214,516 360,510 67,100 296,070 68,420 311,643 0 0
16700000 - Elec System Purchases 814,446 564,237 777,750 429,775 793,300 443,889 425,000 430,000
16800000 - Subdivision Construction 2,008,826 3,229,573 1,938,140 2,528,424 1,927,580 1,354,160 1,859,000 1,859,000
16900000 - Distribution - Other L&P 15,296 93,951 518,110 38,712 518,720 47,934 500,000 500,000
17000000 - Transformer Purchases 769,096 1,133,683 1,495,575 852,403 1,255,534 860,802 0 0
19300000 - General Plant Purchases 544 64,432 135,000 10,995 123,856 289 0 0
19700000 - Capital Labor Elec Field Srv 417,797 496,001 2,442,920 521,024 2,505,800 225,652 725,292 745,298
19710000 - Capital Labor Elec System Engr 587,545 612,119 730,136 680,204 746,117 755,856 646,225 664,427
19720000 - Capital Labor Elec Standards 77,414 95,239 323,638 99,120 330,751 98,098 335,697 345,052
Total Expenses for Offer 5.5 8,003,564 9,705,488 11,629,381 9,402,428 16,343,356 11,620,699 4,951,214 5,003,777
Offer: 5.6 Utilities: Light & Power - Purchase Power
11000000 - Purchase Power 78,495,175 78,272,066 84,569,000 82,164,556 88,792,000 87,276,576 87,300,000 89,500,000
Total Expenses for Offer 5.6 78,495,175 78,272,066 84,569,000 82,164,556 88,792,000 87,276,576 87,300,000 89,500,000
Offer: 5.7 Equipment Replacement - Utilities: Light & Power - Vehicles and
Equipment
19400000 - Power Equipment & Vehicles 245,681 380,585 570,121 394,262 491,630 465,138 625,000 480,000
19410000 - Equip & Vehicle Elec System Engr 0 0 45,000 0 45,000 45,000 0 0
Total Expenses for Offer 5.7 245,681 380,585 615,121 394,262 536,630 510,138 625,000 480,000
Offer: 6.65 Utilities: Light & Power - Energy Services
City of Fort Collins Utility 2017 10-Year Strategic Financial Plan
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Debt Analysis – Light & Power
The electric utility has historically operated without any debt. While this is a very strong
financial policy, it is one that results in cross generational subsidies as assets are bought by one
generation of the community and then effectively used by subsequent generations of the
community. This should be revisited particularly when interest rates are extremely low. It is
much more prudent to take a longer term perspective on capital improvements so as to
minimize the financing costs associated with such projects than to be subject to the financing
costs associated with immediate financing regardless of the economic climate. In 2010 the
utility issued two revenue bonds to receive a matching grant from the Department of Energy
for the AMFC program. Based on the cyclical nature of the economy, the current favorable
financing conditions may not last more than a few years before interest rates increase.
Currently the 2010 Bonds issued to finance the AMFC project are the only debts being serviced
by this utility. Given the continued favorable cost of borrowing consideration should be given
to issuing debt over raising rates for capital investments in the near future. However, the
community interest in expanding this fund to include a broadband internet service is likely to
take up all of the existing debt capacity of this fund at least until 2023.
The existing debt was reviewed by Standard and Poor’s in 2016 which affirmed its AA- bond
rating despite there being little debt history in this fund. The output from the long term
financial model was provided to the analysts for their revised bond rating.
$0
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
Light & Power Fund Annual Debt Service Expense
Amortized
2010 ELECTRIC
City of Fort Collins Utility 2017 10-Year Strategic Financial Plan
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The debt coverage ratio for this Fund has been well above the bond covenant minimum
requirements of 1.15-1.2 as well as above the internally recommended ratio of 2.0 necessary to
be viewed as favorably as possible by the rating agencies.
The actual debt capacity for this utility Enterprise Fund is very large due to the large amount of
revenue collected which is essentially passed through to PRPA. While a simple interpretation
of Pledged Revenues could include this revenue, because it is needed to continue to meet
generation cost obligations, it is not available for debt service for any debt that may be issued
within the distribution utility. Moreover, the debt capacity of the Enterprise Fund is limited by
the outstanding debt held by PRPA as the rating agencies recognize the proportional
ownership of that debt by Fort Collins Utilities. Thus, while there is in some sense existing debt
City of Fort Collins Utility 2017 10-Year Strategic Financial Plan
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capacity of about $100-150M, not all of which may be available to the Light & Power Fund.
Moreover, the effect of issuing such debt would be to severely limit any capital investment for
this Fund beyond that debt issuance for the next 3-5 years, at least.
Reserve Analysis – Light & Power
Financial Management Policy 5, last issued by Council July 15, 2014, specifies Fund Balance
Minimums for Enterprise Reserves. It also states that additional reserves should be set aside for
anticipated capital investments. This Plan does this in the long term financial modeling to
determine when additional capital investment should come from Available Reserves and
when it should come through rates or most directly debt issuances. While not all future capital
investments have been identified, particularly for the renewal of the aging existing
infrastructure, the amount of revenue available for the anticipated capital needs should be
sufficient in the near term to avoid setting aside additional reserves above what has already
been appropriated for anticipated capital work in 2017 and 2018. This will be reviewed ahead
of the 2019-20 Budget For Outcomes cycle which begins in March of 2018.
While the Light & Power Enterprise Fund ended 2016 with a fund balance of $36.8M after
accounting for minimum reserve requirements and prior appropriations only $6.7M was
available for new appropriations. This is less than 20% of the fund balance. The graph below
shows the trend since 2011. Available reserves should be built back up to be available for
future capital needs which will require limiting the growth of operating expenses considerably
into the future and the proposed 5.0% rate increases in 2019 and 2020.
Fund 501 L&P - Debt Capacity Table
Interest Rate: 3.0% Interest Rate: 5.0%
Debt Coverage
Ratio
Debt Capacity
(10 Yr Debt)
Debt Capacity
(15 Yr Debt)
Debt Capacity
(20 Yr Debt)
Debt Coverage
Ratio
Debt Capacity
(10 Yr Debt)
Debt Capacity
(15 Yr Debt)
Debt Capacity
(20 Yr Debt)
1.2 $98.20 $137.30 $171.30 1.2 $88.90 $119.50 $143.50
1.4 $84.20 $117.70 $146.80 1.4 $76.20 $102.40 $123.00
1.6 $73.70 $103.00 $128.50 1.6 $66.70 $89.60 $107.60
1.8 $65.50 $91.60 $114.20 1.8 $59.30 $79.70 $95.70
2.0 $58.90 $82.40 $102.80 2.0 $53.30 $71.70 $86.10
2.2 $53.60 $74.90 $93.40 2.2 $48.50 $65.20 $78.30
2.4 $49.10 $68.70 $85.60 2.4 $44.40 $59.80 $71.80
Outstanding Debt $7.0 M
City of Fort Collins Utility 2017 10-Year Strategic Financial Plan
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In the near term operating income and projected development fees are expected to
increase the Available Reserve balance. As the larger capital investments are made in the
front years of the next decade and the outstanding debt is retired, Available Reserves will
increase. The increasing Available Reserves will be impacted by the development of more
robust system renewal strategies through the Asset Management efforts of the utility.
Rate Analysis – Light & Power
As discussed above, operating revenues have increased significantly over the past decade
driven mainly by rate increases. In 2017 a customer will pay $1.51 for the same amount of
energy that would have cost them $1.00 in 2007.
$0.0
$10.0
$20.0
$30.0
$40.0
$50.0
$60.0
2011 2012 2013 2014 2015 2016
$ Millions
501 - Light & Power Reserves
Fund Balances AVAILABLE Fund Balances
$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
2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025
Available Fund Balance
City of Fort Collins Utility 2017 10-Year Strategic Financial Plan
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That cost increase reflects an average annual rate increase of 4.2% over the decade. The last
year there was no rate increase in electric monthly charges was 2007. Since then the rate
increases have been primarily due to increased generation and transmission costs from PRPA
(see blue bars above). Increased focus on energy conservation programs and renewable
energy sources (see green bars above) has also driven rate increases. Lastly, there have been
two rate increases due to increased costs associated with maintaining and replacing the
distribution system (see yellow bars above).
The portion of the rate increase in 2017 that was not a pass through from PRPA was 1.25% of
the overall 3.45% rate increase. Increasing operating revenues by 1.25% based on 2016
operating revenues is expected to add $1.5M in 2017 operating revenues that are available
for expenses other than purchased power expenses. This represents a 3.6% increase in
revenues available for operating expenses other than purchased power compared to the
7.7% annual growth seen on those expenses over the previous decade. Because of additional
Enhancements to the base 2017-18 Budget, all of this additional revenue will be used above
the ongoing budget and thus will not immediately impact operating income as intended. If
these enhancements are not continued forward into 2019 then this rate increase along with
managed costs will be close to providing positive operating income in 2019 and beyond.
However, in order to assure that positive operating income is generated consistently additional
rate increases for distribution operating expenses will be necessary over the coming decade
as indicated by this analysis.
City of Fort Collins Utility 2017 10-Year Strategic Financial Plan
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Based on the 10 year wholesale rate projections from PRPA, purchased power costs are
expected to increase at a slower retail rate of 1.9% over the next 10 years under the Clean
Power Plan (CPP). If the CPP is delayed or not put into effect, then purchased power costs
should increase at an even slower rate over that period. The long term financial model
assumes the CPP continues as originally planned and that capital improvements are made as
outlined in Scenario 3 above. This results in the following ten year rate forecast:
In 2012 there were significant changes made to the wholesale purchased power rate
structure. A seasonal rate structure was adopted by PRPA and through a cost of service
analysis certain operational costs were re-allocated between the energy and demand
components of the wholesale rates. This utility has historically at City Council’s direction
passed any increase in purchased power costs immediately into the retail rate and 2012 was
no exception. In addition to the shift of wholesale purchased power costs from the demand
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
Rate Increase * 3.45% 1.8% 5.0% 4.9% 2-3% 0-2% 0-2% 1-3% 1-3% 0-2%
* Rate increases may change depending on what PRPA needs each year.
City of Fort Collins Utility 2017 10-Year Strategic Financial Plan
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to energy component of the wholesale rates, City Council adopted a three tiered residential
rate that year.
The intent of the three tiered residential rate structure was to promote energy conservation.
Based on analysis done in 2013 comparing weather normalized residential use in 2011 and
2012 there was no measurable change in energy consumption. In 2014 a pilot study was
approved by the City Council to consider a 12 month time of use (TOU) rate structure. That
rate structure showed a 2.5% reduction in energy consumption compared to the tiered rate
structure suggesting that there is some energy savings that could be expected from adopting
a residential time of use rate structure potentially as soon as 2018. The 12 month pilot study
allowed staff to have confidence that adequate revenues will be generated through a time
of use rate structure. Based on Council feedback it is expected that a time of use rate
structure that may also include a tier will be adopted for all residential customers in late 2018.
The adoption of a TOU rate structure is expected to decrease long term operating revenues
by 1.0%.
Financial Risk Assessment – Light & Power
Below is a list of identified financial risks for this utility. Each risk is categorized as high, medium
or low according to both the likelihood and consequence of it being realized. Those risks
above the solid line are significant enough that risk mitigation strategies should be developed.
Further assessment of these financial risks, particularly with operational input, may change the
likelihood and consequence of each and may identify other significant financial risks. This
additional assessment will be done ahead of the 2019-20 budget cycle.
FUND:
501 - L&P Enterprise Fund
Risk ID Description Likelihood Consequence Mitigation
Recommended
LPFR1 Operating Expense Increases Medium High X
LPFR2 Asset Lifecycle Management Plans High Medium X
LPFR3 PRPA Rate Increases High Medium X
LPFR4 Municipal Broadband High High X
LPFR5 Distributed Energy Resources Medium Medium
LPFR6 Rate Fatigue Medium Medium
LPFR7 System Reliability Medium Low
LPFR8 CAP Initiatives Low Medium
LPFR9 AMFC Cost Savings Medium Low
LPFR10 Clean Power Plan Low Medium
LPFR11 Unidentified Capital Projects Medium Medium
LPFR12 Mulberry Annexation Medium Medium
City of Fort Collins Utility 2017 10-Year Strategic Financial Plan
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1. Continuing escalation of operating expenses at a rate well above inflation would limit
capital investment and require larger rate increases than planned. Likelihood =
Medium; Consequence = High
2. Asset Lifecycle Management Plans may identify significant capital investment is
needed in aging infrastructure to maintain current levels of service. Likelihood = High;
Consequence = Medium
3. PRPA rate increases may limit the amount of any rate increase available to finance
capital improvements to the distribution system. Likelihood = High; Consequence =
Medium
4. A new broadband utility service would require issuing significant debt from this utility –
effectively consuming almost all of the debt capacity thereby limiting the amount of
debt that may be available for L&P capital needs. Likelihood = High; Consequence =
High
5. Distributed Energy Resources may significantly reduce operating income available for
system maintenance and renewal. Likelihood = Medium; Consequence = Medium
6. Rate fatigue, even at more modest annual adjustments, could result in less capital
investment than necessary to meet growth and maintain the current levels of service.
Likelihood = Medium; Consequence = Medium
7. A real or perceived decline in distribution system reliability could accelerate system
renewal capital requirement expectations. Likelihood = Medium; Consequence = Low
8. CAP objectives and tactics may limit capital available for capital needs. Likelihood =
Low; Consequence = Medium
9. AMFC projected cost savings may not be fully realized. Likelihood = Medium;
Consequence = Low
10. State decision on how to meet Clean Power Plan may require larger than anticipated
rate increases from PRPA. Likelihood = Low; Consequence = Medium
11. Unidentified capital investment may be necessary either due to additional capacity or
unexpected asset failures. Likelihood = Medium; Consequence = Medium
12. The Mulberry Annexation could proceed sooner than expected (2019 or 2020) resulting
in $10-20M capital expenditure sooner than anticipated which may require issuing debt
to finance. Likelihood = Medium; Consequence = Medium
City of Fort Collins Utility 2017 10-Year Strategic Financial Plan
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Appendix A: Capital Improvement Plan – Light & Power
Below is a list of identified capital projects expected to be completed over the next decade.
These projects are grouped into the following categories:
New Circuits – circuits that will be necessary to serve new growth areas
New Duct Banks – duct banks that will be necessary to serve new growth areas
New Substations – the 2 new substations that will be necessary to serve new growth areas
Annexations – anticipated annexation areas will require acquisition of infrastructure from
neighboring utility providers
Substation Improvements – system renewal costs for substation infrastructure
Distribution System Improvements – system renewal costs for distribution infrastructure
Fiber Optics Improvements – system renewal costs for fiber infrastructure
Operational Technology Projects – capital projects associated with updating / adopting new
technologies
City of Fort Collins Utility 2017 10-Year Strategic Financial Plan 34 of 36
Light & Power Enterprise Fund Project Prioritization These colored cells were updated Sept 27, 2017.
Project or Program 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Future Years
Total for New Circuits $3,331,017 $1,322,018 $2,852,019 $2,892,020 $4,572,021 $2,752,022 $342,023 $5,882,024 $1,322,025 $2,515,203 $22,636,823
Total for New Duct Banks $1,325,000 $430,000 $3,330,000 $5,970,000 $0 $4,970,000 $6,320,000 $9,160,000 $4,140,000 $0 $0
Total for New Substations $0 $0 $0 $0 $0 $8,750,000 $9,020,000 $0 $0 $0 $0
Total for New Capacity $4,656,017 $1,752,018 $6,182,019 $8,862,020 $4,572,021 $16,472,022 $15,682,023 $15,042,024 $5,462,025 $2,515,203 $22,636,823
Total for Annexations $140,000 $1,275,000 $0 $3,714,000 $3,000,000 $3,000,000 $3,000,000 $3,000,000 $2,500,000 $0 $0
Total for Substation Improvements $445,000 $590,000 $750,000 $620,000 $605,000 $440,000 $440,000 $440,000 $455,000 $440,000 $0
Total for Distribution System Improvements $1,555,000 $2,389,000 $4,450,000 $4,164,500 $6,310,000 $5,890,000 $7,530,000 $6,180,000 $6,370,000 $6,560,000 $6,757,000
Total for Fiber Optics Improvements $160,000 $67,000 $69,000 $71,000 $73,000 $75,000 $77,000 $79,000 $81,000 $83,000 $85,000
Total for Replacement Projects $2,160,000 $3,046,000 $5,269,000 $4,855,500 $6,988,000 $6,405,000 $8,047,000 $6,699,000 $6,906,000 $7,083,000 $6,842,000
Total for Operational Technology Projects $0 $0 $5,500,000 $0 $2,000,000 $0 $0 $0 $0 $0 $0
Grand total for all LPO Capital Projects $6,956,017 $6,073,018 $16,951,019 $17,431,520 $16,560,021 $25,877,022 $26,729,023 $24,741,024 $14,868,025 $9,598,203 $29,478,823
Light & Power Enterprise Fund Project Prioritization
Project or Program 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Future Years
New Capacity
New Circuits 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Future Years
Install circuit 826 to unload 802, 804, and 834 $585,600
Install circuit 936 to unload circuits 804, 834, and 906 $842,400
Install circuit 322 to unload circuits 308 and 332 and serve Mulberry $914,400
Install circuit 724 to unload circuits 714, 722, and 732 $911,520
Re-route circuit 716 due to cable ampacity $37,540
Re-route circuit 736 due to cable ampacity $37,540
| ID# 21 | Circuit: 572 | Install circuit 572 to serve Avago to unload 502 and 522 $490,000
| ID# 74 | Circuit: 558 | Install circuit 558 to serve HP to unload 516 and 532 $490,000
| ID# 85 | Circuit: 216 | Re-route circuit 216 to unload circuit 824 $340,000
| ID# 4 | Circuit: 936 | Install circuit 936 to unload circuits 804, 834, and 906 $1,280,000
| ID# 13 | Circuit: 724 | Install circuit 724 to unload circuits 714, 726, and 722 $980,000
| ID# 76 | Circuit: 734 | Install circuit 734 to unload circuit 738 and 722 $590,000
| ID# 9 | Circuit: 576 | Install circuit off existing breaker 576 to unload circuit 576 $500,000
| ID# 11 | Circuit: 322 | Install circuit 322 to unload circuits 308 and 332 and serve Mulberry $1,450,000
| ID# 12 | Circuit: 314 | Install circuit 314 to unload circuit 308 $700,000
| ID# 75 | Circuit: 836 | Install circuit 836 to serve Hughes Stadium $240,000
| ID# 8 | Circuit: 554 | Install circuit off existing breaker 554 to unload circuit 554 $780,000
| ID# 10 | Circuit: 518 | Install circuit off existing breaker 518 to unload circuit 518 $1,080,000
| ID# 19 | Circuit: 616 | Install circuit 616 to unload circuit 622 $260,000
| ID# 26 | Circuit: 716 | Re-route circuit 716 due to cable ampacity $70,000
| ID# 27 | Circuit: 736 | Re-route circuit 736 due to cable ampacity $70,000
| ID# 33 | Circuit: 336 | Install new circuit 336 to serve Woodard $1,150,000
| ID# 77 | Circuit: 602 | Install new circuit 602 to Serve ABB $580,000
| ID# 78 | Circuit: 634 | Install new circuit 634 to Serve ABB $580,000
| ID# 1 | Circuit: 904 | Install circuit 904 to unload circuit 504 $620,000
| ID# 34 | Circuit: 832 | Install circuit 832 to serve system expansion in west $640,000
| ID# 35 | Circuit: 502 | Install circuit off existing breaker 502 to unload ckts 502, 518 & 534 $880,000
| ID# 36 | Circuit: 566 | Install circuit off existing breaker 566 to unload circuit 522 $610,000
| ID# 37 | Circuit: 548 | Install circuit off existing breaker 548 to unload circuits 326 and 568 $340,000
| ID# 42 | Circuit: 402 | Install circuit 402 to unload circuit 832 $290,000
| ID# 43 | Circuit: 404 | Install circuit 404 to unload circuit 832 $840,000
| ID# 44 | Circuit: 406 | Install circuit 406 to unload circuits 732 and 822 $290,000
| ID# 45 | Circuit: 408 | Install circuit 408 to unload circuits 822 and 832 $840,000
| ID# 46 | Circuit: 422 | Install circuit 422 to serve system expansion in the northwest $1,410,000
| ID# 47 | Circuit: 424 | Install circuit 424 to unload circuit 812 $290,000
City of Fort Collins Utility 2017 10-Year Strategic Financial Plan 35 of 36
Project or Program 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Future Years
| ID# 48 | Circuit: 426 | Install circuit 426 to backup Linden Tech serving downtown $960,000
| ID# 49 | Circuit: 428 | Install circuit 428 to backup Linden Tech serving downtown $960,000
| ID# 82 | Circuit: 614 | Install new circuit 614 to Serve ABB $660,000
| ID# 83 | Circuit: 624 | Install new circuit 624 to Serve ABB $660,000
| ID# 50 | Circuit: 324 | Install circuit 324 to serve Woodward $1,330,000
| ID# 51 | Circuit: 304 | Install circuit 304 to serve Woodward $1,330,000
| ID# 52 | Circuit: 924 | Install circuit 924 to serve system expansion in the southwest $1,100,000
| ID# 53 | Circuit: 926 | Install circuit 926 to serve system expansion in the southeast $1,900,000
| ID# 54 | Circuit: 938 | Install circuit 938 to unload circuits 518, 526, 548, 552, 566 and 908 $1,110,000
| ID# 55 | Circuit: 624 | Install circuit 624 to unload circuits 622 and 638 $270,000
| ID# 56 | Circuit: 504 | Install circuit off existing breaker 504 to serve Intel $820,000
| ID# 57 | Circuit: 508 | Install circuit off existing breaker 508 to serve Intel and Avago $800,000
| ID# 58 | Circuit: 526 | Install circuit off existing breaker 526 to unload circuits 516, 534, and 562 $860,000
| ID# 59 | Circuit: 718 | Install circuit 718 to unload circuits 714, 722, and 732 $1,400,000
| ID# 60 | Circuit: 614 | Install circuit 614 to unload circuits 608 and 622 $790,000
| ID# 61 | Circuit: 222 | Install circuit off existing breaker 222 to unload circuit 824 $550,000
| ID# 62 | Circuit: 824 | Extend circuit 824 to serve CSU Veterans Hospital $260,000
| ID# 63 | Circuit: 102 | Install circuit 102 to serve load south of Northeast Substation $690,000
| ID# 64 | Circuit: 104 | Install circuit 104 to serve load south of Northeast Substation $690,000
| ID# 65 | Circuit: 106 | Install circuit 106 to serve load south of Northeast Substation $690,000
| ID# 66 | Circuit: 108 | Install circuit 108 to serve load east of Northeast Substation $1,480,000
| ID# 67 | Circuit: 122 | Install circuit 122 to serve load east of Northeast Substation $1,430,000
| ID# 68 | Circuit: 124 | Install circuit 124 to serve load east of Northeast Substation $1,290,000
| ID# 69 | Circuit: 126 | Install circuit 126 to serve load east of Northeast Substation $1,410,000
| ID# 70 | Circuit: 128 | Install circuit 128 to serve load south of Northeast Substation $1,120,000
| ID# 71 | Circuit: 118 | Install circuit 118 to unload circuit 704 $1,630,000
| ID# 72 | Circuit: 612 | Install circuit 612 to unload circuits 622 and 638 $300,000
| ID# 73 | Circuit: 916 | Install circuit 916 to serve system expansion in the southeast $1,900,000
Total for New Circuits $3,331,017 $1,322,018 $2,852,019 $2,892,020 $4,572,021 $2,752,022 $342,023 $5,882,024 $1,322,025 $2,515,203 $22,636,823
New Duct Banks 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Future Years
County Rd 5 - Prospect to Mulberry $662,500
Shields Duct Bank - Harmony to Fossil Creek $662,500
| ID# 79 | Install Duct bank to serve HP and Broad Com $430,000
| ID# 28 | County Rd 5 - Prospect to Mulberry $1,380,000
| ID# 78 | Overland Trail Duct Bank Drake To Prospect $1,950,000
| ID# 81 | Install Duct Bank to serve ABB Area Phase I $2,200,000
| ID# 24 | Carpenter Duct Bank Timberline to I-25 $3,770,000
| ID# 29 | Mulberry Duct Bank - I-25 to County Rd 5 $2,140,000
| ID# 31 | Woodward Phase II (Lincoln Ave. Timberline to Lemay) $2,830,000
| ID# 30 | Shields Duct Bank - Harmony to Fossil Creek $1,670,000
| ID# 86 | Northwest Substation Ductbank system $4,650,000
| ID# 84 | Install Duct Bank to serve ABB Area Phase II $2,510,000
| ID# 40 | Northeast Substation Duct Bank System $6,650,000
| ID# 32 | Straus Cabin Rd Harmony to Horsetooth $2,370,000
| ID# 41 | Portner along Trilby Lemay toward Timberline Road $1,770,000
Total for New Duct Banks $1,325,000 $430,000 $3,330,000 $5,970,000 $0 $4,970,000 $6,320,000 $9,160,000 $4,140,000 $0 $0
New Substations 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Future Years
Northwest New Substation with (2) 30/40/50 MVA Transformers $8,750,000
Northeast New Substation with (2) 30/40/50 MVA Transformers $9,020,000
Total for New Substations $0 $0 $0 $0 $0 $8,750,000 $9,020,000 $0 $0 $0 $0
System Additions 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Future Years
System Additions
System Connections
Total for New Capacity $4,656,017 $1,752,018 $6,182,019 $8,862,020 $4,572,021 $16,472,022 $15,682,023 $15,042,024 $5,462,025 $2,515,203 $22,636,823
City of Fort Collins Utility 2017 10-Year Strategic Financial Plan 36 of 36
Project or Program 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Future Years
Annexations
Riverwalk Annexation $50,000
Arapahoe Bend 2nd Annexation $75,000
Leistikow Annexation $15,000
Fossil Creek Open Space Annexation $15,000
Mulberry Annexation $500,000 $3,000,000 $3,000,000 $3,000,000 $3,000,000 $2,500,000
| ID# 87 | Circuit: 818 | WTF Annexation: 3 ph 1/0 and Duct from Overland sub to Laporte
WTF $1,260,000
| ID# 88 | Circuit: 818 | West GMA Annexation: Hughes & Foothills, 750 & Duct from
Sumac to Laporte WTF $3,214,000
Total for Annexations $140,000 $1,275,000 $0 $3,714,000 $3,000,000 $3,000,000 $3,000,000 $3,000,000 $2,500,000 $0 $0
Replacement of Existing Capital
Substations 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Future Years
Substation Improvements
Sub security capital $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000
Automated Distribution and Load Control (3 switches/year) $80,000 $80,000 $80,000 $80,000 $80,000 $80,000 $80,000 $80,000 $80,000 $80,000
Replace battery bank at Dixon $15,000
Replace battery banks at Drake, Rich, Linden, and Portner $30,000 $15,000 $15,000
Substation Improvements misc $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000
Re-gasket and paint substation transformers-2 per year (Harm, Drake, Linden, Rich) $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000
Install cap bank buildings (Dixon, Portner,Timberline, Northeast) $150,000 $150,000 $150,000 $150,000
Install new power quality meters at substations $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000
Improve oil containment on substation power transformers $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000
Replcement of electro-mechanical feeder relays at Richard's lake sub $160,000
Total for Substation Improvements $445,000 $590,000 $750,000 $620,000 $605,000 $440,000 $440,000 $440,000 $455,000 $440,000 $0
Distribution System Improvements 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Future Years
Cable & Transformer Replacement $1,025,000 $1,589,000 $2,000,000 $2,060,000 $4,000,000 $4,120,000 $6,000,000 $6,180,000 $6,370,000 $6,560,000 $6,757,000
1/O to electric heated homes - Lemay/Brookwood $30,000
Streetlight System Replacement $500,000 $650,000 $1,104,500 $1,210,000 $1,770,000 $1,530,000
Cable handling facility for cut-to-length program $900,000
System conversions - overhead to underground or rear lot to front lot. $800,000 $900,000 $1,000,000 $1,100,000
Total for Distribution System Improvements $1,555,000 $2,389,000 $4,450,000 $4,164,500 $6,310,000 $5,890,000 $7,530,000 $6,180,000 $6,370,000 $6,560,000 $6,757,000
Fiber Optic System Improvements 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Future Years
Fiber Cable Relocation $40,000 $41,000 $42,000 $43,000 $44,000 $45,000 $46,000 $47,000 $48,000 $49,000 $50,000
Fiber Panel upgrades $25,000 $26,000 $27,000 $28,000 $29,000 $30,000 $31,000 $32,000 $33,000 $34,000 $35,000
Fiber Optic Splicing equipment $95,000
Total for Fiber Optics Improvements $160,000 $67,000 $69,000 $71,000 $73,000 $75,000 $77,000 $79,000 $81,000 $83,000 $85,000
Total for Replacement Projects $2,160,000 $3,046,000 $5,269,000 $4,855,500 $6,988,000 $6,405,000 $8,047,000 $6,699,000 $6,906,000 $7,083,000 $6,757,000
Operational Technology Projects
Mapping System Conversion & SCO Technology Remodel $500,000
Advanced Distribution Management System $2,000,000
Customer Information System (L&P Share) $3,000,000
Maximo CMMS Implementation (L&P Share) $2,000,000
Total for Operational Technology Projects $0 $0 $5,500,000 $0 $2,000,000 $0 $0 $0 $0 $0 $0
Grand total for all LPO Capital Projects $6,956,017 $6,073,018 $16,951,019 $17,431,520 $16,560,021 $25,877,022 $26,729,023 $24,741,024 $14,868,025 $9,598,203 $29,393,823
Average 10-Year Capital Spend $16,578,489 $16,578,489 $16,578,489 $16,578,489 $16,578,489 $16,578,489 $16,578,489 $16,578,489 $16,578,489 $16,578,489
LIGHT & POWER FUND
10/11/2018
Actual 2015 Actual 2016 Actual 2017 Budget 2018 Budget 2019 Budget 2020 2019 2020
REVENUE PROJECTION
Operating Revenue $117,450,191 $125,072,991 $128,730,192 $130,530,000 $135,573,000 $140,395,000
% Change 6.5% 2.9% 1.4% 3.9% 3.6%
PIF / Contributions $4,435,202 $6,363,132 $5,490,709 $3,130,000 $3,230,000 $3,230,000 Reduced this from $4.63M each year
% Change 43.5% -13.7% -43.0% 3.2% 0.0%
All Other Revenues $2,691,707 $2,586,182 $2,785,561 $2,202,456 $2,069,686 $1,844,020
% Change -3.9% 7.7% -20.9% -6.0% -10.9%
Total Revenues $124,577,100 $134,022,305 $137,006,462 $135,862,456 $140,872,686 $145,469,020 Revenues $140,872,686 $145,469,020
% Change 7.6% 2.2% -0.8% 3.7% 3.3% Reserves $338,918
$141,211,604
Actual 2015 Actual 2016 Actual 2017 Budget 2018 Budget 2019 Budget 2020
CURRENT OFFERS
Offer Result Title
90.1 Utilities: Light & Power - Payments and Transfers $15,967,002 $17,660,398 $17,180,271 $18,493,708 $16,963,228 $17,315,588
% Change 10.6% -2.7% 7.6% -8.3% 2.1%
8.2 ECON Utilities: Light & Power - Core Operations $9,042,578 $10,435,697 $10,053,255 $10,131,766 $10,490,292 $10,783,807
% Change 15.4% -3.7% 0.8% 3.5% 2.8%
8.3 ECON Utilities: Light & Power - Ongoing Capital System
Additions $9,394,986 $11,689,760 $5,817,270 $5,096,234 $5,355,077 $5,427,972
% Change 24.4% -50.2% -12.4% 5.1% 1.4%
8.4 ECON Utilities - Light and Power Purchase Power $82,164,556 $87,276,576 $89,413,232 $89,500,000 $94,441,000 $97,817,000
% Change 6.2% 2.4% 0.1% 5.5% 3.6%
8.5 ECON Equipment Replacement - Utilities: Light & Power
- Vehicles and Equipment $414,351 $510,427 $392,577 $480,000 $372,000 $522,000
% Change 23.2% -23.1% 22.3% -22.5% 40.3%
9.80 ENVIR Utilities: Light & Power - Energy Services $4,401,391 $4,959,714 $4,539,648 $5,317,950 $4,394,748 $4,439,633
% Change 12.7% -8.5% 17.1% -17.4% 1.0%
9.81 ENVIR Utilities: Light & Power - Residential &
Commercial Solar Rebates $1,211,801 $799,190 $825,680 $710,000 $500,000 $500,000
% Change -34.0% 3.3% -14.0% -29.6% 0.0%
9.82 ENVIR Utilities: Light & Power - Core Renewable Energy $2,249,596 $2,564,237 $2,654,070 $3,874,500 $3,568,300 $3,671,500
% Change 14.0% 3.5% 46.0% -7.9% 2.9%
9.83 ENVIR Utilities: Light & Power - Demand Response $567,069 $1,000,549 $586,908 $620,400 $629,460 $638,663
% Change 76.4% -41.3% 5.7% 1.5% 1.5%
39.2 HPG City Manager's Office $108,145 $111,390
% Change 3.0%
63.1 HPG General Legal Services $86,407 $89,000
% Change 3.0%
87.1 SAFE City Managers Office: Office of Emergency Management $12,000 $13,000
% Change 8.3%
Subtotal Current Offers $125,413,331 $136,896,548 $131,462,912 $134,224,558 $136,920,657 $141,329,553 $136,920,657 $141,329,553
% Change 9.2% -4.0% 2.1% 2.0% 3.2% Less Current $4,290,947 $4,139,467
CAPITAL PROJECTS
Offer Result Title
8.6 ECON Capital Replacement - Utilities: Light & Power - Substation Capital Upgrades $649,000 $624,000 reduced by $1.0M in total
% Change
8.7 ECON Capital Replacement - Utilities: Light & Power - Electric Distribution Transformer Replacement $800,000 $827,500
% Change
8.8 ECON Capital Replacement - Utilities: Light & Power - Attrition Based LED Streetlight Conversion $341,360 $351,600
% Change
8.9 ECON Capital Replacement - Utilities: Light & Power - System Cable Replacement $500,000 $500,000 reduced to $500K each yr
% Change
12.1 CULTURUtilities Capital Project: Art in Public Places $14,800 $14,076
% Change
Subtotal Capital Projects $0 $0 $4,370,564 $2,305,160 $2,317,176 $2,305,160 $2,317,176
% Change -47.3% 0.5%
TOTAL WITH CAPITAL PROJECTS $125,413,331 $136,896,548 $131,462,912 $138,595,122 $139,225,817 $143,646,729 Less Capital $1,985,787 $1,822,291
LIGHT & POWER FUND
10/11/2018
2019 2020
REVENUES $141,211,604 $145,469,020
CURRENT 2019 2020
ECON $110,658,369 $114,550,779
ENVIR $9,092,508 $9,249,796
HPG $194,552 $200,390
SAFE $12,000 $13,000
CULTURE $0 $0
OTHER $16,963,228 $17,315,588
CURRENT $136,920,657 $141,329,553
LESS CURRENT $4,290,947 $4,139,467
CAPITAL 2019 2020
ECON $2,290,360 $2,303,100
ENVIR $0 $0
HPG $0 $0
SAFE $0 $0
CULTURE $14,800 $14,076
OTHER $0 $0
CAPITAL $2,305,160 $2,317,176
LESS CAPITAL $1,985,787 $1,822,291
ENHANCEMENTS 2019 2020
ECON $1,480,000 $1,407,600
ENVIR $20,000 $40,000
HPG $485,787 $56,981
SAFE $0 $0
CULTURE
OTHER
ENHANCEMENTS $1,985,787 $1,504,581
LESS ENHANCEMENTS $0 $317,710
TOTALS 2019 2020
ECON $114,428,729 $118,261,479
ENVIR $9,112,508 $9,289,796
HPG $680,339 $257,371
SAFE $12,000 $13,000
CULTURE $14,800 $14,076
OTHER $16,963,228 $17,315,588
TOTALS $141,211,604 $145,151,310
REVENUES $141,211,604 $145,469,020
CHECK - ARE THE CELLS TO THE RIGHT GREEN? $1 $1
STORMWATER FUND
#######
Actual 2015 Actual 2016 Actual 2017 Budget 2018 Budget 2019 Budget 2020 2019 2020
REVENUE PROJECTION
Operating Revenue $15,035,237 $15,620,342 $16,755,272 $16,210,000 $17,170,000 $17,510,000
% Change 3.9% 7.3% -3.3% 5.9% 2.0%
PIF / Contributions $1,276,385 $1,301,236 $1,078,414 $800,000 $680,000 $570,000
% Change 1.9% -17.1% -25.8% -15.0% -16.2%
All Other Revenues $342,365 $216,332 $567,149 $415,305 $438,325 $457,383
% Change -36.8% 162.2% -26.8% 5.5% 4.3%
Total Revenues $16,653,987 $17,137,910 $18,400,835 $17,425,305 $18,288,325 $18,537,383 Revenues $18,288,325 $18,537,383
% Change 2.9% 7.4% -5.3% 5.0% 1.4%
Less Contribution to Reserves ($1,000,000) ($1,000,000) Available for BFO $17,288,325 $17,537,383
Actual 2015 Actual 2016 Actual 2017 Budget 2018 Budget 2019 Budget 2020 + $500K from NECCO closeout
CURRENT OFFERS $500,000
Offer Result Title
9.100 ENVIR
Utilities: Stormwater - Household
Hazardous Waste & Spill Response
Services
$118,286 $110,587 $122,192 $139,060 $157,000 $157,000 $17,788,325
% Change -6.5% 10.5% 13.8% 12.9% 0.0%
11.2 SAFE Utilities: Stormwater - Core Operations $2,809,365 $3,118,677 $3,358,585 $3,461,280 $3,763,198 $3,887,830
% Change 11.0% 7.7% 3.1% 8.7% 3.3%
11.3 SAFE Capital Replacement - Utilities:
Stormwater - Minor Capital $278,352 $266,843 $280,916 $101,767 $383,232 $533,232
% Change -4.1% 5.3% -63.8% 276.6% 39.1%
90.4 Utilities: Stormwater - Payments and
Transfers $9,623,198 $10,234,652 $10,012,425 $7,590,227 $7,511,987 $6,072,936
% Change 6.4% -2.2% -24.2% -1.0% -19.2%
9.101 ENVIR REDUCTION - Utilities: Stormwater - Household Hazardous Waste Events ($27,400) ($27,400) NOT ACCEPTED
% Change 0.0%
9.102 ENVIR REDUCTION - Utilities: Community Spill Response ($32,400) ($32,400)
% Change 0.0%
63.1 HPG General Legal Services (Stormwater portion) $13,543 $13,950
% Change 3.0%
87.1 SAFE City Managers Office: Office of Emergency Management (Stormwater portion) $38,000 $39,000
% Change 2.6%
Subtotal Current Offers $12,829,201 $13,730,759 $13,774,118 $11,292,334 $11,834,563 $10,671,548 11,834,563 10,671,548
% Change 7.0% 0.3% -18.0% 4.8% -9.8% Less Current $5,953,762 $6,865,835
CAPITAL PROJECTS
Offer Result Title
11.4 SAFE Ongoing Capital - Utilities: Stormwater - Stream Rehabilitation Program $1,400,000 $801,000 $1,408,900 7 $0 $0
11.5 SAFE $1,500,000 $1,400,000 $1,500,000 1 $0 $0
Subtotal $2,900,000 $2,201,000 $2,908,900
% Change -24.1% 32.2%
11.6 SAFE Capital Replacement - Utilities: Stormwater - Basin Master Plan Updates $450,000 $450,000 11 See funding memo $1 $1
% Change 0.0%
11.7 SAFE Capital Replacement - Utilities: Stormwater - Developer Repayments $300,000 $100,000 12 See funding memo $0 $0
% Change -66.7%
12.1 CULTU Utilities Capital Project: Art in Public Places $7,611 $25,462 - -
% Change 234.5%
Other Capital Work Completed in 2017
% Change
Subtotal Capital Projects $2,900,000 $2,958,611 $3,484,362 $2,958,611 $3,484,362
% Change 2.0% 17.8%
TOTAL WITH CAPITAL PROJECTS 12,829,201 13,730,759 13,774,118 14,192,334 14,793,174 14,155,910 Less Capital $2,995,151 $3,381,473
% Change 7.0% 0.3% 3.0% 4.2% -4.3%
ENHANCEMENTS
Offer Result Title
STORMWATER FUND
5/1/2018
2019 2020
REVENUES $17,788,325 $17,537,383
CURRENT 2019 2020
ECON $0 $0
ENVIR $97,200 $97,200
HPG $13,543 $13,950
SAFE $4,184,430 $4,460,062
CULTURE $0 $0
OTHER $7,511,987 $6,072,936
CURRENT $11,807,160 $10,644,148
LESS CURRENT $5,981,165 $6,893,235
CAPITAL 2019 2020
ECON $0 $0
ENVIR $0 $0
HPG $0 $0
SAFE $2,951,000 $3,458,900
CULTURE $7,611 $25,462
OTHER
CAPITAL $2,958,611 $3,484,362
LESS CAPITAL $3,022,554 $3,408,873
ENHANCEMENTS 2019 2020
ENVIR $271,671 $267,746
HPG $66,000 $169,500
SAFE $1,686,800 $2,686,700
CULTURE
OTHER
ENHANCEMENTS $2,024,471 $3,123,946
LESS ENHANCEMENTS $998,083 $284,927
TOTALS 2019 2020
ECON $0 $0
ENVIR $368,871 $364,946
HPG $79,543 $183,450
SAFE $8,822,230 $10,605,662
CULTURE $7,611 $25,462
OTHER $7,511,987 $6,072,936
TOTALS $16,790,242 $17,252,456
REVENUES $17,788,325 $17,537,383
CHECK - ARE THE CELLS TO THE RIGHT GREEN? $1 $1
9.66 ENVIR ENHANCEMENT - 1.0 FTE Utilities: Wastewater/Water/Stormwater Water - Field Operations Manager $58,621 $54,696 0 0
9.69 ENVIR ENHANCEMENT - Utilities: Wastewater/Stormwater - Regulatory Water Quality Monitoring Study (bacteriological) $37,500 $37,500 0 0
9.72 ENVIR ENHANCEMENT - Utilities: Wastewater/Water/Stormwater - Engineering Support to Maintain Levels of Service $95,550 $95,550 0 0
10.19 HPG ENHANCEMENT: CAPITAL - Utilities: Asset Register and Work Order Management System $11,000 $152,000 0 0
10.20 HPG ENHANCEMENT: Utilities: Water/Wastewater/Stormwater Scanning As-built Plans $15,000 $0 0 0
10.23 HPG ENHANCEMENT: CAPITAL - Utilities: 700 Wood Street Building/Facilities $40,000 $17,500 0 0
11.20 SAFE ENHANCEMENT: Utilities: Stormwater - Drainage and Detention Maintaining Existing Levels of Service $40,500 $40,500 0 0
11.11 SAFE ENHANCEMENT: CAPITAL REPLACEMENT - Utilities: Stormwater - Castlerock Storm Sewer Evaluation and Rep $300,000 $0 0 0
11.12 SAFE ENHANCEMENT: CAPITAL - Utilities: Stormwater - Poudre River at Oxbow Levee $412,000 $0 0 0
11.13 SAFE ENHANCEMENT: CAPITAL - Utilities: Stormwater - North College Drainage Improvement District, Phase 1 $267,800 $0 0 0
11.14 SAFE ENHANCEMENT: CAPITAL - Utilities: Remington Street Water, Wastewater and Stormwater Improvements $412,000 $2,546,200 0 0
11.15 SAFE ENHANCEMENT: CAPITAL - Utilities: Stormwater - Timberline Levee (Design Only) $103,000 $0 0 0
11.16 SAFE ENHANCEMENT: CAPITAL - Utilities: Stormwater - Drake Levee (Design Only) $51,500 $0 0 0
11.17 SAFE ENHANCEMENT: CAPITAL - Utilities: Stormwater - Flood Warning System $100,000 $100,000 0 0
86.10 ENVIR ENHANCEMENT: Encampment Cleaning Services $80,000 $80,000 0 0
9.67 ENVIR ENHANCEMENT - 1.0 FTE Utilities: Wastewater/Water/Stormwater Utilities Project Coordinator $48,857 $42,529 1 1
9.68 ENVIR ENHANCEMENT - 1.0 FTE Utilities: Wastewater/Water/Stormwater Over hire for Engineering Director $15,616 $0 1 1
11.19 SAFE ENHANCEMENT: Utilities: Stormwater Outreach and Engagement Enhanced Effort $20,000 $20,000 1 1
11.21 SAFE ENHANCEMENT CAPITAL - Utilities: Wastewater/Water/Stormwater - Geographic Information System Program $66,600 $66,600 1 1
87.2 SAFE ENHANCEMENT: OEM $7,000 $7,150 1 1
Subtotal Enhancements $4,299,501 $2,182,544 $3,260,225 $2,024,471 $3,123,946
TOTAL WITH ENHANCEMENTS 12,829,201 13,730,759 13,774,118 18,491,835 16,975,718 17,416,135.12 Less
Enhancements $970,680 $257,527
% Change 7.0% 0.3% 34.3% -8.2% 2.6% from reserves
Available Reserves
REVENUE PROJECTION LESS ALL OFFERS $3,824,786 $3,407,151 $4,626,717 ($1,066,530) $312,607 $121,248 $1,970,680 $3,228,207
Withdrawn Offers
9.35 ENVIR ENHANCEMENT: 1.0 FTE Utilities: Water/Wastewater/Stormwater Utilities Planner/Scheduler - WITHDRAWN $29,585 $34,248
9.103 ENVIR ENHANCEMENT CAPITAL - Utilities: Pollution Prevention/Good Housekeeping Training Facility - WITHDRAWN $100,000 $0
11.18 Safe ENHANCEMENT: 1.0 FTE Utilities: Stormwater - Civil Engineer II (Stormwater Master Planning) -WITHDRAWN $129,854 $128,697
$259,439 $162,945
Capital Replacement - Utilities: Stormwater - Collection System Replacement - Small
Capital Projects
% Change 9.2% -4.0% 5.4% 0.5% 3.2%
ENHANCEMENTS
Offer Result Title
8.12 ECON ENHANCEMENT CAPITAL - Utilities: Light & Power - New Feeder Capacity - Circuit 724 to Serve North College Area $980,000 0 0
8.15 ECON ENHANCEMENT CAPITAL - Utilities: Light & Power - New Feeder Capacity - Circuit 236 to Serve Drake & Lemay Area $500,000 0 0
8.16 ECON ENHANCEMENT CAPITAL - Utilities: Light & Power - New Feeder Capacity - Circuit 576B to Serve West Harmony Area $457,600 0 0
8.25 ECON ENHANCEMENT CAPITAL - Utilities: Light & Power - Supervisory Control Operations Center Remodel $950,000 Shifting to 2020
due to revenue risk
0 0
10.15 HPG ENHANCEMENT: 1.0 FTE Utilities (Repurpose): Customer Service & Administration - Data Enhancement ($109,213) ($113,019) 0 0
10.19 HPG ENHANCEMENT CAPITAL - Utilities: Asset Register and Work Order Management System $435,000 Pushing out 2020
funds to 2021
0 0
10.23 HPG ENHANCEMENT: CAPITAL - Utilities: 700 Wood Street Building/Facilities $160,000 $170,000 0 0
43.12 ENVIR ENHANCEMENT: 2030 Climate Action and Energy Policy Update –Optimizing Policy, Targets and Strategies (50%) $20,000 $40,000 0 0
8.13 ECON ENHANCEMENT CAPITAL - Utilities: Light & Power - New Feeder Capacity - Circuit 734 to Serve Downtown Area $590,000 1 1
8.14 ECON ENHANCEMENT CAPITAL - Utilities: Light & Power - New Feeder Capacity - Circuit 322 to Serve East Prospect & Mulberry Area $820,000 1 1
8.17 ECON ENHANCEMENT CAPITAL - Utilities: Light & Power - New Feeder Capacity - Circuit 314 to Serve East Prospect Area $700,000 1 1
8.18 ECON ENHANCEMENT CAPITAL - Utilities: Light & Power - New Duct Bank - County Road 5, Prospect to Mulberry $1,800,000 1 1
8.22 ECON ENHANCEMENT CAPITAL - Utilities: Light & Power - Arterial & Collector Street LED Streetlight Conversion $773,640 $220,400 1 1
8.23 ECON ENHANCEMENT CAPITAL - Utilities: Light & Power - Cable Waste Reduction $1,447,983 1 1
8.24 ECON ENHANCEMENT - Utilities: Light & Power - Mobile Contact Voltage Survey $59,470 $190,960 1 1
8.26 ECON ENHANCEMENT - Utilities: Light & Power - Automated Vehicle/Crew Location Operational Tech Upgrade $55,000 $20,000 1 1
8.27 ECON ENHANCEMENT CAPITAL - Utilities: Light & Power - Electric Distribution Training Field $200,000 1 1
8.29 ECON ENHANCEMENT CAPITAL- Utilities: Light & Power - Overhead to Underground Conversions $516,000 $500,000 1 1
9.90 ENVIR ENHANCEMENT: Utilities: Light & Power - Energy Efficiency $950,000 $950,000 1 1
9.91 ENVIR ENHANCEMENT: Utilities: Light & Power - Cold Weather Pump Demonstration $150,000 $150,000 1 1
9.92 ENVIR ENHANCEMENT: Utilities: Light & Power - Non-Residential Solar Rebates $500,000 $500,000 1 1
9.94 ENVIR ENHANCEMENT: Utilities: Light & Power - Bring Your Own Thermostat (BYOT) $30,000 $30,000 1 1
9.95 ENVIR ENHANCEMENT: Utilities: Light & Power - Battery Storage Demonstration $100,000 $100,000 1 1
9.93 ENVIR ENHANCEMENT: Utilities: Light & Power - Solar Power Purchase Program (SP3) $200,000 1 1
9.96 ENVIR ENHANCEMENT: 1.0 FTE Conversion to Classified - Energy Code Compliance Specialist - Utilities: Light & Power (50%) $2,135 $2,198 1 1
87.2 SAFE ENHANCEMENT: OEM $2,300 $2,350 1 1
Subtotal Enhancements $3,354,870 $9,162,315 $5,890,489 $1,985,787 $1,504,581
TOTAL WITH ENHANCEMENTS $125,413,331 $136,896,548 $131,462,912 $141,949,992 $148,388,132 $149,537,218 Less
Enhancements $0 $317,710
% Change 9.2% -4.0% 8.0% 4.5% 0.8%
Available Reserves
REVENUE PROJECTION LESS ALL OFFERS ($836,231) ($2,874,243) $5,543,550 ($6,087,536) ($7,515,446) ($4,068,198) $338,918 $0 $317,710
WITHDRAWN OFFERS
Offer Result Title
8.11 Econ ENHANCEMENT CAPITAL - Utilities: Light & Power - New Feeder Capacity - Circuit 936 to Serve South Shields Area (Withdraw $1,280,000
8.19 Econ ENHANCEMENT CAPITAL - Utilities: Light & Power - New Duct Bank - Overland Trail, Drake to Prospect (Hughes Stadium) (W $1,950,000
8.20 Econ ENHANCEMENT CAPITAL - Utilities: Light & Power - New Duct Bank - Mountain Vista Drive - (Montava) (Withdrawn) $2,200,000
8.21 Econ ENHANCEMENT CAPITAL - Utilities: Light & Power - New Duct Bank - Timberline to I-25 (Withdrawn) $3,770,000
8.28 Econ ENHANCEMENT 1.0 FTE - Utilities: Light & Power - Substation Specialist (Withdrawn) $87,788 $90,943
$3,317,788 $6,060,943
13000000 - Energy Services 3,990,019 4,285,157 4,429,403 4,282,694 4,475,203 4,917,517 4,234,054 4,263,877
Total Expenses for Offer 6.65 3,990,019 4,285,157 4,429,403 4,282,694 4,475,203 4,917,517 4,234,054 4,263,877
Offer: 6.67 Utilities: Light & Power - Residential & Commercial Solar Rebates
11110000 - Community Renewables 372,977 283,315 1,414,156 1,211,801 896,520 799,190 500,000 500,000
Total Expenses for Offer 6.67 372,977 283,315 1,414,156 1,211,801 896,520 799,190 500,000 500,000
Offer: 6.68 Utilities: Light & Power - Renewable Energy
11100000 - Purchase Power Renewables 1,823,999 1,824,904 1,824,000 1,893,255 1,824,000 1,823,998 1,900,000 1,992,000
11110000 - Community Renewables 372,977 283,315 1,414,156 1,211,801 896,520 799,190 210,000 210,000
11120000 - Ft Collins Solar Program(FIT) 7,884 118,000 1,028,928 356,341 1,000,000 740,239 850,000 850,000
Total Expenses for Offer 6.68 2,204,860 2,226,219 4,267,084 3,461,397 3,720,520 3,363,427 2,960,000 3,052,000
Offer: 6.69 Utilities: Light & Power - Demand Response
13500000 - Demand Response 102,180 129,639 1,307,062 567,069 1,526,471 1,000,549 794,950 620,400
Total Expenses for Offer 6.69 102,180 129,639 1,307,062 567,069 1,526,471 1,000,549 794,950 620,400
Light & Power Ongoing Offers
0.9%
0.7%
0.8%
1.8%
0.4%
1.2%
0.6% 0.7%
1.0%
0.9%
1.1% 1.7%
0.6%
0.6%
0.6%
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Debt Service as Percent of Expenditures with 2019 COPs*
Governmental Proprietary Funds DDA/URA